MABANAG, Rially Kate C.

BBL114 – TTh 4:30-6:00

Rules on Double Sale of Immovable

In double sale of an immovable, the rules of preference are as follows:

(a) the first registrant in good faith;

(b) should there be no entry, the first in possession in good faith; and

(c) in the absence thereof, the buyer who presents the oldest title in good faith. (Martinez vs. CA, 358 SCRA
38 (2001); Art. 1544, NCC).

MACEDA LAW
REPUBLIC ACT No. 6552

AN ACT TO PROVIDE PROTECTION TO BUYERS OF REAL ESTATE ON INSTALLMENT PAYMENTS. (Rep. Act No. 6552)

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

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

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 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.

Section 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.

Section 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.
Section 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.

Section 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.

Section 8. If any provision of this Act is held invalid or unconstitutional, no other provision shall be affected
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Section 9. This Act shall take effect upon its approval.

Recto Law
The Recto Law comprises Articles 1484 to 1486 of the Civil Code. It was added to the Civil Code to prevent abuses in the
foreclosure of chattel mortgages, such as when mortgagee-creditors foreclosed mortgaged property, bought them at a
low price (on purpose,) then prosecuted the mortgagor-debtors to recover the deficiencies.
In the event a buyer of personal property defaults by failing to pay two or more of the agreed installments, the seller can
do any of the following:
a) Demand that the buyer pay (a.k.a. specific performance)
b) Cancel or rescind the sale
c) Foreclose the mortgage on the property bought (if there ever was a chattel mortgage)
Regarding no. 3, this happens when a person takes a loan to buy something and he mortgages the thing he bought to
ensure the creditor that he will pay the loan. Remember: If you choose one remedy, you can’t choose the others. These
remedies, believe it or not, are also available to the buyer. You also can’t use all or any of them at the same time. The
Recto Law also won’t apply to a straight sale (i.e. a sale where there is a downpayment and the balance is payable in the
future in a single payment only.) The seller can also assign his credit to another person, making that person the new
creditor.

If the buyer refuses to surrender the items to the seller, he becomes a perverse buyer-mortgagor. When that happens,
the seller can recover expenses and attorney’s fees.

The Recto Law also covers leases with the option to purchase.

Lina Law
REPUBLIC ACT NO. 7279

AN ACT TO PROVIDE FOR A COMPREHENSIVE AND CONTINUING URBAN DEVELOPMENT AND HOUSING PROGRAM,
ESTABLISH THE MECHANISM FOR ITS IMPLEMENTATION, AND FOR OTHER PURPOSES.