Presidential Decree 957 and 1216 PDF

GROUP 11 PD 957 -THE SUBDIVISION AND CONDOMINIUM BUYERS' PROTECTIVE DECREE. PD 1216 - THE AMENDMENT REQUIRES SUBDIVISION OWNERS OR DEVELOPERS TO PROVIDE ADEQUATE ROADS, ALLEYS, AND SIDEWALKS IN THEIR PROJECTS. WHAT IS PD 957 ? PRESIDENTIAL DECREE 957 THE SUBDIVISION AND CONDOMINIUM BUYERS'...

GROUP 11 PD 957 -THE SUBDIVISION AND CONDOMINIUM BUYERS' PROTECTIVE DECREE. PD 1216 - THE AMENDMENT REQUIRES SUBDIVISION OWNERS OR DEVELOPERS TO PROVIDE ADEQUATE ROADS, ALLEYS, AND SIDEWALKS IN THEIR PROJECTS. WHAT IS PD 957 ? PRESIDENTIAL DECREE 957 THE SUBDIVISION AND CONDOMINIUM BUYERS' PROTECTIVE DECREE.  PRESIDENTIAL DECREE NO. 957 JULY 12, 1976 REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS, PROVIDING PENALTIES FOR VIOLATIONS THEREOF WHEREAS, THE STATE AIMS TO PROVIDE PROPER HUMAN SETTLEMENT AND IMPROVE THE QUALITY OF LIFE FOR ITS INHABITANTS; WHEREAS, REPORTS REVEAL FAILURES BY REAL ESTATE DEVELOPERS AND SELLERS TO FULFILL OBLIGATIONS, ENDANGERING HOME AND LOT BUYERS;  WHEREAS, SWINDLING AND FRAUDULENT ACTIVITIES HAVE BEEN REPORTED, UNDERMINING THE GOVERNMENT'S LAND AND HOUSING PROGRAM AND THE OBJECTIVES OF THE NEW SOCIETY; WHEREAS, IT IS NECESSARY TO CLOSELY SUPERVISE AND REGULATE THE REAL ESTATE SUBDIVISION AND CONDOMINIUM BUSINESSES AND IMPOSE PENALTIES ON FRAUDULENT PRACTICES AND MANIPULATIONS.  Title I TITLE AND DEFINITIONS Section 1. Title. This Decree shall be known as THE SUBDIVISION AND CONDOMINIUM BUYERS' PROTECTIVE DECREE. Section 2. Title. Definition of Terms When used in this Decree, the following terms shall, unless the context otherwise indicates, have the following respective meanings: (a) Person: "Person" (b) Sale or sell: "Sale" or "sell" (c) Buy and purchase: "Buy" and "purchase" (g) Condominium project (h) Condominium unit (i) Owner (j) Developer (k) Dealer (l) Broker (m) Salesman (n) Authority: "Authority" refers to the National Housing Authority.  Title III REGISTRATION AND LICENSE TO SELL Section 3. National Housing Authority The National Housing Authority shall have exclusive jurisdiction to regulate the real estate trade and business in accordance with the provisions of this Decree. Section 4. Registration of Projects The registered owner of a parcel of land who wishes to convert the same into a subdivision project shall submit his subdivision plan to the Authority which shall act upon and approve the same, upon a finding that the plan complies with the Subdivision Standards' and Regulations enforceable at the time the plan is submitted. Registration Process for Subdivision and Condominium Projects 1. Submission of Plans: ⚬ Subdivision Plan: After approval by the relevant authority, the plan must be submitted to the Director of Lands for further approval. This process adheres to the Land Registration Act's procedures. ⚬ Condominium Plan: This plan also requires approval from the relevant authority, ensuring it complies with the National Building Code (R.A. No. 6541). Afterward, it must be submitted to the Register of Deeds for final action. Registration with the Authority The project owner or real estate dealer must register the project by filing a sworn registration statement with the Authority (likely referring to the National Housing Authority). Information Required: ⚬ Name of the owner. ⚬ Location of the owner’s principal business office. ⚬ Names and addresses of directors and officers (if applicable). ⚬ The general character of the business. ⚬ Capitalization details, including stock information. Documents Required: A copy of the approved subdivision or condominium plan. Marketing materials like brochures, prospectuses, and advertisements. For business firms, financial statements and articles of incorporation or partnership, with all amendments and existing bylaws. A property title that is free from liens and encumbrances. If the property is mortgaged, the mortgagee must agree to release the mortgage upon full payment by the buyer. Publication Requirement Final Registration Section 5. License to sell. Such owner or dealer to whom has been issued a registration certificate shall not, however, be authorized to sell any subdivision lot or condominium unit in the registered project unless he shall have first obtained a license to sell the project within two weeks from the registration of such project. Section 6. Performance Bond. No license to sell subdivision lots or condominium units shall be issued by the Authority under Section 5 of this Decree unless the owner or dealer shall have filed an adequate performance bond approved by said Authority to guarantee the construction and maintenance of the roads, gutters, drainage, sewerage, water system, lighting systems, and full development of the subdivision project or the condominium project and the compliance by the owner or dealer with the applicable laws and rules and regulations. Section 7. Exempt transactions. A license to sell and performance bond shall not be required in any of the following transactions: (a) Sale of a subdivision (b) Sale or transfer of a (c) Sale of a subdivision lot or a lot resulting from the subdivision lot by the condominium unit by or for the partition of land among original purchaser thereof account of a mortgagee in the co-owners and co-heirs. and any subsequent sale ordinary course of business when of the same lot. necessary to liquidate a bona fide debt. Section 8. Suspension of license to sell. Upon verified complaint by a buyer of a subdivision lot or a condominium unit in any interested party, the Authority may, in its discretion, immediately suspend the owner's or dealer's license to sell pending investigation and hearing of the case as provided in Section 13 hereof. SECTION 9: Revocation of registration certificate and license to sell. The Authority may, motu proprio or upon verified complaint filed by a buyer of a subdivision lot or condominium unit, revoke the registration of any subdivision project or condominium project and the license to sell any subdivision lot or condominium unit in said project by issuing an order to this effect, with his findings in respect thereto, if upon examination into the affairs of the owner or dealer during a hearing as provided for in Section 14 hereof, if shall appear there is satisfactory evidence that the said owner or dealer: (a) Is insolvent; or (b) has violated any of the provisions of this Decree or any applicable rule or regulation of the Authority, or any undertaking of his/its performance bond; or (c) Has been or is engaged or is about to engage in fraudulent transactions; or (d) Has made any misrepresentation in any prospectus, brochure, circular or other literature about the subdivision project or condominium project that has been distributed to prospective buyers; or (e) Is of bad business repute; or (f) Does not conduct his business in accordance with law or sound business principles  Section 10. Registers of subdivision lots and condominium units. A record of subdivision lots and condominium units shall be kept in the Authority wherein shall be entered all orders of the Authority affecting the condition or status thereof. The registers of subdivision lots and condominium units shall be open to public inspection subject to such reasonable rules as the Authority may prescribe. Title III DEALERS, BROKERS AND SALESMEN Section 11. Registration of dealers, brokers and salesmen. No real estate dealer, broker or salesman shall registration: expire on the engage in the business of selling thirty-first day of December of subdivision lots or condominium units each year unless he has registered himself with Renewal of registration for the succeeding year shall be granted upon written the Authority in accordance with the application therefor made not less than provisions of this section. thirty nor more than sixty days before the first day of the ensuing year and upon payment of the prescribed fee Section 12. Revocation of registration as Title IV dealers, brokers or salesmen. PROCEDURE FOR REVOCATION OF Registration under the preceding section REGISTRATION CERTIFICATE may be refused or any registration granted thereunder, revoked by the Section 13. Hearing. In the hearing Authority if, after reasonable notice and for determining the existence of any hearing, it shall determine that such ground or grounds for the applicant or registrant: suspension and/or revocation of 1. Has violated any provision of this Decree registration certificate and license to or any rule or regulation made hereunder; sell as provided in Section 8 and 9 or hereof, the following shall be 2. Has made a material false statement in complied with: his application for registration; or (a) Notice 3. Has been guilty of a fraudulent act in (b) Venue connection with any sale of a subdivision (c) Nature of proceeding lot or condominium unit; or (d) Power incidental to the hearing 4. Has demonstrated his unworthiness to transact the business of dealer, broker, or salesman, as the case may be. Section 14. Contempt. (a) Direct contempt. The officer or officers Section 15. Decision. The case shall be designated by the Authority to hear the decided within thirty (30) days from complaint may summarily adjudge in the time the same is submitted for direct contempt any person guilty of decision. The Decision may order the misbehavior in the presence of or so near revocation of the registration of the the said hearing officials as to obstruct or subdivision or condominium project, interrupt the proceedings before the same the suspension, cancellation, or or of refusal to be sworn or to answer as a revocation of the license to sell and/or witness or to subscribe an affidavit or forfeiture, in whole or in part, of the deposition when lawfully required to do so. performance bond mentioned in The person found guilty of direct contempt Section 6 hereof. In case forfeiture of under this section shall be punished by a the bond is ordered, the Decision may fine not exceeding Fifty (P50.00) Pesos or direct the provincial or city engineer to imprisonment not exceeding five (5) days, undertake or cause the construction of or both. roads and of other requirements for the subdivision or condominium as (b) Indirect contempt. The officer or officers stipulated in the bond, chargeable to designated to hear the complaint may also the amount forfeited. Such decision adjudge any person in indirect contempt shall be immediately executory and on grounds and in the manner prescribed shall become final after the lapse of 15 in Rule 71 of the Revised Rules of Court. days from the date of receipt of the Decision. Section 16. Cease and Desist Order. Whenever it shall appear to the Authority that any person is engaged or about to engage in any act or practice which constitutes or will constitute a violation of the provisions of this Decree, or of any rule or regulation thereunder, it may, upon due notice and hearing as provided in Section 13 hereof, issue a cease and desist order to enjoin such act or practices. Section 17. Registration. All contracts to sell, deeds of sale and other similar instruments relative to the sale or conveyance of the subdivision lots and condominium units, whether or not the purchase price is paid in full, shall be registered by the seller in the Office of the Register of Deeds of the province or city where the property is situated.  Section 18. Mortgages. No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the Authority. Such approval shall not be granted unless it is shown that the proceeds of the mortgage loan shall be used for the development of the condominium or subdivision project and effective measures have been provided to ensure such utilization. The loan value of each lot or unit covered by the mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan. The buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for, with a view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereto; Section 19. Advertisements. Advertisements that may be made by the owner or developer through newspaper, radio, television, leaflets, circulars or any other form about the subdivision or the condominium or its operations or activities must reflect the real facts and must be presented in such manner that will not tend to mislead or deceive the public.  Section 18. Mortgages. No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the Authority. Such approval shall not be granted unless it is shown that the proceeds of the mortgage loan shall be used for the development of the condominium or subdivision project and effective measures have been provided to ensure such utilization. The loan value of each lot or unit covered by the mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan. The buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for, with a view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereto; Section 19. Advertisements. Advertisements that may be made by the owner or developer through newspaper, radio, television, leaflets, circulars or any other form about the subdivision or the condominium or its operations or activities must reflect the real facts and must be presented in such manner that will not tend to mislead or deceive the public.  Section 20. Time of Completion. Every owner or developer shall construct and provide the facilities, improvements, infrastructures and other forms of development, including water supply and lighting facilities, which are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus, printed matters, letters or in any form of advertisement, within one year from the date of the issuance of the license for the subdivision or condominium project or such other period of time as may be fixed by the Authority. Section 21. Sales Prior to Decree. In cases of subdivision lots or condominium units sold or disposed of prior to the effectivity of this Decree, it shall be incumbent upon the owner or developer of the subdivision or condominium project to complete compliance with his or its obligations as provided in the preceding section within two years from the date of this Decree unless otherwise extended by the Authority or unless an adequate performance bond is filed in accordance with Section 6 hereof. Failure of the owner or developer to comply with the obligations under this and the preceding provisions shall constitute a violation punishable under Sections 38 and 39 of this Decree.  Section 22. Alteration of Plans. No owner or developer shall change or alter the roads, open spaces, infrastructures, facilities for public use and/or other form of subdivision development as contained in the approved subdivision plan and/or represented in its advertisements, without the permission of the Authority and the written conformity or consent of the duly organized homeowners association, or in the absence of the latter, by the majority of the lot buyers in the subdivision. Section 23. Non-Forfeiture of Payments. 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, desists 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 interests but excluding delinquency interests, with interest thereon at the legal rate.  Section 24. Failure to pay installments. The rights of the buyer in the event of this failure to pay the installments due for reasons other than the failure of the owner or developer to develop the project shall be governed by Republic Act No. 6552. Where the transaction or contract was entered into prior to the effectivity of Republic Act No. 6552 on August 26, 1972, the defaulting buyer shall be entitled to the corresponding refund based on the installments paid after the effectivity of the law in the absence of any provision in the contract to the contrary. Section 25. Issuance of Title. The owner or developer shall deliver the title of the lot or unit to the buyer upon full payment of the lot or unit. No fee, except those required for the registration of the deed of sale in the Registry of Deeds, shall be collected for the issuance of such title. In the event a mortgage over the lot or unit is outstanding at the time of the issuance of the title to the buyer, the owner or developer shall redeem the mortgage or the corresponding portion thereof within six months from such issuance in order that the title over any fully paid lot or unit may be secured and delivered to the buyer in accordance herewith.  Section 26. Realty Tax. Real estate tax and assessment on a lot or unit shall de paid by the owner or developer without recourse to the buyer for as long as the title has not passed the buyer; Provided, however, that if the buyer has actually taken possession of and occupied the lot or unit, he shall be liable to the owner or developer for such tax and assessment effective the year following such taking of possession and occupancy. Section 27. Other Charges. No owner or developer shall levy upon any lot or buyer a fee for an alleged community benefit. Fees to finance services for common comfort, security and sanitation may be collected only by a properly organized homeowners association and only with the consent of a majority of the lot or unit buyers actually residing in the subdivision or condominium project.  Section 28. Access to Public Offices in the Subdivisions. No owner or developer shall deny any person free access to any government office or public establishment located within the subdivision or which may be reached only by passing through the subdivision. Section 29. Right of Way to Public Road. The owner or developer of a subdivision without access to any existing public road or street must secure a right of way to a public road or street and such right of way must be developed and maintained according to the requirement of the government and authorities concerned. Section 30. Organization of Homeowners Association. The owner or developer of a subdivision project or condominium project shall initiate the organization of a homeowners association among the buyers and residents of the projects for the purpose of promoting and protecting their mutual interest and assist in their community development. SECTION 31. DONATIONS OF ROADS AND OPEN SPACES TO LOCAL GOVERNMENT The registered owner or developer of the subdivision or condominium project, upon completion of the development of said project may, at his option, convey by way of donation the roads and open spaces found within the project to the city or municipality wherein the project is located. Upon acceptance of the donation by the city or municipality concerned, no portion of the area donated shall thereafter be converted to any other purpose or purposes unless after hearing, the proposed conversion is approved by the Authority.  SECTION 32. PHASES OF SUBDIVISION For purposes of complying with the provisions of this Decree, the owner or developer may divide the development and sale of the subdivision into phases, each phase to cover not less than ten SECTION 33. NULLITY OF hectares. The requirement imposed by this WAIVERS Decree on the subdivision as a whole shall be deemed imposed on each phase. Any condition, stipulation, or provision in contract of sale whereby any person waives compliance with any provision of this Decree or of any rule or regulation issued thereunder shall be void. SECTION 34. VISITORIAL POWERS This Authority, through its duly authorized representative may, at any time, make an examination into the business affairs, administration, and condition of any person, corporation, partnership, cooperative, or association engaged in the business of selling subdivision lots and condominium units. For this purpose, the official authorized so to do shall have the authority to examine under oath the directors, officers, stockholders or members of any corporation, partnership, association, cooperative or other persons associated or connected with the business and to issue subpoena or subpoena duces tecum in relation to any investigation that may arise therefrom. The Authority may also authorize the Provincial, City or Municipal Engineer, as the case may be, to conduct an ocular inspection of the project to determine whether the development of said project conforms to the standards and specifications prescribed by the government. The books, papers, letters, and other documents belonging to the person or entities herein mentioned shall be open to inspection by the Authority or its duly authorized representative. SECTION 35. TAKE-OVER DEVELOPMENT The Authority, may take over or cause the development and completion of the subdivision or condominium project at the expenses of the owner or developer, jointly and severally, in cases where the owner or developer has refused or failed to develop or complete the development of the project as provided for in this Decree. The Authority may, after such take-over, demand, collect and receive from the buyers the installment payments due on the lots, which shall be utilized for the development of the subdivision. SECTION 36. RULES AND REGULATIONS The Authority shall issue the necessary standards, rules and regulations for the effective implementation of the provisions of this Decree. Such standards, rules and regulations shall take effect immediately after their publication three times a week for two consecutive weeks in any newspaper of general circulation.  SECTION 37 Deputization of Law Enforcement Agencies. The Authority may deputize the Philippine Constabulary or any law enforcement agency in the execution of its final orders, rulings or decisions. SECTION 38 Administrative Fines. The Authority may prescribe and impose fines not exceeding ten thousand pesos for violations of the provisions of this Decree or of any rule or regulation thereunder. Fines shall be payable to the Authority and enforceable through writs of execution in accordance with the provisions of the Rules of Court. Penalties. Any person who shall violate any of the provisions of this Decree and/or any rule or regulation that may be issued pursuant to this Decree shall, upon conviction, be punished by a fine of not more than twenty thousand (P20,000.00) pesos and/or imprisonment of not more than ten years: Provided, That in the case of corporations, partnership, cooperatives, or associations, the President, Manager or Administrator or the person who has charge of the administration of the business shall be criminally responsible for any violation of this Decree and/or the rules and regulations promulgated pursuant thereto. Liability of controlling persons. Every person who directly or indirectly controls any person liable under any provision of this Decree or of any rule or regulation issued thereunder shall be liable jointly and severally with and to the same extent as such controlled person unless the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action. SECTION 41 Other remedies. The rights and remedies provided in this Decree shall be in addition to any and all other rights and remedies that may be available under existing laws. SECTION 42 Repealing clause. All laws, executive orders, rules and regulations or part thereof inconsistent with the provisions of this Decree are hereby repealed or modified accordingly. SECTION 43 Effectivity. This Decree shall take effect upon its approval.  PRESIDENTIAL DECREE 1216 DEFINING "OPEN SPACE" IN RESIDENTIAL SUBDIVISIONS AND AMENDING SECTION 31 OF PRESIDENTIAL DECREE NO. 957 REQUIRING SUBDIVISION OWNERS TO PROVIDE ROADS, ALLEYS, SIDEWALKS AND RESERVE OPEN SPACE FOR PARKS OR RECREATIONAL USE WHEREAS, there is a compelling need to create and maintain a healthy environment in human settlements by providing open spaces, roads, alleys and sidewalks as may be deemed suitable to enhance the quality of life of the residents therein ; WHEREAS, such open spaces, roads, alleys and sidewalks in residential subdivision are for public use and are, therefore, beyond the commerce of men; WHEREAS, pursuant to Presidential Decree No. 953 at least thirty percent (30%) of the total area of a subdivision must be reserved, developed and maintained as open space for parks and recreational areas, the cost of which will ultimately be borne by the lot buyers which thereby increase the acquisition price of subdivision lots beyond the reach of the common mass; WHEREAS, thirty percent (30%) required open space can be reduced to a level that will make the subdivision industry viable and the price of residential lots within the means of the low income group and at the same time preserve the environmental and ecological balance through rational control of land use and proper design of space and facilities; WHEREAS, pursuant to Presidential Decree No. 757, government efforts in housing, including resources, functions and activities to maximize results have been concentrated into one single agency, namely, the National Housing Authority; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree: SECTION 1 For purposes of this Decree, the term "open space" shall mean an area reserved exclusively for parks, playgrounds, recreational uses, schools, roads, places of worship, hospitals, health centers, barangay centers and other similar facilities and amenities. SECTION 2: SECTION 31 OF PRESIDENTIAL DECREE NO. 957 IS HEREBY AMENDED TO READ AS FOLLOWS: Roads, Alleys, Sidewalks and Open spaces. The owner as developer of a subdivision shall provide adequate roads, alleys and sidewalks. For subdivision projects one (1) hectare or more, the owner or developer shall reserve thirty percent (30%) of the gross area for open space. Such open space shall have the following standards allocated exclusively for parks, playgrounds and recreational use: (a) 9% of gross area for high density or social housing (66 to 100 family lot per gross hectare). (b) 7% of gross area for medium-density or economic housing (21 to 65 family lot per gross hectare). (c) 3.5 % of gross area low-density or open market  These areas reserved for parks, playgrounds and recreational use shall be non-alienable public lands and non-buildable. The plans of the subdivision project shall include tree planting on such parts of the subdivision as may be designated by the Authority. The owner or developer must donate them to the city or municipality where the subdivision is located. It is mandatory for the local government to accept these donations. In some cases, parks and playgrounds can be donated to the Homeowners Association of the project with the consent of the city or municipality. Once parks and playgrounds are donated, they cannot be converted for any other purpose. They must be preserved for their intended use  SECTION 3 Sections 2 and 5 of Presidential Decree No. 953 are hereby repealed and other laws, decrees, executive orders, institutions, rules and regulations or parts thereof inconsistent with these provisions are also repealed or amended SECTION 4 accordingly. This Decree shall take effect immediately.