Contract to Sell — Subdivision Lot (Philippines)
CONTRACT TO SELL
Civil Code of the Philippines (RA 386) • PD 957 (Subdivision and Condominium Buyers' Protective Decree, 1976) • RA 6552 (Realty Installment Buyer Protection Act / Maceda Law, 1972) • RA 11201 (DHSUD Act, 2019)
This Contract to Sell ("Contract") is entered into on [Agreement Date] by and between:
VENDOR: [Vendor Name], with registered address at [Vendor Address]. DHSUD: [Vendor DHSUD License] ("Vendor"); AND
VENDEE: [Vendee Name], with address at [Vendee Address], TIN: [Vendee TIN] ("Vendee").
1. SUBJECT PROPERTY
1.1 Lot Description: [Lot Description].
1.2 Deed Restrictions and HOA: [Lot Restrictions].
2. SUSPENSIVE CONDITION AND NATURE OF CONTRACT
2.1 This Contract to Sell is entered into subject to the suspensive condition of full payment of the purchase price by the Vendee. Until the purchase price is fully paid, ownership of the Subject Property shall remain with the Vendor, and no right of ownership shall pass to the Vendee by reason of this Contract alone.
2.2 Upon full payment, the parties shall execute a Deed of Absolute Sale, and the Vendor shall deliver the Transfer Certificate of Title (TCT) in the name of the Vendee, as further provided in Section 5 below.
3. PURCHASE PRICE AND PAYMENT TERMS
3.1 Total Contract Price: [Total Price].
3.2 Down Payment: [Down Payment].
3.3 Balance Payable in Installments: [Balance].
3.4 Monthly Amortization: [Monthly Amortization], at an interest rate of [Interest Rate]. Payment due date: [Payment Due Date].
3.5 Late Payment Penalty: [Late Penalty].
4. BUYER'S RIGHTS — MACEDA LAW (RA 6552)
4.1 [Maceda Disclosure].
4.2 Any provision of this Contract that diminishes or waives the Vendee's rights under Republic Act No. 6552 shall be void and unenforceable as against public policy.
5. TITLE DELIVERY AND GOVERNING LAW
5.1 Title Delivery: [Title Delivery].
5.2 Taxes and Transfer Costs: Capital Gains Tax (6% of the higher of the gross selling price or BIR zonal value under NIRC Section 24(D)) shall be for the account of the Vendor. Documentary Stamp Tax (1.5% of the consideration under NIRC Section 196), Transfer Tax, and Registration fees shall be for the account of the Vendee, unless otherwise agreed in writing.
5.3 For developer-vendors subject to PD 957: Vendor shall not cancel this Contract without prior written authorization from the Department of Human Settlements and Urban Development (DHSUD) under Section 23 of PD 957.
5.4 This Contract is governed by the Civil Code of the Philippines (RA 386), PD 957, and RA 6552. Disputes between a developer-vendor and buyer shall be initially submitted to DHSUD's jurisdiction under PD 957. Other disputes shall be resolved by the proper courts of the judicial region where the Subject Property is located.
IN WITNESS WHEREOF, the parties have signed this Contract on [Agreement Date].
[Vendor Name]
Vendor
[Vendee Name]
Vendee
Vendor (Authorized Representative)
________________
Signature
Vendee / Buyer
________________
Signature
What Is a Contract to Sell — Subdivision Lot (Philippines)?
A Contract to Sell — Subdivision Lot in the Philippines sets out the mutual obligations the parties accept and the terms that govern their dealings.
Contracts to Sell for subdivision lots in the Philippines are primarily regulated by two key statutes. Presidential Decree No. 957 (The Subdivision and Condominium Buyers' Protective Decree, 1976) applies when the seller is a licensed developer selling lots within a registered subdivision project. PD 957 requires the developer to have a Certificate of Registration (CR) and License to Sell (LTS) from the DHSUD (formerly HLURB) before selling any lot, restricts the developer's right to cancel the contract to sell without DHSUD authorization, and mandates delivery of the individual TCT to the buyer within a specified period after full payment. Republic Act No. 6552 (The Realty Installment Buyer Protection Act, or Maceda Law, 1972) protects buyers of real property under installment payment plans by granting them the right to a refund of a percentage of their installments paid if the developer cancels the contract — 50% refund after two years of installment payments, increasing by 5% per additional year of payments.
Individual lot owners (non-developers) who sell a single subdivision lot through a private Contract to Sell are not subject to PD 957's developer licensing requirements, but the Maceda Law still applies if the buyer pays in installments. The BIR requires payment of Capital Gains Tax (CGT) at 6% of the higher of gross selling price, BIR zonal value, or assessed value under Section 24(D) of the NIRC, and Documentary Stamp Tax (DST) at 1.5% of the consideration under Section 196 of the NIRC, upon execution of the Deed of Absolute Sale (not upon the Contract to Sell, unless the contract is treated as equivalent to a sale for tax purposes).
The legal framework governing the Contract to Sell — Subdivision Lot (Philippines) in Philippines draws on several key statutes and regulatory bodies. 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. Parties executing a Contract to Sell — Subdivision Lot (Philippines) in Philippines should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Property Registration Decree (PD 1529) sets the foundational requirements.
When Do You Need a Contract to Sell — Subdivision Lot (Philippines)?
A Contract to Sell for a Subdivision Lot in the Philippines is needed whenever a buyer acquires a residential lot through an installment payment plan, whether from a licensed developer or from an individual owner.
A Contract to Sell is needed when a first-time homebuyer applies for in-house financing from a licensed subdivision developer — such as Ayala Land, Inc. (ALI), DMCI Homes, Filinvest Land, Megaworld Corporation, Vista Land and Lifescapes, or Federal Land — for a residential lot in an open-market or socialized housing project, and the developer's standard contract is supplemented by a specific Contract to Sell with a personalized amortization schedule.
A Contract to Sell is needed when an individual lot owner in a subdivision in Laguna, Cavite, Batangas, Bulacan, or Rizal provinces sells their TCT-titled lot to a buyer who pays in installments over a period of one to five years, and a private Contract to Sell is executed to govern the payment schedule, interest rate, late payment charges, and title delivery obligations.
A Contract to Sell is needed when a buyer avails of a Pag-IBIG Housing Loan (Home Development Mutual Fund, Republic Act No. 9679) or a bank take-out loan (from BDO, BPI, Metrobank, Security Bank, or RCBC) to purchase a lot, and the Contract to Sell serves as the basis for the financing application pending execution of the Deed of Absolute Sale upon loan release.
A Contract to Sell is needed when a buyer of a lot in a DHSUD-registered socialized housing project under BP 220 (Batas Pambansa Blg. 220, 1982) or a National Housing Authority (NHA) resettlement project pays for the lot through a government housing program amortization schedule, and the government housing agency issues a Contract to Sell as the primary instrument governing the installment arrangement.
A Contract to Sell is needed when an OFW (Overseas Filipino Worker) buys a residential lot as a long-term investment while working abroad, paying for the lot through a three-to-five-year installment plan arranged with the developer's OFW housing program, and the Contract to Sell is notarized and apostilled for use by the OFW in the country of employment.
What to Include in Your Contract to Sell — Subdivision Lot (Philippines)
A valid Contract to Sell for a Subdivision Lot in the Philippines must contain the following essential elements.
Parties: Full legal names, addresses, and TIN (Tax Identification Number) of both the vendor (developer or individual seller) and the vendee (buyer). For developer-vendors, include SEC Registration Number and DHSUD Certificate of Registration number and License to Sell (LTS) number, as required by PD 957.
Property Description: Complete technical description of the lot as appearing in the TCT — TCT number, lot number, block number, phase, subdivision project name, municipality/city and province, total lot area in square meters, and boundaries as per TCT or survey plan.
Purchase Price: Total contract price in PHP ₱, VAT treatment (whether inclusive or exclusive of 12% VAT if vendor is VAT-registered), and BIR zonal value comparison.
Payment Terms: Down payment amount and due date; monthly amortization amount in PHP ₱; number of monthly payments (term in months); applicable interest rate per annum; and payment due dates (e.g., the 5th day of each month). Include amortization table if practicable.
Late Payment Charges: Penalty rate per month on overdue installments (typically 2% to 3% per month in Philippine subdivision contracts).
Title Delivery: Developer's obligation to deliver the individual TCT in the buyer's name within a specified period after full payment, as required by PD 957 Section 25. Individual sellers must similarly commit to deliver the TCT and support transfer within a reasonable period.
Maceda Law Disclosures: For installment purchases, the contract must not exclude or diminish the buyer's rights under RA 6552: right to cure arrears within the grace period, right to refund upon cancellation, and right to a 90-day notice before final cancellation after two years of installment payments.
Restrictions on Use: Subdivision deed restrictions, homeowners association dues obligations, prohibition on use contrary to the residential character of the subdivision, and requirement to construct improvements within the developer's prescribed construction period (if applicable).
Cancellation Clause: Conditions under which the contract may be cancelled, reference to Maceda Law protections, and DHSUD authorization requirements for developer cancellations under PD 957 Section 23.
Additional compliance elements for a Contract to Sell — Subdivision Lot (Philippines) used in Philippines include: 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. Forms-legal.com provides this template as a starting point for Philippines-compliant documentation.
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Forms Legal. (2026). Contract to Sell — Subdivision Lot (Philippines) (Philippines) [Legal document template]. Forms Legal. https://forms-legal.com/philippines/real-estate/purchase-sale/contract-to-sell-subdivision-lot-philippines
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}Frequently Asked Questions
The fundamental difference between a Contract to Sell and a Deed of Absolute Sale in the Philippines is when ownership of the lot transfers from seller to buyer. In a Deed of Absolute Sale, ownership passes immediately upon execution of the deed, and the buyer is entitled to register the deed with the Registry of Deeds and obtain a new Transfer Certificate of Title (TCT) in their name. In a Contract to Sell, ownership is deliberately withheld by the seller as a security for payment — ownership passes to the buyer only upon fulfillment of a suspensive condition, which is typically full payment of the purchase price. The Supreme Court of the Philippines has consistently held in a long line of decisions — including Coronel v. Court of Appeals, G.R. No. 103577, October 7, 1996 — that a Contract to Sell does not automatically transfer ownership to the buyer; the seller retains the right to cancel the contract if the buyer fails to pay, without the need to go to court (unlike a Deed of Absolute Sale, where the seller must file an annulment action). Capital Gains Tax (CGT) at 6% and Documentary Stamp Tax (DST) at 1.5% are paid upon execution of the Deed of Absolute Sale, not upon the Contract to Sell — though the BIR may sometimes require DST upon the Contract to Sell if it constitutes a document transferring beneficial ownership.
Republic Act No. 6552 (The Realty Installment Buyer Protection Act, known as the Maceda Law, enacted in 1972 and named after former Senator Ernesto Maceda) provides significant statutory protections to buyers of subdivision lots, condominium units, and other real property on installment plans in the Philippines, protecting them against arbitrary cancellation of their contracts by developers or sellers. For buyers who have paid at least two years of installments: the buyer is entitled to a 30-day grace period per year of paid installments (e.g., if the buyer paid five years of installments, they get a 150-day grace period) to pay overdue amortizations without additional interest; if the developer cancels the contract after the grace period, the developer must refund to the buyer 50% of the total payments made, plus an additional 5% for every year beyond the second year of installments, up to a maximum of 90% of total payments; and the developer must give the buyer a 90-day notice before actual cancellation. For buyers who have paid fewer than two years of installments: the developer must give the buyer a 60-day grace period after the due date to pay arrears; if the buyer fails to pay within the grace period, the developer may cancel the contract after giving a 30-day notice of cancellation. The Maceda Law is a mandatory law — its protections cannot be waived or reduced by contract, and any provision in a Contract to Sell that purports to exclude or limit Maceda Law rights is void as against public policy under Article 6 of the Civil Code.
Under Presidential Decree No. 957, Section 23 (The Subdivision and Condominium Buyers' Protective Decree, 1976), a registered subdivision developer may not cancel a Contract to Sell for a subdivision lot without the prior written approval of the Department of Human Settlements and Urban Development (DHSUD). This DHSUD authorization requirement is a mandatory protective measure for buyers — it prevents developers from summarily canceling contracts and re-selling the same lot to another buyer at a higher price, which was a common fraudulent practice in the pre-PD 957 Philippine real estate market. The developer must file a petition for cancellation before DHSUD, which will evaluate whether: the buyer has materially breached the contract (e.g., non-payment for a substantial period even after the Maceda Law grace periods have expired); the Maceda Law protections and refund rights of the buyer have been properly applied; and the cancellation is not tainted by fraud or bad faith by the developer. If DHSUD authorizes the cancellation, the developer must pay the buyer the applicable Maceda Law refund. A developer that cancels a Contract to Sell without DHSUD authorization and re-sells the same lot to another buyer commits a violation of PD 957, punishable by fines and/or imprisonment, and the original buyer may seek reinstatement of their Contract to Sell before DHSUD or the courts.
The purchase of a subdivision lot in the Philippines triggers several taxes payable to the Bureau of Internal Revenue (BIR) and local government units (LGUs). Capital Gains Tax (CGT): 6% of the higher of the gross selling price, BIR zonal value, or assessed value of the lot under Section 24(D) of the NIRC, paid by the seller. CGT is paid upon execution of the Deed of Absolute Sale (not the Contract to Sell), within 30 days of notarization, using BIR Form 1706. Documentary Stamp Tax (DST): 1.5% of the consideration (selling price) under Section 196 of the NIRC, paid by the buyer (though in practice parties often agree who bears this cost). DST must be paid within five days after the close of the month of notarization of the deed, using BIR Form 2000-OT. Value Added Tax (VAT): If the seller is a VAT-registered developer and the lot is part of a low-cost or socialized housing project (selling price exceeding the DHSUD/BIR threshold — currently PHP 3,199,200 per lot for socialized housing exemption), the lot sale may be subject to 12% VAT under Section 106 of the NIRC. Transfer Tax: 0.5% to 0.75% of the selling price or zonal value (whichever is higher), paid to the LGU (City or Province where the lot is located) before transfer of title. Registration Fee: Paid to the Registry of Deeds based on a schedule of fees for registration of the Deed of Absolute Sale and issuance of new TCT in the buyer's name.
The transfer of a subdivision lot's Transfer Certificate of Title (TCT) from the seller's name to the buyer's name in the Philippines typically takes 60 to 120 days from the execution of the Deed of Absolute Sale under normal conditions, though delays are common. The process involves: (1) Payment of Capital Gains Tax (CGT) and Documentary Stamp Tax (DST) at the BIR Revenue District Office (RDO) where the property is located — BIR processing: 15-30 business days; (2) Payment of Transfer Tax at the City or Provincial Treasurer's Office — 5-10 business days; (3) Submission to the Registry of Deeds for registration of the Deed of Absolute Sale and issuance of a new TCT in the buyer's name — Registry of Deeds processing: 30-60 business days, longer in Metro Manila registries like Makati, Pasig, and Quezon City that handle high volumes; (4) Real Property Tax (RPT) declaration update at the City or Municipal Assessor's Office — 5-10 business days. Delays may arise from BIR processing backlogs, deficiencies in submitted documents, encumbrance cancellations pending at the Registry of Deeds, or outstanding real property tax arrears. For subdivision developers subject to PD 957, Section 25, the developer is legally required to deliver the individual TCT to the buyer within the period specified in the developer's DHSUD-approved undertaking — developers that fail to deliver titles within the committed period may be sanctioned by DHSUD.
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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