The Maceda Law, explained: your rights when buying property on installment

Buying a home on monthly installments is how most Filipinos buy property, but it also carries the most risk. Miss a payment and a developer could, in the worst case, cancel your contract and keep everything you've paid. The Maceda Law (Republic Act No. 6552, approved in August 1972) exists to stop exactly that. It is the law that turns an installment buyer's expectations into enforceable rights.

Who the law protects

RA 6552 covers anyone buying real estate on installment payments, including residential condominium apartments. It excludes industrial lots, commercial buildings, and a narrow set of sales to tenants under other laws. If you're buying a home or condo to live in, or as a residential investment, this law almost certainly protects you.

Your grace period after two years of payments

Once you've paid at least two years of installments and fall behind, the developer cannot cancel on the spot. You're entitled to a grace period of one month for every year of payments made, and you can settle the unpaid installments within that window without additional interest. The right can be exercised once every five years of the contract.

One month of grace for every year of payments made, with no extra interest, and the right refreshes once every five years.

If the contract is cancelled: the cash surrender value

If the contract is cancelled, you don't walk away empty-handed. The developer must refund the cash surrender value of your payments: fifty percent of everything you've paid, plus an additional five percent for every year beyond the first five, up to ninety percent of total payments. Cancellation only becomes final thirty days after you receive a notarial notice, and only once the refund has been fully paid.

If you've paid less than two years

Paid less than two years? You still get a grace period of at least sixty days from the date the installment became due. Only after that window closes, and a further thirty days from a notarial cancellation notice, can the developer cancel.

Your other rights

The law also lets you sell or assign your rights to another buyer, reinstate the contract by updating your account within the grace period, and pay ahead (including the full balance) at any time without interest, with that full payment annotated on the certificate of title. Any contract clause that tries to waive these rights is null and void.

What this means for you

Know your numbers: one month of grace per year of payments, fifty percent cash surrender value growing to ninety percent, and no forfeiture without a proper notarial process. If you're buying on installment, keep records of every payment, because they are the proof these rights are built on.