11. Payment
To pay, without additional interest, the
unpaid installments due within the total
grace period
for every one year of installment payments
made;
That this right shall be exercised by the
Buyer only once in every five years of the
life of the contract and its extensions,
13. the seller shall refund to the buyer the cash
surrender value of the payments on the property
equivalent to fifty percent 50% of the total
payments made
Cash Surrender Value
more than 2 years
14. Cash Surrender Value
an additional 5% every year
but not to exceed ninety per cent of the
total payments made
After 5 years
* excludes penalty interest
15. that the actual cancellation of the contract by a
NOTARIAL ACT
and upon full payment of the cash surrender value to the
buyer.
Cash Surrender Value
16. sixty days (60 days)
from the date the installment
become due.
Grace Period
17. If the buyer FAILS to pay the
installments due at the expiration of
the grace period,
Grace Period
the seller may cancel the Contract after
30 days thirty days
from receipt by the buyer of the notice of
cancellation of the contract
by a NOTARIAL ACT.
18. Assign/reinstatement
the right to sell his rights or assign the
same to another person
reinstate the contract by updating the
account during the grace period and
before actual cancellation of the contract.
The deed of sale or assignment shall be
done by notarial act.
19. Pay in Advance
right to pay in advance any installments or
the full unpaid balance of the purchase
price any time without interest.
To have such full payment of the purchase
price annotated in the certificate of title
covering the property.
20. Downpayments
DOWNPAYMENT, DEPOSITS or
OPTIONS on the contract
included in the computation
of the total number of installment
payments made.
PENALTIES
not included
22. SUMMARY – Cash Surrender Value
Less than 2 years
More than 2 years
More than 5 years
No Refund
50%
50% +
additional 5%
For every year
23. CSV Formula
TP x % RF = RF or CSV
Total Payments x Percentage of refund
=REFUND/Cash Surrender Value
24. Application Quiz
Your buyer bought a 200 sqm subdivision lot at
P3,000/sqm. He paid 25% downpayment. The
balance payable in 120 amortizations at 21% per
annum. He has paid 84 monthly amortizations
totalling P737,612.20 inclusive of penalty interest
of P32,000
Compute for him his Cash Surrender Value under the
Maceda Law
25. Solution
The buyer has paid 7 years
- 84 divided by 12 mos
therefore entitled to 60% refund
- 50% for 5 yrs & 5% per year
thereafter
27. Solution
DP: 200 sqm x P3,000 x 25% = P150,000.00
Amortization (737,612.60-P32,000)= P705,612.20
Basis of Refund = P855,612.20
Percentage of refund x 60% .
Amount of Refund =P513,367.32
