Litigating Pre-Selling Condominium Delays: Using the Maceda Law to Demand Developer Refunds

Introduction: why pre-selling delays turn into refund disputes

Refund claims arising from delayed or unfinished pre-selling condominium projects are common in the Philippines because buyers usually pay over time while construction and turnover are still pending. When a project is not completed as promised, buyers often seek to stop paying and recover what they already paid. In litigation, however, the most frequent legal basis for full refunds due to non-development or non-completion is not the Maceda Law, but Presidential Decree No. 957 (Subdivision and Condominium Buyers’ Protective Decree) and the adjudicatory jurisdiction now exercised under the Department of Human Settlements and Urban Development system.

This article explains how corporate and individual buyers typically pursue full refund relief through the administrative route and, when needed, through court review—especially where the developer effectively abandons the project or fails to complete it within the period required by law.

Important note on legal basis: “Maceda Law” vs. P.D. No. 957 refund cases

The topic frames refunds using the “Maceda Law.” In actual condominium delay and non-completion disputes, the clearest statutory grant for a full refund tied to project non-development/non-completion is found in Section 23 of P.D. No. 957, which provides buyer remedies when the developer fails to develop the project according to approved plans and within the time limit. Section 23 expressly allows the buyer, after due notice, to desist and either suspend payments or cancel and seek reimbursement of amounts paid, with legal interest (excluding delinquency interest). This remedy is repeatedly applied in Supreme Court decisions involving delayed or unfinished condominium projects.

Accordingly, for litigation aiming for a full refund because the project was not completed or was effectively abandoned, the discussion below centers on P.D. No. 957, Supreme Court rulings applying it, and the administrative forum that has original jurisdiction over these disputes.

Governing laws and authorities for condominium delay/refund disputes

P.D. No. 957 (1976) is the principal buyer-protection decree for subdivision and condominium sales. Its refund protection is found in Section 23 (Non-Forfeiture of Payments), which bars forfeiture of installment payments when the buyer desists (after due notice) due to the developer’s failure to develop according to approved plans and within the required time, and gives the buyer the option to be reimbursed the total amount paid (including amortization interest but excluding delinquency interest) with interest at the legal rate. This is the statute most directly invoked for full refund relief arising from non-completion. Presidential Decree No. 957, Section 23 (Non-Forfeiture of Payments), 1976.

R.A. No. 11201 (2019) created the Department of Human Settlements and Urban Development and provides for the Human Settlements Adjudication Commission (HSAC), including the original and exclusive jurisdiction of Regional Adjudicators over many buyer-developer disputes involving condominiums. These include claims for refund and cases for specific performance or contractual and statutory obligations arising from the sale and development of the project. Republic Act No. 11201 (DHSUD Act), 2019, Section 16.

When a “delay” becomes a refundable breach under P.D. No. 957

P.D. No. 957 protects buyers when the developer fails to develop the condominium project according to approved plans and within the time required. The Supreme Court has applied P.D. No. 957 to grant buyers the right to cancel and demand refund when the developer fails to complete the project within the required period; the remedy is not limited to mere suspension of payments. Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2023; Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2025.

Even when developers argue partial completion, the Court has recognized that “substantial completion” does not suffice when the law and the approved plans require completion within the mandated period. Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2023; Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2025.

Buyer remedies under P.D. No. 957 Section 23

Section 23 is often summarized by the Court as giving buyers two principal options when the developer fails to complete the project on time:

• Continue the contract but suspend payments until the developer finishes the project; or
• Cancel and demand a refund of all payments made (excluding delinquency interest), with legal interest.

Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2023.

What “full refund” usually covers (and what it does not)

In refund awards under P.D. No. 957, the Supreme Court has recognized refunds of amounts that are part of the purchase payment stream (e.g., equity and monthly amortizations), with legal interest, when the project was not completed within the required period. Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2025.

At the same time, the Court has ruled that the refund does not automatically extend to payments unrelated to the purchase price of the unit, such as move-in fees and costs of improvements. Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2023.

Developer defenses that often fail in delay and non-completion cases

Developers commonly invoke economic downturns or currency fluctuations as reasons for delay. Philippine jurisprudence has repeatedly treated these as foreseeable business risks that generally do not excuse performance as a fortuitous event for real estate developers.

• The 1997 Asian financial crisis was not accepted as a fortuitous event excusing a developer from obligations to buyers. Fil-Estate Properties, Inc. v. Go, G.R. No. 165164, 2007.
• When a contract specifies a definite delivery date and time is of the essence, default can arise from non-delivery even without demand; economic crises are not treated as force majeure for developers. Megaworld Globus Asia, Inc. v. Tanseco, G.R. No. 181206, 2009.
• Developers failing to develop a condominium project as agreed may be exposed to rescission, reimbursement with interest, and other relief; crisis conditions do not automatically excuse compliance. Fil-Estate Properties, Inc. v. Ronquillo, G.R. No. 185798, 2014.

Administrative route: where refund and abandonment-related cases are filed

For most buyer-developer disputes involving condominiums, the starting point is the administrative adjudication system under DHSUD/HSAC. R.A. No. 11201 recognizes original and exclusive jurisdiction of the Regional Adjudicators over, among others:

• Claims for refund and other claims by subdivision lot or condominium unit buyers against developers (with additional rules when the cause of action arises from Section 23 of P.D. 957 and the property is financed by a bank or financing institution). Republic Act No. 11201, 2019, Section 16(a)(2).
• Specific performance or contractual and statutory obligations arising from the sale of the unit and development of the project. Republic Act No. 11201, 2019, Section 16(a)(3).
• Suits to declare projects abandoned within the regulatory jurisdiction of the Department, for purposes connected to P.D. 957. Republic Act No. 11201, 2019, Section 16(a)(5).

For buyers seeking a full refund due to prolonged delay or non-completion, filing an administrative complaint for refund under Section 23 of P.D. 957 is commonly the main route, with allegations and evidence focused on the developer’s failure to develop according to approved plans and within the required period.

Judicial route: when courts get involved

Even if the main dispute begins in the administrative forum, disputes can reach the regular courts through the judicial review processes applicable to administrative adjudications. In practice, buyers and developers litigate issues such as whether Section 23 applies, whether the developer failed to complete within the legally required period, the computation of the refund, and the proper imposition of legal interest. The Supreme Court decisions cited above show how refund disputes under P.D. 957 proceed through review until final resolution. Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2023; Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2025.

Process outline for buyers seeking full refunds (individuals and corporations)

The steps below reflect the usual sequence in P.D. 957 delay/non-completion disputes, focusing on what typically determines success in refund litigation.

1) Document the delay or non-completion against approved plans and promised deliverables

Because Section 23 is anchored on failure to develop according to approved plans and within the time limit, buyers should gather proof such as the contract to sell, delivery/turnover commitments, brochures and advertisements describing facilities, and correspondence about construction status. The Supreme Court’s analysis in refund cases often turns on whether completion within the required period occurred, and whether “substantial completion” arguments are adequate. Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2023.

2) Give “due notice” before desisting from further payments

Section 23 requires that the buyer desists from further payment after due notice to the developer. Presidential Decree No. 957, Section 23, 1976. Buyers should preserve proof of service of written notice and the grounds (failure to develop/complete as required), since this is commonly contested.

3) Choose the remedy: suspend payments or cancel and demand refund

Buyers must decide whether to keep the contract alive (suspension) or to terminate and pursue a refund. Section 23 and jurisprudence recognize both options. Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2023.

4) File the proper administrative complaint for refund and related relief

Refund claims and disputes on contractual and statutory obligations in condominium development are within the HSAC Regional Adjudicators’ original and exclusive jurisdiction under R.A. No. 11201. Republic Act No. 11201, 2019, Section 16(a)(2) and (a)(3). For cases tied to Section 23 where the purchase price is paid through a housing loan, the financing institution may need to be impleaded as a necessary party under the statute. Republic Act No. 11201, 2019, Section 16(a)(2).

5) Litigate the computation: what should be refunded

Buyers should present a clean accounting showing what payments are directly attributable to the purchase. The Supreme Court has recognized refunds of equity and monthly amortizations, with legal interest, but has excluded items not tied to the purchase price such as move-in fees and improvement costs. Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2023; Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2025.

6) Anticipate defenses: force majeure and “industry-wide crisis” arguments

Developers often argue financial crises or market events as force majeure. Supreme Court decisions have generally rejected economic downturns and currency fluctuations as fortuitous events that excuse developers, treating them as foreseeable risks of the business. Fil-Estate Properties, Inc. v. Go, G.R. No. 165164, 2007; Megaworld Globus Asia, Inc. v. Tanseco, G.R. No. 181206, 2009; Fil-Estate Properties, Inc. v. Ronquillo, G.R. No. 185798, 2014.

Common scenarios (with examples) and likely outcomes

Scenario	Common buyer position	Likely focus of adjudication
Developer misses completion/turnover and amenities remain unfinished	Cancel and seek refund under Section 23 due to failure to develop on time and as promised	Whether completion within the required period occurred; whether promised facilities were delivered; refund scope and legal interest (P.D. 957 cases)
Developer claims “substantial completion” and offers unit turnover	Reject as non-compliance; demand full refund if statutory completion standard not met	Whether “substantial” completion satisfies the statutory requirement (often it does not)
Buyer paid equity and housing-loan amortizations; developer fails to complete	Seek refund of equity and amortizations, with legal interest	Accounting of payments; exclusion of unrelated charges (e.g., move-in fees)

Practical advice for buyers and counsel

• Build the record early. Preserve the contract, disclosures, advertisements, demand letters, proof of delay, and payment receipts; refund cases are evidence-driven.
• Make “due notice” provable. Use written notice and reliable service; Section 23’s text makes notice part of the buyer’s entitlement. Presidential Decree No. 957, Section 23, 1976.
• Separate refundable payments from non-refundable charges. Prepare schedules distinguishing equity/amortizations from items like move-in fees and improvements, consistent with jurisprudence. Phinma Property Holdings Corporation v. Rivera, G.R. No. 261877, 2023.
• Expect crisis-based defenses. Jurisprudence generally rejects broad “economic crisis” defenses as force majeure for developers. Fil-Estate Properties, Inc. v. Go, G.R. No. 165164, 2007; Megaworld Globus Asia, Inc. v. Tanseco, G.R. No. 181206, 2009.
• File in the proper forum. Refund and development-obligation disputes are within HSAC Regional Adjudicators’ original and exclusive jurisdiction under R.A. 11201. Republic Act No. 11201, 2019, Section 16.

Conclusion: positioning a refund case for success

For pre-selling condominium disputes involving long delays, non-completion, or effective abandonment, buyers seeking full refunds generally litigate most effectively by grounding their claims in Section 23 of P.D. No. 957, supported by proof of non-completion against approved plans and timelines and compliance with the “due notice” requirement. The administrative forum under DHSUD/HSAC is typically the primary venue for refund, specific performance, and abandonment-related claims, with judicial review available for contested rulings. Buyers and counsel should focus on a documented timeline of developer non-compliance, a defensible refund computation, and readiness to defeat force majeure defenses that jurisprudence has often rejected for real estate developers.

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