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Bill Prohibits Reservation Fees on Subdivision Lots, Condos

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Manila, Philippines—Masbate Rep. Scott Davies Lanete has filed House Bill 5964, which bans reservation fees on subdivision lots and condominium units to ensure the protection of prospective buyers, according to a statement released by the House of Representatives.

The bill amends “The Subdivision and Condominium Buyers’ Protective Decree,” which regulates the sale of subdivision lots and condominiums.

Lanete said the usual practice of property developers is to require a prospective buyer to pay a reservation fee. “They require the buyer to submit numerous documents and subject them to various background checks.”

He added that the failure of a prospective buyer to submit the documentary requirements automatically leads to the forfeiture of the reservation fee.

Lanete also disclosed that a number of property developers have been constructing condominium projects near the fault line, which is not being divulged to the public.

“This has placed a lot of real estate and condo owners/tenants at risk of losing their lives to potentially disastrous earthquakes,” he said. “Same goes when living within a flood-prone and/or calamity-prone area.”

The bill mandates property developers to provide the buyer with transparent information, certified by the concerned governmental agency, e.g. Phivolcs or MMDA.

Under the bill, the prospective buyer is not required to pay any reservation fees until all documentary requirements are reviewed and accepted by the property developer.

The bill suggests a fine of not less than PhP 500,000 but not more than PhP 1 million to violators.

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4 Comments

  1. […] Manila, Philippines—Masbate Rep. Scott Davies Lanete has filed House Bill 5964, which bans reservation fees on subdivision lots and condominium units to ensure the protection of prospective buyers, according to a statement released by the House of Representatives. The bill amends “The Subdivision and Condominium Buyers’ Protective Decree,” which regulates  […]

  2. Dante comedido
    August 25, 2015 at 1:10 pm — Reply

    im the victim of ayala condo,they didnt return our reservation money 50T,the agent said late submission of docs

  3. Fad
    August 26, 2015 at 5:22 am — Reply

    Can’t hide from the BS. Mga Binay ng Masbate.

    Family of crooks… Pathetic!

  4. Nikko Mahor
    September 9, 2015 at 1:48 am — Reply

    A conscientious real estate agent WILL NOT FORCE A BUYER TO PAY THE RESERVATION FEE UNTIL AND UNLESS THE BUYER’S DOCUMENTS HAVE BEEN EVALUATED AND FOUND TO BE ACCEPTABLE BY THE DEVELOPER.

    A conscientious real estate developer will likewise NOT ACCEPT RESERVATIONS of those whom they deem do not meet their standard on buyer qualification.

    The hardworking congressman should look instead to amend the MACEDA LAW because if a buyer has not completed at least 24 months of payments, he or she is not entitled to any refund. I think that is a bit oppressive on the part of the buyer. Perhaps a graduated schedule for refunds could be adopted through the amendment of the MACEDA law.

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