Government Regulations Pertaining to Real Estate Marketing and Sales

Last Updated on

Real estate is a major purchase for almost anyone, making it paramount that its marketing and sales be duly regulated for the benefit and protection of the buyer.

Be if for commercial or residential use, the sale of real estate often involves a significant amount of money. For many buyers, this is usually their life savings plus income for the foreseeable future. This understandably makes it necessary to have regulations ensuring buyers will receive their money’s worth, as well as everything else that was promised from the property they acquire.

Fortunately, there laws that regulate the real estate industry, and the marketing and selling of properties in the Philippines. These provide potential buyers or investors the necessary pieces of information regarding their planned property acquisitions and are given nothing less than what is factual.

Laws on Consumer Protection

Competition in the local real estate industry is at an all-time high, with the developers and their subsidiaries, and numerous brokers working on closing deals. Unfortunately, while some conduct business with utmost care and professionalism, others opt to do just about anything to complete a deal.

Questionable sellers have the tendency to over-promise something to clients but under-deliver (or deliberately deceive the client by fraudulent presentation or by feeding incomplete, incomprehensive or inaccurate information) as they look to sell the fastest time and/or at the highest price.

Presidential Decree No. 957 addresses such problem and protects the welfare of buyers. First implemented in 1976 and amended several times in recognition of the changing property market landscape and conditions, its primary purpose is to protect real estate investors against misrepresentation and fraudulent activities of sellers (developers, brokers, sellers, and landlords).

False Advertising Government Regulations Pertaining to Real Estate Marketing and Sales
Image via Shutterstock

Laws Governing Advertising and Marketing

Through the years, P.D. 957 has been amended numerous times as the real estate landscape evolves. Among the amendments was the inclusion of sets of revised implementing rules and regulations (IRRs) that govern the marketing and selling of real estate.

These IRRs made advertisements almost similar to a warranty, which sellers and developers must responsibly deliver any and all representations that they release to the public after approval from the Housing and Land Use Regulatory Board (HLURB).

SECTION 19. Advertisements

Advertisements that may be made by the owner or developer through newspaper, radio, television, leaflets, circulars or any other form about the subdivision or the condominium or its operations or activities must reflect the real facts and must be presented in such manner that will not tend to mislead or deceive the public.

The owner or developer shall be answerable and liable for the facilities, improvements, infrastructures or other forms of development represented or promised in brochures, advertisements and other sales propaganda disseminated by the owner or developer or his agents and the same shall form part of the sales warranties enforceable against said owner or developer, jointly and severally.

Failure to comply with these warranties shall also be punishable in accordance with the penalties provided for in this Decree.

Section 19 of P.D. 957 enables potential property buyers to make the most informed decision regarding their purchase, so even details as seemingly obvious as whether or not photos used in a real estate ad are actual photos or artist renderings must come with the required disclaimers.

Location and price of the property for sale are key considerations for buyers, and are examples of relevant information addressed by Section 19. For the benefit of the buyers, distances must be accurately mentioned in kilometers when landmarks are mentioned in relation to a project or property. Similarly, a maximum price for economic and social housing projects must also be indicated in ads, but modes of payment or financing may not be mentioned unless disclosed in full and in detail.

Classifieds Government Regulations Pertaining to Real Estate Marketing and Sales
Image via Shutterstock

Laws Governing Property Turnovers and Payment Schemes

Another common concern being addressed by P.D. 957 is when sellers and developers fail to turn over the property at the time advertised or agreed upon. Buyers are protected from having the payments they’ve already made forfeited, as well as reserves them the right to discontinue payments and/or be reimbursed what they’ve already paid:

SECTION 23. 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 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.

With regard to property for sale being advertised as having “no down payment”, buyers are advised to read all fine prints and clauses:

SECTION 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.

The implementation of such policy due to “no down payment” ads almost always not meaning there is no down payment at all, but rather that it is not needed to be paid upfront in a lump sum like it commonly is, and is instead allowed to be paid in installment, with a common provision that the buyer is only allowed to begin using the property when the down payment is complete.

Main image via Shutterstock


For further information on the rules, regulations, and other responsibilities of the Housing and Land Use Regulatory Board, as well as additional articles related to the HLURB and its attached agencies, visit the Lamudi HLURB page.



Please enter your comment!
Please enter your name here

Must Read

‘Cities within a City’: Fort Bonifacio’s Townships Revisited

The biggest land-holder in Fort Bonifacio, Megaworld continues to raise the standards in Metro Manila’s fastest growing central business district In as little as a...