A tale of woe that's all too familiar

This makes for interesting material from one of our readers who felt shortchanged by realty estate property developers. Bobby Mendoza’s story is all too familiar, and while he may find others with similar stories, he shares also some tips on how to avoid being a victim. Read on.

“I read your article entitled ‘Shortchange in property, insurance promises’ published in the Nov. 6, 2009 issue of The Philippine STAR.

“I am a 35-year old husband and father who is trying to acquire all useful information to protect our investment and assert our rights against a forfeiture threat coming from Empire East Land Holdings Inc. (Empire East), the owner/developer of the Cambridge Village township project in Cainta, Rizal.

“I write, upon your invitation, to share to others our experience with Empire East and impart tips for a prospective buyer, especially a first-timer, to guide them in their investment and to avoid the messy business of having to file a complaint against the developer.

“In August 2003, we entered into a purchase agreement with Empire East to purchase three combined units in one of the clusters at Cambridge Village on a 15-year payment scheme with a fixed annual interest rate.

“The real estate consultant who sold the project to us promised a turnover in three years, or in 2006, and the possibility for a re-computation at any time, whenever we have the means, to avail of external financing.

“The Contract to Buy and Sell (CTBS) was issued to us seven months after we made a significant investment already under pain of forfeiture if the CTBS will not be returned back to Empire East, signed, within the next five days from receipt.

Onerous and grossly disadvantageous

“As first-time buyers, our natural reaction was to comply and protect our investment. Little did we know, that majority of the stipulations are onerous and grossly disadvantageous to the buyer.

“No turnover happened in 2006. Not even in 2007. We never received any communication from Empire East about developments or status. If we did not complain on May 2008, we would have not been given any notice.

“When we saw the unit for turnover in July 2008, we were shocked to see concrete electric posts fronting the units. This differed from the original plan where we were supposed to look down to a garden and children’s playground, one of the major factors why we selected the site.

“We did not sign the acknowledgment receipt, and conveyed to the Empire East personnel that we need an explanation from their head office. No such explanation came. We were just hoping that those structures would be temporary.

“I saw the unit for turnover on a second site visit made in February 2009 and it was more objectionable than the last. There were two electric posts with three kilovolt transformers each, and another concrete post with numerous electric cables dangling from it. The structures are now permanent and much more life threatening.

“When no feedback came from Empire East, we decided to end our passivity and wrote a complaint letter directly to its president. A remedy to transfer us to another cluster was given us and we saw the unit on June 20, 2009.

Deaf ears

“We conveyed the deficiencies of this remedy via email sent on June 27, 2009 and the conditions we set forth in accepting such. But we were ignored and the follow-ups we made went to deaf ears.

“Exasperated after more than a month, on Aug. 7, 2009 we filed another complaint letter, emphasizing the unacceptable treatment we received from the company and our right to rescind the contract and seek full refund. No high-ranking officer gave us the courtesy of a meeting, even if we requested for it.

“We sought this refund month after month, and finally, upon confronting the staff, a letter was issued on 27 October 2009, that the company will be forfeiting all our payments, as stipulated in the CTBS.

“We made it known to them that we will be bringing the case before Housing and Land Use Regulatory Board (HLURB). As the need warranted, I conducted more research on the matter and found that there are existing laws that protect the buyers, specifically Republic Act 6552 or the Realty Installment Buyer’s Protection Act, and Presidential Decree 957 or the Subdivision and Condominium Unit Buyers Protective Decree.

“What makes us wonder is why Empire East could write provisions in their contract, example forfeiture, that are in violation of existing laws. And also, why not present this contract at the start. It appears that some traps are being set to snare unsuspecting buyers into submission.

Musts for home buyers

“Based on our experience, these are a must for homebuyers:

1. Know existing laws. Understand buyer’s rights and developer’s responsibilities.

2. Do not release any payment unless you have seen and reviewed all the important documents, i. e., Contract to Buy and Sell, and have been satisfied.

3. Since most are pre-selling, request to incorporate in the contract the specifics of the unit to be turned over.

4. Incorporate in the contract a specific turn-over date, including date of notices, and the minimum payment amount required to be granted the right to occupy the property.

5. Do not forget to seek specific date for the turn-over of the title.

6. If you will be seeking in-house or external financing, ask for a table of computation, showing principal amount and interest amount, broken down per month up to the life of the loan, to avoid any surprises.

7. Seek the services of a lawyer, whenever possible.

8. Review the reputation of the developer. Do not be swayed by the sweet-talking sales people.

“In my recent research, I found 14 persons who had posted their complaints on the message board of the HLURB, majority of which were asking for a refund, and the oldest posting was in 2007. Empire East’s practice remains the same up to this date. We would be added to the growing statistics of complainants who have grievances against Empire East as elevated to the HLURB.

“But the greatest concern is, if such unscrupulous practices remain unchecked, many more would likely fall in such traps. We seek any intervention possible.”

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Should you wish to share any insights, write me at Link Edge, 25^th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.