Post-dated check payments convenient for real estate developers
"I am a dual citizen (Filipino and American). I bought a condominium unit in Davao City. Since I live abroad, I requested with the company that I will sign the Contract to Sell when I arrive next year. The company approved my request but demanded that I submit all 48 post-dated checks which represent the 4-year term loan finance with the developer, or 96 post-dated checks if I decide to include the parking lot that I intend to purchase together with the condominium unit. I appealed to the company and asked if they will allow me to just submit 6 post-dated checks. They informed me that they will allow the submission of the 6 post-dated checks but the processing of the Contract to Sell will only commence upon the submission of all the required post-dated checks. I just want to know whether the company is violating any HLURB regulations by imposing upon me the submission of all the post-dated checks. If I decide not to comply with their instructions, will it be disadvantageous for me as a buyer to make monthly payments without the Contract to Sell being executed? I hope you can enlighten me.
Dear Darwin,Considering the facts that you have shared with us, we are inclined to believe that there is no violation on the part of the company relative to any Housing and Land Use Regulatory Board (HLURB) rules and regulations or any law governing the sale of condominium units. While there are laws granting protection to condominium unit buyers, such as Presidential Decree No. 957, otherwise known as “Subdivision and Condominium Buyer’s Protective Decree,” Republic Act No. 6552, otherwise known as the “Realty Installment Buyer Protection Act,” and Republic Act No. 4726, otherwise known as “The Condominium Act,” in relation with Republic Act No. 7899 amending Sections 4 and 16 thereof, these laws do not reveal any provision as regards the commission of violation on the part of a company or developer of condominium units for requiring their buyers to submit all post-dated checks covering the purchase of the property or for the financing thereof. It is also a common practice of most companies and developers of subdivision and condominium units to require their buyers to submit post-dated checks as it provides convenience for them insofar as collection of their buyers’ installment payments are concerned. It also serves as assurance that the buyers’ payments will be received on their stipulated period.
In addition to the foregoing, it is worth mentioning that our civil laws recognize the rights of parties to a contract to stipulate on the terms which will govern them. As provided for under Article 1306 of the New Civil Code of the Philippines: “The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.” Accordingly, if it is indicated in your agreement that all post-dated checks must be submitted prior to the processing of the Contract to Sell, the company from which you bought the condominium unit has the option not to execute and process such contract should you decide not to comply with the submission of said checks because you have failed to comply with what is incumbent upon you. Moreover, it is not advisable for you to pay the installments without the Contract to Sell because you have no tangible assurance relative to your rights over the condominium unit which you bought. It is better for you to have in your hand the Contract to Sell so that you will be properly guided as to what your obligations are with the company and vice versa.We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to firstname.lastname@example.org."
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"Post-dated check payments convenient for real estate developers"
was written by Mary
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comments. The article was created on 15 September 2021
and updated on 15 September 2021