Contract to Sell (Philippines)
CONTRACT TO SELL
Civil Code of the Philippines (RA 386) | MACEDA Law (RA 6552) | Property Registration Decree (PD 1529)
This CONTRACT TO SELL is made and entered into this [Date of Contract], by and between:
SELLER:
[Seller Name], of legal age, [Seller Civil Status], Filipino, with address at [Seller Address] (hereinafter referred to as the "SELLER");
BUYER:
[Buyer Name], of legal age, [Buyer Civil Status], Filipino, with address at [Buyer Address] (hereinafter referred to as the "BUYER").
The SELLER and BUYER are hereinafter collectively referred to as the "PARTIES".
RECITALS
WHEREAS, the SELLER is the registered owner of the real property described as follows:
[Property Description], covered by [TCT/CCT Number], with a total lot area of [Lot Area], registered with the [Registry of Deeds] under the Land Registration Authority (LRA) Torrens system pursuant to Presidential Decree No. 1529.
WHEREAS, the BUYER desires to purchase the above-described property on installment basis, and the SELLER is willing to sell the same subject to the terms and conditions herein stated.
NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual covenants herein contained, the PARTIES agree as follows:
1. AGREEMENT TO SELL
1.1 The SELLER agrees to sell, transfer, and convey to the BUYER the above-described property upon full payment of the total purchase price and fulfillment of all conditions herein. Ownership and title to the property shall remain with the SELLER until the BUYER has fully paid the total purchase price and all associated charges.
2. PURCHASE PRICE AND PAYMENT
2.1 The total purchase price of the property is [Total Purchase Price] (Philippine Pesos).
2.2 The BUYER shall pay the purchase price as follows:
(a) Reservation fee / down payment: [Reservation Fee], due upon signing of this Contract;
(b) Monthly amortization of [Monthly Amortization] for [Number of Payments], commencing on [First Payment Date];
(c) Interest rate: [Interest Rate] per annum (if applicable).
2.3 All payments shall be made in Philippine Pesos (PHP ₱) to the SELLER at the address stated above or through such other mode as the SELLER may designate in writing.
2.4 Late payments shall be subject to a penalty of [Penalty Rate] on the unpaid installment, without prejudice to the SELLER's right to cancel this Contract subject to the requirements of RA 6552.
3. RETENTION OF TITLE — SUSPENSIVE CONDITION
3.1 This Contract to Sell is subject to the suspensive condition that the BUYER shall have fully paid the total purchase price of [Total Purchase Price] and all charges due under this Contract. Until such full payment is made, the SELLER retains absolute ownership and title over the property.
3.2 Upon full payment of the total purchase price and fulfillment of all conditions herein, specifically [Deed Execution Condition], the SELLER shall execute a Deed of Absolute Sale in favor of the BUYER and deliver the owner's duplicate [TCT/CCT Number] to the BUYER for registration with the [Registry of Deeds].
4. DELIVERY OF POSSESSION
4.1 The SELLER shall deliver physical possession of the property to the BUYER on [Possession Date], or upon execution of this Contract if no date is stated. Delivery of possession does not constitute transfer of ownership, which shall occur only upon execution of the Deed of Absolute Sale.
4.2 From the date of delivery of possession, the BUYER shall pay all real property taxes, association dues, and other charges attributable to the property.
5. MACEDA LAW PROVISIONS (RA 6552)
5.1 For residential real estate subject to the Maceda Law (Republic Act No. 6552), the following protections apply to the BUYER:
(a) If the BUYER has paid at least two (2) years of installments: the BUYER is entitled to a grace period of one (1) month for every year of installments paid from the date the installment fell due, before the SELLER may cancel this Contract. Upon valid cancellation, the SELLER shall refund to the BUYER at least fifty percent (50%) of total payments made, plus an additional five percent (5%) per year beyond five years (maximum 90%).
(b) If the BUYER has paid less than two (2) years of installments: the BUYER is entitled to a sixty (60)-day grace period after receipt of the SELLER's written notice of cancellation.
5.2 Cancellation of this Contract requires a notarial act of rescission and actual payment of the cash surrender value to the BUYER, as required under Sections 3 and 4 of RA 6552. These rights cannot be waived.
6. TAXES AND EXPENSES
6.1 Documentary Stamp Tax (DST) at 1.5% of the higher of the selling price or the Bureau of Internal Revenue (BIR) zonal value shall be paid upon execution of this Contract under Section 196 of the National Internal Revenue Code (NIRC, RA 8424 as amended by RA 10963).
6.2 Capital Gains Tax (CGT) at 6% shall be paid by the SELLER upon execution of the Deed of Absolute Sale. Transfer Tax shall be paid by the BUYER to the Local Government Unit. Registration fees at the [Registry of Deeds] shall be borne by the BUYER.
6.3 Notarization fees for this Contract and for the Deed of Absolute Sale shall be shared equally by the PARTIES unless otherwise agreed.
7. GOVERNING LAW AND DISPUTE RESOLUTION
7.1 This Contract is governed by and construed in accordance with the laws of the Republic of the Philippines, including the Civil Code (RA 386), the MACEDA Law (RA 6552), and the Property Registration Decree (PD 1529).
7.2 Any dispute arising from or in connection with this Contract shall be submitted to the Regional Trial Court of [Governing City] with jurisdiction over the subject property. Prior to filing in court, the PARTIES agree to undergo mandatory conciliation before the Barangay Lupong Tagapamayapa (Katarungang Pambarangay) if required by law.
8. GENERAL PROVISIONS
8.1 This Contract constitutes the entire agreement between the PARTIES with respect to the subject matter hereof and supersedes all prior negotiations, representations, or agreements.
8.2 Any amendment to this Contract must be in writing and signed by both PARTIES before a notary public.
8.3 If any provision of this Contract is declared void or unenforceable, the remaining provisions shall continue in full force and effect.
IN WITNESS WHEREOF, the PARTIES have signed this Contract to Sell on the date and at the place first written above.
SELLER: [Seller Name]
Seller's Spouse (conformity): [Seller Spouse Name]
BUYER: [Buyer Name]
Signed in the presence of:
Seller
________________
Signature
Buyer
________________
Signature
What Is a Contract to Sell (Philippines)?
A Contract to Sell in the Philippines sets out the mutual obligations the parties accept and the terms that govern their dealings.
The Contract to Sell differs fundamentally from a Deed of Absolute Sale in that title does not pass to the buyer upon signing. The Supreme Court of the Philippines, in Coronel v. Court of Appeals (G.R. No. 103577, October 7, 1996), established the controlling doctrine: a contract to sell is a conditional sale where the seller's obligation to sell becomes effective only upon the happening of the suspensive condition — full payment. Non-payment prevents the obligation from arising and entitles the seller to cancel the contract without court action, provided proper notice is given.
For residential real estate sold on installment basis — including subdivision lots, condominium units, and residential house-and-lot packages — the Maceda Law (Republic Act No. 6552, 1972) imposes mandatory protection for buyers who have paid at least two years of installments. Under Section 3 of RA 6552, such buyers are entitled to a grace period of one month for every year of installments paid before the seller may cancel the contract. Buyers who have paid less than two years receive a 60-day grace period under Section 4 of RA 6552. Cancellation requires a notarial act of rescission and actual refund of the cash surrender value.
The Department of Human Settlements and Urban Development (DHSUD), which absorbed the Housing and Land Use Regulatory Board (HLURB), regulates contracts to sell for subdivision and condominium projects. DHSUD Memorandum Circular No. 1, Series of 2022 requires that contracts to sell for licensed subdivision and condominium projects use DHSUD-approved standard forms or contain provisions at least as favorable as those required by RA 6552. Buyers may file complaints with DHSUD for violations of their Maceda Law rights.
Documentary Stamp Tax (DST) at the rate of 1.5% of the higher of the selling price or Bureau of Internal Revenue (BIR) zonal value applies to contracts to sell upon execution, under Section 196 of the National Internal Revenue Code (NIRC, RA 8424 as amended by the TRAIN Law, RA 10963). Capital Gains Tax (CGT) at 6% is triggered upon execution of the Deed of Absolute Sale upon full payment, not at the time of the Contract to Sell. The BIR has clarified this in Revenue Memorandum Circular No. 37-2012.
When Do You Need a Contract to Sell (Philippines)?
A Contract to Sell in the Philippines is required whenever real property is being transferred through installment payments rather than a lump-sum cash transaction.
A Contract to Sell is needed when a developer is selling residential subdivision lots or condominium units on an installment basis to individual buyers. Under Presidential Decree No. 957 (Subdivision and Condominium Buyers Protective Decree), licensed subdivision and condominium developers must execute a Contract to Sell — not a Deed of Absolute Sale — with buyers until title can be cleanly transferred upon full payment and completion of the project.
A Contract to Sell is required when an individual property owner sells land, a house, or a commercial property to a buyer who cannot pay the full purchase price upfront and will pay in agreed monthly or periodic installments. The seller protects their ownership rights by retaining title under the Contract to Sell until the final payment clears.
A Contract to Sell is needed when Overseas Filipino Workers (OFWs) purchase property in the Philippines while working abroad. OFW buyers frequently purchase through agents or attorneys-in-fact holding Special Powers of Attorney (SPA), and the Contract to Sell governs the payment timeline across multiple years while the property is being constructed or the buyer accumulates funds.
A Contract to Sell is required when a buyer is financing the purchase through a Pag-IBIG Fund (Home Development Mutual Fund) housing loan, BDO, Metrobank, or other bank mortgage. Banks and Pag-IBIG will accept a Contract to Sell as the basis for loan processing, and the full Deed of Absolute Sale is executed upon loan release and full payment to the seller.
A Contract to Sell is needed for pre-selling condominium projects where the developer has not yet obtained a Certificate of Registration and License to Sell from DHSUD. The contract governs the buyer's rights during the construction period and specifies the conditions under which the Deed of Condominium Certificate of Title will be transferred.
What to Include in Your Contract to Sell (Philippines)
A valid Contract to Sell in the Philippines must contain the following essential elements to be enforceable and compliant with Philippine law.
Parties: Full legal names, addresses, and civil status of the seller and buyer as appearing on government-issued identification. For married parties, the spouse's conformity is required under Article 96 of the Family Code (EO 209, 1988), as properties acquired during marriage under the Absolute Community of Property or Conjugal Partnership regimes cannot be sold without spousal consent. For corporate sellers, include the Securities and Exchange Commission (SEC) registration number and the name of the authorized signatory with board resolution authority.
Property Description: A precise description of the subject property, including the Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) number, lot number, block number, subdivision or condominium project name, lot area in square meters, and the Registry of Deeds where the title is registered under the Land Registration Authority (LRA) Torrens system (Property Registration Decree, PD 1529).
Purchase Price and Payment Schedule: The total contract price in Philippine Pesos (PHP ₱), broken down into: (a) reservation fee or down payment amount and due date; (b) monthly amortization amount, payment start date, and total number of payments; (c) balloon payment or final payment details; and (d) interest rate if applicable. The payment schedule must comply with MACEDA Law (RA 6552) minimum requirements for residential installment transactions.
Condition Precedent: An express provision stating that ownership and title shall remain with the seller until the buyer has fully paid the total contract price and all related charges. This suspensive condition is the defining feature of a Contract to Sell under Coronel v. Court of Appeals (G.R. No. 103577, 1996) doctrine.
MACEDA Law Provisions: For residential real estate, mandatory provisions on buyer grace periods — one month per year of installments paid (for buyers who have paid two or more years) or 60 days (for buyers who have paid less than two years) — as required by Sections 3 and 4 of RA 6552. The right of the buyer to receive a refund of the cash surrender value upon valid cancellation must be stated.
Taxes and Charges: Allocation of Documentary Stamp Tax (DST at 1.5% of higher of selling price or BIR zonal value under NIRC Section 196), Capital Gains Tax (CGT at 6% triggered at Deed of Absolute Sale stage), transfer tax (0.5%-0.75% payable to the Local Government Unit), and registration fees with the Register of Deeds.
Notarization Requirement: The contract must be notarized before a notary public commissioned under the 2004 Rules on Notarial Practice (A.M. No. 02-8-13-SC) to be considered a public instrument under Civil Code Article 1358. Notarized contracts to sell for real property are admissible as prima facie evidence without further proof of authenticity.
Signatures: Signatures of both parties and their spouses (if applicable), two competent witnesses, and the notary public's seal and entry in the notarial register.
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 Contract to Sell (Philippines) template covers the mandatory elements under Property Registration Decree (PD 1529).
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Forms Legal. (2026). Contract to Sell (Philippines) (Philippines) [Legal document template]. Forms Legal. https://forms-legal.com/philippines/real-estate/purchase-sale/contract-to-sell-philippines
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year = {2026},
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note = {Free legal document template. Based on Property Registration Decree (PD 1529)}
}Frequently Asked Questions
A Contract to Sell in the Philippines is a conditional agreement where the seller retains ownership until the buyer completes full payment of the purchase price — title does not pass upon signing. A Deed of Absolute Sale, by contrast, transfers ownership immediately and unconditionally upon execution. The Supreme Court of the Philippines in Coronel v. Court of Appeals (G.R. No. 103577, October 7, 1996) confirmed that in a Contract to Sell, the seller's promise to sell is conditioned on full payment, which is a suspensive condition that prevents the sale from being consummated until payment is complete. If the buyer fails to pay, the seller may cancel the contract without filing a court action, provided proper notice and the MACEDA Law (RA 6552) requirements are followed for residential installment sales. A Deed of Absolute Sale, once executed and registered, is immediately final and cannot be unilaterally rescinded without court action or mutual agreement.
A Contract to Sell for real property in the Philippines must be notarized to constitute a public instrument under Article 1358 of the Civil Code of the Philippines (RA 386). While an unnotarized contract to sell may still be valid and binding between the parties as a private document under Article 1356 of the Civil Code, it cannot be registered with the Register of Deeds, cannot be used to compel execution of the Deed of Absolute Sale through court action as efficiently, and does not carry the evidentiary weight of a public instrument. Notarization is performed by a notary public commissioned under the 2004 Rules on Notarial Practice (A.M. No. 02-8-13-SC, Supreme Court). The notary verifies the identity and personal appearance of the parties, records the instrument in the notarial register, and affixes the official seal. For transactions involving Overseas Filipino Workers (OFWs) signing abroad, the document must be apostilled by the DFA-accredited authority in the country of signing under RA 11002 (Hague Apostille Convention, effective May 14, 2019).
The Maceda Law (Republic Act No. 6552, 1972) provides mandatory protections to buyers of residential real estate — including subdivision lots, condominium units, and residential house-and-lot packages — purchased on installment. Buyers who have paid at least two years of installments are entitled under Section 3 of RA 6552 to a grace period of one month for every year of installments paid before the seller may cancel the contract, and the seller must refund 50% of total payments made, plus an additional 5% for every year beyond five years (maximum 90%). Buyers who have paid less than two years of installments receive a 60-day grace period before cancellation under Section 4. Cancellation of the contract requires both a notarial act of rescission and actual payment of the cash surrender value — the seller cannot simply declare the contract cancelled. MACEDA Law protections cannot be waived by contract, meaning any provision in the Contract to Sell that purports to waive these rights is void under RA 6552 Section 7.
A Contract to Sell in the Philippines triggers Documentary Stamp Tax (DST) upon execution at 1.5% of the higher of the selling price or the Bureau of Internal Revenue (BIR) zonal value of the property, under Section 196 of the National Internal Revenue Code (NIRC, RA 8424 as amended by the TRAIN Law, RA 10963). DST must be paid to the BIR within five days after the close of the month of execution. Capital Gains Tax (CGT) at 6% of the higher of selling price, BIR zonal value, or fair market value is triggered only upon execution of the Deed of Absolute Sale — not at the Contract to Sell stage — as clarified by BIR Revenue Memorandum Circular No. 37-2012. Transfer Tax (0.5% in provinces, 0.75% in cities) is payable to the Local Government Unit upon the Deed of Absolute Sale. The buyer is also responsible for registration fees at the Register of Deeds under the Land Registration Authority (LRA) schedule.
A seller may cancel a Contract to Sell in the Philippines if the buyer defaults on payments, but the cancellation procedure depends on how long the buyer has been paying. Under the Maceda Law (RA 6552), if the buyer has paid at least two years of installments, the seller must provide a grace period of one month per year of payments, give written notice of cancellation, execute a notarial act of rescission, and refund the cash surrender value (at least 50% of total payments). If the buyer has paid less than two years, the seller must give a 60-day grace period after written notice before cancelling. For non-residential real property not covered by MACEDA Law, Article 1191 of the Civil Code of the Philippines (RA 386) governs rescission. The Supreme Court in Rillo v. Court of Appeals (G.R. No. 125347, 1997) clarified that failure to comply with the Maceda Law cancellation procedure renders the purported cancellation void, and the buyer can continue paying and demand execution of the Deed of Absolute Sale.
A Contract to Sell may be annotated on the Transfer Certificate of Title (TCT) at the Register of Deeds under the Land Registration Authority (LRA) to protect the buyer's rights against third parties under the Property Registration Decree (PD 1529). While registration is not mandatory for the contract to be valid and binding between the parties, annotating the contract on the TCT prevents the seller from encumbering or selling the property to another buyer, as the annotation gives constructive notice to the world under Section 51 of PD 1529. Buyers who do not annotate their Contract to Sell risk losing their rights to a subsequent buyer who registers a deed of sale in good faith and for value under the Torrens system. The annotation is made by presenting the notarized Contract to Sell to the Register of Deeds with the owner's duplicate TCT and paying the prescribed annotation fees. DHSUD also requires developers to submit copies of all contracts to sell for licensed subdivision and condominium projects.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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