PRE-SELLING REFUND

This is a MUST READ. This development is a continuation of Maceda Law. Good news for pre-selling buyers, bad news for developers.

Last July 2025, the Supreme Court ruled on a case (G.R. No. 261877) involving a pre-selling condominium project that was not completed on time and not delivered as promised.

Here’s the big takeaway (based on my reading of the case):

If a developer fails to complete a project:

According to the approved plans, OR

Within the prescribed period

the buyer’s statutory rights under PD 957 (Subdivision and Condominium Buyers’ Protection Decree) are triggered.

The buyer may:

a. Suspend further amortization payments, or

b. Cancel the contract and demand a refund

Critical clarifications by the Court:

👉 Developers cannot hide behind extensions of time granted by HLURB/HSAC. Such extensions are expressly “without prejudice to buyers’ rights.”

👉 A buyer may still demand a refund even if they:

Signed a turnover or unit acceptance certificate,

Moved in and occupied the unit, or

Continued living in the unit while the case was pending.

In these situations, the buyer is NOT estopped from demanding a refund if the project or promised amenities were not completed as advertised.

Important limitation (also clarified by the Court):

❌ Not all payments are refundable.

❌ Move-in fees, utility deposits, and improvement costs are generally NOT included, as they are not amortization payments for the purchase of the unit.

Why this matters:

This ruling strengthens buyer protection beyond Maceda Law. It reinforces that pre-selling is a promise, not a suggestion. Developers must deliver what they marketed — on time and according to approved plans — or return the buyer’s money.

JPRE side comment:

This may partly explain why some developers are raising cash or liquidating assets — either to prepare for potential refunds or to ensure sufficient funding to complete projects on time.

Takeaways:

1. Expect more buyers seeking to exit contracts to invoke this case as basis for refunds.

2. Expect developers to build larger construction buffers (farther turnover dates) for new projects.

3. This ruling will increase pressure on developers’ cash reserves.