1. This Act shall be known as the "Realty Installment Buyer Act."
2. It is hereby declared a public policy to protect buyers of real
on installment payments against onerous and oppressive conditions.
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
to tenants under Republic Act Numbered Thirty-eight hundred forty-four,
as amended by Republic Act Numbered Sixty-three hundred eighty-nine,
the buyer has paid at least two years of installments, the buyer is
to the following rights in case he defaults in the payment of
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
in every five years of the life of the contract and its extensions, if
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If the contract is cancelled, the seller shall refund to the buyer the
cash surrender value of the payments on the property equivalent to
per cent of the total payments made, and, after five years of
an additional five per cent every year but not to exceed ninety per
of the total payments made: Provided, That the actual
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.
payments, deposits or options on the contract shall be included in the
computation of the total number of installment payments made.
4. In case where less than two years of installments were paid, the
shall give the buyer a grace period of not less than sixty days from
date the installment became due.
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the buyer fails to pay the installments due at the expiration of the
period, the seller may cancel the contract after thirty days from
by the buyer of the notice of cancellation or the demand for rescission
of the contract by a notarial act.
5. Under Section 3 and 4, the buyer shall have the right to sell his
or assign the same to another person or to reinstate the contract by
the account during the grace period and before actual cancellation of
contract. The deed of sale or assignment shall be done by notarial act.
6. The buyer shall have the right to pay in advance any installment or
the full unpaid balance of the purchase price any time without interest
and to have such full payment of the purchase price annotated in the
of title covering the property.
7. Any stipulation in any contract hereafter entered into contrary to
provisions of Sections 3, 4, 5 and 6, shall be null and void.
8. If any provision of this Act is held invalid or unconstitutional, no
other provision shall be affected thereby.
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9. This Act shall take effect upon its approval.
August 26, 1972