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PD 957

PD 957 directly protects buyers by requiring developers to include project completion schedules, turnover dates, and remedies for delay in all sales documents....

PD 957

PD 957 is a Philippine presidential decree enacted on July 12, 1976 that regulates the sale of subdivision lots and condominiums to protect buyers from fraudulent practices by developers. Officially titled the "Subdivision and Condominium Buyers' Protective Decree," it mandates registration requirements, licensing standards, and completion timelines for real estate projects.

Key Provisions

  • Project Registration: All subdivision and condominium projects must be registered with the regulatory authority (now DHSUD) before any sale can occur.
  • License to Sell: Developers must obtain a License to Sell before offering units to the public. This requires proof of financial stability and absence of fraudulent intent.
  • Performance Bond: Developers must post a bond guaranteeing completion of roads, drainage, sewerage, water systems, lighting, and other infrastructure.
  • Time of Completion (Section 20): Developers must complete all promised facilities within one year from license issuance or a period fixed by the authority.
  • Title Delivery (Section 25): Developers must deliver the TCT or CCT to buyers upon full payment without additional fees.
  • Non-Forfeiture of Payments (Section 23): Buyers who stop payments due to developer failure cannot have their installments forfeited.

Who is Affected?

  • Real estate developers building subdivision or condominium projects
  • Property buyers purchasing pre-selling or ready-for-occupancy units
  • Real estate brokers and salespersons selling subdivision lots or condo units
  • Homeowners associations formed under Section 30 of the decree

Penalties

  • Administrative fines: Up to PHP 10,000 for violations
  • Criminal penalties: Up to PHP 20,000 fine and/or imprisonment up to 10 years
  • License revocation: The authority may revoke registration and license to sell for insolvency, fraud, or misrepresentation
  • Take-over authority: DHSUD may take over project development at the developer's expense if they fail to complete it

Relevance to Philippine Real Estate

PD 957 directly protects buyers by requiring developers to include project completion schedules, turnover dates, and remedies for delay in all sales documents. This applies to:

  • Contract to Sell: Must specify completion timelines and facilities promised
  • Reservation agreements: Subject to PD 957 disclosure requirements
  • Pre-selling transactions: Buyers can demand refunds if developers fail to deliver as promised

The decree works alongside RA 6552 (Maceda Law) for installment payment protection and BP 220 for socialized housing standards. Developers must also coordinate with DHSUD for project approvals and the Registry of Deeds for title registration.

For buyers, PD 957 provides legal recourse when developers fail to deliver promised amenities or delay turnover beyond agreed dates. The law ensures that brochures, advertisements, and sales materials become enforceable warranties.

References

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