Requisites of a valid and effective cancellation under R.A. 6552 (Maceda Law) - protection of the rights of house and lot buyers on installment basis.

"Mandatory Twin Requirements:
Notarized Notice of Cancellation and
Refund of Cash Surrender Value

This Court has been consistent in ruling that a valid and effective
cancellation under R.A. 6552 must comply with the mandatory twin requirements of a notarized notice of cancellation and a refund of the cash surrender value.

In Olympia Housing, Inc. v. Panasiatic Travel Corp.,39 we ruled that
the notarial act of rescission must be accompanied by the refund of the cash surrender value.

x x x The actual cancellation of the contract can only be deemed to take place upon the expiry of a 30-day period following the receipt by the buyer of the notice of cancellation or demand for rescission by a notarial act and the full payment of the cash surrender value.


In Pagtalunan v. Dela Cruz Vda. De Manzano,40 we ruled that there is no valid cancellation of the Contract to Sell in the absence of a refund of the cash surrender value. We stated that:

x x x Sec. 3 (b) of R.A. No. 6552 requires refund of the cash surrender value of the payments on the property to the buyer before cancellation of the contract. The provision does not provide a different requirement for contracts to sell which allow possession of the property by the buyer upon execution of the contract like the instant case. Hence, petitioner cannot insist on compliance with the requirement by assuming that the cash surrender value payable to the buyer had been applied to rentals of the property after respondent failed to pay the installments due. (Emphasis supplied). "


See - 
G.R. No. 202358. November 27, 2013
Gatchalian Realty, Inc. Vs. Evelyn M. Angeles