Laws vs erring developers gain ground in Congress

DELINQUENT subdivision and condominium developers will soon be meted heavy fines aside from a minimum 10-year jail time for failing to complete their projects and for using sub-standard materials. 

Rep. Susan A. Yap, principal
author

The proposed amendment to the current rules and regulations—particularly on the protection of buyers of property development—has been approved on second reading in the House of Representatives.

House Bill 395 that seeks to amend Presidential Decree 957 or the Subdivision and Condominium Buyers’ Protective Decree of 1976 has recently gained ground in the Lower Chamber of Congress as lawmakers press for its early passage.

Lawmakers have found the existing laws (PD 957) to be weak in deterring bad behavior among property developers and builders.

The bill dubbed “The Subdivision and Condominium Buyers’ Protective Decree Amendment of 2013” requires developers to register at their own expense all deeds of sale of subdivision lots and condominium units that have been fully paid.

In case of units sold through installment scheme, the developer and buyer would share the registration expenses proportionately.

Rep. Alfredo Benitez,
Housing Committee
chairman

The bill  empowers the Register of Deeds to cancel a property’s registration papers without the need of a court order if the buyer defaulted on his or her payment. It likewise requires developers to donate open spaces reserved for schools, places of worship, hospitals, health centers, and barangay centers to the local government in their project sites,

“Due to obsolete penalties for violations of PD957, many land and condominium developers contravene the decree knowing fully well that payment for the defiance of the law is so small,” Said Tarlac Rep. Susan A. Yap, principal author of the bill.

Negros Occidental Rep. Alfredo Benitez, chair of the House committee on housing and urban development, said that the bill would provide protection to real estate buyers who end up holding the empty bag when developers do not deliver on their promises made during the pre-selling of their projects.

“A certificate of registration does not vest the owner or dealer of a project the authority to sell without the necessary license to sell,” Benitez said.

The bill would raise to P50,000 the administrative fine for each violation of any of the provisions of the decree or of any rule or Lawmakers has found the existing laws (PD 957) to be weak in deterring bad behavior among property developers and builders.

These includes failure to complete the  project and or titles to the property sold to buyers, inability to refund the purchase price, and failure to follow construction specifications or poor workmanship resulting to sub-standard units or to construction defects.

For multiple violations,  offenders would be slapped with a P500,000 penalty and jail term of four years for the first offense; P750,000 penalty and 7 years imprisonment for the second offense; and P1 million penalty and 10 year imprisonment and revocation of business permit and licenses for the third offense.

Violators would be levied an additional fine of  P500,000 for every house and lot or condominium unit sold from illegal advertising.