The Short Answer
The Maceda Law, Republic Act No. 6552 (RA 6552), protects people who buy a house, lot or condo unit and pay the seller in instalments. If you fall behind, you get a grace period to catch up. If you have paid for at least two years and the sale is cancelled, the seller must give back at least half of what you paid. The seller can cancel only 30 days after you receive a notarized notice. It does not cover a housing loan from a bank or Pag-IBIG.
Example: An OFW Family's House in General Trias, Cavite
Names and details in this example are made up.
Arnel Domingo, a seafarer, and his wife Joy signed a Contract to Sell with a developer in 2023 for a house and lot in General Trias, Cavite. They paid the down payment of ₱120,000 in 12 monthly instalments, then ₱10,000 a month on the balance, through the developer's in-house financing. By early 2026 they have paid three full years: ₱360,000 in all.
In February 2026 Arnel's contract ends and he cannot find a new ship for months. Joy misses the March, April and May payments.
The grace period. They have paid three years, so they get three months of grace (one month for each year paid) to pay the missed instalments without added interest. If Joy pays everything she owes within that time, the contract goes on as before.
If they cannot catch up. The developer may cancel, but only by sending a notice of cancellation by notarial act (a notarized notice) and paying them the cash surrender value, the refund the law requires. At three years of payments, that is 50% of ₱360,000, or ₱180,000. The cancellation takes effect only 30 days after Joy receives the notice and the refund is paid in full.
Another way out. Before the contract is cancelled, they can sell or assign their rights to another buyer, in a notarized document. A cousin who wants the house takes over the payments and pays them for what they have put in.
If they had paid only one year. They would get a grace period of at least 60 days from the missed due date, but no refund if the contract is cancelled.
Who the Maceda Law Covers
RA 6552, the Realty Installment Buyer Protection Act, covers sales of real estate paid in instalments, including residential condominium units. It is meant to protect people buying a home. It does not cover:
- industrial lots;
- commercial buildings;
- sales to tenants under the agrarian reform laws.
It applies whether the seller is a developer or a private person, as long as you are paying the seller in instalments, usually under a Contract to Sell (a contract where the seller keeps the title until you finish paying). Paying through a developer's in-house financing counts. For developer sales, PD 957 says a buyer who stops paying for reasons other than the developer's fault is covered by RA 6552. See buying a lot, house or condo from a developer.
Your Rights, by How Long You Have Paid
| You Have Paid | Grace Period | If the Sale Is Cancelled |
|---|---|---|
| At least two years of instalments | One month for every year paid, without added interest. You can use it once every five years of the contract. | The seller must refund a cash surrender value of 50% of everything you paid. After five years of payments, add 5% for each extra year, up to 90%. |
| Less than two years | At least 60 days from the date the missed instalment was due | No refund required by this law. Your contract may give one. |
The down payment, deposits and option money (money paid for the right to buy) count when adding up your years and your total payments.
Whichever row applies to you, cancellation takes effect only 30 days after you receive a notice of cancellation or demand for rescission by notarial act (a notarized notice cancelling the sale). For buyers with two or more years of payments, the seller must also pay the full cash surrender value first. A text message, a phone call or an unsigned letter does not cancel your contract.
Other Rights Under the Law
- Sell or assign your rights to another person before the contract is cancelled, in a notarized document. See the Deed of Assignment template.
- Reinstate the contract by paying what you owe during the grace period, before actual cancellation.
- Pay ahead: pay any instalment or the whole balance early, without interest.
Any part of the contract that gives you less than the law does is void (has no effect). So a clause saying "all payments are forfeited (lost) if you miss three months" does not take away your refund once you have paid two years.
Pag-IBIG and Bank Loans Are Different
Many buyers pay the developer in full using a Pag-IBIG housing loan or a bank loan. From then on, you are no longer paying the seller in instalments. You are paying back a loan, and the house is mortgaged to the lender as security. If you stop paying, the lender may foreclose the mortgage (take the property and sell it to recover the loan). The grace periods and refund of the Maceda Law generally do not apply to that loan.
If you are behind on a Pag-IBIG or bank housing loan, talk to the lender early. Ask in writing about restructuring the loan (changing the payment terms) or other relief it offers, and keep copies of every letter.
If the Seller Does Not Follow the Law
Write to the seller and ask them to follow RA 6552: honour your grace period, or pay the cash surrender value before cancelling. Keep your receipts and the contract. Complaints against developers are heard by the Human Settlements Adjudication Commission (HSAC). For a dispute with a private seller who lives in the same city or municipality, start at the barangay; see going to the barangay first. The Public Attorney's Office (PAO) helps people who qualify.
Common Questions
Tatlong Buwan na Akong Hindi Nakakabayad sa Developer. Mababawi ba Agad ang Bahay?
Not immediately. You first have a grace period: at least 60 days if you have paid less than two years, or one month for each year paid if you have paid two years or more. Even after that, the seller must send a notarized notice of cancellation, and the cancellation takes effect only 30 days after you receive it (and, after two years of payments, only once the refund is paid).
How Much Will I Get Back If I Give Up the House?
If you have paid at least two years of instalments and the seller cancels, at least 50% of everything you paid, including the down payment. After five years of payments, add 5% for each extra year, up to 90%. If you have paid less than two years, the law does not require a refund, but check your contract.
Does the Maceda Law Apply to a Lot I Am Buying From My Neighbour on Hulugan?
It can. The law covers instalment sales of real estate, not only developer sales, as long as it is not an industrial lot, a commercial building or an agrarian reform sale to a tenant. Put your agreement in a written Contract to Sell and keep receipts for every payment.
Is the Reservation Fee Refundable Under the Maceda Law?
Deposits and down payments count as instalments when adding up your years and your total payments. Whether a reservation fee alone can be refunded if you back out early depends on the Reservation Agreement, so read it before you pay.
Can I Transfer My Contract to Someone Else Instead of Losing It?
Yes. The law lets you sell or assign your rights to another person before the contract is cancelled, by a notarized document. Developers usually have their own process for this, so ask them for it in writing.
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. This page explains the general rules; it cannot tell you how they apply to your own family or case. Last reviewed October 8, 2026.