Know Your Rights as a Property Buyer

As a property buyer, it pays to know what your rights are. Having some legal knowledge and understanding can protect you from those who might take advantage.

As the Philippines’ real estate market looks ahead for further growth this 2019, the competition becomes stiffer for the public has a pool of options of whom to deal with. How to ensure the public’s safety and protection? How can the state cover the public’s right for shelter? How can the state manage the industry?

The quick answer to these questions is Presidential Decree 957,  also known as the Subdivision and Condominium buyer’s Protective Decree on “regulation the sale of subdivision lots and condominiums, providing penalties for violations thereof.”

The nature of Presidential Decree 957

Under the government of the late President, Mr. Ferdinand E. Marcos, Presidential Decree 957 is passed to closely supervise and regulate real estate practitioners, owners, and developers in the Philippines. It is initiated and signed by the late president on July 12, 1976 in Manila.

The primary purpose of this law is to protect buyers’ welfare from all types of real estate misrepresentations. The state has passed to resolve the numerous fraudulent reports about  real estate problems in the country.

The importance of Presidential Decree 957

1. It aims to control and prevent “reneged on representations and obligations,” “swindling and fraudulent manipulations,” and “failure to deliver.”

2. It consists of rules and regulations on buying and selling a house or condominium, from the point of sale to turnover of unit to property title of ownership. It also states the other laws governing the after-sale rights of buyers and developer’s obligations.

3. It specifies details pertaining to policies in dealing with real estate practitioners such as developer, dealer, broker, and salesman or agent.

4. It empowers the National Housing Authority (NHA) to have “exclusive jurisdiction to regulate real estate trade and business.” At present, Housing and Land Use Regulatory Board (HLURB) is now the key government agency to implement this law.

5. It enumerates the process and procedures of registration, as well as the sanctions and penalties for any unauthorized transactions made by real estate practitioners.

The practitioners of real estate services

The real estate practitioners are the people to deal with, either “to sale or sell,” or “to buy and purchase,” a subdivision lot, house, and condominium. These are the developers, dealers, brokers, and salesmen or agents, which are all subject for registration.

• “Developer” shall mean the person who develops or improves the subdivision project or condominium project for and on behalf of the owner thereof.

• “Dealer” shall mean any person directly engaged as a principal in the business of buying, selling or exchanging real estate whether on a full-time or part-time basis.

• “Broker” shall mean any person who, for a commission or other compensation, undertakes to sell or negotiate the sale of a real estate belonging to another.

• “Salesman” shall refer to the person regularly employed by a broker to perform, for and in his behalf, any or all functions of a real estate broker.

The key takeaways for buyers

PD 567 is designed to protect the buyer’s rights and to promote healthy competition among real estate practitioners. As a buyer, you should verify and validate the person you’re dealing with when purchasing a property. You may check online to search for his or her registration. Below are other points to remember:

• • Certificate of Registration. HLURB releases this when the developer passes the required standard to develop projects in accordance with Subdivision Standards and Regulations for horizontal developments, or of the National Building Code for vertical development.

  • License To Sell. Once registered, HLURB releases this for developers to sell units. The certificate is issued upon assurance of the developer’s capacity to deliver and free from any fraudulent act.

  • HLURB ID/ Certificate of Registration for Dealer, Broker, and Salesman. HLURB mandates all dealers, brokers, salesmen or agents who are engaged in selling subdivisions or condominiums to register. The registration is good for 1 year and subject for renewal to continually engage in real estate deals.

Certainly, this law enumerates for public’s welfare on their right in securing a shelter of their own. As real estate rises each year, the market continues to be at high risk if not for this law. It is better to know your right as a buyer when dealing in any transaction with real estate practitioners. Your thorough understanding and knowledge about the real estate industry can lead you to the right home for you and your family.

Overall, PD 567 is designed and initiated for the public’s  welfare and protection from all types of real estate misrepresentations and fraudulent actions. As what an old saying goes, prevention is better than cure.