Non-Forfeiture of Payments in Subdivision Sales

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HLRB BOARD NO. R-540: Non-Forfeiture of Payments in Subdivision Sales

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Title Supreme Court: Non-Forfeiture of Payments in Subdivision Sales

Law: Hlrb Board No. R-540

Decision Date: Feb 16, 1994

Amending the rules on non-forfeiture of payments, this resolution ensures that buyers can halt installment payments without penalty if developers fail to complete projects as promised, provided they notify the relevant parties and receive clearance from the Board.

installment payment

administrative law

A

Definition and Conditions Constituting Failure to Develop

Failure to develop occurs when the owner or developer does not complete the construction, installation, provision of operational and usable facilities, improvements, and infrastructure within the set time limit or extensions granted.
Required developments include water supply, lighting, and other facilities specified in approved plans, contracts, brochures, advertisements, or standards set by the Board.

Conditions Allowing Buyer to Desist from Further Payments

There must be a verified failure to develop as stated.
The buyer must be current on amortization or installment payments (no arrears).
The buyer must notify in writing the developer/owner, Housing and Land Use Regulatory Board (HLRB), and if applicable, the lending institution.
The Board must issue clearance permitting the buyer to stop further payments.

Verification and Clearance Procedure by the HLRB

HLRB is responsible for verifying the buyer's claim of developer failure to develop.
The Board informs both the buyer and developer whether the buyer's request to suspend installment payments is approved.

Important Legal Concepts

Protection against arbitrary cessation of payments by buyers and unfair forfeiture by developers.
Legal framework ensuring project development accountability by developers through adherence to approved plans and timelines.
Formal notification and clearance process to balance interests of buyers, developers, and financing institutions.

Scope and Application

Applies to both new and existing subdivision and condominium projects covered under the implementation of P.D. 957.
Provides a uniform basis for resolving disputes related to non-forfeiture of payments under Section 23 of P.D. 957.

Penalties and Interest

Buyers who stop payments after due process are entitled to reimbursement with interest at the legal rate.
Amortization interest payments by buyers are protected; delinquency interest is excluded from reimbursement.

Procedural Safeguards

Written notices to all concerned parties prevent unilateral decisions.
Clearances from the HLRB ensure administrative oversight and fairness.

Authority and Adoption

The amendments were adopted by the Housing and Land Use Regulatory Board on February 16, 1994.
Signed and approved by the Chairman and members of the Board, including representatives from HUDCC, NEDA, DILG, DOJ, and other government offices.

END