Maceda Law (RA 6552) Explained for Buyers

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By Jeremiah Villagomez · PRC & DHSUD Accredited Real Estate Salesperson · Updated October 4, 2026 · 4 min read

Quick answer: The Maceda Law (RA 6552) protects buyers who pay for residential real estate in installments. If you have paid at least two years of installments, you get a grace period of one month per year paid. If the contract is cancelled, you get a refund of at least 50% of total payments, plus 5% for each year beyond five years, up to 90%. If you have paid less than two years, you get a grace period of at least 60 days. In both cases, cancellation requires a notarial notice, and it takes effect 30 days after you receive it (and, for buyers with two or more years paid, only after the refund is paid).

Who is covered

Buyers of residential real estate, including house and lot, residential lots, and condominium units, on installment
Purchases from developers and from private sellers
Payments made directly to the seller, including equity installments in pre-selling

Not covered: industrial lots, commercial buildings, and sales to tenants under agrarian reform laws. Loans from banks and Pag-IBIG are mortgage loans, not installment sales, so defaults there are handled by foreclosure rules rather than the Maceda Law.

If you have paid at least two years of installments

Grace period: one month for every year of installments paid, without interest, usable once every five years of the contract and its extensions.
Refund on cancellation: the cash surrender value, at least 50% of total payments made. After five years of installments, add 5% per additional year, up to a maximum of 90%.
Cancellation process: it takes effect 30 days after you receive a notice of cancellation or demand for rescission by notarial act, and only after the full refund is paid to you.

If you have paid less than two years

A grace period of at least 60 days from the date the missed installment was due
If you still don't pay, the seller may cancel 30 days after you receive a notarial notice
There is no statutory refund. Check your contract, as some developers offer partial refunds.

Other rights under the law

You may sell or assign your rights to another person, by notarial act, before cancellation.
You may pay the full unpaid balance in advance at any time without interest, and have the full payment annotated on the title.
Down payments, deposits, and options are counted in computing total payments made.
Any contract clause that waives these rights is void.

Worked refund example

A buyer paid ₱8,000 a month for 7 years (84 months), a total of ₱672,000, then defaulted. The developer cancelled properly.

Base refund: 50%
Years beyond five: 7 − 5 = 2 years × 5% = 10%
Refund rate: 60%
Refund due: ₱672,000 × 60% = ₱403,200, payable before the cancellation takes effect

Grace period available: 7 months (one month per year paid).

Where the Maceda Law meets PD 957

PD 957, the law for subdivision and condominium buyers, adds another protection. If the developer fails to develop the project according to approved plans and timelines, a buyer who stops paying after due notice to the developer can't be charged forfeiture. The buyer may instead ask for a refund of total payments with legal interest. Complaints about developers go through DHSUD and its adjudication arm, the Human Settlements Adjudication Commission.

Practical steps if you're falling behind

Write to the developer before missing a payment. Restructuring is often possible.
Know your count: how many years of installments have you completed?
Consider assigning your rights to a buyer you find, which often recovers more than the refund.
Keep every receipt, statement of account, and notice.
If cancellation is threatened without notarial notice or refund, seek legal advice or file a complaint with DHSUD.

Frequently asked questions

Does the Maceda Law apply to every property purchase?

No. It covers residential real estate bought on installment from a seller or developer. It doesn't cover commercial or industrial property, or bank and Pag-IBIG mortgage loans, which follow foreclosure rules.

How much refund do I get under the Maceda Law?

If you have paid at least two years of installments, at least 50% of total payments, plus 5% per year after the fifth year, up to 90%. Less than two years of payments carries no statutory refund.

Can a developer cancel my contract without notice?

No. Cancellation requires a notice by notarial act. It takes effect only 30 days after you receive it, and, if you have paid two or more years, only after the refund is paid.

Does the Maceda Law cover reservation fees?

Reservation fees on their own are generally governed by the reservation agreement. Once you are paying installments under a Contract to Sell, deposits and down payments count toward total payments for refund purposes.

Official sources and further reading

Reviewed for accuracy on October 4, 2026. Rates, fees, thresholds, and agency procedures change. Confirm transaction-specific details with the issuing agency, your lender, or a lawyer before you pay or sign.

Jeremiah Villagomez, PRC-accredited real estate salesperson in San Pablo City, Laguna

About the author: Jeremiah Villagomez is a PRC-accredited and DHSUD-accredited Real Estate Salesperson based in San Pablo City, Laguna. He helps first-time buyers, OFWs, and relocating families buy house and lot homes with Pag-IBIG, bank, or cash financing. More about Jeremiah · Call 0976 302 6551

Have a specific situation? Call or text 0976 302 6551 and I will run the numbers for your exact unit, budget, and financing route for free.