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       Are you planning to buy a subdivision lot or a condominium unit? Before proceeding with the purchase, you must check whether the real estate developer selling the property you are interested in has a license to sell.

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Under the Presidential Decree No. 957 or the Subdivision and Condominium Buyers’ Protective Decree, the real estate developer must obtain a license to sell or “LTS” before selling, disposing, or attempting to dispose of, for a valuable consideration a subdivision lot, including the building and other improvements thereof, if any, in a subdivision project or a condominium unit in a condominium project, within two (2) weeks from the registration of the project. 

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If the Department of Human Settlements and Urban Development (“DHSUD”) finds that the real estate developer is registered and of good repute, that its business is financially stable, and that the proposed sale of the subdivision lots or condominium units to the public would not be fraudulent, it shall issue the LTS in favor of the developer’s project.

To check and verify whether the real estate developer has an LTS for its subdivision project or condominium project, you may go to the website of the DHSUD on the List of Projects with License to Sell, which can be accessed here: https://dhsud.gov.ph/services/list-of-license-to-sell/. 

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If the developer fails to obtain an LTS prior to the sale of the subdivision project or condominium project, you may ask for cancelation or rescission of the contract or agreement previously entered into and demand the total amount paid. Furthermore, the real estate developer will be punished by a fine of not more than Twenty Thousand Pesos (PhP20,000.00) and/or imprisonment of not more than ten (10) years. In the case of corporations, partnerships, cooperatives, or associations, the President, Manager Administrator, or the person who has charge of the administration of the business shall also be criminally responsible under P.D. 957.

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Given the costs and financial commitment associated with real estate transactions,  it is crucial that before purchasing, you must perform due diligence. This entails meticulously examining all details of the real estate developer and the property, rather than solely relying on public advertisements. 

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Disclaimer: This article is for informational purposes only and should not be considered legal advice. For specific guidance in cases or issues on the real estate developer’s license to sell, consult with a legal professional.

‍Padin & Partners Law Offices is a full-service law firm based in Cebu City, Cebu Philippines, that offers legal services such as filing cases involving real estate transactions in  Cebu City, Cebu, Philippines. For consultations: book an appointment or reach us at +63 (32) 316-1540 or +63 917 188 0361.