overseas Filipinos

OFWs in a bind with condo payments due to pandemic

Jojo Dass

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OFWs in a bind with condo payments due to pandemic

Construction of a residential condominium in Quezon City on August 6, 2018. Photo by Jire Carreon/Rappler


OFWs who have lost their jobs due to the pandemic struggle to pay their mortgages back home

Filipino workers in the United Arab Emirates who lost their jobs or got salary cuts because of the pandemic are facing another challenge: paying their mortgage on properties they bought back home years ago, when their future seemed so secure.

Through the years, major Philippine property developers set up satellite offices in Dubai to tap the huge market of about half a million Filipino workers. But now, they all have clients in a quandary on how to continue paying for their properties.

Beth Camia (not her real name) and her husband acquired a P2.5 million property near SM Southmall during the pre-selling stage, years ago. “Na-turnover na dapat, kaso lang medyo ilang buwang hindi kami makabayad (It should have been turned over already, but we haven’t been able to pay for months),” she said.

Pre-selling means the actual unit – or building itself – has not been constructed. Most OFWs prefer buying at the pre-selling stage because the property is a lot cheaper and its value would have increased when the key is finally turned over.

Some OFWs flip the property or sell it, while others rent it out and use part of the money for the monthly amortization.

Camia is an assistant teacher who has been jobless for 4 months as schools were closed due to the pandemic. She said they have been locked in negotiations with their property developer.

Her husband is a seafarer who is on a ship in the Persian Gulf. His ship could not dock because of COVID-19 measures.

“Hindi kami maka-move,” Camia said. “Ito naging problem now. Hindi makahulog asawa ko kasi nasa laot, hindi makalapag. Pero bibigyan naman daw kami ng option to pay,” she added.

(We can’t move. This is the problem now. My husband can’t pay because he’s at sea, he can’t come ashore. But we were told we’d be given an option to pay.)


Property developers in Dubai interviewed by Rappler said they have OFW clients facing similar problems.

“We have some cases of clients defaulting on their monthly down payment,” said Manuel Arbues II, Ayala Land International Sales regional head for North America and the Middle East. He added that these cases “were already at the banks’ monitoring.”

Another property developer representative here, who asked not to be named, said: “Puro loan take-out accounts dumaan sa akin now. Mga turnover units na. ‘Yung balance nila for the unit ay bank loan na.”

(Everything that I’m working on are loan take-out accounts. They’re all turnover units already. Their balance for the units are on bank loan.)

Take-out accounts are those where clients were already done paying down payments or equity and whose properties are with the bank to which they regularly make payments.

Will banks foreclose?

Vince Lubrin, a licensed real estate broker at Robinson’s Land Corporation International, said it would be better for OFWs facing foreclosures to get in touch with their loan officer in the bank and make a compromise agreement.

“Banks will be lenient to make restructural loan proposals suitable for both parties,” he said. “Remember that the banks’ main business is to keep their money moving. As much as possible, they don’t want to foreclose properties because it would be an idle asset on their part.”

He said that since the pandemic started in March, some of their clients, particularly in the UAE, have had difficulty paying their monthly amortization, “especially those who were still in the pre-selling stage.”

Lubrin said those who have already mortgaged their condo units to the banks and were renting out were not much affected. “Only very few of them,” he said.

He also noted that real estate companies have implemented a moratorium during the pandemic, in compliance with the Philippines’ Bayanihan To Heal As One Act – they did not collect monthly amortization from March to June 2020.

“Personally,” he said, “I advise my client to write an email regarding the non-payment of their monthly amortization and ask for an extension, so that it would not be an additional burden on their part to pay since expenses have piled up,” Lubrin said.


Miguel Bilan Jr, Sta Lucia International sales and operations manager, said they, too, have encountered OFWs with payment problems. “Most of them were either placed on a no-work-no-pay status or experienced salary reduction as a result of COVID-19,” he said.

As a result, he said, they have offered them adjusted payment plans or payment restructuring to avoid paying their arrears in lump sum.

“For OFWs having problems in paying their properties as a result of COVID-19, I strongly suggest that they communicate with their developer for proper guidance. For sure, there will be some options available for them to lighten their burden. Most developers, I suppose, have come up with remedies to assist and keep their clients,” Bilan said.

In the case of those who lost their jobs and had gone home, Bilan said their advice is “that they look for a relative or anybody they know and close to them who is willing to assume and continue the purchase of the property.”


Lawyer Barney Almazar, a director at Dubai-based Gulf Law, said OFWs facing such predicaments are also protected under Republic Act No. 6552 or the Realty Installment Buyer Protection Act.

The law has provisions allowing default-borrowers to pay the unpaid installments free of interest at a rate of one-month grace period for every year of installment payments.

This, Almazar explained, means that an OFW who had continuously paid in installment for 4 years, for instance, is relieved of 4 months’ interest for the unpaid installments being settled.

“You can only exercise this remedy once every 5 years as provided by the law,” Almazar said.

He also stressed that this covers those who have made installment payments for at least two years.

There is also an option for those who have made at least two years’ payments, for a refund at a so-called “cash surrender value” if in case the contract is canceled.

The law requires a 50% refund of the total payments made for the first 5 years, and an additional 5% for the succeeding years. The statute also provides that down payments, deposits, or options on the contract should be included in the installments made.

Provisions for those who have paid in installment for less than two years require the developer to give the default-borrower a grace period of not more than 60 days from the date the installment payment was due.

Failure to pay by the end of the grace period would allow the developer to cancel the contract after 30 days from receipt by the buyer of the subsequent cancellation notice, the law states.

Almazar explained that these provisions do not apply to those making payments with the bank, in which case they are given a “redemption period” if the property has been foreclosed.

“When the bank forecloses the property, you are given the opportunity to buy it back from them,” Almazar said.

Most OFWs prefer investing in real property to gain passive income and as preparation for retirement.

Bloomberg, citing Colliers International Group Incorporated, reported in April that residential condominium prices would drop by 15% this year from a year ago before slightly recovering in 2021, due to the economic contraction caused by the pandemic. This assessment was made months before the Philippines officially went into recession, after the economy shrank by 16.5% in the second quarter. – Rappler.com

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