Question & AnswerQ&A (Republic Act No. 6552)
The official name of the law is the 'Realty Installment Buyer Protection Act'.
The declared public policy is to protect buyers of real estate on installment payments against onerous and oppressive conditions.
The Act covers transactions or contracts involving the sale or financing of real estate on installment payments, including residential condominium apartments but excludes industrial lots, commercial buildings, and sales to tenants under Republic Act Nos. 3844 and 6389.
The buyer has the right to pay, without additional interest, the unpaid installments due within the total grace period earned, which is one month grace period for every one year of installments paid. This right may be exercised only once every five years during the contract life.
The seller must refund to the buyer the cash surrender value of payments made, equivalent to 50% of payments made plus an additional 5% for every year after five years of installment payments, but not to exceed 90% of the total payments made.
Actual cancellation takes place after 30 days from receipt of the notice of cancellation or demand for rescission by a notarial act and upon full payment of the cash surrender value to the buyer.
The seller shall give the buyer a grace period of not less than 60 days from the due date of the installment.
The buyer may sell or assign his rights to another person or reinstate the contract by updating payments during the grace period and before contract cancellation. The deed of sale or assignment must be done by notarial act.
Yes, the buyer has the right to pay any installment or the full unpaid balance of the purchase price any time without interest, and have the full payment annotated in the certificate of title.
No, any stipulations contrary to these sections in contracts entered into after this Act are null and void.