Should Land Developers Refund Buyers’ Money for Broken Promises?

Can Buyers Refund Their Money If Developers Failed to Keep Their Promises

Did you know that the Supreme Court can order real estate developers to refund their buyers and pay for exemplary damages in case they don’t stick to the agreement. There are many instances that developers fail to deliver what they promised their clients. If this is your case, you can file a complaint in the court so you can get a reimbursement or refund from your developer. Let’s take a closer look on how you can get a refund if the developer didn’t fulfill what’s in the contract.

​What Are the Grounds for Reimbursement?

If a real estate developer and a buyer enters into a mutual obligation using a written agreement or contract, both parties must fulfill that obligation. For example, the buyer’s obligation is to pay a reservation fee while the developer should issue a Contract to Sell. In case one party failed to do what they have agreed upon, there can be legal consequences.
Let’s say you have already paid for the reservation fee and even made additional payments for the property. However, the developer did not release the Contract to Sell they promised to give you. Now, that failure to issue a Contract to Sell can be a ground for refund or reimbursement. Just make sure that it was a written agreement and duly signed.

​Reciprocal Obligations and Rescission

Under Article 1191 of the Civil Code, the Supreme Court considers rescission in handling reciprocal obligations in the Philippines. Furthermore, Article 1385 reiterates that rescission makes the responsibility to return any objects involved in the said agreement. To put it simply, parties entering into reciprocal obligations must comply or else, the party who failed will be obliged to return whatever was given under the contract, such as payments made.
While the lower courts can exclude exemplary damages, the high court may emphasize the right action which is to return payments to the buyer. This is particularly applicable for parties that committed fraudulent, oppressive, reckless acts towards another party.
The Supreme Court underscores the importance of imposing damages to discourage socially undesirable behavior. Rather, damages are imposed to reshape conduct through negative incentives. If you qualify of filing a case under these circumstances, you may do so no matter how long it already had been when you’ve encountered a fraudulent developer in the Philippines.

Final Thoughts

Now you know what to do when your developer doesn’t comply with what you have agreed in the contract. Make sure to talk to your legal counsel on what specific steps to take to recover the money you’ve paid as well as other damages. This is why it’s always important to transact with legal developers only. You can visit REALS.PH for our exclusive listings of properties for sale in and around the Philippines, including house and lot in Baguio City. Rest assured that we only work with legitimate developers that are trusted by many, especially home buyers and investors.