It is really painful to hear from our fellow Filipinos that their hard earned money can easily be forfeited by some of the real estate developers without proper guidance on their part. Agents and brokers do not even discuss this with the buyers during the presentation and signing of the reservation agreement.
As per your reservation agreement, reservation fee is non-refundable if you wish not to continue with the payment. Most of the reservation agreements further provide that your payment will be forfeited if you delay in payment, thus your purchase of the property will be canceled.
However, real estate developer cannot forfeit your equity payment or what we called instalment of your down payments for two main grounds: (a) developer did not develop or construct the property as prescribed and approved by the government (Housing and Land Use Regulatory Board –HLURB), (b)developer did not deliver the property to the owner on the time specified in the License to Sell (LTS) issued by the HLURB (government agency).
Furthermore, the buyer must notify or inform the real estate owner or developer, not just to the agent or broker of his or her interest to suspend payment or his/her interest to refund due to the non-compliance of the approved specification and non-delivery of the property on the specified timeline.
P.D. 957 REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS, PROVIDING PENALTIES FOR VIOLATIONS THEREOF: SECTION 23. Non-Forfeiture of Payments, provides that – No installment payment made by a buyer in a 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, desist from further payment due to the failure of the owner or developer to develop the subdivision or condominium 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 interest but excluding delinquency interest, with interest thereon at the legal rate.
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