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Fallout from Phivolcs’ alert

PalabricaLAST WEEK, the Philippine Institute of Volcanology and Seismology (Phivolcs) released the Valley Fault System Atlas on the places in Metro Manila and adjoining provinces that are built on top of or near an active earthquake fault.

The atlas shows the streets, villages and outline of some structures that may be directly affected if a strong tremor happens.

On account of the extensive media coverage of the report, the Phivolcs website was swamped with page views and download requests.

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Judging from the phoned-in comments in radio stations and random TV interviews, the public had mixed reactions over the Phivolcs alert. Many were thankful for the information and advice given on how to cope with the situation.

There were some though who described Phivolcs’ action as alarmist and said it should have let the local government officials quietly handle the problem with their constituencies.

A few complained that the alert resulted in monetary losses for them due to the cancellation of sales or rentals of condominium units and residences in the vicinity of the fault area.

The owners of some houses near the danger zones expressed hope that their families would not be seriously affected by an earthquake.

Options

Undoubtedly, the Phivolcs atlas would adversely affect the value of real estate properties that lie along or are close to the earthquake fault section.

Similar to flood-prone areas, nobody [if he can help it] would like to live in a place where his life and properties are at a greater risk of sinking if the earth under him moves.

Mother Nature seems to have dealt an even hand on this problem because the geological aberration cuts across all economic classes of our society.

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The potential victims of the feared calamity are residents of posh gated communities in the cities of Quezon and Pasig, middle class subdivisions in Rizal province and depressed areas in Taguig City.

Ahead of the anticipated Big One, the financially-able among the affected residents may likely opt to sell their houses [assuming there are interested buyers] and relocate to safer ground, or reinforce their house structures to withstand a strong earthquake and pray that God would be merciful to them.

On the part of real estate developers and brokers, they would have to be more creative in convincing potential buyers that the benefits of buying the houses and condominium units in the red-lined areas outweigh the attendant risks.

The pre-selling of residential condominium buildings and townhouses in those places may require offering liberal payment terms because buyers of these properties are usually first-time homeowners and therefore more careful in this major acquisition.

Agreement

The Phivolcs alert is providential for people who may be planning to buy or rent real estate properties in the affected areas.

Given the risks involved, they would have to weigh things carefully—go ahead or drop the whole idea?

In this regard, it is comforting that, on account of the construction boom in the country today, there is no dearth in condominium buildings or residential subdivisions far from the earthquake fault that are available for rent or purchase.

But what if a deed of sale or lease had been signed, or installment rental or payment already made, over a property within the danger zone before the Phivolcs atlas became public?

Under normal circumstances, there is no pulling out of a contract that has been signed by the parties and notarized. More so if payment had been made because the contract was already consummated.

Unless the owner or lessor of the property is agreeable to canceling the sale or lease, the buyer or lessee is stuck with it.

Going to court to compel the termination of the contract would be advisable only if there is proof the owner or lessor knew about the defect of the property and concealed it, or the buyer or lessee would not have bought or leased the property had he known the defect earlier.

In these instances, the warranty against hidden defects that the law imposes on sellers or lessors of real property is deemed violated so there is justifiable ground to demand the rescission of the contract.

Penalty

The situation is less sticky if contracts to sell or lease govern the relationship of the parties.

It is standard practice in these contracts to provide for the contingency that the buyer or lessee may, for one reason or another, decide not to proceed with the purchase or lease of the property.

The prospective buyer or lessee who is spooked by the idea of living in a place susceptible to grave danger in the event of an earthquake can opt to cancel the contract.

The usual trade-off for this action is the payment of a “break-up penalty” which may be in the nature of a pre-agreed amount or forfeiture of a percentage of the amounts already paid.

Or if the owner or lessor happens to have other properties outside the danger zone that meet the buyer’s or lessee’s requirements, the transaction can be carried over to those properties to keep the deal alive.

Some tough decisions have to be made by the people whose houses or businesses are threatened by the fault lines identified in the Phivolcs atlas. And they have to be done fast because there is no telling when nature may decide to rearrange its geologic plates.

Although scary, the Phivolcs alert should be looked at as a wake-up call for all of us to prepare for the anticipated but unwelcome happening of the Big One. For comments, please send your e-mail to “rpalabrica@inquirer.com.ph.”

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TAGS: Business, Earthquake, economy, Marikina Valley Fault System Atlas, News, Real Estate
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