Recently-Issued Rules and Guidelines THE 2015 REVISED RULES AND GUIDELINES ON TIME OF COMPLETION SUBDIVISION AND HOUSING DEVELOPERS ASSOCIATION (SHDA)

Recently-Issued Rules and Guidelines

THE 2015 REVISED RULES ANDGUIDELINES ON TIME OF COMPLETION

SUBDIVISION AND HOUSING DEVELOPERS ASSOCIATION (SHDA) 2016 1st Business Meeting February 10, 2016 Metro Club, Makati City, Metro Manila

By: Atty. Antonio M. BernardoChief Executive Officer and

Commissioner

PURCHASE OF ASSET-BACKED SECURITIES ISSUED BY THE NHMFC AS MODE OF COMPLIANCE WITH SECTION

18 OF REPUBLIC ACT NO. 7279

B.R. No. 929 S. of 2015(December 1, 2015)

PROVISIONAL ACCREDITATION OFSOCIALIZED HOUSING DEVELOPERS

M.C. No. 10, S. of 2015 (October 23,2015)

Dispenses with the requirement of 500 housing units built for accreditation` Requires only the submission of development permit and joint-venture agreement between the main subdivision and socialized housing developers


PURCHASE OF ASSET-BACKED SECURITIES ISSUED BY THE NHMFC AS MODE OF COMPLIANCE WITH SECTION

18 OF REPUBLIC ACT NO. 7279

B.R. No. 929 S. of 2015(December 1, 2015)

NHMFC will securitize and issue asset- backed securities from existing buyers’ loans with accredited socialized housing developers` Purchase of the asset-backed securities by developers of main subdivision project shall be allowed as developers’ compliance with Section 18 of UDHA


B.R. No. 932 S. of 2015(January 28, 2015)

SUSPENDING THE REQUIREMENT OF PRIOR APPROVAL FOR ADVERTISEMENTS TO BE PUBLISHED IN

PERIODICALS

DEVELOPERS’ PARTICIPATION IN LAND DEVELOPMENT AND HOUSING CONSTRUCTION IN CMP PROJECTS AS

MODE OF COMPLIANCE WITH SECTION 18 OF REPUBLIC ACT NO. 7279

B.R. No. 933 S. of 2015(January 28, 2015)B.R. No. 932 S. of 2015

(January 28, 2015)

Temporary suspension for a period of six months of the requirement of prior approval of project advertisements to be published in newspapers, tabloids and magazines` Suspension of prior approval does not exempt any owner, developer, dealer, broker or salesperson who may have caused the dissemination of prohibited advertisements from imposition of fines and penalties


SUSPENDING THE REQUIREMENT OF PRIOR APPROVAL FOR ADVERTISEMENTS TO BE PUBLISHED IN

PERIODICALS

DISPENSING WITH THE SUBMISSION OF UNDERTAKING IN POSTING CASH BOND

M.C. No. 1, Series of 2016 (February 1, 2015)

B.R. No. 933 S. of 2015(January 28, 2015)

Developers may participate in land development and housing construction in community mortgage program projects

` The cost of such participation shall be the allowed as the developers’ compliance with Section 18 of the UDHA


DEVELOPERS’ PARTICIPATION IN LAND DEVELOPMENT AND HOUSING CONSTRUCTION IN CMP PROJECTS AS

MODE OF COMPLIANCE WITH SECTION 18 OF REPUBLIC ACT NO. 7279

Recently-Issued Rules and Guidelines Rules and Guidelines Under Study and Consideration

DISPENSING WITH THE SUBMISSION OF UNDERTAKING IN POSTING CASH BOND

M.C. No. 1, Series of 2016 (February 1, 2015)

Dealers, brokers and salespersons registering or renewing their registration may post cash bond in lieu of surety bond

` Submission of undertaking under oath as required under M.C. No. 02-A, S. of 2015 is dispensed with to further expedite registration and renewal process

PERFORMANCE BOND (Section 6, PD 957)

Upon notice, buyer may desist payment upon failure of the owner/developer to develop the project according to the approved plans and

within the period fixed by HLURB

Buyer may opt to be reimbursed the totalamount paid including amortization interests

but excluding delinquency interests, withinterest thereon at the legal rate

NON-FORFEITURE OF PAYMENTS (Section 23, PD 957)

Rules and Guidelines Under Study and Consideration

In such a case, payments made by thebuyer shall not be forefeited in favor of

the owner or developer

REMOVAL OF THE TEMPORARY LICENSE TO SELL (Section 5, PD 957)

NON-FORFEITURE OF PAYMENTS (Section 23, PD 957)

PERFORMANCE BOND (Section 6, PD 957)

Current required bond is only 20% ofremaining cost of completion

Insufficient to complete the project in caseof non-development or abandonment


Completion and delivery is delayed due to non-development pending issuance of building permit

non-compliance by the developers withthe required escrow deposit

Non-submission of required sales reports

Building permit may bedenied by the local government


REMOVAL OF THE TEMPORARY LICENSE TO SELL (Section 5, PD 957)

COMPLIANCE WITH BSP CIRCULAR NO. 755 (2012) Developers as Credit-Granting Entities

Every owner or developer shall construct andprovide the facilities, infrastructures and other forms

of development, including water supply and lightingfacilities, which are offered and indicated in the

approved subdivision or condominium plans,brochures, prospectus, printed matters, letters or in any form of advertisement, within one (1) yearfrom the date of the issuance of license to sell for

the subdivision or condominium project or such otherperiod of time as may be fixed by the [Authority].

Real estate developers who, in the course oftheir business, extend credit through installment

or deferred payment sale shall be deemedas “Credit-Granting Entities” (CGEs)

Registration of CGEs’ lending or financing activity with the BSP to ensure compliance

with the Truth in Lending Act

Requirement and format of disclosure, including manner of computing of interest

TIME OF COMPLETION

COMPLIANCE WITH BSP CIRCULAR NO. 755 (2012) Developers as Credit-Granting Entities

TIME OF COMPLETION Rules and Guidelines Under Study and Consideration

P.D. No. 957Section 20. Time of Completion

Every owner or developer shall construct andprovide the facilities, infrastructures and other forms

of development, including water supply and lightingfacilities, which are offered and indicated in the

approved subdivision or condominium plans,brochures, prospectus, printed matters, letters or in any form of advertisement, within one (1) yearfrom the date of the issuance of license to sell for

the subdivision or condominium project or such otherperiod of time as may be fixed by the [Authority].

REVISED IMPLEMENTING RULES AND REGULATIONS TO GOVERNTHE TIME OF COMPLETION OF SUBDIVISION AND CONDOMINIUM PROJECTS UNDER PRESIDENTIAL DECREE NO. 957, OTHERWISE KNOWN AS “THE SUBDIVISION AND CONDOMINIUM BUYERS’ PROTECTIVE DECREE” AND ALL OTHER PROJECTS REQUIRED

BY LAW TO BE REGISTERED WITH THE HOUSING ANDLAND USE REGULATORY BOARD

BOARD RESOLUTION NO. 926SERIES OF 2015

Main Features of the Revised Rules

Approved on October 1, 2015Published on January 30, 2016Effective on February 14, 2016

TIME OF COMPLETION

Current Issues and Concernson Time of Completion

P.D. No. 957Section 20. Time of Completion

No uniformity in fixing theproject’s period of completion

Extensions of time granted as amatter of course because of the

practice of fixing the time ofcompletion on an annual basis

Developers invoke the grant of ETD against buyers to be exempt from

liabilities under Sec. 23 of P.D. No. 957

GUIDELINES ON BOARD RESOLUTION NO. 926, SERIES OF 2015 OR THE REVISED IMPLEMENTING RULES AND REGULATIONS TO

GOVERN THE TIME OF COMPLETION OF SUBDIVISION AND CONDOMINIUM PROJECTS UNDER PRESIDENTIAL DECREE NO.

957, OTHERWISE KNOWN AS “THE SUBDIVISION AND CONDOMINIUM BUYERS’ PROTECTIVE DECREE” AND ALLOTHER PROJECTS REQUIRED BY LAW TO BE REGISTEREDWITH THE HOUSING AND LAND USE REGULATORY BOARD

MEMORANDUM CIRCULAR NO. 02SERIES OF 2016

Effective on February 15, 2016

Scope of Application

Requirement to secure Certificateof Completion for Land Development

(COCLD) and optional issuance of Certificate of Completion for Housing

Component (COCHC)

Additional period to complete theproject may only be granted in

meritorious or exceptional cases

Unbundling of the periods of completion for land development and completionand delivery of housing component

Period of completion for land development based on submitted

program of development

Date of completion and delivery ofhousing unit purchased based on

contract to sell or purchase agreement

TIME OF COMPLETION

Main Features of the Revised Rules

2015 Rules and Guidelineson Time of Completion


General Rulesand Guidelines

Duty To Complete The ProjectWithin The Fixed Period of Completion

The period of time fixed by the HLURB withinwhich the owner or developer shall develop and

complete the project, including the construction and provision of facilities, improvements and other forms of

development, including water supply and electrical facility.

Time of Completion

DefinitionScope of Application


All subdivisions, including residential, commercial, farmlot, and industrial subdivisions

SUBDIVISION PROJECTS

All condominiums, including residentialand commercial condominiums

CONDOMINIUM PROJECTS

Any other similar projects, includingcemeteries, memorial parks, and columbaria

SIMILAR PROJECTS


No extension or additional period of time may be granted to develop and complete the project unless such failure or

inability of the owner or developer to complete the project is due to justifiable grounds as provided under the new rules

and guidelines.

Period of CompletionBased on Work Program

Restrictive Grant of Additional TimeTo Develop The Project

The work program or program of development submitted for approval by the owner or developer upon application for the

project’s Certificate of Registration and License to Sell (CR/LS) shall primarily be the basis for fixing the period of

completion of the project.

Within one year from the date of the issuanceof the license for the project or such other period of

time as may be fixed by HLURB, every owner ordeveloper shall construct and provide the facilities, improvements, infrastructures and other forms of

development, including water supply and electrical facilities, which are offered and indicated in the

approved project plans, brochures, prospectus,printed matters, letters or any form of advertisement

Duty To Complete The ProjectWithin The Fixed Period of Completion



There shall be a separate period of completionfor land development and house constructionand delivery in case of residential subdivision

projects with house and lot package

Upon issuance of the development permit or CR/LSof the project, the HLURB, in the exercise of its visitorial

power, on its own initiative or uponverified complaint, may monitor the development

and completion of a project and imposeappropriate sanctions, fines and penalties in

case of violation or non-compliance therewith

MonitoringUnbundling of Periods of CompletionRestrictive Grant of Additional Time

To Develop The Project

No extension or additional period of time may be granted to develop and complete the project unless such failure or

inability of the owner or developer to complete the project is due to justifiable grounds as provided under the new rules

and guidelines.



Periods ofCompletion

primarily based on the work program or program of development submitted for approval

period of completion to be fixed shall consider level of development at the time of issuance of license to sell

Period of Completion for Land Development

There shall be a separate period of completionfor land development and house constructionand delivery in case of residential subdivision

projects with house and lot package

Unbundling of Periods of Completion



inclement weather

prolonged or repeated power failures

shortage of construction supplies or materials

other similar incidents

The work program or program of development shall consider and provide for a reasonable allowance for possible delay in the

project development due to work interruptions or temporary suspensions brought about by:

Allowances and Contingencies In the Work Program

Period of Completion for Land Development

primarily based on the work program or program of development submitted for approval

period of completion to be fixed shall consider level of development at the time of issuance of license to sell

Period of Completion and DeliveryOf Housing Components

Explicitly provided in the contract to sellor any purchase agreement

In the absence of such provision, theperiod of completion and delivery shall notexceed one (1)-year from date of purchase



All subdivision amenities and facilities such as clubhouse, playgrounds, sport facilities and other infrastructures as

may be included in the approved project plans, brochures, prospects printed matters, letters or any forms of

advertisement shall be developed and completed within the SUBMITTED and APPROVED period for the project’s land

development.

The work program or program of development shall consider and provide for a reasonable allowance for possible delay in the

project development due to work interruptions or temporary suspensions brought about by:

Allowances and Contingencies In the Work Program

inclement weather

prolonged or repeated power failures

shortage of construction supplies or materials

other similar incidents

Subdivision Amenities and Facilities



All amenities and facilities included in the approved plan or included or represented in brochures, prospectus, printed

matters, letters or any form of advertisement of the project shall all be completed in accordance with the work program

or program of development of the project

Condominium AmenitiesSubdivision Amenities and Facilities

All subdivision amenities and facilities such as clubhouse, playgrounds, sport facilities and other infrastructures as

may be included in the approved project plans, brochures, prospects printed matters, letters or any forms of

advertisement shall be developed and completed within the SUBMITTED and APPROVED period for the project’s land

development.



The date of completion of the project, which shall include the month, day and year, shall be indicatedon the license to sell of the project.

ON THE LICENSE TO SELL


Statement of the Date of CompletionCondominium Amenities

All amenities and facilities included in the approved plan or included or represented in brochures, prospectus, printed

matters, letters or any form of advertisement of the project shall all be completed in accordance with the work program

or program of development of the project


Such date of completion of the project and dateof completion and delivery from date of purchaseof any housing unit, if applicable, is a mandatory statement in any advertisement of the project

MANDATORY STATEMENTON THE ADVERTISEMENT

“The date of completion and delivery of the housing component shall be explicitly provided in the contract to sell or any purchase agreement”

The date of completion of the project, which shall include the month, day and year, shall be indicatedon the license to sell of the project.

Restrictive Grounds for the Grantof Additional Time of Completion Statement of the Date of Completion

ON THE LICENSE TO SELL


Additional TimeOf Completion


“In the absence thereof, the period of completion and delivery of the housing unit shall in no case exceed one (1) year from the date of purchase”

HOUSE & LOT PACKAGECONDITION IN THE LICENSE TO SELL

Existence of sub-soil condition[s]; Discoverable only after actualexcavation works in the project; and Would necessarily require additional excavation time

FORTUITOUS EVENTS

Restrictive Grounds for the Grantof Additional Time of Completion

LAWFUL ORDERS



SUB-SOIL CONDITIONS SUB-SOIL CONDITIONSFORTUITOUS EVENTS

LAWFUL ORDERS

Independent of the will of the owner or developer1

Unforeseeable or unavoidable2Causes: (i) Damage to the on-going project that requires reconstruction; or (ii) Delays which are directly attributable to the event; and Renders its completion within the original approved period impossible in a normal manner

3

The owner or developer is free from any participationor aggravation of the damage sustained by the project4

FORTUITOUS EVENTS




Issuance of a lawful order of the court, government agency or local government unit resulting to the temporary enjoinment or stoppage of the construction or development of the project

MEGAWORLD GLOBUS ASIA, INC., v. TANSECOG.R. NO. 181206, OCTOBER 9, 2009

within SIXTY (60) DAYS from receipt or knowledge thereof, the owner or developer shall have, in writing, notified the RFO of such issuance

3 attributable to any fault, mistake, or negligence on the part of the owner or developer; or 1

LAWFUL ORDERS

due to any dispute between the owner and developer in the development and completion of the project2

AND PROVIDED FURTHER THAT:EXCEPT WHEN THE ISSUANCE OF SUCH ORDER IS:




Supporting pictures or documents, if any32 Proof of notice to all lot or unit buyers or owners

In cases falling under Sub-Soil Conditions, a sworn statement by a licensed engineer attesting to the existence of the sub-soil condition

4

Revised work program with computation ofthe remaining cost of completion duly signedor sealed by a licensed engineer or architect

5

Sworn application by the owner or developer, stating the grounds or reasons1

REQUIREMENTS

The Court cannot generalize the 1997 Asian financial crisis to be unforeseeable and beyond the control ofa business corporation.

THE ASIAN CRISISBond or Security

Additional period of time shall only be granted upon posting of a new bond or security in accordance with the

existing rules and guidelines of the HLURBA real estate enterprise engaged in the pre-sellingof condominium units is concededly a master in projections on commodities and currency movements, as well as business risks.

The fluctuating movement of the Philippine pesoin the foreign exchange market is an everyday occurrence, hence, not an instance of caso fortuito. Megaworld’s excuse for its delay does not thus lie.

All applications for additional time of completion shall be filed with the RFO where the project is registered

New Procedure for Applicationand Grant of Additional Time

MEGAWORLD GLOBUS ASIA, INC., v. TANSECOG.R. NO. 181206, OCTOBER 9, 2009



APPLICATION

Under “Sub-Soil Conditions”, within sixty (60) days from discovery thereof1

Under “Lawful Order”, within sixty (60) days fromreceipt or knowledge of the order or issuance lifting the enjoinment or stoppage of development

3

2

Under “Fortuitous Event”, within sixty (60)days prior to the expiration of the approvedoriginal time of completion, provided howeverthat if such occurrence shall fall within the last sixty (60) days of the approved period of completion, the application shall be filed within sixty (60) days from the occurrence thereof

PERIODS TO APPLYREQUIREMENTS

Supporting pictures or documents, if any32 Proof of notice to all lot or unit buyers or owners

In cases falling under Sub-Soil Conditions, a sworn statement by a licensed engineer attesting to the existence of the sub-soil condition

4

Revised work program with computation ofthe remaining cost of completion duly signedor sealed by a licensed engineer or architect

5


Sworn application by the owner or developer, stating the grounds or reasons1



Any owner or developer applying for additionaltime of completion shall notify all lot or unit buyersor owners of its intent to apply for additional timeto complete the development of the project.

NOTICE TO LOT OR UNIT BUYERS

PERIODS TO APPLY Under “Sub-Soil Conditions”, within sixty (60) days from discovery thereof1

Under “Lawful Order”, within sixty (60) days fromreceipt or knowledge of the order or issuance lifting the enjoinment or stoppage of development

3

2

Under “Fortuitous Event”, within sixty (60)days prior to the expiration of the approvedoriginal time of completion, provided howeverthat if such occurrence shall fall within the last sixty (60) days of the approved period of completion, the application shall be filed within sixty (60) days from the occurrence thereof




Any appeal from the decision of the application by the RFO shall be decided by the Supervising Commissioner

APPEALNOTICE TO LOT OR UNIT BUYERS

Any owner or developer applying for additionaltime of completion shall notify all lot or unit buyersor owners of its intent to apply for additional timeto complete the development of the project.

verify the nature and extent of damage or validate the justification for the application

conduct an ocular inspectionof the project, If necessary

ascertain the additional period of timeneeded to complete the project and the estimated

remaining cost of completion

Upon receipt of the application, the RFO shall:1

EVALUATION AND GRANT




2

If the RFO finds justifiable reason to grant the additional period of time, it shall proceed to grant the application. Otherwise, it shall deny the same.

The fees provided for extension or additional time to develop applicable to the different classifications of subdivision and condominium projects in the approved Schedule of Fees of the HLURB, including Processing Fee, Additional Fee, and Inspection Fee are adopted

B.R. NO. 912, S. OF 20132013 REVISED SCHEDULE OF FEES

FeesNew Procedure for Applicationand Grant of Additional Time

Any appeal from the decision of the application by the RFO shall be decided by the Supervising Commissioner

APPEAL



Certificatesof Completion

Issuance of Certificatesof Completion

The fees provided for extension or additional time to develop applicable to the different classifications of subdivision and condominium projects in the approved Schedule of Fees of the HLURB, including Processing Fee, Additional Fee, and Inspection Fee are adopted

B.R. NO. 912, S. OF 20132013 REVISED SCHEDULE OF FEES



Fees

Upon completion of the housing component, a separate Certificate of Completion for Housing Component (COCHC) may also be issued.

The issuance, however, of a COCLD shall not relieve the owner or developer of the obligationto maintain the roads, alleys, sidewalks, playgrounds, amenities, facilities, improvements, infrastructuresor other forms of developments represented or promised in brochures, advertisements and othersales propaganda until proper donation or turnover

CERTIFICATE OF COMPLETIONFOR HOUSING COMPONENT (COCHC)

DUTY TO MAINTAIN UNTILDONATION OR TURNOVER


Upon completion of the project’s landDevelopment, the owner or developer shallapply for issuance of Certificate of Completionfor Land Development (COCLD) from the RFOIf upon ocular inspection the project is foundto have been completed in accordance withthe approved time of completion, a COCLDshall be issued in accordance with the existingrules and guidelines of the HLURB.

CERTIFICATE OF COMPLETIONFOR LAND DEVELOPMENT (COCLD)



Buyers’ Remedies in CaseOf Non-Completion

Relief, Sanctionsand Penalties

Upon completion of the housing component, a separate Certificate of Completion for Housing Component (COCHC) may also be issued.


CERTIFICATE OF COMPLETIONFOR HOUSING COMPONENT (COCHC)



P 1,000 - P 10,000 in accordancewith HLURB’s Approved Schedule

of Fines and Penalties

Suspension of License to Sell

CDO – Selling / Advertising /Collecting Installments

Fines and Sanctions

Buyers on Installments

Other rights and remediesprovided for by other laws

Sec. 23 , P.D. 957

Fully Paid Buyers

Civil Code [ Art. 1191 ]

Buyers’ Remedies in CaseOf Non-Completion



Applications – Regional Field Office

Appeal – Supervising Commissioner

ExCom. Res. No. 01, S. of 2007 (Amending the Delineation of Authority to Approve/Disapprove Applications for Extension of Time to Develop

Subdivision and Condominium Projects

Repealing Clause

P 1,000 - P 10,000 in accordancewith HLURB’s Approved Schedule

of Fines and Penalties

Suspension of License to Sell

CDO – Selling / Advertising /Collecting Installments

Fines and Sanctions



Within ninety (90) days from the effectivity of this Rules,all on-going projects with an original fixed or approved

period of completion or extension of time to develop thatis shorter than the period of completion provided in the originally

submitted or revised work program or programof development may apply for a final additional time to

develop and complete the project based on their approvedor revised work program or program of development

Transitory Provision

Applications – Regional Field Office

Appeal – Supervising Commissioner

ExCom. Res. No. 01, S. of 2007 (Amending the Delineation of Authority to Approve/Disapprove Applications for Extension of Time to Develop

Subdivision and Condominium Projects

Repealing Clause



Thank you and visit us atwww.hlurb.gov.ph

09176273784

Transitory Provision

Within ninety (90) days from the effectivity of this Rules,all on-going projects with an original fixed or approved

period of completion or extension of time to develop thatis shorter than the period of completion provided in the originally

submitted or revised work program or programof development may apply for a final additional time to

develop and complete the project based on their approvedor revised work program or program of development



Thank you and visit us atwww.hlurb.gov.ph09176273784

http://www.hlurb.gov.ph/

Thank you and visit us atwww.hlurb.gov.ph09176273784

Documents

Recently-Issued Rules and Guidelines THE 2015 REVISED RULES AND GUIDELINES ON TIME OF COMPLETION SUBDIVISION AND HOUSING DEVELOPERS ASSOCIATION (SHDA)