Civil Law, 2015 Bar — Question VII-A

ESSAY

Mr. and Mrs. X migrated to the US with all their children. As they had no intention of coming back, they offered their house and lot for sale to their neighbours, Mr. and Mrs. A (the buyers) who agreed to buy the property for P8 Million. Because Mr. and Mrs. A needed to obtain a loan from a bank first, and since the sellers were in a hurry to migrate, the latter told the buyers that they could already occupy the house, renovate it as it was already in a state of disrepair, and pay only when their loan is approved and released. While waiting for the loan approval, the buyers spent P1 Million in repairing the house. A month later, a person carrying an authenticated special power of attorney from the sellers demanded that the buyers either immediately pay for the property in full now or vacate it and pay damages for having made improvements on the property without a sale having been perfected. (A) What are the buyers' options or legal rights with respect to the expenses they incurred in improving the property under the circumstance? (3%)

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