Bill Prohibits Reservation Fees on Subdivision Lots, Condos
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.