Condominium Unit Purchase Agreement (Philippines)

A Condominium Unit Purchase Agreement in the Philippines records the sale and passing of title in the property, setting out the purchase price, the parties and the condition in which the asset transfers.

Presidential Decree No. 957 is the primary consumer protection law for condominium buyers in the Philippines. PD 957 requires all condominium developers to: obtain a License to Sell from the Housing and Land Use Regulatory Board (HLURB, now the Human Settlements Adjudication Commission or HSAC under RA 11201) before marketing any unit; register the subdivision or condominium project; deliver the completed unit within the period stated in the license; and comply with project specifications without material deviation. Violations of PD 957 entitle the buyer to file an administrative complaint with the HSAC or a criminal complaint before the prosecutor's office — PD 957 provides for criminal penalties of imprisonment and fines for developers who sell without a license or fail to deliver the unit.

The Maceda Law (RA 6552) provides important protections for buyers paying in installments. Under Section 3 of RA 6552, a buyer who has paid at least two years of installments may cancel only after the seller provides 60 days' notice and the buyer fails to cure the default within that period — the seller must also refund 50% of total payments made (increasing by 5% for every year beyond five years, up to a maximum of 90% refund). For buyers who have paid less than two years, Section 4 of RA 6552 provides a 60-day grace period to cure the default before the seller can cancel. The Maceda Law protections cannot be waived by contract.

Under Section 25 of PD 957, the buyer has a statutory right to a full refund with interest if the developer fails to complete and deliver the unit within the period stated in the purchase agreement, or if the developer fails to comply with reasonable standards of construction. The HSAC has jurisdiction to hear buyer complaints under PD 957 and may order refunds, completion of the project, or other relief.

For foreign buyers, the Condominium Act (RA 4726) allows foreigners to purchase condominium units subject to the restriction that foreign nationals may not own more than 40% of the total units in a condominium building — the remaining 60% must be Filipino-owned. This makes Philippine condominiums one of the few real property interests that foreign nationals may acquire directly.

A Condominium Unit Purchase Agreement in the Philippines is needed whenever a buyer acquires a condominium unit — whether from a developer on a pre-selling or ready-for-occupancy basis, or from a resale seller — and both parties need a written contract documenting the terms of sale.

A Condominium Unit Purchase Agreement is needed when buying a pre-selling unit from a licensed developer — units sold before construction completion or during construction are commonly sold under a Contract to Sell with monthly amortization payments. The HSAC requires the developer to provide the buyer with a copy of the signed contract within 30 days of signing under PD 957.

A Condominium Unit Purchase Agreement is required for a resale transaction where the current unit owner (who already has a Transfer Certificate of Title for the unit) sells the condominium unit to a new buyer. The agreement triggers: Bureau of Internal Revenue (BIR) documentary stamp tax under Section 196 of the National Internal Revenue Code (NIRC); capital gains tax of 6% of the gross selling price or zonal value under Section 24(D)(1) of the NIRC; and transfer tax payable to the local government unit under Section 135 of RA 7160 (Local Government Code).

A Condominium Unit Purchase Agreement is needed when a buyer uses a bank housing loan — from a BSP-supervised bank, the Social Security System (SSS) housing loan, the Pag-IBIG Housing Loan under RA 9679, or the GSIS housing loan under RA 8291 — to finance the purchase. Banks require the signed purchase agreement as a primary document for housing loan processing and the annotation of the real estate mortgage on the TCT.

A Condominium Unit Purchase Agreement is required when a corporation purchases a condominium unit as a corporate asset — the agreement must identify the corporation as the buyer with its SEC Registration Number, and the board resolution authorizing the purchase must be attached. The 40% foreign ownership limit under RA 4726 applies at the project level, not the individual transaction.

A Condominium Unit Purchase Agreement is needed in an estate settlement where a deceased unit owner's condominium unit is sold to a third party by the estate administrator or heirs — the agreement must be preceded by payment of estate taxes to the BIR under Section 84 of the NIRC and issuance of the Certificate Authorizing Registration (CAR) by the BIR before the Register of Deeds will allow the title transfer.

A valid Condominium Unit Purchase Agreement in the Philippines must contain the following essential elements to comply with PD 957, RA 4726, RA 6552 (Maceda Law), and the Civil Code.

Parties and Unit Identification: Full legal names and addresses of the seller (developer or individual seller) and buyer. For the unit, state: building name and address, floor number, unit number, unit type (studio, 1BR, 2BR), floor area in square meters, parking slot number (if included), and the TCT number (for resale) or future title reference (for pre-selling). For corporate sellers, include SEC Registration Number and the name of the authorized representative with the board resolution authorizing the sale.

Purchase Price and Payment Terms: The total contract price in Philippine pesos (PHP ₱), the breakdown of payments (reservation fee, down payment, monthly amortization), the amortization schedule with due dates, interest rate (if applicable), and payment method. For installment sales subject to the Maceda Law (RA 6552), state the minimum of two years of installments that trigger the 50% refund entitlement and the 60-day cure period.

Unit Description and Specifications: Description of the unit in its as-built or as-to-be-built condition, reference to the approved floor plan and specifications on file with HSAC, and the developer's commitment to comply with specifications without material deviation under Section 23 of PD 957.

Delivery Date: The specific date on which the developer commits to complete and deliver the unit in habitable condition. Under Section 25 of PD 957, failure to deliver entitles the buyer to a full refund with interest. For ready-for-occupancy (RFO) units, the delivery date is typically within 30 days of the contract signing upon payment of full down payment.

Title Transfer: The obligation of the seller to execute and deliver a Deed of Absolute Sale and support the transfer of the TCT to the buyer's name upon full payment. Specify who bears the cost of: capital gains tax (normally seller); documentary stamp tax (normally buyer); transfer tax (normally buyer); registration fees at the Register of Deeds (normally buyer); and notarial fees.

Maceda Law Rights (RA 6552): An explicit statement of the buyer's rights under RA 6552 — the 60-day grace period, the refund entitlement after two years of installment payments, and the reinstatement right within 30 days after cancellation. PD 957 and RA 6552 rights cannot be waived by agreement.

Developer's License and Registration: Reference to the HSAC License to Sell number and the project registration number as required by Section 5 of PD 957 — any contract executed without a valid License to Sell is void and the developer is subject to criminal penalties.

Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. The forms-legal.com Condominium Unit Purchase Agreement (Philippines) template covers the mandatory elements under Property Registration Decree (PD 1529).