How to Avoid Fraudulent Real Estate Sales: Essential Steps for Protecting Your Investment

Worried about falling prey to real estate scams? Protect your investment by always requesting the License to Sell for the specific subdivision or condominium project you're eyeing. This simple yet critical step ensures your peace of mind and secures your financial future.

The Origins of Buyer Protection: PD 957

In the 1970s, the Philippines faced a surge in fraudulent real estate deals, prompting the Marcos Administration to enact Presidential Decree No. 957 (PD 957), also known as the Subdivision and Condominium Buyer's Protective Decree. Signed into law to curb deceptive practices, PD 957 safeguards homebuyers by holding developers accountable for delivering promised infrastructure—like roads, drainage systems, and essential utilities—while prioritizing buyer safety.

What Does PD 957 Do?

PD 957 shields buyers, sellers, and developers from fraud by setting strict standards for real estate projects. It ensures developers meet their obligations, protecting you from incomplete or substandard developments. Over the years, Congress has refined the law to address new challenges, making it more robust and effective.

The Role of DHSUD

The Department of Human Settlements and Urban Development (DHSUD), formerly the Housing and Land Use Regulatory Board (HLURB), enforces PD 957. Established under Republic Act 11201 (signed February 14, 2019), DHSUD oversees key bureaus, including:

• Environmental, Land Use, and Urban Planning and Development Bureau

• Housing and Real Estate Development Regulation Bureau

• Homeowners Associations and Community Development Bureau

DHSUD ensures all real estate developers are registered and licensed, monitors compliance, resolves disputes, and penalizes violations, giving you confidence in your investment.

The License to Sell: Your Key to Security

Under Section 5 of PD 957, developers must secure a License to Sell within two weeks of registering their project. This document confirms that the project meets regulatory standards, serving as your second layer of defense against fraud. Developers are required to display the License to Sell prominently in their offices.

Sample of License to Sell for Specific Condo or Subdivision Project

How to Protect Yourself

1. Request the License to Sell for the specific lot, house-and-lot, or condo unit you're considering.

2. Verify its authenticity with DHSUD to ensure the document is valid.

3. For subdivisions, confirm the License to Sell matches the project phase. For condominiums, ensure it corresponds to the specific tower or section.

Why It Matters

The Certificate of Registration and License to Sell verify a developer's legitimacy and financial stability. Checking these documents minimizes risks and ensures you're dealing with a reputable developer.

Sample of Certificate of Registration issued to the Developer

Trust DHSUD for Oversight

DHSUD diligently monitors compliance, imposes penalties for violations, and mediates disputes between buyers and developers. Their oversight ensures developers adhere to PD 957, safeguarding your investment.

Take Control of Your Real Estate Journey

By verifying the License to Sell and consulting with DHSUD, you can confidently navigate the Philippine real estate market. Protect your investment and avoid fraud with these simple steps.

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Have questions or need assistance? Contact us at 0920 207 5035 or email cebuhousefinder@yahoo.com. We're here to guide you toward a secure and seamless homebuying experience. Disclaimer: This guide is for educational purposes only. Consult a lawyer for your specific case.