PRESIDENTIAL DECREE NO.

957
REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS,
PROVIDING PENALTIES FOR VIOLATIONS THEREOF
July 12, 1976
WHEREAS, it is the policy of the State to afford its inhabitants the reuire!ents of
decent hu!an settle!ent and to pro"ide the! #ith a!ple opportunities for i!pro"in$
their uality of life%
WHEREAS, nu!erous reports re"eal that !any real estate subdi"ision o#ners,
de"elopers, operators, and&or sellers ha"e rene$ed on their representations and obli$ations
to pro"ide and !aintain properly subdi"ision roads, draina$e, se#era$e, #ater syste!s,
li$htin$ syste!s, and other si!ilar basic reuire!ents, thus endan$erin$ the health and
safety of ho!e and lot buyers%
WHEREAS, reports of alar!in$ !a$nitude also sho# cases of s#indlin$ and
fraudulent !anipulations perpetrated by unscrupulous subdi"ision and condo!iniu!
sellers and operators, such as failure to deli"er titles to the buyers or titles free fro! liens
and encu!brances, and to pay real estate ta'es, and fraudulent sales of the sa!e
subdi"ision lots to different innocent purchasers for "alue%
WHEREAS, these acts not only under!ine the land and housin$ pro$ra! of the
$o"ern!ent but also defeat the ob(ecti"es of the )e# Society, particularly the pro!otion
of peace and order and the enhance!ent of the econo!ic, social and !oral condition of
the *ilipino people%
WHEREAS, this state of affairs has rendered it i!perati"e that the real estate
subdi"ision and condo!iniu! businesses be closely super"ised and re$ulated, and that
penalties be i!posed on fraudulent practices and !anipulations co!!itted in connection
there#ith+
),W, -HERE*,RE, ., *ER/.)A)/ E+ 0AR1,S, 2resident of the 2hilippines, by
"irtue of the po#ers "ested in !e by the 1onstitution, do hereby decree and order3
-itle .
-.-4E A)/ /E*.).-.,)S
Sec+ 1+ -itle 5 -his /ecree shall be 6no#n as -HE S78/.9.S.,) A)/
1,)/,0.).70 87:ERS; 2R,-E1-.9E /E1REE+
Sec+ 2+ /efinition of -er!s 5 When used in this /ecree, the follo#in$ ter!s shall,
unless the conte't other#ise indicates, ha"e the follo#in$ respecti"e !eanin$s3
a< 2erson+ 5 =2erson= shall !ean a natural or a (uridical person+ A (uridical person
refers to a business fir! #hether a corporation, partnership, cooperati"e or associations
or a sin$le proprietorship+
b< Sale or sell+ 5 =Sale= or =sell= shall include e"ery disposition, or atte!pt to dispose,
for a "aluable consideration, of a subdi"ision lot, includin$ the buildin$ and other
i!pro"e!ents thereof, if any, in a subdi"ision pro(ect or a condo!iniu! unit in a
condo!iniu! pro(ect+ =Sale= and =sell= shall also include a contract to sell, a contract of
purchase and sale, an e'chan$e, an atte!pt to sell, an option of sale or purchase, a
solicitation of a sale, or an offer to sell, directly or by an a$ent, or by a circular, letter,
ad"ertise!ent or other#ise+
A pri"ile$e $i"en to a !e!ber of a cooperati"e, corporation, partnership, or any
association and&or the issuance of a certificate or receipt e"idencin$ or $i"in$ the ri$ht of
participation in, or ri$ht to, any land in consideration of pay!ent of the !e!bership fee
or dues, shall be dee!ed a sale #ithin the !eanin$ of this definition+
c< 8uy and purchase+ 5 -he =buy= and =purchase= shall include any contract to buy,
purchase, or other#ise acuire for a "aluable consideration a subdi"ision lot, includin$
the buildin$ and other i!pro"e!ents, if any, in a subdi"ision pro(ect or a condo!iniu!
unit in a condo!iniu! pro(ect+
d< Subdi"ision pro(ect+ 5 =Subdi"ision pro(ect= shall !ean a tract or a parcel of land
re$istered under Act )o+ >96 #hich is partitioned pri!arily for residential purposes into
indi"idual lots #ith or #ithout i!pro"e!ents thereon, and offered to the public for sale,
in cash or in install!ent ter!s+ .t shall include all residential, co!!ercial, industrial and
recreational areas as #ell as open spaces and other co!!unity and public areas in the
pro(ect+
e< Subdi"ision lot+ 5 =Subdi"ision lot= shall !ean any of the lots, #hether residential,
co!!ercial, industrial, or recreational, in a subdi"ision pro(ect+
f< 1o!ple' subdi"ision plan+ 5 =1o!ple' subdi"ision plan= shall !ean a subdi"ision
plan of a re$istered land #herein a street, passa$e#ay or open space is delineated on the
plan+
$< 1ondo!iniu! pro(ect+ 5 =1ondo!iniu! pro(ect= shall !ean the entire parcel of real
property di"ided or to be di"ided pri!arily for residential purposes into condo!iniu!
units, includin$ all structures thereon+
h< 1ondo!iniu! unit+ 5 =1ondo!iniu! unit= shall !ean a part of the condo!iniu!
pro(ect intended for any type of independent use or o#nership, includin$ one or !ore
roo!s or spaces located in one or !ore floors ?or part of parts of floors< in a buildin$ or
buildin$s and such accessories as !ay be appended thereto+
i< ,#ner+ 5 =,#ner= shall refer to the re$istered o#ner of the land sub(ect of a
subdi"ision or a condo!iniu! pro(ect+
(< /e"eloper+ 5 =/e"eloper= shall !ean the person #ho de"elops or i!pro"es the
subdi"ision pro(ect or condo!iniu! pro(ect for and in behalf of the o#ner thereof+
6< /ealer+ 5 =/ealer= shall !ean any person directly en$a$ed as principal in the
business of buyin$, sellin$ or e'chan$in$ real estate #hether on a full5ti!e or part5ti!e
basis+
l< 8ro6er+ 5 =8ro6er= shall !ean any person #ho, for co!!ission or other
co!pensation, underta6es to sell or ne$otiate the sale of a real estate belon$in$ to
another+
!< Sales!an+ 5 =Sales!an= shall refer to the person re$ularly e!ployed by a bro6er to
perfor!, for and in his behalf, any or all functions of a real estate bro6er+
n< Authority+ 5 =Authority= shall !ean the )ational Housin$ Authority+
-itle ..
RE@.S-RA-.,) A)/ 4.1E)SE -, SE44
Sec+ A+ )ational Housin$ Authority 5 -he )ational Housin$ Authority shall ha"e
e'clusi"e (urisdiction to re$ulate the real estate trade and business in accordance #ith the
pro"isions of this /ecree+
Sec+ >+ Re$istration of 2ro(ects 5 -he re$istered o#ner of a parcel of land #ho #ishes
to con"ert the sa!e into a subdi"ision pro(ect shall sub!it his subdi"ision plan to the
Authority #hich shall act upon and appro"e the sa!e, upon a findin$ that the plan
co!plies #ith the Subdi"ision Standards and Re$ulations enforceable at the ti!e the plan
is sub!itted+ -he sa!e procedure shall be follo#ed in the case of a plan for a
condo!iniu! pro(ect e'cept that, in addition, said Authority shall act upon and appro"e
the plan #ith respect to the buildin$ or buildin$s included in the condo!iniu! pro(ect in
accordance #ith the )ational 8uildin$ 1ode ?R+A+ )o+ 6B>1<+
-he subdi"ision plan, as so appro"ed, shall then be sub!itted to the /irector of 4ands
for appro"al in accordance #ith the procedure prescribed in Section >> of the 4and
Re$istration Act ?Act )o+ >96, as a!ended by R+A+ )o+ >>C<3 2ro"ided, that it case of
co!ple' subdi"ision plans, court appro"al shall no lon$er be reuired+ -he condo!iniu!
plan as li6e#ise so appro"ed, shall be sub!itted to the Re$ister of /eeds of the pro"ince
or city in #hich the property lies and the sa!e shall be acted upon sub(ect to the
conditions and in accordance #ith the procedure prescribed in Section > of the
1ondo!iniu! Act ?R+A+ )o+ >726<+
-he o#ner or the real estate dealer interested in the sale of lots or units, respecti"ely,
in such subdi"ision pro(ect or condo!iniu! pro(ect shall re$ister the pro(ect #ith the
Authority by filin$ there#ith a s#orn re$istration state!ent containin$ the follo#in$
infor!ation3
a< )a!e of the o#ner%
b< -he location of the o#ner;s principal business office, and if the o#ner is a non5resident
*ilipino, the na!e and address of his a$ent or representati"e in the 2hilippines is
authoriDed to recei"e notice%
c< -he na!es and addresses of all the directors and officers of the business fir!, if the
o#ner be a corporation, association, trust, or other entity, and of all the partners, if it be a
partnership%
d< -he $eneral character of the business actually transacted or to be transacted by the
o#ner% and
e< A state!ent of the capitaliDation of the o#ner, includin$ the authoriDed and
outstandin$ a!ounts of its capital stoc6 and the proportion thereof #hich is paid5up+
-he follo#in$ docu!ents shall be attached to the re$istration state!ent3
a< A copy of the subdi"ision plan or condo!iniu! plan as appro"ed in accordance #ith
the first and second para$raphs of this section+
b< A copy of any circular, prospectus, brochure, ad"ertise!ent, letter, or co!!unication
to be used for the public offerin$ of the subdi"ision lots or condo!iniu! units%
c< .n case of a business fir!, a balance sheet sho#in$ the a!ount and $eneral character
of its assets and liabilities and a copy of its articles of incorporation or articles of
partnership or association, as the case !ay be, #ith all the a!end!ents thereof and
e'istin$ by5la#s or instru!ents correspondin$ thereto+
d< A title to the property #hich is free fro! all liens and encu!brances3 2ro"ided,
ho#e"er, that in case any subdi"ision lot or condo!iniu! unit is !ort$a$ed, it is
sufficient if the instru!ent of !ort$a$e contains a stipulation that the !ort$a$ee shall
release the !ort$a$e on any subdi"ision lot or condo!iniu! unit as soon as the full
purchase price for the sa!e is paid by the buyer+
-he person filin$ the re$istration state!ent shall pay the re$istration fees prescribed
therefor by the Authority+
-hereupon, the Authority shall i!!ediately cause to be published a notice of the filin$ of
the re$istration state!ent at the e'pense of the applicant5o#ner or dealer, in t#o
ne#spapers $eneral circulation, one published in En$lish and another in 2ilipino, once a
#ee6 for t#o consecuti"e #ee6s, recitin$ that a re$istration state!ent for the sale of
subdi"ision lots or condo!iniu! units has been filed in the )ational Housin$ Authority%
that the aforesaid re$istration state!ent, as #ell as the papers attached thereto, are open
to inspection durin$ business hours by interested parties, under such re$ulations as the
Authority !ay i!pose% and that copies thereof shall be furnished to any party upon
pay!ent of the proper fees+
-he subdi"ision pro(ect of the condo!iniu! pro(ect shall be dee!ed re$istered upon
co!pletion of the abo"e publication reuire!ent+ -he fact of such re$istration shall be
e"idenced by a re$istration certificate to be issued to the applicant5o#ner or dealer+
Sec+ B+ 4icense to sell+ 5 Such o#ner or dealer to #ho! has been issued a re$istration
certificate shall not, ho#e"er, be authoriDed to sell any subdi"ision lot or condo!iniu!
unit in the re$istered pro(ect unless he shall ha"e first obtained a license to sell the pro(ect
#ithin t#o #ee6s fro! the re$istration of such pro(ect+
-he Authority, upon proper application therefor, shall issue to such o#ner or dealer of a
re$istered pro(ect a license to sell the pro(ect if, after an e'a!ination of the re$istration
state!ent filed by said o#ner or dealer and all the pertinent docu!ents attached thereto,
he is con"inced that the o#ner or dealer is of $ood repute, that his business is financially
stable, and that the proposed sale of the subdi"ision lots or condo!iniu! units to the
public #ould not be fraudulent+
Sec+ 6+ 2erfor!ance 8ond+ 5 )o license to sell subdi"ision lots or condo!iniu! units
shall be issued by the Authority under Section B of this /ecree unless the o#ner or dealer
shall ha"e filed an adeuate perfor!ance bond appro"ed by said Authority to $uarantee
the construction and !aintenance of the roads, $utters, draina$e, se#era$e, #ater syste!,
li$htin$ syste!s, and full de"elop!ent of the subdi"ision pro(ect or the condo!iniu!
pro(ect and the co!pliance by the o#ner or dealer #ith the applicable la#s and rules and
re$ulations+
-he perfor!ance bond shall be e'ecuted in fa"or of the Republic of the 2hilippines
and shall authoriDe the Authority to use the proceeds thereof for the purposes of its
underta6in$ in case of forfeiture as pro"ided in this /ecree+
Sec+ 7+ E'e!pt transactions+ 5 A license to sell and perfor!ance bond shall not be
reuired in any of the follo#in$ transactions3
a< Sale of a subdi"ision lot resultin$ fro! the partition of land a!on$ co5o#ners and co5
heirs+
b< Sale or transfer of a subdi"ision lot by the ori$inal purchaser thereof and any
subseuent sale of the sa!e lot+
c< Sale of a subdi"ision lot or a condo!iniu! unit by or for the account of a !ort$a$ee in
the ordinary course of business #hen necessary to liuidate a bona fide debt+
Sec+ E+ Suspension of license to sell+ 5 7pon "erified co!plaint by a buyer of a
subdi"ision lot or a condo!iniu! unit in any interested party, the Authority !ay, in its
discretion, i!!ediately suspend the o#ner;s or dealer;s license to sell pendin$
in"esti$ation and hearin$ of the case as pro"ided in Section 1A hereof+
-he Authority !ay !otu proprio suspend the license to sell if, in its opinion, any
infor!ation in the re$istration state!ent filed by the o#ner or dealer is or has beco!e
!isleadin$, incorrect, inadeuate or inco!plete or the sale or offerin$ for a sale of the
subdi"ision or condo!iniu! pro(ect !ay #or6 or tend to #or6 a fraud upon prospecti"e
buyers+
-he suspension order !ay be lifted if, after notice and hearin$, the Authority is
con"inced that the re$istration state!ent is accurate or that any deficiency therein has
been corrected or supple!ented or that the sale to the public of the subdi"ision or
condo!iniu! pro(ect #ill neither be fraudulent not result in fraud+ .t shall also be lifted
upon dis!issal of the co!plaint for lac6 of le$al basis+
7ntil the final entry of an order of suspension, the suspension of the ri$ht to sell the
pro(ect, thou$h bindin$ upon all persons notified thereof, shall be dee!ed confidential
unless it shall appear that the order of suspension has in the !eanti!e been "iolated+
Sec+ 9+ Re"ocation of re$istration certificate and license to sell+ 5 -he Authority !ay,
!otu proprio or upon "erified co!plaint filed by a buyer of a subdi"ision lot or
condo!iniu! unit, re"o6e the re$istration of any subdi"ision pro(ect or condo!iniu!
pro(ect and the license to sell any subdi"ision lot or condo!iniu! unit in said pro(ect by
issuin$ an order to this effect, #ith his findin$s in respect thereto, if upon e'a!ination
into the affairs of the o#ner or dealer durin$ a hearin$ as pro"ided for in Section 1>
hereof, if shall appear there is satisfactory e"idence that the said o#ner or dealer3
a< .s insol"ent% or
b< has "iolated any of the pro"isions of this /ecree or any applicable rule or re$ulation of
the Authority, or any underta6in$ of his&its perfor!ance bond% or
c< Has been or is en$a$ed or is about to en$a$e in fraudulent transactions% or
d< Has !ade any !isrepresentation in any prospectus, brochure, circular or other
literature about the subdi"ision pro(ect or condo!iniu! pro(ect that has been distributed
to prospecti"e buyers% or
e< .s of bad business repute% or
f< /oes not conduct his business in accordance #ith la# or sound business principles+
Where the o#ner or dealer is a partnership or corporation or an unincorporated
association, it shall be sufficient cause for cancellation of its re$istration certificate and
its license to sell, if any !e!ber of such partnership or any officer or director of such
corporation or association has been $uilty of any act or o!ission #hich #ould be cause
for refusin$ or re"o6in$ the re$istration of an indi"idual dealer, bro6er or sales!an as
pro"ided in Section 11 hereof+
Sec+ 1C+ Re$isters of subdi"ision lots and condo!iniu! units+ 5 A record of
subdi"ision lots and condo!iniu! units shall be 6ept in the Authority #herein shall be
entered all orders of the Authority affectin$ the condition or status thereof+ -he re$isters
of subdi"ision lots and condo!iniu! units shall be open to public inspection sub(ect to
such reasonable rules as the Authority !ay prescribe+
-itle ...
/EA4ERS, 8R,FERS A)/ SA4ES0E)
Sec+ 11+ Re$istration of dealers, bro6ers and sales!en+ 5 )o real estate dealer, bro6er
or sales!an shall en$a$e in the business of sellin$ subdi"ision lots or condo!iniu! units
unless he has re$istered hi!self #ith the Authority in accordance #ith the pro"isions of
this section+
.f the Authority shall find that the applicant is of $ood repute and has co!plied #ith
the applicable rules of the Authority, includin$ the pay!ent of the prescribed fee, he shall
re$ister such applicant as a dealer, bro6er or sales!an upon filin$ a bond, or other
security in lieu thereof, in such su! as !ay be fi'ed by the Authority conditioned upon
his faithful co!pliance #ith the pro"isions of this /ecree3 2ro"ided, that the re$istration
of a sales!an shall cease upon the ter!ination of his e!ploy!ent #ith a dealer or bro6er+
E"ery re$istration under this section shall e'pire on the thirty5first day of /ece!ber of
each year+ Rene#al of re$istration for the succeedin$ year shall be $ranted upon #ritten
application therefor !ade not less than thirty nor !ore than si'ty days before the first day
of the ensuin$ year and upon pay!ent of the prescribed fee, #ithout the necessity of
filin$ further state!ents or infor!ation, unless specifically reuired by the Authority+ All
applications filed beyond said period shall be treated as ori$inal applications+
-he na!es and addresses of all persons re$istered as dealers, bro6ers, or sales!en
shall be recorded in a Re$ister of 8ro6ers, /ealers and Sales!en 6ept in the Authority
#hich shall be open to public inspection+
Sec+ 12+ Re"ocation of re$istration as dealers, bro6ers or sales!en+ 5 Re$istration
under the precedin$ section !ay be refused or any re$istration $ranted thereunder,
re"o6ed by the Authority if, after reasonable notice and hearin$, it shall deter!ine that
such applicant or re$istrant3
1< Has "iolated any pro"ision of this /ecree or any rule or re$ulation !ade hereunder% or
2< Has !ade a !aterial false state!ent in his application for re$istration% or
A< Has been $uilty of a fraudulent act in connection #ith any sale of a subdi"ision lot or
condo!iniu! unit% or
>< Has de!onstrated his un#orthiness to transact the business of dealer, bro6er, or
sales!an, as the case !ay be+
.n case of char$es a$ainst a sales!an, notice thereof shall also be $i"en the bro6er or
dealer e!ployin$ such sales!an+
2endin$ hearin$ of the case, the Authority shall ha"e the po#er to order the suspension of
the dealer;s, bro6er;s, of sales!an;s re$istration% pro"ided, that such order shall state the
cause for the suspension
-he suspension or re"ocation of the re$istration of a dealer or bro6er shall carry #ith
it all the suspension or re"ocation of the re$istrations of all his sales!en+
-itle .9
2R,1E/7RE *,R RE9,1A-.,) ,* RE@.S-RA-.,) 1ER-.*.1A-E
Sec+ 1A+ Hearin$+ 5 .n the hearin$ for deter!inin$ the e'istence of any $round or
$rounds for the suspension and&or re"ocation of re$istration certificate and license to sell
as pro"ided in Section E and 9 hereof, the follo#in$ shall be co!plied #ith3
a< )otice+ 5 )o such hearin$ shall proceed unless the respondent is furnished #ith a copy
of the co!plaint a$ainst hi! or is notified in #ritin$ of the purpose of such hearin$+
b< 9enue+ 5 -he hearin$ !ay be held before the officer or officers desi$nated by the
Authority on the date and place specified in the notice+
c< )ature of proceedin$+ 5 -he proceedin$s shall be non5liti$ious and su!!ary in nature
#ithout re$ard to le$al technicalities obtainin$ in courts of la#+ -he Rules of court shall
not apply in said hearin$ e'cept by analo$y or in a suppletory character and #hene"er
practicable and con"enient+
d< 2o#er incidental to the hearin$+ 5 *or the purpose of the hearin$ or other proceedin$
under this /ecree, the officer or officers desi$nated to hear the co!plaint shall ha"e the
po#er to ad!inister oaths, subpoena #itnesses, conduct ocular inspections, ta6e
depositions, and reuire the production of any boo6, paper, correspondence,
!e!orandu!, or other record #hich are dee!ed rele"ant or !aterial to the inuiry+
Sec+ 1>+ 1onte!pt+
a< /irect conte!pt+ 5 -he officer or officers desi$nated by the Authority to hear the
co!plaint !ay su!!arily ad(ud$e in direct conte!pt any person $uilty of !isbeha"ior in
the presence of or so near the said hearin$ officials as to obstruct or interrupt the
proceedin$s before the sa!e or of refusal to be s#orn or to ans#er as a #itness or to
subscribe an affida"it or deposition #hen la#fully reuired to do so+ -he person found
$uilty of direct conte!pt under this section shall be punished by a fine not e'ceedin$
*ifty ?2BC+CC< 2esos or i!prison!ent not e'ceedin$ fi"e ?B< days, or both+ a
b< .ndirect conte!pt+ 5 -he officer or officers desi$nated to hear the co!plaint !ay also
ad(ud$e any person in indirect conte!pt on $rounds and in the !anner prescribed in Rule
71 of the Re"ised Rules of 1ourt+
Sec+ 1B+ /ecision+ 5 -he case shall be decided #ithin thirty ?AC< days fro! the ti!e the
sa!e is sub!itted for decision+ -he /ecision !ay order the re"ocation of the re$istration
of the subdi"ision or condo!iniu! pro(ect, the suspension, cancellation, or re"ocation of
the license to sell and&or forfeiture, in #hole or in part, of the perfor!ance bond
!entioned in Section 6 hereof+ .n case forfeiture of the bond is ordered, the /ecision !ay
direct the pro"incial or city en$ineer to underta6e or cause the construction of roads and
of other reuire!ents for the subdi"ision or condo!iniu! as stipulated in the bond,
char$eable to the a!ount forfeited+ Such decision shall be i!!ediately e'ecutory and
shall beco!e final after the lapse of 1B days fro! the date of receipt of the /ecision+
Sec+ 16+ 1ease and /esist ,rder+ 5 Whene"er it shall appear to the Authority that any
person is en$a$ed or about to en$a$e in any act or practice #hich constitutes or #ill
constitute a "iolation of the pro"isions of this /ecree, or of any rule or re$ulation
thereunder, it !ay, upon due notice and hearin$ as pro"ided in Section 1A hereof, issue a
cease and desist order to en(oin such act or practices+
Sec+ 17+ Re$istration+ 5 All contracts to sell, deeds of sale and other si!ilar
instru!ents relati"e to the sale or con"eyance of the subdi"ision lots and condo!iniu!
units, #hether or not the purchase price is paid in full, shall be re$istered by the seller in
the ,ffice of the Re$ister of /eeds of the pro"ince or city #here the property is situated+
Whene"er a subdi"ision plan duly appro"ed in accordance #ith Section > hereof,
to$ether #ith the correspondin$ o#ner;s duplicate certificate of title, is presented to the
Re$ister of /eeds for re$istration, the Re$ister of /eeds shall re$ister the sa!e in
accordance #ith the pro"isions of the 4and Re$istration Act, as a!ended3 2ro"ided,
ho#e"er, that it there is a street, passa$e#ay or reuired open space delineated on a
co!ple' subdi"ision plan hereafter appro"ed and as defined in this /ecree, the Re$ister
of /eeds shall annotate on the ne# certificate of title co"erin$ the street, passa$e#ay or
open space, a !e!orandu! to the effect that e'cept by #ay of donation in fa"or of a city
or !unicipality, no portion of any street, passa$e#ay, or open space so delineated on the
plan shall be closed or other#ise disposed of by the re$istered o#ner #ithout the
reuisite appro"al as pro"ided under Section 22 of this /ecree+
Sec+ 1E+ 0ort$a$es+ 5 )o !ort$a$e on any unit or lot shall be !ade by the o#ner or
de"eloper #ithout prior #ritten appro"al of the Authority+ Such appro"al shall not be
$ranted unless it is sho#n that the proceeds of the !ort$a$e loan shall be used for the
de"elop!ent of the condo!iniu! or subdi"ision pro(ect and effecti"e !easures ha"e
been pro"ided to ensure such utiliDation+ -he loan "alue of each lot or unit co"ered by the
!ort$a$e shall be deter!ined and the buyer thereof, if any, shall be notified before the
release of the loan+ -he buyer !ay, at his option, pay his install!ent for the lot or unit
directly to the !ort$a$ee #ho shall apply the pay!ents to the correspondin$ !ort$a$e
indebtedness secured by the particular lot or unit bein$ paid for, #ith a "ie# to enablin$
said buyer to obtain title o"er the lot or unit pro!ptly after full pay!ent thereto%
Sec+ 19+ Ad"ertise!ents+ 5 Ad"ertise!ents that !ay be !ade by the o#ner or
de"eloper throu$h ne#spaper, radio, tele"ision, leaflets, circulars or any other for! about
the subdi"ision or the condo!iniu! or its operations or acti"ities !ust reflect the real
facts and !ust be presented in such !anner that #ill not tend to !islead or decei"e the
public+
-he o#ner or de"eloper shall ans#erable and liable for the facilities, i!pro"e!ents,
infrastructures or other for!s of de"elop!ent represented or pro!ised in brochures,
ad"ertise!ents and other sales propa$anda disse!inated by the o#ner or de"eloper or his
a$ents and the sa!e shall for! part of the sales #arranties enforceable a$ainst said o#ner
or de"eloper, (ointly and se"erally+ *ailure to co!ply #ith these #arranties shall also be
punishable in accordance #ith the penalties pro"ided for in this /ecree+
Sec+ 2C+ -i!e of 1o!pletion+ 5 E"ery o#ner or de"eloper shall construct and pro"ide
the facilities, i!pro"e!ents, infrastructures and other for!s of de"elop!ent, includin$
#ater supply and li$htin$ facilities, #hich are offered and indicated in the appro"ed
subdi"ision or condo!iniu! plans, brochures, prospectus, printed !atters, letters or in
any for! of ad"ertise!ent, #ithin one year fro! the date of the issuance of the license
for the subdi"ision or condo!iniu! pro(ect or such other period of ti!e as !ay be fi'ed
by the Authority+
Sec+ 21+ Sales 2rior to /ecree+ 5 .n cases of subdi"ision lots or condo!iniu! units
sold or disposed of prior to the effecti"ity of this /ecree, it shall be incu!bent upon the
o#ner or de"eloper of the subdi"ision or condo!iniu! pro(ect to co!plete co!pliance
#ith his or its obli$ations as pro"ided in the precedin$ section #ithin t#o years fro! the
date of this /ecree unless other#ise e'tended by the Authority or unless an adeuate
perfor!ance bond is filed in accordance #ith Section 6 hereof+
*ailure of the o#ner or de"eloper to co!ply #ith the obli$ations under this and the
precedin$ pro"isions shall constitute a "iolation punishable under Sections AE and A9 of
this /ecree+
Sec+ 22+ Alteration of 2lans+ 5 )o o#ner or de"eloper shall chan$e or alter the roads,
open spaces, infrastructures, facilities for public use and&or other for! of subdi"ision
de"elop!ent as contained in the appro"ed subdi"ision plan and&or represented in its
ad"ertise!ents, #ithout the per!ission of the Authority and the #ritten confor!ity or
consent of the duly or$aniDed ho!eo#ners association, or in the absence of the latter, by
the !a(ority of the lot buyers in the subdi"ision+
Sec+ 2A+ )on5*orfeiture of 2ay!ents+ 5 )o install!ent pay!ent !ade by a buyer in a
subdi"ision or condo!iniu! pro(ect for the lot or unit he contracted to buy shall be
forfeited in fa"or of the o#ner or de"eloper #hen the buyer, after due notice to the o#ner
or de"eloper, desists fro! further pay!ent due to the failure of the o#ner or de"eloper to
de"elop the subdi"ision or condo!iniu! pro(ect accordin$ to the appro"ed plans and
#ithin the ti!e li!it for co!plyin$ #ith the sa!e+ Such buyer !ay, at his option, be
rei!bursed the total a!ount paid includin$ a!ortiDation interests but e'cludin$
delinuency interests, #ith interest thereon at the le$al rate+
Sec+ 2>+ *ailure to pay install!ents+ 5 -he ri$hts of the buyer in the e"ent of this
failure to pay the install!ents due for reasons other than the failure of the o#ner or
de"eloper to de"elop the pro(ect shall be $o"erned by Republic Act )o+ 6BB2+
Where the transaction or contract #as entered into prior to the effecti"ity of Republic Act
)o+ 6BB2 on Au$ust 26, 1972, the defaultin$ buyer shall be entitled to the correspondin$
refund based on the install!ents paid after the effecti"ity of the la# in the absence of any
pro"ision in the contract to the contrary+
Sec+ 2B+ .ssuance of -itle+ 5 -he o#ner or de"eloper shall deli"er the title of the lot or
unit to the buyer upon full pay!ent of the lot or unit+ )o fee, e'cept those reuired for
the re$istration of the deed of sale in the Re$istry of /eeds, shall be collected for the
issuance of such title+ .n the e"ent a !ort$a$e o"er the lot or unit is outstandin$ at the
ti!e of the issuance of the title to the buyer, the o#ner or de"eloper shall redee! the
!ort$a$e or the correspondin$ portion thereof #ithin si' !onths fro! such issuance in
order that the title o"er any fully paid lot or unit !ay be secured and deli"ered to the
buyer in accordance here#ith+
Sec+ 26+ Realty -a'+ 5 Real estate ta' and assess!ent on a lot or unit shall de paid by
the o#ner or de"eloper #ithout recourse to the buyer for as lon$ as the title has not
passed the buyer% 2ro"ided, ho#e"er, that if the buyer has actually ta6en possession of
and occupied the lot or unit, he shall be liable to the o#ner or de"eloper for such ta' and
assess!ent effecti"e the year follo#in$ such ta6in$ of possession and occupancy+
Sec+ 27+ ,ther 1har$es+ 5 )o o#ner or de"eloper shall le"y upon any lot or buyer a fee
for an alle$ed co!!unity benefit+ *ees to finance ser"ices for co!!on co!fort, security
and sanitation !ay be collected only by a properly or$aniDed ho!eo#ners association
and only #ith the consent of a !a(ority of the lot or unit buyers actually residin$ in the
subdi"ision or condo!iniu! pro(ect+
Sec+ 2E+ Access to 2ublic ,ffices in the Subdi"isions+ 5 )o o#ner or de"eloper shall
deny any person free access to any $o"ern!ent office or public establish!ent located
#ithin the subdi"ision or #hich !ay be reached only by passin$ throu$h the subdi"ision+
Sec+ 29+ Ri$ht of Way to 2ublic Road+ 5 -he o#ner or de"eloper of a subdi"ision
#ithout access to any e'istin$ public road or street !ust secure a ri$ht of #ay to a public
road or street and such ri$ht of #ay !ust be de"eloped and !aintained accordin$ to the
reuire!ent of the $o"ern!ent and authorities concerned+
Sec+ AC+ ,r$aniDation of Ho!eo#ners Association+ 5 -he o#ner or de"eloper of a
subdi"ision pro(ect or condo!iniu! pro(ect shall initiate the or$aniDation of a
ho!eo#ners association a!on$ the buyers and residents of the pro(ects for the purpose
of pro!otin$ and protectin$ their !utual interest and assist in their co!!unity
de"elop!ent+
Sec+ A1+ /onations of roads and open spaces to local $o"ern!ent+ 5 -he re$istered
o#ner or de"eloper of the subdi"ision or condo!iniu! pro(ect, upon co!pletion of the
de"elop!ent of said pro(ect !ay, at his option, con"ey by #ay of donation the roads and
open spaces found #ithin the pro(ect to the city or !unicipality #herein the pro(ect is
located+ 7pon acceptance of the donation by the city or !unicipality concerned, no
portion of the area donated shall thereafter be con"erted to any other purpose or purposes
unless after hearin$, the proposed con"ersion is appro"ed by the Authority+
Sec+ A2+ 2hases of Subdi"ision+ 5 *or purposes of co!plyin$ #ith the pro"isions of
this /ecree, the o#ner or de"eloper !ay di"ide the de"elop!ent and sale of the
subdi"ision into phases, each phase to co"er not less than ten hectares+ -he reuire!ent
i!posed by this /ecree on the subdi"ision as a #hole shall be dee!ed i!posed on each
phase+
Sec+ AA+ )ullity of #ai"ers+ 5 Any condition, stipulation, or pro"ision in contract of
sale #hereby any person #ai"es co!pliance #ith any pro"ision of this /ecree or of any
rule or re$ulation issued thereunder shall be "oid+
Sec+ A>+ 9isitorial po#ers+ 5 -his Authority, throu$h its duly authoriDed representati"e
!ay, at any ti!e, !a6e an e'a!ination into the business affairs, ad!inistration, and
condition of any person, corporation, partnership, cooperati"e, or association en$a$ed in
the business of sellin$ subdi"ision lots and condo!iniu! units+ *or this purpose, the
official authoriDed so to do shall ha"e the authority to e'a!ine under oath the directors,
officers, stoc6holders or !e!bers of any corporation, partnership, association,
cooperati"e or other persons associated or connected #ith the business and to issue
subpoena or subpoena duces tecu! in relation to any in"esti$ation that !ay arise
therefro!+
-he Authority !ay also authoriDe the 2ro"incial, 1ity or 0unicipal En$ineer, as the
case !ay be, to conduct an ocular inspection of the pro(ect to deter!ine #hether the
de"elop!ent of said pro(ect confor!s to the standards and specifications prescribed by
the $o"ern!ent+
-he boo6s, papers, letters, and other docu!ents belon$in$ to the person or entities
herein !entioned shall be open to inspection by the Authority or its duly authoriDed
representati"e+
Sec+ AB+ -a6e5o"er /e"elop!ent+ 5 -he Authority, !ay ta6e o"er or cause the
de"elop!ent and co!pletion of the subdi"ision or condo!iniu! pro(ect at the e'penses
of the o#ner or de"eloper, (ointly and se"erally, in cases #here the o#ner or de"eloper
has refused or failed to de"elop or co!plete the de"elop!ent of the pro(ect as pro"ided
for in this /ecree+
-he Authority !ay, after such ta6e5o"er, de!and, collect and recei"e fro! the buyers
the install!ent pay!ents due on the lots, #hich shall be utiliDed for the de"elop!ent of
the subdi"ision+
Sec+ A6+ Rules and Re$ulations+ 5 -he Authority shall issue the necessary standards,
rules and re$ulations for the effecti"e i!ple!entation of the pro"isions of this /ecree+
Such standards, rules and re$ulations shall ta6e effect i!!ediately after their publication
three ti!es a #ee6 for t#o consecuti"e #ee6s in any ne#spaper of $eneral circulation+
Sec+ A7+ /eputiDation of la# enforce!ent a$encies+ 5 -he Authority !ay deputiDe the
2hilippine 1onstabulary or any la# enforce!ent a$ency in the e'ecution of its final
orders, rulin$s or decisions+
Sec+ AE+ Ad!inistrati"e *ines+ 5 -he Authority !ay prescribe and i!pose fines not
e'ceedin$ ten thousand pesos for "iolations of the pro"isions of this /ecree or of any rule
or re$ulation thereunder+ *ines shall be payable to the Authority and enforceable throu$h
#rits of e'ecution in accordance #ith the pro"isions of the Rules of 1ourt+
Sec+ A9+ 2enalties+ 5 Any person #ho shall "iolate any of the pro"isions of this /ecree
and&or any rule or re$ulation that !ay be issued pursuant to this /ecree shall, upon
con"iction, be punished by a fine of not !ore than t#enty thousand ?22C,CCC+CC< pesos
and&or i!prison!ent of not !ore than ten years3 2ro"ided, -hat in the case of
corporations, partnership, cooperati"es, or associations, the 2resident, 0ana$er or
Ad!inistrator or the person #ho has char$e of the ad!inistration of the business shall be
cri!inally responsible for any "iolation of this /ecree and&or the rules and re$ulations
pro!ul$ated pursuant thereto+
Sec+ >C+ 4iability of controllin$ persons+ 5 E"ery person #ho directly or indirectly
controls any person liable under any pro"ision of this /ecree or of any rule or re$ulation
issued thereunder shall be liable (ointly and se"erally #ith and to the sa!e e'tent as such
controlled person unless the controllin$ person acted in $ood faith and did not directly or
indirectly induce the act or acts constitutin$ the "iolation or cause of action+
Sec+ >1+ ,ther re!edies+ 5 -he ri$hts and re!edies pro"ided in this /ecree shall be in
addition to any and all other ri$hts and re!edies that !ay be a"ailable under e'istin$
la#s+
Sec+ >2+ Repealin$ clause+ 5 All la#s, e'ecuti"e orders, rules and re$ulations or part
thereof inconsistent #ith the pro"isions of this /ecree are hereby repealed or !odified
accordin$ly+
Sec+ >A+ Effecti"ity+ 5 -his /ecree shall ta6e effect upon its appro"al+
/one in the 1ity of 0anila, this 12th day of July, in the year of ,ur 4ord, nineteen
hundred and se"enty5si'+