Navigating Property Sales Without HLURB License: A Guide

Ms. J asks: I bought a subdivision lot and already made several downpayments. I discovered that the property developer does not possess a License to Sell from the HLURB. Can I get a refund?

Introduction

In the Philippines, the Housing and Land Use Regulatory Board (HLURB) is responsible for regulating property developers. One of the requirements for these developers is to possess a License to Sell before they can legally sell subdivision lots. But what happens when a property developer does not have this license? This guide will provide you with an understanding of your rights and options in such a scenario.

The Importance of an HLURB License

Under Presidential Decree No. 957, a property developer is required to possess a License to Sell before selling subdivision lots. This license ensures that the developer has met all the necessary requirements and standards set by the HLURB, providing a layer of protection for buyers.

What if the Property Developer Does Not Have a License?

The absence of a License to Sell does not automatically render the Contract to Sell null and void. In a 2013 Supreme Court case (Moldex Realty, Inc. vs. Flora A. Saberon), it was clarified that while the law penalizes developers for selling without a license, it does not explicitly declare contracts to sell as invalid due to the lack of a license. Therefore, if all the requirements of a valid contract are present, the Contract to Sell remains valid, and the sale of the property may proceed.

Your Rights as a Buyer

As a buyer, you have two general alternative rights:

Proceed with the Sale: Given that the Contract to Sell is valid despite the absence of a License to Sell, you can choose to proceed with the sale; or
Demand for a Full Refund: According to Section 23 of PD 957, if a property developer fails to develop a subdivision or condominium project according to the approved plans and within the agreed time limit, the buyer has the right to demand a full refund. This refund includes the total amount paid, including amortization interests (excluding delinquency interests), with interest at the legal rate.

Conclusion

Addressing issues with unlicensed HLURB property developers can be complicated, requiring the insights of professional legal counsel to assess your unique situation and devise the most suitable approach. If you require guidance on property sales or any other legal matters, our team at Lawyers Online PH is ready to assist. We provide you with the access to right professionals to make your legal journey smoother.

Book your appointment at https://www.lawyersonlineph.com/