Question & AnswerQ&A (HLRB BOARD Resolution NO. R-540)
Section 23 governs the non-forfeiture of payments made by a buyer in a new or existing subdivision or condominium project when the buyer desists from further payment due to the developer's failure to develop the project as agreed.
No installment payment shall be forfeited if the buyer desists from further payment due to the failure of the developer to develop the project according to approved plans and within the prescribed time limit.
The buyer must give due notice to the owner or developer and obtain clearance from the Housing and Land Use Regulatory Board (HLRB) before stopping payments.
The buyer may be reimbursed the total amount paid, including amortization interests but excluding delinquency interests, with interest thereon at the legal rate.
Failure to develop occurs when the owner or developer fails to complete construction, installation, and provision of operational and usable facilities, improvements, infrastructure, including water supply and lighting, within the time limit set by law or extensions granted by the Board according to approved plans and specifications.
The conditions are: (1) there is a failure to develop, (2) the buyer’s payments are up-to-date with no arrears, (3) the buyer notifies in writing the developer, HLRB, and the lending institution (if applicable) of his intention to stop payment, and (4) clearance is issued by the Board.
HLRB verifies the claim of failure to develop and informs both the buyer and developer whether clearance to suspend payments is granted to the buyer.
No, delinquency interests are excluded from the reimbursement; only the total amount paid including amortization interests is reimbursed with legal interest.
The buyer must notify the developer/owner, the HLRB, and the lending institution (if applicable).
Yes, it applies to installment payments made by a buyer in both new and existing subdivision or condominium projects.