The DHSUD License to Sell: a pre-selling unit has a licence, and you can ask to see it
// Short answer
What is the DHSUD License to Sell and why does a pre-selling buyer care?
A License to Sell is the permit that authorises a developer to offer units in a specific registered project to the public. Section 5 of Presidential Decree 957 provides that an owner or dealer holding a registration certificate “shall not, however, be authorized to sell any subdivision lot or condominium unit in the registered project unless he shall have first obtained a license to sell the project”. Since Republic Act 11201 of 2019, the regulatory function sits with the Department of Human Settlements and Urban Development, while the adjudicatory function sits with the Human Settlements Adjudication Commission. It matters to a pre-selling buyer because it is a checkable, named document about a unit that does not physically exist yet.
Buying off-plan means paying for something you cannot stand inside. Everything you are relying on in that window is either a document or a hope, and the regulatory layer is the part that happens to be written down. This page walks the named permits — the registration certificate, the licence to sell and the development permit that is neither — plus what the advertising rules make enforceable, what the Maceda Law gives a buyer who stops paying, and what the Decree says when a project is not built as approved. It is a checklist, not a warning: most of what follows is paperwork a licensed project produces without friction. The commercial half of the decision sits in the Philippine off-plan risk read.
What Is a License to Sell, and Which Agency Issues It?
A License to Sell is the permit that allows a developer to offer units in a specific registered project to the public. It comes from Presidential Decree 957, the Subdivision and Condominium Buyers’ Protective Decree of 1976, and Section 5 puts the requirement in one sentence: an owner or dealer holding a registration certificate “shall not, however, be authorized to sell any subdivision lot or condominium unit in the registered project unless he shall have first obtained a license to sell the project”.
The same section says what the regulator weighs before issuing one. It is granted “if, after an examination of the registration statement filed by said owner or dealer and all the pertinent documents attached thereto, he is convinced that the owner or dealer is of good repute, that his business is financially stable, and that the proposed sale of the subdivision lots or condominium units to the public would not be fraudulent”. Three findings, made before units are offered.
The agency name has changed and this trips people up when they read older material. PD 957 assigns the function to “the Authority”, which at the time was the National Housing Authority, and it later sat with the HLURB. Republic Act 11201 of 2019 moved it again. Section 25 of that Act transfers “the regulatory function, including the formulation, promulgation, and enforcement of rules, standards and guidelines over subdivisions, condominiums and similar real estate developments” to the new Department of Human Settlements and Urban Development. Section 12 reconstitutes the HLURB as the Human Settlements Adjudication Commission and transfers the adjudicatory function there. So: regulation to DHSUD, adjudication to HSAC. Note the statute’s own words are “consolidated and reconstituted”, not abolished.
What Is a Certificate of Registration, and How Does It Differ?
They are two documents in a fixed order, and a buyer should ask for both by name. Section 4 of PD 957 covers registration: the owner or dealer files a sworn registration statement, the project is “deemed registered upon completion of the above publication requirement”, and “the fact of such registration shall be evidenced by a registration certificate to be issued to the applicant-owner or dealer”.
Registration establishes that the project exists on the regulator’s books with its plans and disclosures filed. The licence is what authorises selling. Section 5 expects it “within two weeks from the registration of such project”. One document says the project is on record. The other says units may be offered. A developer holding only the first is not licensed to sell.
A third document sits before both and is regularly mistaken for them: the Development Permit. DHSUD’s published guidance on PD 957 is explicit that an approved plan and a development permit do not authorise the owner or developer to sell, dispose of or offer the project in the real estate market — the owner must then apply for registration and the licence to sell with the DHSUD Regional Office. A development permit shown across a sales desk is evidence of a permitted build, not a permitted sale.
| The document | What it establishes | What it does not authorise |
|---|---|---|
| Development Permit | A permitted build. It comes before the other two and is regularly mistaken for them. | DHSUD’s published guidance is explicit that an approved plan and a development permit do not authorise the owner or developer to sell, dispose of or offer the project in the real estate market. |
| Certificate of Registration — Section 4 | That the project is on the regulator’s books with its plans and disclosures filed. The project is “deemed registered upon completion of the above publication requirement”, evidenced by a registration certificate. | Selling. A developer holding only this one is not licensed to sell. |
| License to Sell — Section 5 | That units in this registered project may be offered to the public. Granted where the regulator is convinced the owner or dealer is of good repute, the business financially stable, and the proposed sale to the public would not be fraudulent. | Anything outside the project and phase it names. A licence for phase one is not a licence for phase two, and a large development can hold several at different stages. |
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Section 5 expects the licence “within two weeks from the registration of such project”. The implementing rules require the Certificate of Registration and the License to Sell to be displayed in a conspicuous place at the principal office, with a copy in every branch. Since Republic Act 11201 of 2019, regulation sits with DHSUD and adjudication with the HSAC. This is a document request, not a judgement about anybody.
Where Does a Buyer Verify a Licence Number?
Here I am going to be exact about what I could and could not confirm, because this is a question where a confident wrong answer wastes a buyer’s afternoon.
What is verifiable. The Revised Implementing Rules for PD 957 require display: “The Certificate of Registration and License to Sell issued by the Board shall be displayed in a conspicuous place in the principal office of the owner, dealer, broker or salesman, as the case may be and a Xerox copy thereof in all its branches and offices.” So the documents are meant to be visible where the selling happens, and asking to see them is asking for something the rules already contemplate you seeing.
What DHSUD itself tells buyers to do. Its published guidance states that the Department “has Regional Offices across the country where any prospective buyer may inquire whether a subdivision or condominium project is registered and licensed”. That is a first-party instruction, and it points at an office rather than a website.
What I could not confirm. I could not verify that a live, public, searchable online licence lookup is currently operating. A DHSUD page titled “List of Projects with License to Sell” exists in the Department’s own navigation, but I was unable to load and read its current contents from this environment, and I am not going to describe a tool I have not opened. Third-party “licence verification” sites exist and are not official. Treat the Regional Office enquiry, made through your Philippine lawyer, as the verification route, and treat anything online as a lead to confirm rather than an answer.
What Must Appear on a Pre-Selling Advertisement?
Less than the internet will tell you, and the gap matters. Section 19 of PD 957 governs advertisements and sets a truthfulness standard: advertisements “about the subdivision or the condominium or its operations or activities must reflect the real facts and must be presented in such manner that will not tend to mislead or deceive the public”.
It then does something more useful than a disclosure rule. It makes the marketing enforceable: the owner or developer “shall answerable and liable for the facilities, improvements, infrastructures or other forms of development represented or promised in brochures, advertisements and other sales propaganda”, and “the same shall form part of the sales warranties enforceable against said owner or developer, jointly and severally”. The brochure is a warranty. Keep every version of it, dated, with the renderings and the amenity list.
The implementing rules add a prior-approval step: “All advertisements for the sale of subdivision lots and condominium units shall be declared and approved by the Board pursuant to Section 19 of the Decree.” What I could not source anywhere in PD 957, its implementing rules or a DHSUD issuance is the widely repeated claim that a licence number must be printed inside the advertisement itself. So do not use the absence of a number in an advertisement as a signal in either direction. Ask for the documents instead.
THIS IS A ONE-DOCUMENT REQUEST, NOT AN ACCUSATION
Pre-selling permits, the 40 percent cap, the CCT and the full cost stack in and out. The operator’s frame on the Philippines, in one file.
Get The Philippines Playbook — $39What Protection Does the Maceda Law Give a Buyer Who Stops Paying?
Republic Act 6552, the Realty Installment Buyer Protection Act, is the statute behind the instalment structure most pre-selling uses, and Section 3 states its own scope: it applies to “all transactions or contracts involving the sale or financing of real estate on installment payments, including residential condominium apartments but excluding industrial lots, commercial buildings and sales to tenants” under the agrarian reform legislation.
The rights split at two years of instalments paid. Where the buyer has paid at least two years, Section 3 gives a grace period “fixed at the rate of one month grace period for every one year of installment payments made”, exercisable once every five years; and on cancellation the seller “shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty per cent of the total payments made, and, after five years of installments, an additional five per cent every year but not to exceed ninety per cent”. Down payments, deposits and options count toward the total.
Where less than two years have been paid, Section 4 gives “a grace period of not less than sixty days from the date the installment became due”. In both cases the cancellation mechanism is the same and it is formal: it takes effect thirty days after the buyer receives the notice of cancellation or demand for rescission by a notarial act, and under Section 3 also upon full payment of the cash surrender value. Section 7 makes any contrary stipulation null and void.
| Instalments paid | Grace period | On cancellation |
|---|---|---|
| At least two years — Section 3 | “One month grace period for every one year of installment payments made”, exercisable once every five years. | The seller refunds the cash surrender value: “fifty per cent of the total payments made”, and after five years of instalments an additional five per cent every year, but not to exceed ninety per cent. Down payments, deposits and options count toward the total. |
| Less than two years — Section 4 | “A grace period of not less than sixty days from the date the installment became due”. | Section 4 is the grace-period provision. The cash surrender value sits in Section 3 and is tied to the two-year line — put your own contract in front of a Philippine lawyer rather than reading across. |
| Either way | — | Cancellation takes effect thirty days after the buyer receives the notice of cancellation or the demand for rescission by a notarial act. Section 7 makes any contrary stipulation null and void. |
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Read against your own payment schedule, so you know the date two years’ worth of instalments is actually reached. A different cause has a different remedy: where a buyer desists because the project was not developed according to the approved plans, Section 23 of PD 957 governs rather than the Maceda Law, and Section 24 draws that line.
What Happens to Buyers If a Project Stalls After Licensing?
PD 957 addresses this directly, and the provision is worth knowing before you need it. Section 23, Non-Forfeiture of Payments: no instalment payment shall be forfeited in favour of the owner or developer where the buyer, after due notice to the owner or developer, “desists from further payment due to the failure of the owner or developer to develop the subdivision or condominium project according to the approved plans and within the time limit for complying with the same”. Such a buyer may, at their option, be reimbursed the total amount paid including amortisation interests but excluding delinquency interests, with interest at the legal rate.
Section 24 draws the line between the two situations cleanly: a buyer’s failure to pay “for reasons other than the failure of the owner or developer to develop the project” is governed by the Maceda Law, while development failure is Section 23 territory. Different cause, different remedy, and the written notice you give is what places you in one or the other.
Where such a claim is heard changed in 2019. RA 11201 transferred the adjudicatory mandate to the Human Settlements Adjudication Commission, whose Regional Adjudicators have original and exclusive jurisdiction over, among other things, “claims for refund, and other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman”. DHSUD’s published guidance points buyers to the DHSUD Regional Office for enforcement assistance and to the HSAC Regional Adjudication Branch for a formal complaint. Two doors, two purposes.
How Does the Licence Relate to the Master Deed and the Eventual Title?
The licence governs the selling. The Master Deed governs the building as a legal object. The Condominium Certificate of Title is what you end up holding. They are three different documents and a pre-selling buyer meets them in that order.
PD 957 links the licence to the eventual title through two provisions. Section 25: the owner or developer “shall deliver the title of the lot or unit to the buyer upon full payment”, no fee may be collected for issuing it except registration fees at the Registry of Deeds, and where a mortgage is outstanding at issuance the developer must redeem it or the corresponding portion “within six months from such issuance”. And Section 17: all contracts to sell, deeds of sale and similar instruments “whether or not the purchase price is paid in full, shall be registered by the seller in the Office of the Register of Deeds”.
Section 18 is the one to read twice as an off-plan buyer. “No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the Authority”, approval requires that loan proceeds be used for development, and “the loan value of each lot or unit covered by the mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan”. That notification right exists whether or not anyone mentions it at the sales desk. How a mortgage shows up on a title is covered on the Registry of Deeds page.
What Should Be Checked Before Paying a Reservation Fee?
Seven items. Every one of them is a document request, not a judgement about anybody:
- The Certificate of Registration and the License to Sell, both naming the exact project and phase, both current. The implementing rules require them to be on display at the principal office, with copies at branches.
- Confirmation from the DHSUD Regional Office covering the project that it is registered and licensed — DHSUD’s own guidance names its Regional Offices as the place a prospective buyer may enquire.
- Which tower and phase the licence covers. A licence for phase one is not a licence for phase two, and a large development can hold several at different stages.
- The minimum level of development on the ground. The implementing rules require, before a licence issues for a condominium project, proof of “excavation per approved plan/excavation permit”. A licensed condominium project has broken ground.
- Every brochure, rendering and amenity list, dated and kept, because Section 19 makes them part of the sales warranties enforceable against the developer.
- Whether any mortgage over the project or the unit exists, and confirmation of the Section 18 notification right before any loan release.
- The payment schedule read against the Maceda thresholds, so you know where two years’ worth of instalments actually falls on your own calendar.
That is a one-afternoon list, and it is the whole of the regulatory layer. What it does not cover is the commercial layer: whether the developer has finished and handed over comparable buildings before, whether buyers in those projects actually received their certificates of title, and how long issuance took. Those questions sit in the Philippine off-plan risk read, and they are where a pre-selling decision is actually made.
What Questions Should Go in Writing Before the Contract to Sell?
Five, sent as a short email, answered in the same medium:
- Please confirm the Certificate of Registration and License to Sell numbers for this exact project and phase, and the dates of issue.
- Please confirm the DHSUD Regional Office with which this project is registered, so it can be confirmed independently.
- Please confirm whether the project or this unit is subject to any mortgage, and the arrangement for notifying buyers before a loan release.
- Please confirm the schedule of payments and the point at which two years’ worth of instalments will have been paid.
- Please confirm the expected date of turnover and of title issuance, and the process by which the certificate of title is delivered on full payment.
A written answer is worth more than a reassuring one, and not because anybody is expected to give a bad answer. It is because a saved email survives a staff change, a phase renumbering and an eighteen-month gap between reservation and turnover, and a conversation does not. Keep the replies with the brochures and the receipts in one file. Every counter you meet after this works from documents.
A pre-selling permit is one country’s answer. Five countries answer it differently.
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- Whose name can legally go on the title in the Philippines, Thailand, Vietnam, Indonesia, Malaysia and Cambodia — side by side, on one page.
- Which document proves it in each country — TCT, CCT, chanote, pink book, SHM. Six registers, six different objects.
- Where the caps and the clocks actually bite — the 40 percent line here, the quota and the term elsewhere.
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