RecentlyIssued Rules and Guidelines THE 2015 REVISED RULES

Recently-Issued Rules and Guidelines THE 2015 REVISED RULES AND GUIDELINES ON TIME OF COMPLETION By: Atty. Antonio M. Bernardo Chief Executive Officer and Commissioner SUBDIVISION AND HOUSING DEVELOPERS ASSOCIATION (SHDA) 2016 1 st Business Meeting February 10, 2016 Metro Club, Makati City, Metro Manila

Recently-Issued Rules and Guidelines B. R. No. 929 S. of 2015 M. C. No. 10, S. of 2015 (December 1, 2015) (October 23, 2015) PURCHASE OF ASSET-BACKED SECURITIES PROVISIONAL ACCREDITATION OF ISSUED BY THE NHMFC AS MODE OF COMPLIANCE SOCIALIZED HOUSING DEVELOPERS WITH SECTION 18 OF REPUBLIC ACT NO. 7279 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

Recently-Issued Rules and Guidelines B. R. No. 932 S. of 2015 B. R. No. 929 S. 28, of 2015 (January 2015) (December 1, 2015) SUSPENDING THE REQUIREMENT OF PRIOR PURCHASE OF FOR ASSET-BACKED SECURITIES APPROVAL ADVERTISEMENTS TO BE ISSUED BY THE NHMFC ASINMODE OF COMPLIANCE PUBLISHED PERIODICALS WITH SECTION 18 OF REPUBLIC ACT NO. 7279 NHMFC will securitize and issue assetbacked 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

Recently-Issued Rules and Guidelines B. R. No. 933932 S. of B. R. S. 2015 of 2015 (January 28, 2015) (January 2015) SUSPENDING PARTICIPATION THE REQUIREMENT OF PRIOR DEVELOPERS’ IN LAND APPROVAL FOR ADVERTISEMENTS TO BEIN DEVELOPMENT AND HOUSING CONSTRUCTION PUBLISHED PERIODICALS CMP PROJECTS AS MODEIN OF COMPLIANCE WITH SECTION 18 OF REPUBLIC ACT NO. 7279 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

Recently-Issued Rules and Guidelines B. R. No. 933 S. of 2015 28, 2015) M. C. (January No. 1, Series of 2016 (February 1, 2015) PARTICIPATION IN LAND DEVELOPERS’ DEVELOPMENT AND HOUSING CONSTRUCTION IN DISPENSING WITH THE SUBMISSION OF CMPUNDERTAKING PROJECTS AS IN MODE OF COMPLIANCE POSTING CASH BONDWITH SECTION 18 OF REPUBLIC ACT NO. 7279 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

Rules and Guidelines Recently-Issued Rules and Guidelines Under Study and Consideration M. C. No. 1, Series of 2016 (February 1, 2015) DISPENSING WITH THE SUBMISSION OF UNDERTAKING IN POSTING CASH BOND 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

Rules and Guidelines Under Study and Consideration NON-FORFEITURE OF PAYMENTS (Section 23, PD 957) Upon PERFORMANCE notice, buyer may BOND desist payment upon failure of the owner/developer (Section 6, PD 957) to develop the project according to the approved plans and within the period fixed by HLURB In such a case, payments made by the buyer shall not be forefeited in favor of the owner or developer Buyer may opt to be reimbursed the total amount paid including amortization interests but excluding delinquency interests, with interest thereon at the legal rate

Rules and Guidelines Under Study and Consideration NON-FORFEITURE REMOVAL OF OF PAYMENTS THE (Section 23, PD TEMPORARY LICENSE 957) TO SELL (Section 5, PD 957) PERFORMANCE BOND (Section 6, PD 957) Current required bond is only 20% of remaining cost of completion Insufficient to complete the project in case of non-development or abandonment

Rules and Guidelines Under Study and Consideration COMPLIANCE WITH BSP CIRCULAR REMOVAL OF THE NO. 755 (2012) Developers as Credit-Granting Entities TEMPORARY LICENSE TO SELL (Section 5, PD 957) Completion and delivery is delayed due to nondevelopment pending issuance of building permit non-compliance by the developers with the required escrow deposit Non-submission of required sales reports Building permit may be denied by the local government

Rules and Guidelines TIME OF COMPLETION Under Study and Consideration P. D. No. 957 COMPLIANCE WITH CIRCULAR NO. 755 (2012) Section 20. BSP Time of Completion Developers as Credit-Granting Entities Every owner developer shall construct Real estateor developers who, in the course of and provide thebusiness, facilities, infrastructures other forms their extend credit through and installment or deferredincluding payment sale shall be deemed of development, water supply and lighting “Credit-Granting Entities” (CGEs) facilities, aswhich are offered and indicated in the TIME OF COMPLETION approved subdivision or condominium plans, Registration of CGEs’ lending or financing brochures, prospectus, printed matters, letters or activity with the BSP to ensure compliance in any form with of advertisement, within the Truth in Lending Act one (1) year from the date of the issuance of license to sell for the subdivision or condominium project or such other Requirement and format of disclosure, including period of time as of may be fixed the [Authority]. manner computing of by interest

TIME OF COMPLETION Current Issues P. D. No. and 957 Concerns on Time 20. Time ofthe Completion of Completion Main. Section Features of Revised Rules BOARD RESOLUTION NO. 926 SERIES OF 2015 fixing the Every owner. No oruniformity developer in shall construct and project’s. RULES period of completion REVISED IMPLEMENTING AND REGULATIONS TO GOVERN provide the facilities, infrastructures and other forms THE TIME OF COMPLETION OF SUBDIVISION AND CONDOMINIUM of development, including water supply and lighting PROJECTS UNDER PRESIDENTIAL DECREE NO. 957, OTHERWISE facilities, which are of offered and indicated the Extensions time granted as a in BUYERS’ KNOWN AS “THE SUBDIVISION AND CONDOMINIUM approved subdivision or. OTHER condominium matter of. AND course because of theplans, PROTECTIVE DECREE” ALL PROJECTS REQUIRED brochures, prospectus, printed or of fixing thematters, time of letters BY LAW TO practice BE REGISTERED WITH THE HOUSING AND in any form of advertisement, within one (1) year LAND USE REGULATORY BOARD completion on an annual basis from the date of the issuance of license to sell for Approved on Octoberproject 1, 2015 or such other the subdivision or condominium Developers invoke the grant of ETD Published on January 30, 2016 period of against time as buyers may beto fixed by the [Authority]. be exempt from Effective on February 14, 2016 liabilities under Sec. 23 of P. D. No. 957

2015 Rules 2015 and Rules Guidelines and Guidelines. General Rules TIME OF on Time on of. Time Completion of. COMPLETION Completion and Guidelines Scope of Application Main Features of. CIRCULAR the Revised Rules MEMORANDUM NO. 02 SERIES OF 2016 Requirement to secure Certificate Unbundling of the periods of completion Completion for Land Development for land RESOLUTION development and completion GUIDELINES ONof BOARD NO. 926, SERIES OF 2015 OR (COCLD) and of optional issuance of and delivery housing component THE REVISED IMPLEMENTING RULES AND REGULATIONS TO Certificate Completion. OF for. SUBDIVISION Housing GOVERN THE TIME OF of COMPLETION AND Component (COCHC) CONDOMINIUM PROJECTS PRESIDENTIAL Period of. UNDER completion for land DECREE NO. 957, OTHERWISE KNOWN based AS “THE AND development on SUBDIVISION submitted Additional period to complete the AND ALL CONDOMINIUM BUYERS’ PROTECTIVE DECREE” program of development project may only granted OTHER PROJECTS REQUIRED BYbe LAW TO BEin REGISTERED meritorious or exceptional casesof BOARD WITH THE HOUSING LAND USE REGULATORY Date of. AND completion and delivery housingon unit purchased Effective February 15, based 2016 on contract to sell or purchase agreement

2015 Rules and Guidelines on Time of Completion General Rules and Guidelines of Application Duty Scope To Complete Definition. The Project Within The Fixed Period of Completion SUBDIVISION PROJECTS Time of Completion All subdivisions, including residential, commercial, farmlot, and industrial subdivisions The period of time fixed by the HLURB within which the owner or developer shall develop and CONDOMINIUM PROJECTS complete the project, including the construction and provision of facilities, improvements and other All condominiums, including residential commercial condominiums forms of and development, including water supply and electrical facility. SIMILAR PROJECTS Any other similar projects, including cemeteries, memorial parks, and columbaria

2015 Rules and Guidelines on Time of Completion General Rules and Guidelines Duty To Complete The Project Within The Fixed Period of Completion Restrictive Period Grant of Completion of Additional Time Based To Develop on Work The. Program Project Within one year from the date of the issuance of. No the license for project or such other The work program or program of of development extension or the additional period time period may beof time as may be fixed HLURB, every owner or submitted for approval byby the owner or project developer upon granted to develop and complete the unless developer shall construct and provide the facilities, application for project’s Certificate Registration such failure orthe inability of the owner orof developer to improvements, infrastructures and otherbe forms ofas and License to project Sell (CR/LS) shall primarily the basis complete the is due to justifiable grounds development, including water supply and forprovided fixing the period completion theelectrical project. under theof new rules andofguidelines. facilities, which are offered and indicated in the approved project plans, brochures, prospectus, printed matters, letters or any form of advertisement

2015 Rules and Guidelines on Time of Completion General Periods Rules of and Completion Guidelines Unbundling of Periods of Completion Monitoring Restrictive Grant of Additional Time To Develop The Project Upon issuance ofathe development permit or CR/LS There shall be separate period of completion offor the project, HLURB, in the exercise of its land development andperiod house construction No extension orthe additional of time may be visitorial power, on its own initiative or upon and delivery in case of residential granted to develop and complete the subdivision project unless verified complaint, the projects withmay house and lot package such failure or inability ofmonitor the owner ordevelopment developer to and the completion ofdue a project and impose complete project is to justifiable grounds as appropriate sanctions, in provided under the newfines rulesand andpenalties guidelines. case of violation or non-compliance therewith

2015 Rules and Guidelines on Time of Completion Periods of Completion Period of Completion for Land Development Unbundling of Periods of Completion primarily based on the work program or program of development submitted for approval There shall be a separate period completion period of completion to be fixed shallofconsider level of for land development and house construction development at the time of issuance of license to sell and delivery in case of residential subdivision projects with house and lot package

2015 Rules and Guidelines on Time of Completion Periods of Completion Period. Allowances of Completion and for Contingencies Land Development In the Work Program primarily based on the work program or program of development submitted for approval The work program or program of development shall consider and provideto for reasonable allowance forof period of completion bea fixed shall consider level possible delayat inthe thetime project development due totowork development of issuance of license sell interruptions or temporary suspensions brought about by: Period of Completion and Delivery shortage of construction inclement weather Of Housing Components supplies or materials prolonged or repeated Explicitly provided in the contract sell other similarto incidents power failures or any purchase agreement In the absence of such provision, the period of completion and delivery shall not exceed one (1)-year from date of purchase

2015 Rules and Guidelines on Time of Completion Periods of Completion Allowances and Contingencies Subdivision In the Amenities Work Program and Facilities The work program or program of development shall All subdivision amenities and facilities such as consider and provide for a reasonable allowance for clubhouse, playgrounds, sport facilities and other possible delay in the project development due to work infrastructures as may be included in the approved interruptions or temporary suspensions brought about by: project plans, brochures, prospects printed matters, letters or any forms of advertisement shall be shortage of construction developed and completed within the SUBMITTED and inclement weather supplies or materials APPROVED period for the project’s land development. prolonged or repeated other similar incidents power failures

2015 Rules and Guidelines on Time of Completion Periods of Completion Subdivision Condominium Amenities and Facilities All subdivision amenities and facilities such as All amenities and facilities included in the approved clubhouse, playgrounds, sport facilities and other plan or included or represented in brochures, infrastructures as may be included in the approved prospectus, printed matters, letters or any form of project plans, brochures, prospects printed matters, advertisement of the project shall be completed in letters or any forms of advertisement shall be accordance with the work program or program of developed and completed within the SUBMITTED and development of the project APPROVED period for the project’s land development.

2015 Rules and Guidelines on Time of Completion Periods of Completion Statement of the Date of Completion Condominium Amenities ON THE LICENSE TO SELL The of completion of the included project, which Alldate amenities and facilities in the shall approved include theor month, dayor and year, shallin bebrochures, indicated plan included represented on the license to sell ofmatters, the project. prospectus, printed letters or any form of advertisement of the project shall be completed in accordance with the work program or program of development of the project

2015 Rules and Guidelines on Time of Completion Additional Periods Time of Of. Completion Restrictive Grounds the Grant Statement of the Date for of Completion of Additional Time of Completion ON THE LICENSE TO SELL MANDATORY STATEMENT The date of completion of the project, which shall ON THE include the. ADVERTISEMENT month, day and year, shall be indicated on the license to sell of the project. Such date of completion of the project and date of completion from date of purchase HOUSE & and LOTdelivery PACKAGE of any housing unit, if applicable, is a mandatory CONDITION IN THE LICENSE TO SELL statement in any advertisement of the project “The date of completion and delivery of the housing component shall be explicitly provided in the contract to sell or any purchase agreement ” “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”

2015 Rules and Guidelines on Time of Completion Additional Time Of Completion Restrictive Grounds for the Grant of Additional Time of Completion FORTUITOUS EVENTS SUB-SOIL CONDITIONS Existence of sub-soil condition[s]; Discoverable only after. EVENTS actual FORTUITOUS excavation works in the project; and Would necessarily require additional LAWFUL ORDERS excavation time

2015 Rules and Guidelines on Time of Completion Additional Time Of Completion Restrictive Grounds for the Grant of Additional Time of Completion LAWFUL ORDERS FORTUITOUS EVENTS 1 Independent of the will of the owner or developer 2 Unforeseeable or unavoidable Causes: (i) Damage to the on-going project that requires reconstruction; or 3 (ii) Delays which are directly attributable to the event; and Renders its completion within the original approved period impossible in a normal manner 4 The owner or developer is free from any participation or aggravation of the damage sustained by the project

2015 Rules and Guidelines on Time of Completion Additional Time Of Completion Restrictive Grounds for the v. Grant MEGAWORLD GLOBUS ASIA, INC. , TANSECO of Additional Time of Completion G. R. NO. 181206, OCTOBER 9, 2009 LAWFUL ORDERS 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 AND EXCEPT PROVIDED WHEN THE FURTHER ISSUANCE THAT: OF SUCH ORDER IS: attributable any fault, from mistake, or or negligence within SIXTYto (60) DAYS receipt knowledge 1 3 on the part the owner or developer; or in writing, thereof, the of owner or developer shall have, notified the RFO of such issuance 2 due to any dispute between the owner and developer in the development and completion of the project

2015 Rules and Guidelines on Time of Completion Additional Time Of Completion New Procedure ASIA, for Application MEGAWORLD GLOBUS INC. , v. TANSECO and Grant of Additional Time G. R. NO. 181206, OCTOBER 9, 2009 REQUIREMENTS APPLICATION THE ASIAN CRISISBond or Security by the for owner or developer, All applications additional time financial 1 The. Sworn Courtapplication cannot generalize the 1997 Asian stating the grounds reasons Additional ofor time shall only with be granted upon ofperiod completion shall be filed the crisis to be unforeseeable and beyond the control of posting a new security in accordance RFO where project is registered corporation. 2 a business Proof ofof notice tobond all the lotoror unit buyers or owners with the existing rules and guidelines of the HLURB 3 A real Supporting pictures or documents, if pre-selling any estate enterprise engaged in the of condominium units is concededly a master in In cases falling under Sub-Soil Conditions, a sworn projections and currency movements, 4 statementon bycommodities a licensed engineer attesting to the as existence well as business risks. condition of the sub-soil Revised work program with computation of 5 The fluctuating movement of the Philippine peso the foreign remaining cost of completion duly signed in the exchange market is an everyday or sealed by a licensed orof architect occurrence, hence, not anengineer instance caso fortuito. Megaworld’s excuse for its delay does not thus lie.

2015 Rules and Guidelines on Time of Completion Additional Time Of Completion New Procedure for Application and Grant of Additional Time PERIODS REQUIREMENTS TO APPLY application the owner within or developer, Under “Sub-Soil by Conditions”, 1 1 Sworn stating or reasons sixty the (60)grounds days from discovery thereof Under “Fortuitous within sixty Proof of notice to all Event”, lot or unit buyers or (60) owners days prior to the expiration of the approved 3 Supporting pictures or documents, if any original time of completion, provided however 2 that if such occurrence shall fall within the last Insixty cases falling under Sub-Soil Conditions, a sworn (60) days of the approved period of 4 statement by a licensed engineer attesting to the completion, the application shall be filed within existence the sub-soil sixty (60)ofdays from thecondition occurrence thereof Revised work program computation of Under “Lawful Order”, within sixty (60) days from 5 remaining cost of completion duly 3 the receipt or knowledge of the order or signed issuance lifting orthe sealed by a licensed engineer or architect enjoinment or stoppage of development 2

2015 Rules and Guidelines on Time of Completion Additional Time Of Completion New Procedure for Application and Grant of Additional Time PERIODS TO APPLY Under TO “Sub-Soil Conditions”, within 1 NOTICE LOT OR UNIT BUYERS sixty (60) days from discovery thereof Any owner or developer applying additional Under “Fortuitous Event”, within for sixty (60) time of completion shall notify all lot or unit buyers days prior to the expiration of the approved or owners of its intent to apply for additional original time of completion, provided howevertime complete the development of the project. 2 to that 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 Under “Lawful Order”, within sixty (60) days from 3 receipt or knowledge of the order or issuance lifting the enjoinment or stoppage of development

2015 Rules and Guidelines on Time of Completion Additional Time Of Completion New Procedure for Application and Grant of Additional Time EVALUATION AND GRANT APPEAL TO LOTof OR UNIT BUYERS the RFO shall: Upon receipt the application, 1 NOTICE Any appeal from the decision of the application by the Any owner or developer applying for additional RFO shall be decided by the Supervising Commissioner verify the nature and extent of damage or time of completion shall notify all lot or unit buyers validate justification application or owners of the its intent to applyfor forthe additional time to complete thethe development the project. ascertain additionalofperiod of time needed to complete the project and the estimated remaining cost of completion conduct an ocular inspection of the project, If necessary If the RFO finds justifiable reason to grant the additional period of time, it shall proceed to grant 2 the application. Otherwise, it shall deny the same.

2015 Rules and Guidelines on Time of Completion Additional Time Of Completion New Procedure for Application Fees and Grant of Additional Time B. R. NO. 912, S. OF 2013 REVISED SCHEDULE OF FEES APPEAL Theappeal fees provided for extension or additional time to Any from the decision of the application by the develop toby the different classifications of RFO shallapplicable be decided the Supervising Commissioner subdivision and condominium projects in the approved Schedule of Fees of the HLURB, including Processing Fee, Additional Fee, and Inspection Fee are adopted

2015 Rules and Guidelines on Time of Completion Additional Certificates Time Of of Completion Issuance of Certificates Fees of Completion B. R. NO. 912, S. OF 2013 REVISED SCHEDULE OF FEES 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

2015 Rules and Guidelines on Time of Completion Certificates of Completion Issuance of Certificates of Completion CERTIFICATE DUTY TO MAINTAIN OFOF COMPLETION UNTIL CERTIFICATE COMPLETION FOR HOUSING DONATION COMPONENT OR TURNOVER (COCHC) FOR LAND DEVELOPMENT (COCLD) Upon completion ofof the housing component, The issuance, however, ofproject’s a COCLD shall nota Upon completion the land separate Certificate of Completion forobligation Housing relieve the owner orowner developer of the Development, the or developer shall Component (COCHC) may alsosidewalks, be issued. to maintain the roads, alleys, playgrounds, apply for issuance of Certificate of Completion amenities, facilities, improvements, infrastructures for Land Development (COCLD) from the RFO or other forms of developments represented or If upon ocular inspection the project is found promised in brochures, advertisements and other to have been completed in accordance sales propaganda until proper donation orwith turnover the approved time of completion, a COCLD shall be issued in accordance with the existing rules and guidelines of the HLURB.

2015 Rules and Guidelines on Time of Completion Relief, Certificates Sanctions of and Completion Penalties Issuance of Certificates Buyers’ Remedies in Case of Completion Of Non-Completion CERTIFICATE OF COMPLETION FOR HOUSING COMPONENT (COCHC) Upon completion of the housing component, a separate Certificate of Completion for Housing Component (COCHC) may also be issued.

2015 Rules and Guidelines on Time of Completion Relief, Sanctions and Penalties Buyers’ Remedies in Case Fines and Sanctions Of Non-Completion Buyers on - P 10, 000 in accordance P 1, 000 Sec. 23 , P. D. 957 Installments with HLURB’s Approved Schedule of Fines and Penalties Fully Paid Civil Code Buyers [ Art. 1191 ] Suspension of License to Sell Other rights and remedies provided for by other laws CDO – Selling / Advertising / Collecting Installments

2015 Rules and Guidelines on Time of Completion Relief, Sanctions and Penalties Fines and Sanctions Repealing Clause Ex. Com. Res. No. 01, S. of 2007 (Amending the P 1, 000 - P 10, 000 in accordance Delineation of Authority to Approve/Disapprove with HLURB’s Approved Schedule Applications for Extension of Time to Develop of Fines and Penalties Subdivision and Condominium Projects Suspension to. Field Sell Applications of – License Regional Office CDO – Selling Appeal – / Advertising Supervising/ Collecting Installments Commissioner

2015 Rules and Guidelines on Time of Completion Relief, Sanctions and Penalties Repealing Clause Ex. Com. Res. Transitory No. 01, S. Provision of 2007 (Amending the Delineation of Authority to Approve/Disapprove Applications Extension Time to of Develop Within ninety (90)for days from the of effectivity this Rules, Subdivision Projects all on-going projectsand with. Condominium an original fixed or approved period of completion or extension of time to develop that is shorter than the period of provided in the Applications – completion Regional Field Office originally submitted or revised work program or program of development may apply for a final additional time to Appealthe project – Supervising develop and complete based on their approved or revised work program or. Commissioner program of development

2015 Rules and Guidelines on Time of Completion Relief, Sanctions and Penalties 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 that is shorter than the period of completion provided in the originally submitted or revised work program or program of development may apply for a final additional time to develop and complete the project based on their approved or revised work program or program of development Thank you and visit us at www. hlurb. gov. ph 09176273784

Thank you and visit us at www. hlurb. gov. ph 09176273784