Buyers’ protection is a primordial mandate and obligation of the Department of Human Settlements and Urban Development (DHSUD).
As such, the department has been pro-active in issuing guidelines, policies, rules and regulations to ensure that the rights of the real estate buyers and investors are always upheld.
On top of implementing regulatory measures, we often issue reminders to the general public through various platforms, especially on social media, urging them to be cautious when acquiring real estate properties to protect them from becoming victims of dubious transactions.
Presidential Decree No. 957—or the Subdivision and Condominium Buyers’ Protective Decree, which has been in full force for the past 40 years—provides protection to homebuyers. Under this decree are two basic principles that must be considered by a prospective buyer before dealing with real estate developers and agents: the project registration and license to sell.
Before, these two documents are issued by the Housing and Land Use Regulatory Board (HLURB). Since January 2020 however, these are already being issued by the DHSUD.
Unknown to many, every landowner or developer subdividing a parcel of land, constructing housing units or townhouses, or building multi-level apartments or residential structures, irrespective of the number of lots or units, is actually developing a subdivision or condominium project. Such developer/landowner is required to register the project with the DHSUD.
Registration is required to ensure that the housing project has proper sewer, drainage and water systems. Also, the location must not be susceptible to risks such as flooding, earthquake and landslide, with adequate roads and lots that are regularly configured and not undersized.
Before these subdivided lots or housing units can be advertised or offered for sale, there is also a need for the developer/landowner to secure a license to sell (LTS) from the department.
The license to sell binds the developers to all their obligations and commitments to the buyers. Through licensing and project monitoring, buyers’ protection starts by ensuring that the title of a property is clean and free from any prior liens, the advertisements are not misleading, the development is in accordance with approved technical design and standards, and the lots and units will be delivered timely as promised by the developers.
Brokers and salespersons are likewise required to register with the DHSUD. Homebuyers are cautioned not to deal with unregistered brokers and salespersons.
We hear of homebuyers being misled by inaccurate advertisements and lured by easy payment terms and they end up complaining of substandard construction and late delivery of titles and turnover of units.
Overseas Filipino workers (OFWs) are among the favorite prey of these unscrupulous real estate agents. Returning OFWs already imagining their new homes are oftentimes welcomed by a house far from completion or by substandard units, contrary to what was stated in the contract and advertised.
Buyers should carefully check and clarify the terms of payment provided in a contract to sell, particularly any fees or surcharges discreetly tucked in fine print. When in doubt, consult the nearest office of the DHSUD not only on the project status but also on the approved design and standards vis-à-vis what is being offered to them.
To ensure that your prospective property is “clean” and abides by existing government standards, you have to demand a copy of the certificate of registration from the real estate developer or agent.
Before purchasing a lot, house and lot or a condominium unit, a buyer must first check if the project is registered and has an approved license to sell.
Hefty penalty is imposed on those found advertising or selling lots or units of unlicensed projects, including ads and promos posted or shared online, which are prevalent nowadays.
Any aggrieved buyer may seek preliminary conciliation with the Regional Offices of the DHSUD or file a formal complaint with the newly-created Human Settlements Adjudication Commission to enforce their rights under P.D. No. 957.
This article is first published in Philippine Daily Inquirer