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How to File a Refund From Your Real Property Developer

Having experienced a hard-time looking for resources and information on how to go about the proper process of filing a refund, and if such action merits my decision to do so, I decided to blog about it and put this un-related topic for reference of those who, like me, delved into a real property investment that turned unfavorable to your part or simply, due to circumstances brought about by the developer (take note of this).

Real Estate (image from: Blue Ribbon Real Estate)

As a backgrounder, me and my brother partnered together around November, 2011 to purchase in installment a combined unit at one of the upcoming high-rise Condominium in Quezon City, claimed as the first "Sports Condominium" in the Philippines. The developer has earned our trust for having completed already a number of low-cost projects. We were also convinced as it suited our location preference, payment option, living features, and turn-over period (May, 2015) enough for us to build up funds for the transfer/miscellaneous fees before our monthly equity begins.

After completing our reservation and documentary requirements, we've patiently waited and observed the construction progress... for 2-years... and it was very slow until it already seemed like the construction totally halted. Our agent became hard to reach also with our SMS getting no replies and calls un-answered. When he finally kept in touch with us, we only get frustrated with his excuses as to why he wasn't able to attend to our messages and calls (but was very much available when he was still trying to convince us). He gave us many excuses, until at the turn of 1st quarter of 2014, he finally admitted to us that the delay was because their contractors were made to swiftly finish the then on-going construction of a much bigger project in Bulacan -- Ciudad de Victoria -- thus favoring just a single project out of the other pending projects being paid by many of their clients in the Metro.

Looking at the situation, we are at a disadvantage and are no longer happy with this venture. Add to it that during this time, 3-years after closing our deal, the construction progress was still at the 3rd-floor. So thinking hard about it, we've finally decided to end our contract and ask for a total refund. This decision did not came easy as we've had a lot of fears and disinformation coming -- that we will not be able to get our hard-earned money back, or if luck comes with us, only up to a maximum 50% of our payments will be returned as stipulated under Republic Act 6552 (RA 6552) - Realty Installment Buyer Protective Act (26Aug1972) or much popular as the "Maceda Law".

That's what most of the real estate agents are telling us and to other misinformed people who had the same predicament as us. But that policy for me felt so unfair for buyers who have faithfully kept their part of the bargain and obligations on the contract. Luckily, by digging and scouring the internet with all the search keywords I can think of, I've chanced upon a "somewhat" lesser known rule of law under Presidential Decree 957 (PD 957) - Subdivision and Condominium Buyers Protective Decree (12July1976). You may read the specifics at section 23-24 under Title IV of the decree.

I have learned that the difference, and probably short explanation between these two policies is what kind of protection does a buyer get according to who's at fault or who failed from their obligation. Under RA6552, the buyer gets certain refund when they are no longer able to continue paying their installments (buyer is at fault); while in PD957, the buyer gets full refund when the developer failed to complete the development or deliver the project within the required period. You may read more about the differences of these two from this link.

Having our fears armed with that new found information, we proceeded with the refund process beginning with a series of calls, intent letter, another follow-up call, and finally a complaint to the office of the Housing and Land Use Regulatory Board (HLURB) in Diliman, Quezon City.

Okay, just for a disclaimer, I am not in any way claiming to be expert in any of these 2 laws or any other law governing the real estate rights of buyer or developer. All the information and steps posted here were all based on our own experience and that which applied to our situation. Study your own circumstances and the protective act that may apply to you and follow according to your understanding and discernment.

So to make it easy, below are the steps on how to file and request for payment refunds from a real property developer under P.D. 957. The steps we've taken were also guided and inspired by another buyer which you may find at this forum.

1. Request for your latest Statement of Account (SOA) from the accounting department of the developer's office. This SOA will be used to prove your total payments, outstanding balance, if there are penalties, and if your account is still active.

2. Request for a Certification from HLURB or copy of License to Sell (LTS) (if you don't have one yet) that will prove that a developer is current with its obligations with the government requirements. In our case, the developer was not issued with an LTS on the date of our document signing, nor even during the period of filing our request for refund. We paid Php 288.00 for this Certification.

3. Submit a Refund Letter request to the developer indicating your intent and reason of such action. Attach those pertinent documents in steps 1 and 2. Don't forget to get a receiving copy, and contact person to whom you can follow-up.

4. Give them 3- to 5-days after receipt of your letter to call you back. Follow-up every now and then by calling the person in-charge about the progress of your request.

5. Submit a Follow-up Letter to the developer if there's no valuable feedback yet. Indicate on your letter that you will be filing a complaint at HLURB when there's still no action from their part is taken. Attach your original refund request letter, the original copy of all the ORs, and photocopy of the Contract to Sell (CTS).

Okay, although these are the initial steps that we took, I think you may directly file your complaint to HLURB. I just decided to follow these steps for hopes that the request can be settled sooner with the developer without going thru the once I thought "hassle" steps in dealing under any government office. I was wrong though as our transactions with HLURB went smooth without any red tape. So if you choose not to follow the steps above, you may proceed below:

6. Submit a Complaint Letter to HLURB office in-charge in the area of the project. You may attach the letters you've previously submitted to the developer. Our complaint letter took 2-pages long as I've detailed our purchase history and it also entailed a paragraph of drama about our having a "dream property".

7. Fill-up the "Request for Assistance" form from HLURB. While writing on this form, I realized that you only need a single page complaint letter as this form from HLURB is where you will put most of the information and facts about your complaint.

Note: there was not any payments made or asked by the HLURB office from this process, nor from the succeeding processes.

8. Wait for notice of hearing/conference from HLURB. We received our notice 2-weeks after filing our complaint. The notice though was issued 7-days from the date of our complaint letter.

9. Appear at the hearing date and place stated from HLURB's notice. From hereon, all the succeeding steps will be based according to the results of your conciliation or settlement between you and the developer. The HLURB will act as the arbiter/mediator and will take note of the minutes of the conference.

10. Once all the series of hearing is done, claim your refund. It took us two conciliation meetings/hearings which were scheduled 1-month apart before we were able to agree on each of our terms.

Our term was to ask for full refund including the reservation fee and interests (which were not indicated as we don't know where to base the interest rate). The developer's lawyer told us that the reservation fee may not be refunded anymore if we wish to get the refund as soon as possible. Their soonest timeline for encashing of the cheques were scheduled 5-months after in three equally divided amount which are also dated 1-month apart each. While if we insist with refunding the reservation fee, the cheques may get re-scheduled for another month or two since they still have to defend and present that term to the board and other blah, blah!

We just agreed to the lawyer's term accepting the fact that we will no longer be able to get our reservation payments. A 3rd and last conference was scheduled a month after to receive the cheques. When we finally claimed our cheques, we were surprised that the first cheque was dated 1-month earlier than the previously agreed schedule. But instead of only three equally-amount cheques, there were 5 cheques already, with total amount now including the reservation fees. The result came out still amenable as we've received 100% refund of our amortization payments, except the earned interests and lost time (of course).

From the date of our first letter, it took 3-months before we were able to get the attention of the developer, additional 2-months before we got hold of the refund cheques, plus 2-months before the first schedule of cheque encashment, and final 5-months to complete the cheque encashments. All in all, it took 1-year to complete the refund process, or a total lost investment time of 4-years from the date of our contract.

Investing on a property is not that easy as it seems, there are laws and regulations that we have to know and be armed at. These information may not be readily available just by agreeing with your agent. I've learned that we also have to ask a lot of questions, even if you think that the agent may not be able to answer it. Leave those questions for them as their assignment to you. As a piece of advise, it is okay to trust some not-so-famous developers, just make sure that they have complied with the government requirements and that they are still able to deliver new projects. But for peace of mind, it is always best to trust those with good track of record already.

Sample Refund Request Letter
Sample Refund Request Follow-up Letter

10 comments:

  1. Hi .. this is my complaint sa developer sana po matulungan nyo po



    hi.. nagpurchase po ako ng house and lot sa Via verde. natapos ko po ang 12 months installment para sa downpayment. pero one year na mahigit eh di pa rin natatayo yung bahay. kahit isang hollow block wala pa..

    ngayon nagsulat ako ng letter stating that i want a full refund.. pero pinipilit nila yung maceda law... sabi ko sa kanila may PD 957 kasi hindi sila sumunod sa time frame.. ano po bang dapat kong gawin

    wala po akong receiving copy kasi sinend ko lang sa kanila sa internet yung letter ko. pero nagfeedback sila. pwede po ba yun?

    ReplyDelete
    Replies
    1. Hi there, your local HLURB office will be able to help you at this stage (where in my case, it's already step#6 from the blog post above). You may ask for their assistance and advice.

      Delete
  2. thank you very much for sharing your experience (and the sample letter) in this article. very helpful indeed. i hope we can also get a 100% refund. sakit sa ulo, hay.

    ReplyDelete
    Replies
    1. No problem, glad to be of help. Please spread the word for others benefit also. Thank you :)

      Delete
  3. @PEDO. This is very helpful and thank you for coming out with this. I can relate from this experience of yours as I have also an on going concern with my developer. Tried to file complaint with HLURB but they developer did not show up on the set hearing so the arbiter ask me if we want to file a verified complaint. Trouble with this is there is a filing fee to be paid which if you claims for about PHP3M full refund of your TCP, you may have to pay a sum of PHP24k filing fee. But still best to explore if your sure that its the developer's fault. Reading your thread on how you were able to recoup your money back means it would really be a time waiting game. But will also try rather than not as my developer had failed to move-in me and the other buyers with permanent facility in the subdivision for over a year now. I bought H&L unit in Altea- Molino Cavite developed by Camella. My persistent follow-ups did not work as they have a bigger problem on the finishing of its amenities, TCT , tax etc. I also found out that the developer's LTS is not yet issued when they started to sell the property. Now they are trying to move in tenants and those that are really in need to transfer as they are continuously paying on their bank house loan already just accepts and were content with rationed water and temporary lights, but no clubhouse, fence and other amenity as they have promised before. Hope there are other readers who are tenants of this property who can share and tell their own story.

    ReplyDelete
    Replies
    1. Glad to be of help Sagittarius! Although I don't know that there's a filing fee as there was not any single cent required to me by HLURB Quezon City from start to finish. Just be sure that you get an Official Receipt from any payments that you'll be paying.

      And here I thought also that Camella housings are well-trusted! Hoping for the best on your refund ordeal.

      Delete
  4. Hi! Thank you for sharing your experience. It's very timely as we are currently experiencing delay on turnover date with Amaia Scape Lucena. We purchased house & lot thru bank financing, so technically, we already paid Amaia in full. Sa start pa lang actually, gusto na namin Sana magback-out kasi andaming sinabi ng ahente Na later on turned out Na Hindi pala totoo. But then, non-refundable daw yung reservation fees, e Hindi naman biro yung Php 24,000. So we opted to proceed. Then, nagkaron ng issues about their money back guarantee promo. Supposed to be 1 month after loan takeout, they will give us said refund but it took them 5 months before they released the checks. And then ito na ngang delay on turnover. We were promised 6-7 months upon loan takeout, ma-turnover Na Sa 'min. We were told September ang turnover. So, nagtiwala kami na matutupad Yun. But just recently, we were told that target turnover date would be 2nd week of December. That would mean additional costs on our part kasi nagbabayad Na kami Ng monthly amortization with the bank, Tapos nagre-rent pa Ng house where my parents and sisters are currently residing. Plus, because we thought September Ang turnover date, that should give us ample time to completely finish the house by December kaya nagdecide kaming umuwi Ng Pinas in time for our first Christmas celebration on that house, instead of our planned vacation on August 2017. In your opinion, may laban Ba Kami to demand from Amaia that they pay for 1) house rentals from promised turnover (Sept) until the ACTUAL turnover and 2) hotel accommodations when we come to the Philippines on December kasi wala nga kaming matutuluyan considering that even before I booked our tickets as early as June, pina-confirm ko pa ulit Sa amaia kung Kelan Nga Ang turnover date.
    Hope to hear your thoughts on this.
    Thank you!

    ReplyDelete
    Replies
    1. Hi Purple02, sorry for the late response.

      I don't actually have any slight idea about refund for expenses accrued due to late turnover like your situation, but you may check your contract if there is such, though I doubt! In any case, it is better to ask advice from your local HLURB office.

      I understand your plight, at hindi talaga biro yung ganyang unexpected expenses. I learned though that most of the Developers can't deliver their promises on-time. May mga delays talagang nangyayari, swerte ka na talaga kung 3-months lang ang pagkaka-delay at hindi aabutin ng years like in my case.

      Delete
  5. Hello po,ask ko lng baka alam nyo po case ko,wala po kaming sale or sale contract,reservation contract pa lmg po ang ibinigay nila,pero pinag monthly amortization na nila ako,nag start na po ako maghulog at least 7months,nag stop ako ngaun sinasabi nila i porfeit nila lahat ngnaihulog ko,legal po ba yun?first time ko po ito baka sakali matulungan nyo ko

    ReplyDelete
    Replies
    1. Hi there!

      The signed/notarized contract to sell must've been given to you after your 1st-month amortization payment. If not, you should've requested for it. Puwede mo pa rin naman i-request yun anytime.

      As for your payments, you didn't mention the reason why you are suddenly stopping your payments. But if it's nothing about the developer's fault, your case may fall under RA 6552 - Realty Installment Buyer Protective Act (26Aug1972) or much commonly known as the "Maceda Law". Under this, entitled ka pa rin makapag-refund, depending on how much you have already paid, but not the full amount. You may want to study this Republic Act and be informed.

      Delete

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