Maceda and Recto Law Essay

These deuce laws be relevant and are very often the issue of many court cases. Both laws cast the deal of property by installments. The Recto Law, which forms part of the Civil Code, covers installment gross revenue of soulfulnessal property while the Maceda Law governs installment sales of rattling property.The Recto LawThe Recto Law comprises Articles 1484 to 1486 of the Civil Code. It was added to the Civil Code to prevent abuses in the foreclosure of chattel mortgages, such as when mortgagee-creditors foreclosed mortgaged property, bought them at a base bell (on purpose,) then prosecuted the mortgagor-debtors to recover the deficiencies.In the event a emptor of personal property defaults by failing to pay two or more of the agreed installments, the marketer kindle do any of the followers1.) Demand that the vendee pay (a.k.a. specific performance)2.) Cancel or purloin the sale3.) Foreclose the mortgage on the property bought (if there invariably was a chattel mort gage)Regarding no. 3, this happens when a person takes a bring to buy something and he mortgages the thing he bought to ensure the creditor that he pass on pay the loan. Remember If you submit one remedy, you cant choose the others. These remedies, believe it or not, are besides available to the purchaser. You also cant use all or any of them at the said(prenominal) period. The Recto Law also wont apply to a true(a) sale (i.e. a sale where there is a down recompense and the balance is payable in the future in a single payment wholly.) The seller can also assign his credit to other person, making that person the sassy creditor.If the vendee refuses to giving up the items to the seller, he be necks a perverse vendee-mortgagor. When that happens, the seller can recover expenses and attorneys fees.The Recto Law also covers leases with the option to purchase.The Maceda LawThe Maceda Law, RA 6552, is the sincere estate equivalent of the Recto Law. Like the Recto Law, it a lso covers financing of sales of substantial property (which is why mortgages also come in.) It doesnt apply,however, to the following sales1.) Industrial scores2.) Commercial buildings and lots3.) Lands under the CARP LawDepending on when the buyer defaults, there are two (2) contingent scenarios if the buyer paid at least two (2) eld installments and if the buyer paid less than 2 geezerhood installments.If the buyer paid less than 2 old age installments and defaults, he is given a forgiveness outcome of sixty (60) geezerhood starting from the date of his go away installment to resume gainful. This degree can be increased by the seller. If afterwards the grace period the buyer still cant pay, the seller must make a notarial command to cancel the sale. The cancellation becomes in force(p) thirty (30) old age after the buyer was notified. So its possible that the buyer could be notified two months after the 60-day period and then the 30-day period will begin.If the buy er paid at least two familys installments, the buyer can pay the unpaid balance without interest. The grace period is computed at one (1) month per socio-economic class of installment payments. It also begins from the beat the buyer paid his last installment.The grace period can be used only once every five (5) years of the sales incurs life -including its extensions. So its possible to submit a grace period of a year if the buyer had beenpaying his installments faithfully for 12 years. Once the buyer chooses to use the grace period, he cant stun it again until another five years are over.If the seller wants to cancel the sale, he has to refund the buyer of 50% of the actual payments. If the buyer paid more than five years installments another 5% for every year is to be added to the refund, but only up to 90% of the total payments do. The payments mentioned here include the downpayment, options and deposits. The refund is made in this way if the buyer paid more 2 to 5 years i nstallments, he can get back 50% of the bullion surrender observe. If he paid for more than 5 years, he can get the 50% plus 5% per year up to 90%.The buyer is also allowed to make advanced payments, or even the full price, without interest. He can also assign his rights to another person, making that person the new buyer, but he can only do that with a notarial routine of sale assignment.The Maceda Law cannot be used by a real estate developer (see here.) It also cannot be used by the highest bidder in foreclosure proceedings. body politic dissemble NO. 6552REALTY initiation BUYER PROTECTION ACTAN ACT TO PROVIDE PROTECTION TO BUYERS OF REAL ESTATE ON INSTALLMENT PAYMENTS Section 1. This Act shall be known as the Realty installation Buyer Act. Sec. 2. It is hereby declared a public policy to shelter buyers of real estate on installment payments against onerous and oppressive conditions. Sec. 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 tenants under Republic Act Numbered Thirty-eight carbon forty-four, as amended by Republic Act Numbered Sixty-three snow 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 unpaidinstallments 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 f ive 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 recission 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.Sec. 4. In case where less than two years of installments were paid, the seller shall give the buyer a grace period of not less than sixty days from the date the installment became due. If the buyer fails to pay the installments due at the firing of the grace period, the seller may cancel the contract 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.Sec. 5. Under Sectio n 3 and 4, the buyer shall scram the right to sell his rights or assign the selfsame(prenominal) to another person or to reinstate the contract by update the account during the grace period and before actual cancellation of the contract. The deed of sale or assignment shall be done by notarial act.Sec.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 certificate of title covering the property. Sec.7. Any stipulation in any contract hereafter entered into contrary to the provisions of Sections 3, 4, 5 and 6, shall be null and void.Sec. 8. If any provision of this Act is held invalid or unconstitutional, no other provision shall be affected thereby.Sec. 9. This Act shall take fix upon its approval.Approved August 26, 1972Source http//www.foreclosurephilippines.com/2011/04/maceda-law-full-text-ra-6552.htmlixzz2WU4VzLe8