Republic of the Philippines

Office of the President

HOUSING AND LAND USE REGULATORY BOARD
Northern Tagalog Regional Field Office-III
3rd Floor, Insular Life Bldg,
San Fernando, Pampanga

SUCELYN MANAOG CELIZ

Complainant,
-versus - HLURB- CASE NO. NTR-REM-81818-858
For: Refund of Payment

GUIGUINTO AGRO INDUSTRIAL CORP.,

Respondent.
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DRAFT DECISION

This resolves HLURB- CASE NO. NTR-REM-81818-858, filed by Complainant

Sucelyn Manaog Celiz (hereinafter referred to as simply as “Complainant”, for
brevity) against respondent Guiguinto Agro Industrial Corp (hereinafter referred to
as “Respondent), praying for the refund of One Million Six Hundred Fifty-Two
Thousand Three Hundred Sixty Six Pesos and Eithty-Eight Centavos (P1,
652,366.88) paid to the Respondent as part of the purchase price of the subject
property.

Factual Antecedents

It is undisputed, Complainant offered to purchase from Respondent a townhouse

unit at the La Aldea, Subdivision for the total purchase price of Two Million Four
Hundred Ninety (P2,490,000.00), payable thru in-house financing with an interest
rate of 18%. The downpayment is payable in 18 months while the remaining
balance is payable in 60 monthly amortizations.

According to the complainant, she had already paid the total amount of to One
Million Six Hundred Fifty- Two Thousand Three Hundred Sixty Pesos and Eighty-
Eight Centavos (P1,652,366.88) out of the total purchase price of P2,490,000.00,
inclusive of the down payment.1

That sometime in November 2017, complainant was asked to sign a Contract to

Sell which provided for different terms and conditions than those that was earlier
agreed upon; the contract provided for payment of monthly amortizations from
2017 to 2022, when she had already started paying the monthly amortizations since
2014, with the last payment due in October 2020.

After some time, complainant found out that one of the windows of the unit was
broken. She informed the office of such, but she was informed that it was no longer
their responsibility since it was already turned over to the owner. Contrary to this
allegation, the Complainant alleged that no turn-over of the unit has transpired.
Complainant merely signed a punchlist showing the completed works and works
yet to be accomplished.

Consequently, complainant informed the respondent of their decision to no longer

continue with the purchase of the property and merely requested for the refund of
the payments made thereof, amounting to P1,652,366.88. However, respondent
offered to refund only Five Hundred Ninety-Six Thousand Six Hundred Thirty-
Seven Pesos and Seventy One Centavos (P596, 637) out of the P1,652,366.88 paid
by complainant. Thus, the complaint.

On the other hand, according to the Respondent, complainant had only paid
P1,647,707.24 contrary to the claims of the latter. The amount of P5,000.00 which
complainant also paid corresponds to the water meter installations fee. Contrary to
the claims of complainant, Pre- Amortization Schedule and Official Receipts
evidencing the sale was issued to her.

Allegedly, the different terms and conditions of the Contract to Sell stems when
complainant started paying her amortization even if the subject property was not
yet turned over to her by the respondent. Such revision was done with prior
knowledge and conformity from the complainant.

On June 3, 2017, parties conducted an inspection to the subject property, where

they noted and prepared a punchlist for the required works for the completion of
the same.

On June 17, 2017, the subject property was formally turned over and accepted by
the complainant, evidenced by the punchlist and Certificate of Acceptance 2, where
she noted its acceptability in accordance with the duly approved plans and
specifications set by the respondent.

As regards to the complainant’s demand for refund of her total payments, the
respondent is willing to return cash surrender value of 50% of complainant’s total
payments of P1,647,707.24 per computation as of September 21,2018, following
the Contract to Sell entered by them, in accordance to Republic Act No. 6552.3

Ruling

Complainant’s contention is without merit.

Given the nature of the contract of the parties, the respondent court correctly
applied Republic Act No. 6552, known as the Maceda Law.

Republic Act No. 6552 or the Realty Installment Buyer Protection Act, has the
declared public policy of "protecting buyers of real estate on installment payments
against onerous and oppressive conditions."4 It recognizes in conditional sales of
all kinds of real estate (industrial, commercial, residential) the right of the seller to
cancel the contract upon non-payment of an installment by the buyer, which is
simply an event that prevents the obligation of the vendor to convey title from
acquiring binding force.5 Section 3 of R.A. 6552 provides for the rights of a buyer
who has paid at least two years of installments but defaults in the payment of
succeeding installments. Section 3 reads:

Section 3. In all transactions or contracts involving the sale or financing

of real estate on installment payments, including residential
condominium apartments but excluding industrial lots, commercial
buildings and sales to and satenants under Republic Act Numbered
Thirty-eight Hundred Forty-four, as amended by Republic Act
Numbered Sixty-three Hundred Eighty-nine, where the buyer has paid at
least two years of installments, the buyer is entitled to the following
rights in case he defaults in the payment of succeeding installments:

(a) To pay, without additional interest, the unpaid installments due

within the total grace period earned by him which is hereby fixed at
the rate of one month grace period for every one year of installment
payments made: Provided, That this right shall be exercised by the
buyer only once in every five years of the life of the contract and its
extensions, if any.

(b) If the contract is cancelled, the seller shall refund to the buyer
the cash surrender value of the payments on the property
equivalent to fifty per cent of the total payments made, and, after
five years of installments, an additional five per cent every year but
not to exceed ninety per cent of the total payments made: Provided,
That the actual cancellation of the contract shall take place after
thirty days from receipt by the buyer of the notice of cancellation or
the demand for rescission of the contract by a notarial act and upon
full payment of the cash surrender value to the buyer.

Down payments, deposits or options on the contract shall be included in

the computation of the total number of installment payments made.6

Thus, based on the factual milieu of the instant case, complainant is entitled to
receive the cash surrender value of the payments they had made which, under
Section 3(b) of the Maceda Law, is equivalent to 50% of the total payments
made.

Complainant claims that it already paid a total of P1,652,366.88, consisting of

eighteen monthly installments for the downpayment and eighteen of the 60-
month amortization payments. However, respondent claims that P5,000.00 of
which served as payment for the water meter installation. Thus, complainant
had only paid P1,647,707.24
Complainant’s claim is untenable.

According to Presidential Decree 957 or Subdivision and Condominium

Buyers Protective Decree, the owner or developer shall be answerable and
liable for the facilities, infrastructures or other forms of development
represented or promised in brochures advertisments and other sales
propaganda disseminated by the owner or developer or his agents and the
same shall form part of the sales warranties enforceable against said owner or
developer, jointly and severally.

Here, there is no stipulation, promise nor advertisement made by the

respondent that water meter installations shall form part of the total
amortization. Further, R.A. 6552 does not include such improvements to the
computation of the total number of instalment payments made. Under the
principle of ejusdem generis, "where a general word or phrase follows an
enumeration of particular and specific words of the same class or where the
latter follow the former, the general word or phrase is to be construed to
include, or to be restricted to persons, things or cases akin to, resembling, or
of the same kind or class as those specifically mentioned, hence, what the law
does not include, it excludes. Thus, the water meter installation shall not be
included in the computation of the cash surrender value.

Wherefore, for paying more than two years of installments on the lot,
complainant was entitled to receive cash surrender value of her payments on
the lot equivalent to fifty per cent of the total payments made. This right is
provided by Section 3(b) of R.A. 6552.

Complainant is therefor ordered to pay respondent Attorney’s fees of Php

50,000.00, litigation cost of Php 30,000.00 and cost of suit.
1
Annex F, Complaint
2
Annex 6, Reply with Counterclaims
3
Realty Installment Act
4
R.A. 6552, Section 2.
5
Leaño v. Court of Appeals, G.R. No. 129018, November 15, 2001, 369 SCRA 36, 45.
6
Moldex Realty, Inc., vs. Flora A. Saberon, G.R. No176289, April 8, 2013