Thursday, January 23, 2014

Real estate fraud and your rights

In the Philippines, the widespread competition among real estate developers has provided some advantages to homebuyers. It has brought about better deals with competitive prices and better quality and design of houses and condominium units. At any given prime location, it is not uncommon to see several developers offering properties with a price range for every budget. Homebuyers now have more options than ever before. 

Fortunately, the country has laws to protect homebuyers from these fraudulent activities, in the form of Presidential Decree No. 957 (P.D. 957) or the Subdivision and Condominium Buyer’s Protective Decree. Whether you’re a seasoned investor or a first-time homebuyer, it’s important to be well versed with your rights as a property buyer.

However, these advantages also come at a cost. The stiff competition pushes developers and brokers to their limits, sometimes committing to more than they can provide. There may also be some cases of misleading property information just to be able to sell, or worse, scams and cases of fraud. 

Fortunately, the country has laws to protect homebuyers from these fraudulent activities, in the form of Presidential Decree No. 957 (P.D. 957) or the Subdivision and Condominium Buyer’s Protective Decree. Whether you’re a seasoned investor or a first-time homebuyer, it’s important to be well versed with your rights as a property buyer. 

When buying any kind of property, it is best to choose a reputable developer with registered projects and a license to sell. Property sales agents, dealers and brokers should also be duly registered. This may offer some peace of mind, but does not give complete assurance of good faith on your developer or broker’s part. 

According to Section 9 of P.D. 957, the registration certificate and license to sell of the developer or dealer may be revoked if a verified complaint of a buyer has found that the property developer: 

a) Is insolvent; or 

b) Has violated any of the provisions of this Decree or any applicable rule or regulation of the Authority, or any undertaking of his/its performance bond; or 

c) Has been or is engaged or is about to engage in fraudulent transactions; or 

d) Has made any misrepresentation in any prospectus, brochure, circular or other literature about the subdivision project or condominium project that has been distributed to prospective buyers; or

e) Is of bad business repute; or 

f) Does not conduct his business in accordance with law or sound business principles. 

In most property transactions, particularly for subdivisions and condos, buyers usually conduct their business with property sales agents or brokers. This may be where problems arise. Section 12 of P.D. 957 also covers the revocation of registration of a property dealer, broker or salesman, after reasonable notice and hearing, who: 

1. Has violated any provision of this Decree or any rule or regulation made hereunder; or 

2. Has made a material false statement in his application for registration; or 

3. Has been guilty of a fraudulent act in connection with any sale of a subdivision lot or condominium unit; or 

4. Has demonstrated his unworthiness to transact the business of dealer, broker or salesman, as the case may be. 

5. In case of charges against a salesman, notice thereof shall also be given the broker or dealer employing such salesman. 

As a property buyer, it is your right to report any fraudulent activities and wrongdoings on the part of your property dealer or broker. You may view P.D. 957 in full at and its revised implementing rules and regulations


Previous Next

Share
Email

Top Articles

Small spaces: Decor t...
Need a little more leg space in your living room? Use scaled-down sofas, arrang...
Home decor: Tips to c...
Even if you’re on a tight budget, it’s possible to completely transform a room ...
Buying Lots in Valenz...
Our partner is buying several properties in areas in Valenzuela, Quezon City, B...
Tips for designing th...
With imagination and clever design, you can encourage your family to spend more...
Buying Lots in QC, Va...
Our partner is buying several properties in Quezon City, as well as the cities ...
More property news...