In Short
- Under PD 957, a developer needs a Certificate of Registration and a License to Sell for the project before it can sell any lot or unit.
- The DHSUD (Department of Human Settlements and Urban Development) now gives these out. It took over this work from the HLURB.
- Most developer sales start with a reservation fee, then a Contract to Sell. The developer keeps the title until you finish paying.
- The Maceda Law (RA 6552) gives people buying a home in instalments extra time to catch up and, after two years of payments, a cash refund if the sale is cancelled.
- When you have paid in full, PD 957 says the developer must give you the title.
Check the License to Sell First
Before you pay a developer anything, check that it is allowed to sell. Presidential Decree No. 957 (PD 957), the Subdivision and Condominium Buyers' Protective Decree, sets two steps before a developer can sell:
- Registration of the project. The developer files a sworn registration statement with the plans, its financial records and the title to the land. Once approved, it gets a Certificate of Registration (Section 4).
- License to Sell. Registration alone does not allow sales. The developer must also get a License to Sell for the project, which is given only if the developer is found to have a good reputation and enough money, and the sale would not cheat buyers (Section 5).
These were once handled by the Housing and Land Use Regulatory Board (HLURB). Under Republic Act No. 11201 (RA 11201), the job of checking and licensing developers moved to the DHSUD, and the HLURB became the Human Settlements Adjudication Commission (HSAC), which hears buyer complaints.
Before you pay anything:
- Ask the developer or agent for a copy of the Certificate of Registration and License to Sell. Check that the license covers the exact project and phase you are buying into, not a different phase or a sister project.
- Confirm with the DHSUD regional office that covers the project. The DHSUD can issue a certification on a project's registration and license.
- Check that the agent or broker has a license. Real estate brokers and salespersons are registered with the Professional Regulation Commission.
For a resale (buying from an owner, not from the developer), see checking land before buying instead.
Reservation, Down Payment and the Contract to Sell
A typical developer sale goes like this:
- Reservation. You pay a reservation fee to hold a specific lot or unit. Read the Reservation Agreement. Does the fee count toward the price? Can you get it back if you back out or your loan is not approved?
- Down payment. Often paid in monthly instalments over a set period.
- Contract to Sell. The developer agrees to sell, and you agree to pay the price on the stated terms. Ownership and title stay with the developer until you pay in full. Read the parts on penalties, cancellation, refunds, turnover date and who pays the transfer costs.
- Balance. You pay the rest in cash, through in-house financing (a loan from the developer itself), or with a bank or Pag-IBIG housing loan.
- Deed of Absolute Sale and title. After full payment, the developer signs a Deed of Absolute Sale (the final sale document) and the title is transferred to you.
PD 957 also says what is promised in advertisements and brochures counts. Facilities and improvements shown in the developer's ads become things it must provide (Section 19), and the developer must build the promised roads, facilities and improvements within the time the law or the license sets (Section 20).
For a private sale paid in instalments between individuals, see the Contract to Sell template and the Receipt of Earnest Money.
The Maceda Law: If You Fall Behind on Instalments
Republic Act No. 6552 (RA 6552), the Realty Installment Buyer Protection Act or "Maceda Law", protects people who buy a home or residential lot, including condo units, and pay in instalments. It does not cover industrial lots, commercial buildings, or sales to farm tenants under the agrarian reform law. PD 957 says a buyer who stops paying for reasons other than the developer's fault is covered by RA 6552.
| You Have Paid | Your Rights Under RA 6552 |
|---|---|
| At least two years of instalments | A grace period (extra time to catch up) of one month for every year of instalments paid, without added interest. You can use it once every five years of the contract. If the contract is then cancelled, the seller must refund a cash surrender value (cash back) of 50% of what you paid, plus 5% more for every year after five years, up to 90%. |
| Less than two years | A grace period of at least 60 days from the date the instalment was due. |
In both cases, cancellation takes effect only 30 days after you receive a notarized notice of cancellation or demand for rescission (cancelling the contract). If you have paid at least two years, it also needs full payment of the cash surrender value to you. Down payments, deposits and options count as instalments when counting your years of payment.
The law also lets you:
- sell or transfer your rights to someone else, in a notarized document, before cancellation;
- catch up on your payments during the grace period and before cancellation to bring the contract back into effect;
- pay any instalment, or the whole balance, ahead of time without interest.
Any part of the contract that gives you less than these rights is void (has no effect).
If the Developer Does Not Deliver
Section 23 of PD 957 says that if you stop paying, after giving the developer notice, because it failed to develop the project according to the approved plans and timelines, the developer cannot keep your payments (forfeit them). You may ask for a refund of what you paid, without the interest for late payments, plus legal interest (the interest rate set by law).
Complaints about developers, such as refunds, delays and failure to deliver the title, are heard by the Human Settlements Adjudication Commission (HSAC). Put your demand in writing first and keep copies of every receipt and letter. A lawyer can help with a formal complaint. The Public Attorney's Office (PAO) gives free help to people who qualify.
Condominiums: What You Actually Own
Under Republic Act No. 4726 (RA 4726), the Condominium Act, buying a condo unit gives you the unit itself plus a shared part-ownership of the land and the common areas (lobbies, hallways, amenities). Where the common areas are held by a condominium corporation, unit owners automatically become members, and that membership goes with the unit. The project must have a master deed (the main document that sets up the condo project) recorded with the Registry of Deeds. Your proof of ownership is a condo title, called a Condominium Certificate of Title (CCT). The law keeps foreign ownership within the limits of the Constitution, so a project cannot let foreign buyers go beyond the 40% share allowed to foreigners.
Getting the Title After Full Payment
Section 25 of PD 957 says the developer shall deliver the title of the lot or unit to the buyer upon full payment. If the land or unit is still mortgaged (used as security for a loan) to the developer's lender at that point, the developer must pay off and free it (redeem the mortgage) within six months from when the title is issued. The developer may charge you only the fees needed to register the Deed of Sale.
The steps after the Deed of Absolute Sale are much like any title transfer: taxes at the BIR, transfer tax at the treasurer, registration at the Registry of Deeds, and a new Tax Declaration at the assessor. Because selling property is a developer's business, the BIR taxes are different from a private sale of a home (usually creditable withholding tax and sometimes VAT, not capital gains tax). Your contract should say who pays which costs. See transferring a land title for the general steps.
If you took a Pag-IBIG or bank loan, the title is issued in your name but carries a note (annotation) of the lender's mortgage. When the loan is paid, see cancelling a mortgage.
Papers to Ask for and Keep
Keep originals in a safe place. You will need them for a loan, a complaint or the title transfer.
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Common Questions
How Do I Know If a Developer Has a License to Sell?
Ask the developer for a copy of the License to Sell for the specific project and phase, then confirm with the DHSUD regional office where the project is. Be wary of a seller who takes payments but cannot show a license.
Can I Get a Refund If I Stop Paying?
Under the Maceda Law, if you have paid at least two years of instalments and the contract is cancelled, you have the right to cash back (the cash surrender value) of at least 50% of what you paid, more after five years. If you paid less than two years, the law gives a grace period of at least 60 days but no refund. Your contract may give more, never less.
Is the Reservation Fee Refundable?
It depends on the Reservation Agreement, so read it before you pay. Under the Maceda Law, deposits and down payments count as instalments when counting how long you have paid.
I Have Fully Paid but the Developer Has Not Given Me the Title. What Can I Do?
PD 957 says the developer must give you the title once you have paid in full. Write to the developer asking for it by a set date. If nothing happens, a complaint can be filed with the Human Settlements Adjudication Commission. See Demand Letters.
Is a Contract to Sell the Same as a Deed of Sale?
No. In a Contract to Sell, the seller keeps ownership until you pay in full. The Deed of Absolute Sale, signed after full payment, is what transfers ownership and lets you register the title in your name.
Not legal advice. This is general information. For advice on your own situation, consult a lawyer. If you cannot afford one, the Public Attorney's Office (PAO) or an IBP legal aid office may help for free.
Government fees, rules and requirements change, so always check with the office concerned before you go. Last reviewed October 8, 2026.