Understanding the 'Maceda Law'

Dear PAO,

In January 2021, I bought a house and lot from a developer. Since then, I have been paying my monthly amortization amounting to Twenty-one Thousand Pesos (P21,000.00). Over the past three years, I have been making payments for the property, but the same has not been continuous since I failed to pay the amortization for a couple of months when I got laid off from work. The total amount that I have paid is Three Hundred Seventy-eight Thousand Pesos (P378,000.00). Now, I lost my job again, and I can't afford to pay anymore. Am I entitled to a refund of my payments?

Marc

Dear Marc,

Please be informed that Sections 3 and 4 of Republic Act (R.A.) 6552, otherwise known as the «Realty Installment Buyer Act or Maceda Law,» provide that:

«Section 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 canceled, the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty percent of the total payments made, and, after five years of installments, an additional five percent every year but not to exceed ninety percent 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