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Please shed some light on The Maceda Law (RA 6552) - real estate investor

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Arresto Menor
We bought a condo and we have been paying it for more than 3 years now. We loaned from the bank and pays the monthly mortgage thru them.

We are currently facing some financial issues and not able to continue the payment anymore.

I received SOA from the bank that we have a past due amounting to more or less PHP240,000 since January 2013 (includes interest).

We have decided not to pursue the investment and we would like to cancel the bank loan. Plz advise if we could just send email to the bank to tell them that we are not able to pay/continue with the loan anymore. Are we obligated to pay them the past due amount? And the Maceda Law, is it applicable here? Thanks much.

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Arresto Menor
BTW, Here's the Maceda Law R.A. 6552

Section 1. This Act shall be known as the “Realty Installment Buyer Act.”

Sec. 2. It is hereby declared a public policy to protect buyers of real estate on installment payments against onerous and oppressive conditions.

Sec. 3. In all transactions or contracts involving the sale or financing of real estate on installment payments, including residential condominium apartments but excluding industrial lots, commercial buildings and sales to tenants under Republic Act Numbered Thirty-eight hundred forty-four, as amended by Republic Act Numbered Sixty-three hundred eighty-nine, where the buyer has paid at least two years of installments, the buyer is entitled to the following rights in case he defaults in the payment of succeeding installments:

(a) To pay, without additional interest, the unpaid installments due within the total grace period earned by him which is hereby fixed at the rate of one month grace period for every one year of installment payments made: Provided, That this right shall be exercised by the buyer only once in every five years of the life of the contract and its extensions, if any.

(b) If the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty per cent of the total payments made, and, after five years of installments, an additional five per cent every year but not to exceed ninety per cent of the total payments made: Provided, That the actual cancellation of the contract shall take place after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act and upon full payment of the cash surrender value to the buyer.

Down payments, deposits or options on the contract shall be included in the computation of the total number of installment payments made.

Sec. 4. In case where less than two years of installments were paid, the seller shall give the buyer a grace period of not less than sixty days from the date the installment became due.

If the buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel the contract after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act.

Sec. 5. Under Section 3 and 4, the buyer shall have the right to sell his rights or assign the same to another person or to reinstate the contract by updating the account during the grace period and before actual cancellation of the contract. The deed of sale or assignment shall be done by notarial act.

Sec. 6. The buyer shall have the right to pay in advance any installment or the full unpaid balance of the purchase price any time without interest and to have such full payment of the purchase price annotated in the certificate of title covering the property.

Sec. 7. Any stipulation in any contract hereafter entered into contrary to the provisions of Sections 3, 4, 5 and 6, shall be null and void.

Sec. 8. If any provision of this Act is held invalid or unconstitutional, no other provision shall be affected thereby.

Sec. 9. This Act shall take effect upon its approval.

Approved: August 26, 1972

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Arresto Menor
Hello po, sana may makapg bigay ng Advise. :-)

We paid a lot for this condo already. Our monthly ammort is 59k. This 59K is actually the lowest so far after 2 years. The first 2 years was 99/mo. It's a huge one.

We no longer want to continue coz may personal issues na kami plus we do not want to share anymore.

Kindly advise if we could get something from the developer, at kahit may utang din kami sa bank na 250k.

Thanks much.

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maceda law is not applicable because you fully paid the developer with the loan proceeds. you are repaying a loan and the bank will foreclose on the loan and have the condo auctioned.

you will not get anything except if there is a bid higher than the loan amount.

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Arresto Menor
Thanks po sa reply. Ive already sent the bank a request to terminate the loan.

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