Thursday, January 16, 2014

Misleading property ads

From TV and radio to newspapers and the Internet, posting advertisements across different platforms is now a common selling tool for real estate developers. For residential properties in particular, many developers resort to distributing flyers and brochures in public places, such as malls. 

For pre-selling condos in particular, no matter what is indicated in the advertisements, there is no real way to ensure that you’re getting exactly what you’re paying for.

While this has proven to be an effective selling tool on the developers' part, it also provides valuable information for interested homebuyers and investors. It’s important for buyers to be cautious of information found in ads, because these advertisements typically put real estate developments in the best light possible. 

Most flyers have some form of this statement in fine print, “All information stated is intended to give a general overview of the project. The developer reserves the right to modify as it sees fit without prior notice”. When buying any property, it’s always best to visit the property to see the house or condominium unit’s exact floor plan and dimensions, as well as the development’s various amenities. Also, discuss the payment rates and terms with an accredited broker or sales agent to confirm the ad information. 

For pre-selling condos in particular, no matter what is indicated in the advertisements, there is no real way to ensure that you’re getting exactly what you’re paying for. Buying properties that are not yet built, will mean you always run the risk of project delays and changes in floor plans and development amenities. When buying at the pre-selling stage, it’s important to discuss the plans and terms with a sales agent and be prepared for these very real risks. 

These tips are just some of the more basic things to consider as a cautious buyer. However, there are also Philippine laws to protect property buyers against misleading ads. In Section 19 of the Presidential Decree No. 957 (P.D. 957), otherwise known as the Subdivision and Condominium Buyer’s Protective Decree, it states that: 

Advertisements that may be made by the owner or developer through newspaper, radio, television, leaflets, circulars or any other form about the subdivision or the condominium or its operations or activities must reflect the real facts and must be presented in such manner that will not tend to mislead or deceive the public.  

The owner or developer shall be answerable and liable for the facilities, improvements, infrastructures or other forms of development represented or promised in brochures, advertisements and other sales propaganda disseminated by the owner or developer or his agents and the same shall form part of the sales warranties enforceable against said owner or developer, jointly and severally. Failure to comply with these warranties shall also be punishable in accordance with the penalties provided for in this Decree.  

False advertisements may be grounds for the revocation of a real estate developer’s registration certificate and license to sell. Know your other rights as a property buyer under P.D. 957. You can view the full document and its revised implementing rules and regulations. - Aislinn Kee 


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