Limitations on Vendor’s Subsequent Actions After Mortgage Foreclosure
- If the vendor opts to foreclose the mortgage for unpaid installments, the vendor cannot pursue further claims to recover any remaining unpaid balance from the purchaser.
- Any contractual provision that contradicts this limitation (i.e., allowing further recovery after foreclosure) is considered null and void.
Applicability to Leases with Option to Purchase
- The same rules apply to leases of personal property that include an option to purchase clause.
- If the lessor deprives the lessee of the enjoyment of the property (due to failure to pay installments), the lessor may exercise the right to cancel or foreclose similarly as in sale contracts.
Effectivity
- The provisions of this Act became effective immediately upon its approval on December 9, 1933.