📋 Tender Overview
The Supreme Court (SC) reiterated that a notice to cancel a contract to sell real estate must be notarized under Republic Act No. 6552, popularly known as the In a Decision written by Associate Justice Antonio T. Kho, Jr., the SCs Second Division upheld the validity of contracts to sell between State Investment Trust, Inc. (SITI) and spouses Carlos and Victoria Baculo (Spouses Baculo) after SITI failed to meet the s cancellation requirements.SITI owned two parcels of land in Batasan Hills, Quezon City, which it offered to sell to Spouses Baculo through two contracts to sell, allowing them to pay the total purchase price in installments over three years.After the spouses failed to complete payments, SITI sent letters demanding payment within five days and later declaring the contracts to sell cancelled. The spouses refused to vacate the property, leading Siti to file an ejectment case. While the Metropolitan Trial Court and Regional Trial Courts ruled in SITIs favor, the Court of Appeals (CA) reversed the decisions, stating that contract cancellation requires a notarized notice under the . The SC agreed, ruling that while a seller may cancel a contract to sell under the on its own without going to court, it must still comply with Section 4 of the law, which requires: (1) a 60-day grace period for the buyer to settle overdue installments, counted from the date the installment became due; (2) a notarized notice of cancellation from the seller; and (3) cancellation only after 30 days from the buyers receipt of the notarized notice.The purpose is to protect real estate buyers on installment payments against one-sided conditions in contracts.The SC found that SITIs letters were not notarized, and it failed to provide the required 60-day grace period, giving only five days to settle the balance.Under the , a proper notarial act occurs when a person appears before a notary public and confirms signing a document voluntarily. Notarization makes private documents public and allows sellers to cancel the contract on their own, even without agreement from the other parties.As a result, the SC ruled that the contracts remain valid. However, Spouses Baculo must pay the outstanding balance with interest, after which SITI must execute a Deed of Absolute Sale in their favor. If they fail to pay within 60 days, they must vacate the properties without further demand. () This press release is prepared for members of the media and the general public by the SC Office of the Spokesperson as a simplified summary of the SCs Decision. For the SCs complete discussion of the case, please read the full text of the Decision in G.R. No. 237934 () at:
