Understanding the Maceda Law: Your Rights as a Real Estate Buyer in the Philippines
A simple, complete guide to Republic Act No. 6552 (Realty Installment Buyer Protection Act)
Buying a home or condominium through installment is one of the most common ways Filipinos acquire real estate. But what happens if a buyer can no longer continue payments? Do they automatically lose everything?
This is where the Maceda Law comes in.
Passed as Republic Act No. 6552, the Maceda Law—also known as the Realty Installment Buyer Protection Act—was created to protect buyers of real estate sold on installment. It outlines the rights of buyers, grace periods, refunds, and the correct legal process when a buyer defaults.
If you are purchasing a house, lot, townhouse, or condominium through installment (except rent-to-own or mortgage loans), this law applies to you.
Here’s a clear, simple breakdown of what the Maceda Law provides.
1. What Is the Maceda Law?
Republic Act 6552 (Maceda Law) protects buyers of real property sold on installment, specifically:
- House and lot
- Lots
- Townhouses
- Condominiums
- Any real estate (except industrial lots, commercial buildings, and agricultural land)
It applies when the sale is directly from the developer or seller and paid through installments—not through bank loans, Pag-IBIG financing, or mortgage contracts.
2. Who Is Protected Under the Maceda Law?
You are protected if:
- You bought real property through installment
- You have made at least two years of installment payments
- The property is for residential use
The law is buyer-friendly and ensures that if you can no longer pay, you still get certain rights.
3. If You Have Paid at Least 2 Years of Installments: You Are Entitled to a Refund
Under Section 3 of RA 6552, if a buyer has paid at least 2 years of installments, the developer must grant:
1. A 60-day grace period
You are given a minimum of 60 days to settle overdue payments without losing your rights.
2. A refund of 50% of total payments made
If the contract is canceled after the grace period, you are entitled to a refund:
- 50% of total payments made, and
- After 5 years of installments, an additional 5% per year, capped at 90% total refund
This refund must be paid before the developer can formally cancel the contract.
This protects buyers from losing everything they paid.
4. If You Have Paid Less Than 2 Years of Installments: You Still Get Rights
Even if you paid less than 2 years, RA 6552 still grants:
A 60-day grace period
You cannot be evicted or canceled immediately.
You must first be given written notice, and then the 60-day grace period starts.
If you fail to pay within 60 days, only then can the seller cancel the contract through the proper legal process.
No refund is required for buyers who paid less than 2 years.
5. Contract Cancellation Must Follow Legal Procedure
A developer or seller cannot just lock you out, change the door, cancel verbally, or take back the property without due process.
Under the Maceda Law:
✔ The cancellation must be in writing
✔ Delivered through a notarial act of cancellation
✔ Refund (if applicable) must be issued before cancellation
✔ Only after these steps can the seller resell the property
Failure to follow this procedure invalidates the cancellation.
6. You Can Sell or Assign Your Rights Before Cancellation
RA 6552 allows buyers to:
- Sell their rights to another buyer
- Assign the property
- Transfer the contract
- Change ownership
…before cancellation or default.
This gives flexibility to buyers who want to avoid losing their investment.
7. Why the Maceda Law Exists
The law was created to:
✔ Protect hardworking Filipinos buying homes through installment
✔ Prevent developers from abusing buyers
✔ Ensure fairness in contract cancellation
✔ Provide reasonable grace periods
✔ Allow refunds for long-term payers
It is considered one of the strongest buyer-protection laws in Philippine real estate.
8. Maceda Law vs. Rent-to-Own vs. Mortgage Financing
The Maceda Law applies only to installment sales.
It does not apply to:
- Bank-financed home loans
- Pag-IBIG housing loans
- In-house financing already converted to mortgage
- Rent-to-own lease agreements
- Commercial or industrial property
Each of these has different rules and protections.
9. Common Misconceptions — Clarified
❌ “If I miss one payment, the developer can evict me.”
✔ False. You have a legal 60-day grace period.
❌ “I lose everything if I can’t continue payments.”
✔ False. If you’ve paid at least 2 years, you get a refund.
❌ “Cancellation can be verbal or through text.”
✔ False. Cancellation must be through a notarial act.
❌ “The developer can refund anytime.”
✔ False. Refund must be paid before cancellation.
10. Why Understanding the Maceda Law Helps Buyers and Investors
Knowing your rights allows you to:
- Protect your investment
- Avoid abusive practices
- Make informed decisions
- Plan financing more clearly
- Safeguard your hard-earned money
- Negotiate better with developers
Knowledge is your best defense in real estate.
Final Thoughts: The Maceda Law Protects Your Real Estate Investment
Buying real estate is one of the biggest financial decisions you will ever make.
The Maceda Law (RA 6552) ensures that:
- You get protection
- Your payments are valued
- You are treated fairly
- Your rights are respected
Whether you are buying a pre-selling condo, a house and lot, or a subdivision property, knowing this law empowers you as a buyer.
FAQ: Maceda Law (RA 6552)
Q1: What is the Maceda Law in the Philippines?
The Maceda Law (RA 6552) is a law that protects buyers of real estate sold through installment. It provides grace periods, refund rights, and proper cancellation procedures for buyers of residential properties.
Q2: Who is covered by the Maceda Law?
The Maceda Law covers buyers who acquire residential real estate through installment, including:
- House and lot
- Lots
- Townhouses
- Condominiums It applies only to installment sales, not mortgage loans.
Q3: Does the Maceda Law apply to mortgage and Pag-IBIG loans?
No. The Maceda Law applies only to installment sales.
Loans financed through banks, Pag-IBIG, or in-house mortgage contracts are not covered.
Q4: What happens if I cannot continue paying my installment?
Under RA 6552, you get:
- A 60-day grace period to settle unpaid installments
- Legal protection from immediate cancellation Developers cannot cancel your contract without proper notice and procedure.
Q5: Am I entitled to a refund under the Maceda Law?
Yes — if you have paid at least two years of installments.
You are entitled to:
- 50% refund of all payments made, and
- An additional 5% refund per year after the 5th year, up to 90%.
Q6: What if I have paid less than two years of installments?
You are still entitled to a 60-day grace period, but no refund is required.
If you cannot pay within 60 days, the developer may cancel the contract following proper legal steps.
Q7: Can my contract be canceled immediately if I miss payments?
No. The Maceda Law requires:
- Written notice from the developer
- A 60-day grace period
- A notarial act of cancellation Developers cannot evict or cancel verbally or through text messages.
Q8: Can I sell or transfer my property before cancellation?
Yes. Buyers may assign, transfer, or sell their rights to another person before cancellation under RA 6552.
Q9: Does the Maceda Law apply to pre-selling condo units?
Yes — as long as the property is sold through installment and is considered residential real estate, pre-selling units are protected by RA 6552.
Q10: What properties are NOT covered by the Maceda Law?
The following are NOT covered:
- Industrial lots
- Commercial real estate
- Agricultural land
- Properties under mortgage loans
- Bank-financed or Pag-IBIG-financed purchases
Q11: Why is the Maceda Law important for buyers?
The Maceda Law safeguards buyers by preventing sudden eviction or loss of investment. It ensures proper refund, due process, and fair treatment when buyers encounter financial difficulty.
Q12: Can the developer resell my unit after canceling my contract?
Yes — but only after:
- Issuing a notarial cancellation
- Complying with grace periods
- Paying refunds (if applicable) Until then, the developer cannot resell the property.
Need assistance with your real estate purchase?
Landlord Realty Development is led by:
Rafael Penilla, MBA
Licensed Real Estate Broker
PRC License No. 0004428
DHSUD No. NCR-B-6576
📩 Contact us today for expert guidance in buying, selling, or investing in real estate.
