Property developers can also suffer from scheming buyers

MANILA, Philippines - Presidential Decree No. 957 (PD 957), or “The Subdivision and Condominium Buyers’ Protective Decree”, took effect in the late-70s, courtesy of the late President Ferdinand Marcos. It was enacted mainly to address the concerns of the time, “that many real estate subdivision owners, developers, operators, and/or sellers have reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems, and other similar basic requirements, thus endangering the health and safety of home and lot buyers” and regarding, “cases of swindling and fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles to the buyers or titles free from liens and encumbrances, and to pay real estate taxes, and fraudulent sales of the same subdivision lots to different innocent purchasers for value.”

To give its due, now on its 34th year of existence, PD 957 has really been fairly effective in curbing the tendencies and temptations for real estate companies to leave their clients hanging after getting hefty payments from them. The Housing and Land Use Regulatory Board (HLURB) is at the forefront, as the agency granted exclusive jurisdiction to handle matters regarding the application of the decree.

But there are also penal provisions in the decree that can be properly enforced through the prosecutor’s office and the courts.

However, it seems that certain buyers-the scheming and profiteering ones, far from being “innocent purchasers”– take advantage of the overwhelming bias of the decree in their favor, and then use and abuse the provisions of the decree (especially the criminal provisions) and indiscriminately wield them against the developers, for the purpose of pressuring them into granting certain concessions and accommodations. Quite contrary to the situation envisioned by the decree, several condominium developers nowadays complain about scheming and cunning buyers who file criminal charges against them for alleged violations of the decree but whose disguised intentions are really to force these hapless real estate developers to accommodate some of their requests, i.e., amend the master deed or the deed of restrictions, vary the original purposes or design of the buildings, and other arbitrary and flimsy reasons.

On this note, the prosecutor’s office and the courts should always be wary of the ulterior motives and bad faith of buyers of real estate, and should always subject complaints filed with them to the initial test of whether there is indeed fraud or misrepresentation. This is but consistent with the rationale of the decree which is precisely the prevention of “swindling and fraudulent manipulations” by unscrupulous real estate developers.

In the absence of fraud and misrepresentation, the prosecutor’s office and the courts should immediately dismiss the complaints and just let the HLURB do its thing. Anyway, the HLURB is better technically equipped on these matters than them. Otherwise, the prosecutor’s office and the courts could already be accused of intervening in purely private and civil transactions, and be used as instruments to unfairly increase the buyer’s bargaining power on the negotiating table. In the end, real estate developers-even the most law-abiding and scrupulous ones-could fall victim to and forever be at the mercy of rogue and scheming buyers.