Law Summary
Definitions and Key Terms
- "Person" includes natural and juridical persons (corporations, partnerships, etc.).
- "Sale" covers all forms of disposition or contract relating to subdivision lots or condominium units.
- Definitions cover subdivision project/lot, condominium project/unit, owner, developer, dealer, broker, salesman, and Authority (NHA).
Registration and Licensing Requirements
- Registered owner must submit subdivision/condominium plans to NHA for approval ensuring compliance with standards and the National Building Code.
- Registration of projects requires sworn statement with owner’s details, corporate information, financials, and approved plans.
- Advertisement materials and titles free from liens must be attached.
- Public notice of registration must be published in newspapers.
- License to sell issued only after registration and upon determining good repute and financial stability.
- Adequate performance bond required to guarantee development and maintenance of infrastructure and compliance with laws.
- Exemptions: sales resulting from partition among co-owners, resale by original purchasers, sales by mortgagee to liquidate bona fide debts.
Suspension and Revocation of License
- NHA may suspend license to sell upon verified complaints or if registration information is misleading.
- Suspension can be lifted after hearing and correction of deficiencies.
- Revocation of registration and license can occur for insolvency, violations, fraud, misrepresentation, bad repute, or failure to conduct business according to law and sound principles.
- Corporate responsibility includes acts of officers or partners.
Records and Public Inspection
- NHA must keep registers of subdivision lots and condominium units including all orders affecting status.
- Registers are open to public inspection.
Dealers, Brokers, and Salesmen
- Must register with NHA, filing bonds conditioned on compliance with the decree.
- Registration expires annually with renewal procedures.
- NHA may revoke or refuse registration upon violations, false statements, fraud, or demonstrated unworthiness.
- Suspension of dealer registration includes suspension of salesmen employed.
Hearing Procedures
- Notice and opportunity to be heard are required before suspension or revocation.
- Proceedings are summary and non-litigious.
- Authority may administer oaths, subpoena witnesses, inspect premises, and require production of documents.
Contempt Powers
- Officers hearing cases can summarily punish direct contempt with fines or imprisonment.
- Indirect contempt proceedings follow the Rules of Court.
Decision and Enforcement
- Decisions issued within 30 days of submission become final after 15 days.
- May order suspension, revocation, and forfeiture of performance bond.
- Forfeiture proceeds may be used to complete required development.
Cease and Desist Orders
- NHA may issue orders to prevent violations of the decree or rules after notice and hearing.
Registration of Sale Documents
- Contracts to sell, deeds, and related instruments must be registered with the Register of Deeds.
- Street or open space annotations required on titles for complex subdivisions.
Mortgages
- Mortgages on lots or units require NHA approval.
- Mortgage proceeds must be used for project development.
- Buyers notified of loan values; option to pay mortgagee directly for prompt title issuance.
Advertising and Representations
- All advertisements must be truthful and non-misleading.
- Owners/developers are liable for representations and warranties in sales propaganda.
Development Obligations and Timeframes
- Owners/developers must complete all infrastructure and improvements within one year or as fixed by Authority.
- For projects sold before the decree, compliance must be completed within two years or as extended.
Changes to Approved Plans
- Alterations to roads, open spaces, facilities require NHA approval and consent of homeowners association or majority buyers.
Buyer Protections
- Payments not forfeited if buyer stops payments due to failure to develop project as agreed; right to reimbursement with legal interest.
- Failure to pay for other reasons governed by existing law (R.A. No. 6552).
Transfer of Titles and Taxes
- Titles must be delivered upon full payment without fees except registration costs.
- Mortgages outstanding at issuance must be redeemed within six months.
- Real estate taxes paid by owner until title transfer; buyer liable if in possession and occupancy.
Fees and Charges
- Owners/developers may not impose community benefit fees; such fees may be collected only by a homeowners association with majority consent.
Access and Right of Way
- Free access to government/public offices within subdivisions must be allowed.
- Owners must secure and maintain right of way to public roads if subdivision lacks access.
Homeowners Associations and Donations
- Owners/developers must facilitate formation of homeowners associations.
- Roads and open spaces may be donated to local government upon completion; conversion requires approval.
Project Phasing
- Development and sale may be divided into phases (minimum 10 hectares each), with consistent compliance required for each phase.
Nullity of Waivers
- Contract provisions waiving rights under the decree or rules are void.
Inspection and Enforcement
- NHA and authorized engineers have visitorial powers including inspections, document examination, and subpoenas.
- May take over and complete projects if owners fail, recovering costs from buyers.
- NHA empowered to issue necessary regulations and deputize law enforcement for execution.
Penalties
- Administrative fines up to P10,000 for violations.
- Criminal penalties up to P20,000 and/or 10 years imprisonment for violations.
- Corporate officers responsible for violations.
- Controllers liable jointly unless proved acting in good faith.
Supplementary Legal Remedies and Repeal
- Rights under this decree are additional to existing remedies.
- Conflicting laws and regulations repealed or modified.
Effectivity
- The decree takes effect upon approval.