PD 957

Section 11. License to Sell (Amended per Board Res. No. 763, Series of 2004)

No owner or dealer shall sell any disposable subdivision lot or condominium unit in the registered
project without a license to sell issued by the Board within two (2) weeks from the registration of
each project. 1

RULE V
REGISTRATION OF REAL ESTATE DEALERS, BROKERS AND
SALESMEN

Section 13. Application for Registration of Brokers and Salesmen

No broker or salesman shall engage in the business of selling subdivision lots or condominium units
without securing a certificate of registration by filing with the Board a registration statement in
quadruplicate containing the following information:

Section 21. Time for Completion: Every owner or developer shall construct and provide the facilities,
infrastructures, other forms of development, including water supply and lighting facilities and as far
as practicable improvements, which are offered and indicated in the approved subdivision or
condominium plans, brochures, prospectus, printed matters, letters or in any form of advertisement,
within one (1) year or within such other period of time as may be fixed by the Board from the date of
the issuance of license to sell for the subdivision or condominium project. Request for extension of
time to complete development of a subdivision or condominium project may be granted only in
cases where non-completion of project is caused by fortuitous events, legal orders or such other
reasons that the board may deem fit/proper with the written notice to lot or unit buyers without
prejudice to the exercise of their rights pursuant to Section 23 of the Decree. The request for

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EFFECT OF ABSENCE OF CERTIFICATE OF REGISTRATION AND LICENSE TO SELL

ISSUE: There was a sale of a realty but there was a contention that the sale is void for lack of prior certificate of
registration and license to sell by the HLURB.

HELD: No. P.D. 957 is a law that seeks to regulate the sale of subdivision lots and condominiums in view of the
increasing number of incidents wherein “real estate subdivision owners, developers, operators, and/or sellers
have reneged on their representations and obligations to proved and maintain properly” the basic
requirements and amenities, as well as “reports of alarming magnitude… of swindling and fraudulent
manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators.” As such, P.D.
957 requires the registration not just of the developers, seller, brokers and/or owners of the project but also of
the project itself. Upon the registration of the project, a license to sell must be obtained prior to the sale of the
subdivision lots or condominium units therein. The law also provides for the suspension and revocation of the
registration and license in certain instances, as well as the procedure to be observed in the event thereof.
Finally, the law provides for administrative fines and other penalties in case of violation of, or non-compliance
with its provisions.

The requirements of Section 4 and 5 of P.D. 957 do not go into the validity of the contract, such that the
absence thereof would automatically render the contract null and void. It is rather more of an administrative
convenience in order to allow for a more effective regulation of industry.  (Sps. Co Chien v. Sta. Lucia Realty &
Dev., Inc., et al., G.R. No. 162090, January 31, 2007)
extension of time for completion shall be accompanied by a revised work program duly signed and
sealed by a licensed engineer or architect with project costing and financing scheme there for. In
appropriate cases, the Board may require the posting of additional performance bond amounting to
20% of development cost of the unfinished portion of the approved development plan, or issue such
orders it may deem proper. 2

Section 24. Non-forfeiture of Payments

No installment payment made by a buyer in a new or existing subdivision or condominium project for
the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer when the
buyer, after due notice to the owner or developer and clearance from the Board desists from further
payment due to the failure of the owner or developer to develop the project according to the
approved plans and within the time limit for complying with the same. Such buyer may at his option
be reimbursed the total amount paid including amortization interests but excluding delinquency
interests, with interest thereon at the legal rate. 3

Sec. 33. Nullity of waivers. - Any condition, stipulation, or provision in contract of sale whereby any
person waives compliance with any provision of this Decree or of any rule or regulation issued
thereunder shall be void.

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In case the developer of a subdivision or condominium fails in its obligation under Section 20, Section 23 gives the buyer
the option to demand reimbursement of the total amount paid, or to wait for further development of the subdivision, and
when the buyer opts for the latter alternative, he may suspend payment of installments until such time that the owner or
developer had fulfilled its obligation to him (Tamayo vs Huang).

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Under PD 957, the seller is obliged to develop the subdivision, otherwise, the buyer has the right to suspend
payment and the only requirement under the law is to give due notice to the owner or developer of the buyer’s
intention to suspend payment.The contention that the written notice was belatedly sent is not correct since
there was a verbal notice to suspend payment.The law does not specifically provide the form of notice to be
given to the owner/developer. Considering the purpose of the law and the evil sought to be prevented, a
verbal notice of the intention to suspend remittance of payment is sufficient. Such a holding is consistent with
the ruling in Francel Realty Corp. v. Sycip, G.R. No. 154684, September 8, 2005, 469 SCRA 424, where the
requirement of an HLURB clearance under Section 23, Rule VI of the Rules Implementing P.D. No. 957 before
the buyer of a subdivision lot or a home could lawfully withhold monthly payments was declared void. It was
explained:
            x x x To require clearance from the HLURB before stopping payment would not be in keeping with the
intent of the law to protect innocent buyer of lots or homes from scheming subdivision developers. To give full
effect to such intent, it would be fitting to treat the right to stop payment to be immediately effective upon
giving due notice to the owner or developer or upon filing a complaint before the HLURB against the erring
developer. Such course of action would be without prejudice to the subsequent determination of its propriety
and consequences, should the suspension of payment subsequently be found improper. (Tamayo v. Huang,
G.R. No. 164136, January 25, 2006, 480 SCRA 156; Francel Realty Corp. v. Sycip).

 In case the developer of a subdivision or condominium fails in its obligation under Section 20 of P.D. No, 957,
Section 23 of the law gives the buyer the option to demand reimbursement of the total amount paid, or to wait
for further development of the subdivision, and when the buyer opts for the latter alternative, he may suspend
payment of installments until such time that the owner or developer had fulfilled its obligation to him. (Tamayo
v. Huang).