PD 957, explained: the protections behind every subdivision and condo purchase

Presidential Decree No. 957, also known as the Subdivision and Condominium Buyers' Protective Decree, was issued in July 1976, and it remains one of the strongest shields a Filipino home buyer has. It was written in response to developers who promised roads, water, and titles they never delivered, and to cases of lots sold twice to different buyers. If you're buying a subdivision lot or a condominium unit, this decree is on your side from the first meeting to the final title.

No license, no selling

A developer can't legally start selling a project until it is registered and has obtained a license to sell, which is due within two weeks of registration. The same applies to the people doing the selling: dealers, brokers, and salesmen must be registered with the authority, and their names are kept in a public register. Before you pay anyone, ask to see the credentials.

No registration, no license, no sale. The decree makes the paperwork a legal requirement, not a formality.

What developers must actually deliver

Everything promised in the plans, brochures, and advertisements (roads, drainage, water supply, lighting, and other facilities) must be completed within one year of the license being issued, or within another period fixed by the authority. And those approved plans can't be silently changed: altering roads, open spaces, or infrastructure for public use requires permission and the consent of the homeowners association or a majority of lot buyers.

Your payments are protected

If the developer fails to develop the project according to the approved plans and timeline, your installment payments cannot be forfeited. After due notice, you can stop paying and either be reimbursed the total amount paid (including amortization interest, at the legal rate) or keep the contract going. If you default for reasons unrelated to the developer's failure, your rights are governed by RA 6552, the Maceda Law.

What developers can't charge or waive

No developer may levy a fee on a lot or buyer for an alleged community benefit. Charges for common security, comfort, and sanitation can only be collected by a properly organized homeowners association, and only with the consent of a majority of resident buyers. Just as importantly, any contract clause where you waive the protections of this decree is void.

Homeowners associations are your job too

The developer is required to initiate the organization of a homeowners association among buyers and residents. Once organized, it's how you collectively hold both the community and the developer to account.

What this means for you

Check the license to sell and the registered status of your broker before paying. Compare what the brochure promises against what the approved plan shows. And know that your installments can't simply be forfeited if the developer doesn't deliver. These are rights, so keep the paperwork that proves them.