Wednesday, January 22, 2014
Buying a condo unit at the pre-selling stage usually offers a comparatively lower price and more options for available units. With the rise of condo developments in prime locations around the metro, many now prefer to purchase a condo unit closer to work or school instead of going through the grueling commute every day. However, people who are buying units for this purpose often list the unit turnover date as one of their top considerations.
As a homebuyer or investor, it’s important to note that whatever the property advertisements or your real estate broker says, pre-selling condos always have the risk of delayed turnovers. Short delays may be acceptable compromises for homeowners, but delays may also last several years in cases where the developers are suffering bankruptcy.
This long a delay may just deem the condo unit useless for the homeowners, especially if the time frame is an issue. Your child’s schooling may be over or you may have moved jobs before your even get your condo unit.
This can be quite a tight spot to be in, but you don’t necessarily have to be stuck with a condo unit you have no use for anymore. The Philippine law provides protection for homebuyers and investors for cases like this. Presidential Decree No. 957 (P.D. 957), otherwise known as the Subdivision and Condo Buyer’s Protective Decree, and its revised implementing rules and regulations tackles this particular subject.
Section 24. Non-forfeiture of Payments
No installment payment made by a buyer in a new or existing subdivision or condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer when the buyer, after due notice to the owner or developer and clearance from the Board desists from further payment due to the failure of the owner or developer to develop the project according to the approved plans and within the time limit for complying with the same. Such buyer may at his option be reimbursed the total amount paid including amortization interests but excluding delinquency interests, with interest thereon at the legal rate.
According to Section 23 of P.D. 957 and Section 24 of the 2009 Revised Implementing Rules and Regulations, in case of delayed turnovers, you have the right to stop making further payments on your condominium unit, but only after due notice to the developer and clearance from the Housing and Land Use Regulatory Board (HLURB). Also, you may back out on your purchase and be reimbursed the total paid amount, excluding delinquency interests, but including amortization interests and legal interest rates.