ESCUDERO PUSHES REFORM OF 54-YEAR-OLD MACEDA LAW TO STRENGTHEN HOME BUYER PROTECTION

Senator Francis “Chiz” Escudero is pushing for major reforms to the 54-year-old Realty Installment Buyer Act, or Republic Act No. 6552, saying the law must be updated to address the realities faced by Filipino families seeking to own homes through installment payments.

As chair of the Senate Committee on Urban Planning, Housing and Resettlement, Escudero sponsored Senate Bill No. 2504 during Tuesday’s plenary session. He said the proposed measure seeks to strengthen protections for homebuyers and provide them with greater opportunities to recover from financial setbacks without immediately losing years of payments and investment.

“In pushing this bill, we give Filipino homebuyers a better chance of making it to the finish line—and finally calling the home they have worked and paid for their own. One missed payment should be a setback, not the end of the road toward owning a home,” Escudero said.

RA 6552, enacted in 1972 and authored by the late Senator Ernesto Maceda, is widely known as the Maceda Law. It introduced safeguards for buyers of real estate sold on installment, including grace periods, refund rights and protection against arbitrary cancellation of contracts.
Escudero said that while the law was considered a landmark measure when enacted, changes are now needed to make it responsive to the present housing and financial environment.

Under the proposed amendments, buyers who have paid for at least two years would receive a grace period equivalent to one month for every year of payments made. They would also be entitled to a cash surrender value beginning at 50 percent and increasing by five percentage points annually after five years, up to a maximum of 90 percent.
Buyers who have made payments for less than two years would be given a 60-day grace period.

The bill would also provide buyers with additional options during the grace period, including transferring or assigning their rights, paying installments in advance, or settling the remaining balance in full without additional surcharges.
Escudero’s proposal further requires contract cancellations to be carried out through a notarial act and to take effect only after the prescribed 30-day period and payment of the buyer’s refund. Delayed refunds would be subject to a penalty of 1.5 percent per month.

The measure also requires sellers to transfer and register ownership within 120 days after full payment. Unjustified delays would carry a penalty equivalent to 0.05 percent of the contract price per month.
Escudero likewise emphasized that the proposed amendments would place ceilings on delinquency penalties and prohibit the imposition of such penalties during the buyer’s grace period.

The senator said the proposed reforms are intended to strengthen the protection of Filipino homebuyers while providing clearer rules for both buyers and sellers under installment-based real estate transactions.