Presidential Decree No. 957

Also known as: PD 957 · Subdivision and Condominium Buyers' Protective Decree · The Buyers' Protection Decree

Definition

Presidential Decree No. 957 (commonly known as the Subdivision and Condominium Buyers’ Protective Decree) is a Philippine law enacted on July 12, 1976, to protect buyers of subdivision lots and condominium units from fraudulent practices, misrepresentations, and default of developers. PD 957 regulates the real estate development industry by requiring developers to register their projects, obtain a License to Sell (LTS) before advertising or selling, deliver titles upon full payment, and complete basic infrastructure and amenities. The law is currently administered by the Department of Human Settlements and Urban Development (DHSUD). (Lawphi, DHSUD)

Identities

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Library of Congress Subject Headings (LCSH)	Real estate development — Law and legislation — Philippines
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Google Scholar	Presidential Decree No. 957 Philippines subdivision condominium buyer
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Also Known As

PD 957
Subdivision and Condominium Buyers’ Protective Decree
The Buyers’ Protection Decree

Examples and Analogies

Withholding Payments for Delays: Under Section 23 of PD 957, a buyer in a Cavite subdivision who experiences a development delay can legally stop paying amortization payments after giving proper notice to the developer.
DHSUD License to Sell (LTS): A developer in Quezon City is fined by the DHSUD for pre-selling units in a new condominium project without first securing a License to Sell under PD 957.
Registration of Sale: A developer registers a Contract to Sell (CTS) with the Register of Deeds as required by PD 957 to protect the buyer’s rights during the amortization period.

Usage Scenarios

1. Pre-selling Project Verification

A buyer verifies the developer’s License to Sell (LTS) number on advertising brochures to ensure the project is registered under PD 957 before signing a reservation agreement.

2. Developer Insolvency or Abandonment

Buyers of an abandoned condominium project file a joint complaint with the DHSUD under PD 957 to freeze the developer’s bank accounts and force the completion of the building.

3. Non-Delivery of Title

A buyer who has fully paid for a subdivision lot files a case under PD 957 to compel the developer to deliver the Transfer Certificate of Title (TCT) within the legally mandated timeframe.

Strategies

Always check the DHSUD website or local office to verify that a project has an active License to Sell (LTS) under PD 957.
Do not pay any reservation fees or sign contracts for projects that have only applied for registration but do not yet hold an LTS.
Know your rights under Section 23, which allows buyers to demand a refund of the total amount paid, including amortization interest, if the project is delayed.

Security and Safety Measures

Confirm that the escrow bank account where payments are deposited is registered with the DHSUD.
Avoid dealing with unlicensed agents or brokers who advertise properties lacking PD 957 registration numbers.
Register contracts to sell immediately to prevent developers from mortgaging or selling the same unit to other buyers.

Historical Context

During the mid-1970s, the rapid urbanization of Metro Manila led to a boom in real estate developments. Due to a lack of regulatory oversight, numerous buyers fell victim to fraudulent developers who collected pre-selling payments and abandoned projects, sold land without access roads or water systems, or mortgaged projects without the buyers’ knowledge. To address this crisis, President Ferdinand Marcos signed Presidential Decree No. 957 on July 12, 1976. The regulatory duties were initially assigned to the National Housing Authority (NHA), later transferred to the Housing and Land Use Regulatory Board (HLURB), and eventually integrated into the Department of Human Settlements and Urban Development (DHSUD) under RA 11201 in 2019. (Lawphi, DHSUD)

Challenges and Controversies

Unlicensed Pre-selling

Despite strict regulations, informal pre-selling of land or condominium units via social media platforms remains prevalent, bypassing PD 957 safeguards.

Slow Dispute Resolution

Resolving disputes through the DHSUD or Human Settlements Adjudication Commission (HSAC) can take several months or years, exhausting buyers’ resources.

Developer Compliance Overhead

Smaller developers argue that the cost of complying with PD 957 standards and obtaining permits contributes to the high cost of development and slow project launches.