What is sale with right to repurchase?

This is the right which the vendor reserves to himself, to reacquire the property sold provided that he returns to the vendee, the price of the sale, expenses of the contract, any other legitimate payments made such as the necessary and useful expenses made on the thing sold  and fulfills other stipulations which may have been agreed upon. It is where the conventional redemption takes place.

As provided under Article 1601 of the New Civil Code:

Article 1601. Conventional redemption shall take place when the vendor reserves the right to repurchase the thing sold, with the obligation to comply with the provisions of Article 1616 and other stipulations which may have been agreed upon.

When the Vendor reserves the right to repurchase the thing sold – with the obligation to return the price of the sale as well as the expenses of the contract, any other legitimate payments made by reason of the sale, the necessary and useful expenses made on the thing sold, and other stipulations which may have been agreed — upon the right to repurchase, in the absence of an express agreement, shall last four years from the date of the contract.

The second paragraph says that should there be an agreement; the period cannot exceed ten years.

However, the vendor may still exercise the right to repurchase within thirty days from the time final judgment was rendered in a civil action on the basis that the contract was a true sale with right to repurchase.

References:

New Civil Code by Paras

New Civil Code by Albano III

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