Worried about falling victim to a fraudulent real estate transaction? To safeguard your investment, always ask for the License to Sell for the specific subdivision or condominium project where your unit is located. This simple step can provide crucial protection and peace of mind.
In the early 1970s, the Marcos Administration became alarmed by the rise in fraudulent real estate transactions in the Philippines. To address this issue, President Marcos enacted Presidential Decree No. 957, also known as the Subdivision and Condominium Buyer's Protective Decree (PD 957). This important law was designed to shield home buyers from deceitful practices and ensure that developers fulfill their obligations.
What is PD 957?
PD 957 was established to protect home buyers from fraudulent acts by real estate developers who fail to deliver promised infrastructure, such as roads, drainage systems, and other essential services. This law is crucial in preventing developers from endangering the health and safety of buyers.
How PD 957 Protects You
PD 957 has proven effective in safeguarding not just buyers but also sellers, dealers, and developers. Over time, Congress has introduced amendments to address emerging issues and improve the law’s effectiveness.
While we won’t delve into all the amendments here, we’ll focus on two key documents under PD 957: the Certificate of Registration and the License to Sell.
The Role of HLURB/DHSUD
The Housing and Land Use Regulatory Board (HLURB), now known as the Department of Human Settlements and Urban Development (DHSUD), is the government agency responsible for enforcing PD 957. Previously, the National Housing Authority (NHA) handled this role before it was transferred to the Human Settlement Regulatory Commission (HSRC) and then rebranded as HLURB. Under Republic Act 11201, signed by President Rodrigo Duterte on February 14, 2019, it became DHSUD.
DHSUD operates several bureaus, including:
Bureau of Environmental, Land Use and Urban Planning and Development
Housing and Real Estate Development Regulation Bureau
Homeowners Associations and Community Development Bureau
All real estate developers must be registered and licensed by DHSUD. The agency oversees the issuance, suspension, and revocation of these licenses and handles disputes between buyers and developers.
License to Sell: Your Second Layer of Defense
A License to Sell is required before any subdivision lot or condominium unit can be sold. Section 5 of PD 957 stipulates that developers must obtain this license within two weeks of registering their project.
The License to Sell ensures that the project meets regulatory standards and is a key measure in preventing fraud. It must also be displayed visibly in the developer’s office.
To protect yourself:
Always request the License to Sell for the specific lot, house-and-lot, or condo unit you are considering.
Verify the License to Sell with DHSUD to ensure its authenticity.
License to Sell: Your Second Layer of Defense (Most Important)
A License to Sell is required before any subdivision lot or condominium unit can be sold. Section 5 of PD 957 stipulates that developers must obtain this license within two weeks of registering their project.
The License to Sell ensures that the project meets regulatory standards and is a key measure in preventing fraud. It must also be displayed visibly in the developer’s office.
To protect yourself:
Always request the License to Sell for the specific lot, house-and-lot, or condo unit you are considering.
Verify the License to Sell with DHSUD to ensure its authenticity.
Why This Matters
The issuance of both the Certificate of Registration and the License to Sell provides reassurance that the developer is legitimate and financially capable. Always verify these documents to avoid potential risks.
When buying in a subdivision, ensure the License to Sell matches the specific phase of the project where your unit is located. For condominiums, check that it corresponds to the specific tower or section.
Trust DHSUD
DHSUD is dedicated to monitoring compliance, imposing penalties for violations, and resolving disputes between buyers and developers. Their vigilance ensures that your investment is protected and that developers adhere to the law.
By following these steps, you can confidently navigate the real estate market and protect yourself from fraud.
This guide is for educational purposes only. Consult a lawyer for advice on your specific situation. If you have any questions or need personalized assistance, contact us at 0920 207 5035 or email cebuhousefinder@yahoo.com. We're here to guide you every step of the way, ensuring a smooth and confident buying experience.
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