LAWS ON REAL ESTATE BUYERS AND OWNERS SHOULD KEEP IN MIND
Understanding important pieces of legislation related to owning real
estate in the Philippines
MANILA, JUNE 28,
2015: Due diligence goes a
long way, especially in real estate. Homebuyers are always advised not to jump
quickly into buying a property without giving the purchase due consideration.
More importantly, they are advised to arm themselves with information, especially
on pieces of legislation that not only protect their rights, but also stipulate
their responsibilities as owners of real properties.
Global property
portal Lamudi Philippines lists down four of the most important
laws related to real estate, and their provisions that apply specifically to
buyers and owners of properties.
Maceda Law
Also known as the
Realty Installment Buyer Act enacted in 1972, this law stipulates that buyers
who have already paid at least two years of installments for a residential
property—but for any reason default in the payment of the succeeding
installments—are still qualified to pay the unpaid installments, interest-free.
However, the late payments must be made within the total grace period they have
earned, which is one month for every year of installment made. Hence, if two
years of installments have been made, two months of grace period have been
earned. Buyers, however, can only exercise this right once in every five years
within the whole life of the contract.
The Condominium Act
Also known as
Republic Act 4726, one of the Condominium Act’s provisions concerns the
lifespan of a condo property. According to the law, the condo corporation,
which is composed of the owners of units in the said condo property, may decide
to sell their condo (plus the land on which it sits) if the project is already
50 years and deemed obsolete.
The unit owners can
then divide the proceeds appropriately among themselves, which is based on the
size of their interest in condo. However, the condo owners may only decide to
sell the property granted that more than 50 percent of them vote against
restoring, renovating, or modernizing it.
The Real Property Tax
Code
This code governs the
appraisal and assessment of properties for the purpose of taxation by local
government units (i.e., provinces, cities, and municipalities). This tax is
called real property tax, or more commonly known as “amilyar” to Filipinos. To
compute for this, the corresponding tax rate for the property is multiplied by
the property’s taxable value (which is a portion of its assessed value).
For example, if your
residential property is located in Metro Manila and has an assessed value of
Php3 million, its tax rate is 2 percent and its taxable value is 40 percent of
its assessed value. Therefore, its real property tax is 2 percent of Php1.2
million, which is Php24,000.
Lina Law
Formally known as the
Urban Development and Housing Act of 1992, the Lina Law is perhaps one
of the most misunderstood laws in the Philippines. Its main aim is the
provision of a housing program for the urban poor.
Many mistakenly
believe that, under the law, once a private property has been occupied by
informal settlers, the owner of the said property must pay the settlers
“disturbance compensation” if the owner wants to evict the settlers. This is
not true. According to the author of the law himself, former senator Jose Lina
Jr., private landowners are neither legally required to pay any compensation to
the informal settlers, nor are they required to oversee the relocation.
Relocation is in fact a job of the government.
ENDS.
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