Maceda Law


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  • i working in a realty business company as an auditor. There was a transaction that the customer avail the Maceda Law refund 50% of what she has paid i question the penalties and interest was included in the computation of installment payments because as far as i know this are not included. Any lawyer help me to understand because the management is saying that it will be included..i highly appreciate....
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Maceda Law

  1. 1. Maceda LawSUMMARY
  2. 2. “ Iba ang napagusapannatin,ayoko nang ituloy yan –isauli nyo na lang perako”
  3. 3. “No! it’s such a fine print! I don’tcare what I signed- I want arefund! And I want it now”
  4. 4. “Pasensiya na ha? Nawalanlang talaga ako ng trabaho,magkano ba ang makukuhako pag nag cancel tayo?
  5. 5. Realty InstallmentBuyer Protection ActMACEDA LAWREPUBLIC ACT NO. 6552By: Ann V. Villareal
  6. 6. Sen. Ernesto Maceda
  7. 7. ObjectiveTo protect buyers of real estateon installment payments againstonerous and oppressiveconditions.
  8. 8. CoverageResidential Real Estate*on Installment basisIncluding - Residential Condominium units
  9. 9. CoverageExcludingIndustrial LotsCommercial lotsSale to tenants under RA 3844Industrial LotsCommercial lotsSale to tenants under RA 3844
  10. 10. Rights of Buyers
  11. 11. PaymentTo pay, without additional interest, theunpaid installments due within the totalgrace periodfor every one year of installment paymentsmade;That this right shall be exercised by theBuyer only once in every five years of thelife of the contract and its extensions,
  12. 12. Cash Surrender ValueNo RefundLess than 2 years
  13. 13. the seller shall refund to the buyer the cashsurrender value of the payments on the propertyequivalent to fifty percent 50% of the totalpayments madeCash Surrender Valuemore than 2 years
  14. 14. Cash Surrender Valuean additional 5% every yearbut not to exceed ninety per cent of thetotal payments madeAfter 5 years* excludes penalty interest
  15. 15. that the actual cancellation of the contract by aNOTARIAL ACTand upon full payment of the cash surrender value to thebuyer.Cash Surrender Value
  16. 16. sixty days (60 days)from the date the installmentbecome due.Grace Period
  17. 17. If the buyer FAILS to pay theinstallments due at the expiration ofthe grace period,Grace Periodthe seller may cancel the Contract after30 days thirty daysfrom receipt by the buyer of the notice ofcancellation of the contractby a NOTARIAL ACT.
  18. 18. Assign/reinstatement the right to sell his rights or assign thesame to another person reinstate the contract by updating theaccount during the grace period andbefore actual cancellation of the contract. The deed of sale or assignment shall bedone by notarial act.
  19. 19. Pay in Advance right to pay in advance any installments orthe full unpaid balance of the purchaseprice any time without interest. To have such full payment of the purchaseprice annotated in the certificate of titlecovering the property.
  20. 20. Downpayments DOWNPAYMENT, DEPOSITS orOPTIONS on the contractincluded in the computationof the total number of installmentpayments made. PENALTIESnot included
  21. 21. Maceda LawSUMMARY
  22. 22. SUMMARY – Cash Surrender ValueLess than 2 yearsMore than 2 yearsMore than 5 yearsNo Refund50%50% +additional 5%For every year
  23. 23. CSV FormulaTP x % RF = RF or CSVTotal Payments x Percentage of refund=REFUND/Cash Surrender Value
  24. 24. Application QuizYour buyer bought a 200 sqm subdivision lot atP3,000/sqm. He paid 25% downpayment. Thebalance payable in 120 amortizations at 21% perannum. He has paid 84 monthly amortizationstotalling P737,612.20 inclusive of penalty interestof P32,000Compute for him his Cash Surrender Value under theMaceda Law
  25. 25. Solution The buyer has paid 7 years- 84 divided by 12 mos therefore entitled to 60% refund- 50% for 5 yrs & 5% per yearthereafter
  26. 26. SolutionREFUNDbased on the total paymentsPlus amortization interest butexclusive of penalty interest
  27. 27. SolutionDP: 200 sqm x P3,000 x 25% = P150,000.00Amortization (737,612.60-P32,000)= P705,612.20Basis of Refund = P855,612.20Percentage of refund x 60% .Amount of Refund =P513,367.32