Escudero pushes reforms to 54-year-old Maceda Law

Senator Francis “Chiz” Escudero is pushing for amendments to Republic Act No. 6552, or the Realty Installment Buyer Act, saying the 54-year-old law needs to be updated to address the realities of today’s housing and financial sectors.

Escudero, chairperson of the Senate Committee on Urban Planning, Housing and Resettlement, said the existing law should provide stronger protection to families who purchase homes through installment arrangements.

He argued that a single missed payment should not wipe out years of payments and investment made by a homebuyer toward owning a property.

“In pushing this bill, we give Filipino homebuyers a better chance of making it to the finish line—and finally calling the home they have worked and paid for their own. One missed payment should be a setback, not the end of the road toward owning a home,” Escudero said.

During Tuesday’s plenary session, Escudero sponsored Senate Bill No. 2504, which seeks to expand the rights and protections of buyers who purchase real estate through installment payments.

RA 6552, enacted in 1972 and authored by the late Senator Ernesto Maceda, is popularly known as the Maceda Law. It established grace periods, refund rights and safeguards against the arbitrary cancellation of installment contracts.

Escudero said the law was a significant measure when it was enacted but now needs to be strengthened to reflect the financial challenges faced by modern homebuyers.

Under the proposed amendments, buyers who have made payments for at least two years would receive a grace period equivalent to one month for every year of payment.

The bill would also increase cash surrender value based on the length of payment, starting at 50 percent and increasing by five percentage points annually after five years, up to a maximum of 90 percent.

Buyers who have paid for less than two years would be given a 60-day grace period.

The measure would also give buyers additional options during the grace period, including transferring or assigning their rights, paying installments in advance, or settling the remaining balance in full without surcharges.

For a cancellation to take effect, sellers would be required to execute it through a notarial act after the prescribed 30-day period and payment of the applicable refund.

Delayed refunds would be subject to a penalty of 1.5 percent per month.

The proposed measure would likewise require sellers to transfer and register ownership within 120 days after the buyer has fully paid for the property. Unjustified delays would carry a penalty equivalent to 0.05 percent of the contract price per month.

Escudero also said the bill would impose ceilings on delinquency penalties and prohibit the imposition of such penalties during the applicable grace period.