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SOURCE: Press and Public Affairs Bureau

House approves stiffer penalties for unscrupulous subdivision and condominium developers
Writer: Jazmin S. Camero, Media Relations Service-PRIB
09 February 2014 09:25:08 AM

The House of Representatives has approved on second reading a measure amending Presidential Decree 957 or the Subdivision and Condominium Buyers' Protective Decree of 1976.

Rep. Susan Yap (2nd District, Tarlac) said House Bill 395 should increase the penalties provided under PD957 to serve as a deterrent to the habitual and deliberate violation of unscrupulous developers.

"Due to obsolete penalties for violations of PD957 or the Subdivision and Condominium Buyer's Protective Degree of 1976, many land and condominium developers contravene the decree knowing fully well that payment for the defiance of the law is so small," Yap, principal author of the bill, said.

House Committee on Housing and Urban Development Chairman Rep. Alfredo Benitez (3rd District, Negros Occidental) and co-author of the bill said the enactment into law of the measure would ensure further protection to the buyers of subdivision lots and condominium units.

"A certificate of registration does not vest the owner or dealer of a project the authority to sell without the necessary license to sell," Benitez said.

The measure increases the administrative fine to P50,000 for each violation of any of the provisions of the decree or of any rule or regulation, which shall be payable to the board.

Failure to complete the development of the project, failure to deliver the title, failure to refund the purchase price, and failure to follow construction specifications or poor workmanship resulting to sub-standard units or to construction defects shall be penalized.

Violators face a fine of P500,000 and jail term of four years for the first offense, P750,000 and 7 years imprisonment for the second offense and P1 million and 10 year imprisonment and revocation of business permit and licenses for the third offense.

An additional fine of P500,000 shall be imposed for every real estate or condominium unit sold by reason of advertisement in violation of the decree.

The measure to be known as The Subdivision and Condominium Buyers' protective Decree Amendment of 2013 mandates the registration in the Office of the Register of Deeds of the province or city where the property is situated by the developer and seller at his expense of all deeds of sale of subdivision lots and condominium units whose purchase price is already paid in full.

In case of an installment scheme, the developer or the seller shall also register the contract to sell, but the seller and the buyer would share the registration expenses proportionately.

The measure allows the registration of a contract to sell to be cancelled by the proper registration of deeds, without the need of a court order, upon execution by the developer of an affidavit that the cancellation or rescission was due to default on the part of the buyer.

The bill mandates the donation of open spaces reserved for schools, places of worship, hospitals, health centers, and barangay centers to the local government by the owner or developer.

The co-authors of the bill are Reps. together with co-author Reps. Christopher Co and Rodel Batocabe (Ako Bicol Party List), Magtanggol Gunigundo I (2nd District, Valenzuela City), Jonathan dela Cruz (Party list, ABAKADA), Lani Mercado-Revilla (2nd District, Cavite), Gary Alejano (Party list, MAGDALO), and Fernando Hicap (Party list, ANAKPAWIS).