Real Estate Law: Cancellation, Foreclosure, Maceda Law

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Questions and Answers

What happens if the vendee fails to pay for two or more installments?

The sale can be canceled and payments can be returned. (correct)

The vendee will face criminal charges.

The sale must continue without any changes.

The vendee is automatically given an extension.

According to the Recto Law, what should not occur after foreclosing a chattel mortgage?

Payments must be returned to the vendee.

Further action against the purchaser for unpaid balance. (correct)

The sale can be canceled.

The purchaser can be sued for damages.

Which of the following is NOT included under the Maceda Law?

Sale of industrial lots. (correct)

Sale of tenants under the land reform code.

Sale of residential condominium apartments.

Sale of financing of real estate.

What constitutes delivery in a situation where the provisions about ownership transfer do not apply?

Placing titles of ownership in the possession of the vendee Signup and view all the answers

What is the maximum grace period a buyer can earn under the Maceda Law?

One month for every year of payment. Signup and view all the answers

How often can a buyer exercise the right to pay unpaid installments within the grace period?

Once every five years. Signup and view all the answers

Under what condition does ownership of goods delivered on sale or return pass to the buyer?

Upon delivery of goods to the buyer Signup and view all the answers

What happens if a buyer does not signify acceptance of the goods delivered on approval?

Ownership remains with the seller until accepted regardless of time Signup and view all the answers

What is one of the main purposes of the Maceda Law?

To protect buyers from onerous conditions. Signup and view all the answers

What is a key distinction between a sale on return and a sale on trial?

A sale on return depends entirely on the buyer's will, while a sale on trial relies on the goods' quality Signup and view all the answers

What occurs if a buyer fails to make payments after having paid two years of installments?

They can still pay without additional interest within the grace period. Signup and view all the answers

Which remedy under the Recto Law cannot be exercised cumulatively with others?

Foreclosing the chattel mortgage. Signup and view all the answers

In the sale of specific goods, what rights can the seller reserve through the contract?

The right of possession or ownership until conditions are fulfilled Signup and view all the answers

In a sale on satisfaction, when does ownership pass to the buyer?

When the buyer adopts the transaction or retains goods after the fixed return time Signup and view all the answers

What is the implication of the risk of injury in a sale on return?

Risk lies with the buyer whether or not the goods are delivered Signup and view all the answers

Which statement accurately reflects the concept of QUASI-TRADITIO?

It may include allowing the vendee to use rights with vendor's consent Signup and view all the answers

What happens to the ownership of goods if the seller ships them but retains the bill of lading for security until payment is made?

Ownership remains with the seller until the bill of exchange is paid. Signup and view all the answers

In what scenario does the risk of loss shift to the buyer before actual delivery has been made?

When delivery is made to the buyer or a bailee for the buyer. Signup and view all the answers

If a seller wrongfully retains the bill of lading and does not honor the bill of exchange, what happens to his rights?

He acquires no additional rights by retaining the bill of lading. Signup and view all the answers

What is the general rule regarding the risk of a thing lost due to a fortuitous event?

The risk is borne by the owner at the time of loss. Signup and view all the answers

Which of the following actions by the seller does NOT violate the contract according to the provided content?

Shipping goods on the buyer's vessel. Signup and view all the answers

What happens to the goods if there is a delay in delivery caused by the seller?

The goods remain at the seller's risk. Signup and view all the answers

What does the seller need to do if he draws on the buyer for the prices and sends the bill of lading?

Secure acceptance or payment of the bill of exchange. Signup and view all the answers

Under what condition does risk of loss NOT transfer to the buyer after ownership has been transferred?

If the seller retains ownership for security. Signup and view all the answers

Under what circumstance may an unpaid seller retain possession of goods?

When the goods have been sold on credit and the term has expired Signup and view all the answers

What is true about the seller's lien?

It provides the right to sell the goods upon default of payment. Signup and view all the answers

What happens to the seller’s lien if the buyer becomes insolvent?

The seller may retain possession of the goods. Signup and view all the answers

What typically indicates that a buyer is entitled to take possession of goods without immediate payment?

A stipulated credit arrangement. Signup and view all the answers

What is the effect of the seller's lien on the buyer's interest in the goods?

The buyer's ownership is limited by the lien. Signup and view all the answers

What can cause the loss of the seller's lien?

An unconditional surrender of possession of the goods. Signup and view all the answers

What does the seller's lien permit the seller to do if there is a default in payment?

Sell the goods at a private sale. Signup and view all the answers

What is required for the buyer to be bound to pay the price after the credit term has expired?

The buyer is bound immediately to pay the price. Signup and view all the answers

What is the primary condition under which a seller can exercise the right to stop goods in transitu?

The goods have not been delivered to the buyer. Signup and view all the answers

How can a seller exercise the right to stop goods in transitu?

By taking actual possession of the goods. Signup and view all the answers

What must the notice given by the seller to the carrier or bailee include?

A description of the goods for identification. Signup and view all the answers

What happens to the seller's right to stop goods in transit if there is an outstanding bill of lading?

The seller must surrender the bill of lading for cancellation. Signup and view all the answers

Which of the following rights does the purchaser hold over the seller's lien or stoppage in transit?

It is superior if purchased for value in good faith. Signup and view all the answers

Under what conditions can an unpaid seller exercise the right of resale?

If goods are perishable. Signup and view all the answers

When can an unpaid seller resale goods if the buyer delays in payment?

If the buyer's delay exceeds a defined period. Signup and view all the answers

What happens when goods are covered by a non-negotiable document of title?

The seller can stop the goods without surrendering the document. Signup and view all the answers

Study Notes

Cancellation and Foreclosure

Vendee’s failure to pay for two or more installments allows seller to cancel the sale.
Purchaser can demand refund of payments made unless forfeiture is stipulated.
Seller may foreclose chattel mortgage on the sold property, eliminating further claims for unpaid balance.
Remedies are alternative; choosing one waives rights to others.

Attachment and Execution

Attachment involves the property of a defendant being held by law during a lawsuit.
Execution enforces a final judgment from a court.

Maceda Law (RA 6552)

Aims to protect installment buyers of real estate.
Authored by Senator Ernesto Maceda, known as Realty Installment Buyer Protection Act.
Covers all installment real estate transactions, excluding industrial lots, commercial buildings, and land reform tenants.
If a buyer has paid at least two years of installments, they have specific rights if they default, including a grace period for unpaid installments without additional interest.

Rights and Ownership

Ownership transfers on delivery under specific terms; buyer may return goods to revert ownership.
Buyer has rights unless owner’s conditions are met or the goods are returned in a reasonable time.
In a sale on approval, ownership remains with seller until buyer accepts or retains goods without rejection notice.

Seller's Rights

Seller can retain possession of specific goods until conditions are met, even after delivery.
If sold on credit, seller retains ownership until payment is made; disruptions may lead to the seller disposing of goods legally.
Selling on credit waives lien rights during the credit period; protection reverts to seller afterward.

Risk Management

General rule: goods remain seller's risk until ownership transfer; after this, risks are with the buyer.
Exceptions include delayed deliveries and fortuitous events impacting ownership.
Unpaid seller can hold onto goods until payment in specified scenarios.

Right of Stoppage in Transit

Seller retains rights to stop goods in transit until ownership is transferred.
Can stop goods by taking possession or notifying the carrier; notice should describe goods clearly.
Ownership is paramount, protecting against creditors; seller must surrender negotiable documents for the buyer to receive goods.

Right of Resale

Unpaid seller can resell goods if conditions permit, such as perishability or explicit reservation of resale rights.
Seller must have exercised prior rights to stop in transit to maintain the right to resale.

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Description

Test your knowledge on the legal aspects of cancellation and foreclosure in real estate transactions. This quiz covers important concepts such as Vendee rights, attachment, execution, and the Maceda Law's impact on installment buyers. Assess your understanding of these critical laws and their applications.