Lessons: Developers Failed to Finish / Deliver the Pre-sold Condo and Residential Units

For recent visitors: Make sure you have comprehended the article ahead of this item.

Before reserving for your property, check if the developer was issued a building permit by the local government and a license to sell by the HLURB.

For the condominium case, the developer was able to pre-sell their condo units with only leaflets stating that the project was for advertising purposes only. The sale was made possible by very well-designed leaflets, convincing sales talk of the agents, the assurance of the developer, the well-known marketing arm and belief of the buyers themselves that they were getting a sure deal.

In reality, even if reputable marketing firms and the developers are behind the project; there is no guarantee thati project/s will be finished, even if it is issued with a License to Sell from the HLURB. Such is the risk that early buyers and investors will have to take if they would like to avail of large discounts from the future total contract price.

There should be fewer cases on unfinished development projects, since all developers have to pay a performance bond to an insurer as one of the requirements before the HLURB issues the License to Sell for the project. The bond's purpose is to guarantee that the insurers will finish the development in case there is a problem by the developer in finishing up the project. However, I have not heard of a performance bond that has been used to finish a project. When I asked an officer of the HLURB about the performance bond, she said that it should be removed since it really serves no purpose except to enrich the insurers and brokers of the bond.

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