What happens if you stop paying installments on an off-plan home in Peru?
You do not lose everything automatically. Under the Civil Code, once you miss three installments, in a row or not, the developer can cancel the contract or demand the whole balance. If it cancels, it must return what you paid, though it can claim compensation and damages, or keep some installments if agreed. A judge can reduce an excessive penalty.
VerificationVerified against the official sourceSee the sources ↓
- 14sources cited
- 14read at the official source
- 1official institutions
Peruvian State portal (gob.pe)
Checked 1 Oct 2026Next review 30 Mar 2027
First: who are you paying?
This page is about installments you pay straight to the developer (inmobiliaria): a down payment split into parts, or the full price on a schedule the developer sets. If a bank lent you the money, your debt is with the bank and other rules apply. Ley 29571, Peru’s consumer code, separates the two cases in article 77:
“77.3 Cuando el financiamiento del precio de venta o parte de este sea ofrecido directamente por el proveedor, debe informar previa y detalladamente e incorporar en una hoja resumen con la firma del proveedor y del cliente lo siguiente: a. El monto de los intereses y las tasas de interés aplicables conforme a las disposiciones del presente Código y las cláusulas penales, si las hubiera. […]”
(When the developer finances the price itself, it must set out the interest, rates and any penalty clauses in a hoja resumen, a summary sheet signed by both sides.) If a bank finances you, section 77.4 says the bank sets out the terms.
When you are in default
The general rule is in article 1333 of the Civil Code:
“Incurre en mora el obligado desde que el acreedor le exija, judicial o extrajudicialmente, el cumplimiento de su obligación. No es necesaria la intimación para que la mora exista: 1.- Cuando la ley o el pacto lo declaren expresamente.”
(You are in default, mora, once the creditor demands payment, in or out of court. No demand is needed when the law or the contract says so expressly.) Many purchase contracts say exactly that. If yours does, you are in default the day an installment falls due.
Default has a cost. Article 1324 says a money debt “devenga el interés legal que fija el Banco Central de Reserva del Perú, desde el día en que el deudor incurra en mora” (earns the legal interest rate set by the Central Reserve Bank from the day of default), with no need for the creditor to prove any loss. If your schedule already carried higher interest, that rate keeps running as default interest.
Three missed installments: what the developer can do
The Civil Code has its own rule for sales paid in installments. Article 1561 says:
“Cuando el precio debe pagarse por armadas en diversos plazos, si el comprador deja de pagar tres de ellas, sucesivas o no, el vendedor puede pedir la resolución del contrato o exigir al deudor el inmediato pago del saldo, dándose por vencidas las cuotas que estuvieren pendientes.”
(When the price is paid in installments and the buyer misses three of them, in a row or not, the seller can ask for the contract to be cancelled or demand the whole balance at once.) Two points matter. Three missed installments count in total, not only three in a row. And the developer chooses: undo the sale, or collect the full balance now.
Your contract can close off the first option. Article 1562, in its current wording (replaced by Ley 27420), says:
“Las partes pueden convenir que el vendedor pierde el derecho a optar por la resolución del contrato si el comprador hubiese pagado determinada parte del precio, en cuyo caso el vendedor sólo podrá optar por exigir el pago del saldo.”
(The parties can agree that once the buyer has paid a set part of the price, the seller can no longer cancel and can only demand the balance.) This protection is not automatic. It exists only if your contract includes it, with whatever share the parties chose.
How the contract gets cancelled
The contract does not end by itself. Article 1428 lets the party that was let down choose between demanding performance or cancellation (resolución), plus damages either way. The developer has three routes:
| Route | What the law says |
|---|---|
| Lawsuit for cancellation | Once you are served with the lawsuit, “la parte demandada queda impedida de cumplir su prestación” (the defendant can no longer perform) (article 1428). Paying after that no longer saves the contract. |
| Notarial letter with a deadline | It demands payment “dentro de un plazo no menor de quince días” (within no less than fifteen days). If you do not pay in time, the contract “se resuelve de pleno derecho” (is cancelled automatically) and you owe damages (article 1429). |
| Express termination clause | If the contract states precisely that it ends when you miss a given payment, cancellation takes effect when the developer tells you it is using that clause (article 1430). |
In practice: if you receive a notarial letter (carta notarial), that deadline is your window to pay. If you are sued for cancellation, it is too late to pay and keep the purchase.
We do not settle here whether an express termination clause can allow cancellation after fewer than three missed installments. Article 1561 sets three; article 1430 allows cancellation for a precisely defined breach. How the two fit together in your contract is a question for a lawyer.
What they must give back if they cancel
This is the rule most buyers do not know. Article 1563 says:
“La resolución del contrato por incumplimiento del comprador da lugar a que el vendedor devuelva lo recibido, teniendo derecho a una compensación equitativa por el uso del bien y a la indemnización de los daños y perjuicios, salvo pacto en contrario. Alternativamente, puede convenirse que el vendedor haga suyas, a título de indemnización, algunas de las armadas que haya recibido, aplicándose en este caso las disposiciones pertinentes sobre las obligaciones con cláusula penal.”
(Cancellation for the buyer’s default means the seller returns what it received, with a right to fair compensation for use of the property and to damages, unless agreed otherwise. Alternatively, the parties can agree that the seller keeps some of the installments as compensation, and then the penalty-clause rules apply.)
What this means for you:
- The starting rule is repayment. The developer returns what it received.
- It can claim two things: fair compensation for use of the property, and the damages you caused. If the home was never handed over, our reading is that there was no use to compensate. The law does not say this in those words.
- Something else can be agreed: that the developer keeps “algunas de las armadas” (some of the installments) as compensation. Those installments then work as a penalty clause, with its rules and its limits.
If you paid arras (a deposit) or a reservation payment (separación), those have their own rules. See how arras work and reservation payments on an apartment or house.
The penalty and its limit
Almost every contract sets a penalty if the buyer does not pay. The Civil Code calls it a cláusula penal. Three rules apply:
The developer does not have to prove its loss. Article 1343 says “para exigir la pena no es necesario que el acreedor pruebe los daños y perjuicios sufridos” (the creditor need not prove damages to claim the penalty). But it can only claim it if the default is attributable to you, unless agreed otherwise.
The penalty is usually the cap. Article 1341 says a penalty limits compensation to that amount, “salvo que se haya estipulado la indemnización del daño ulterior” (unless compensation for further damage was agreed). If your contract does not say that, the developer cannot charge you the penalty and other damages on top.
A judge can reduce it. Article 1346 says:
“El juez, a solicitud del deudor, puede reducir equitativamente la pena cuando sea manifiestamente excesiva o cuando la obligación principal hubiese sido en parte o irregularmente cumplida.”
(At the debtor’s request, the judge can fairly reduce the penalty when it is plainly excessive or when the main obligation was partly or irregularly performed.) If you paid several installments before stopping, you performed in part. The reduction is not automatic: you have to ask for it.
What consumer law adds
If you buy from a developer, Ley 29571 applies on top of the Civil Code. Article 78.1 requires the contract to state, among other things:
“f. Forma de pago y plazo. g. Plazo, fecha o condiciones expresas de entrega del inmueble y penalidades por incumplimiento que se hubieran pactado. h. Supuestos en los cuales se aplican penalidades y el monto de las mismas.”
(The payment method and schedule, the delivery terms and agreed penalties, and when penalties apply and how much they are.) A penalty that is not written into the contract, with its triggers and its amount, does not meet that requirement.
If you signed a standard-form contract, article 49.1 makes unenforceable any non-negotiated clause that, “en contra de las exigencias de la buena fe, coloquen al consumidor, en su perjuicio, en una situación de desventaja o desigualdad” (against good faith, puts the consumer at a disadvantage). Ley 29571 sets no cap on the penalty for a buyer who stops paying. Whether a penalty is disproportionate is judged case by case. We explain this in adhesion contracts and unfair terms. The complaint channels are in buying a home in Peru: what to check before you sign.
If it is the developer that fails to perform, read what happens if a developer is late delivering your home and what happens to your money if the project falls through.
What this page does not cover
We did not review Indecopi decisions or court rulings on penalties charged to off-plan buyers, or how compensation or a penalty reduction is worked out in practice. We do not cover bank mortgages, purchases through Techo Propio or Mivivienda, or limitation periods. Nor do we cover the case where the home has already been handed over and you stop paying.
How to file
- Read your contract and the summary sheetLook for the payment schedule, the penalty for non-payment and when it applies, any express termination clause, any clause saying no demand is needed for default, and any clause that bars cancellation after a set part of the price is paid.
- Act before you reach three missed installmentsThat is the article 1561 rule when the contract says nothing else. Propose a new schedule in writing and keep the reply.
- If a notarial letter arrives, check the deadlineTo cancel by notarial letter, article 1429 requires giving you at least fifteen days to pay. If you pay within that period, the contract is not cancelled by that letter.
- If they cancel, ask in writing for your money backAsk for a statement of what you paid and what the developer wants to deduct, with the clause that allows it. Article 1563 starts from the seller returning what it received.
- If the penalty is excessive or abusive, complainYou can ask a judge to reduce it (article 1346) or argue before Indecopi that the clause is abusive. The complaint channels are in the general home-buying guide.
What people fail to ask in time
What if the payments you cannot make are on a bank mortgage?
Find out before it matters →What most people believe — and what the law says
If I miss one installment, the developer can cancel the contract right away.
The rule in article 1561 of the Civil Code is three missed installments, in a row or not. Your contract may include an express termination clause (article 1430), so read it. Without one, the developer needs a lawsuit or a notarial letter with a deadline.
If they cancel the contract, I lose everything I paid.
Article 1563 says that cancellation for the buyer's default obliges the seller to return what it received. The seller can claim compensation and damages, or keep some installments if that was agreed, but the starting rule is repayment.
The penalty I signed must be paid in full, however high it is.
Article 1346 lets a judge, at your request, fairly reduce a penalty that is plainly excessive, or when the obligation was partly performed. If you paid several installments, you performed in part.
Until they send me a letter, I am not in default.
That is the general rule in article 1333, but it has exceptions. One is a contract that says expressly that no demand is needed. Many contracts say this, so check yours.
Frequently asked questions
Can they demand all the remaining installments at once?
Yes. It is one of the two options article 1561 gives the seller when you miss three installments: demand immediate payment of the balance, with all pending installments treated as due. The other option is cancellation.
I have already paid most of the price. Can they still cancel?
It depends on your contract. Article 1562 allows the parties to agree that, once you have paid a set part of the price, the seller can no longer cancel and can only demand the balance. The law does not set that share; the parties do. Look for that clause.
Can they charge me interest for the delay?
Article 1324 says money debts earn the legal interest rate from the day you fall into default, without the creditor having to prove any loss. If you were already paying a higher rate, it keeps running as default interest. If the developer finances you directly, rates and penalty clauses must be in the summary sheet (Ley 29571, article 77.3).
I have not received the home yet. Can they charge me for using it?
Article 1563 gives the seller a right to fair compensation for use of the property. If you never received the home, our reading is that there was no use to compensate. That is an interpretation, not wording in the law.
The penalty in my contract looks unfair. What can I do?
You have two routes, and you can use both. In court, ask for the penalty to be reduced (article 1346). Before Indecopi, if it is a standard-form contract, argue that the clause is abusive (Ley 29571, article 49.1). If the penalty, its triggers and its amount were not written in the contract, that also breaches article 78.1.
The exact law
Código Civil (Decreto Legislativo N.º 295)Artículo 1561read
Three missed installments: cancellation or full balance due
«Cuando el precio debe pagarse por armadas en diversos plazos, si el comprador deja de pagar tres de ellas, sucesivas o no, el vendedor puede pedir la resolución del contrato o exigir al deudor el inmediato pago del saldo, dándose por vencidas las cuotas que estuvieren pendientes.»
Código Civil (Decreto Legislativo N.º 295), artículo 1562 sustituido por la Ley N.º 27420Artículo 1562read
The parties can agree that, once part of the price is paid, the seller cannot cancel
«Las partes pueden convenir que el vendedor pierde el derecho a optar por la resolución del contrato si el comprador hubiese pagado determinada parte del precio, en cuyo caso el vendedor sólo podrá optar por exigir el pago del saldo.»
Código Civil (Decreto Legislativo N.º 295)Artículo 1563read
If the sale is cancelled for non-payment, the seller returns what it received
«La resolución del contrato por incumplimiento del comprador da lugar a que el vendedor devuelva lo recibido, teniendo derecho a una compensación equitativa por el uso del bien y a la indemnización de los daños y perjuicios, salvo pacto en contrario. Alternativamente, puede convenirse que el vendedor haga suyas, a título de indemnización, algunas de las armadas que haya recibido, aplicándose en este caso las disposiciones pertinentes sobre las obligaciones con cláusula penal.»
↳Artículo 1333read
When a debtor is in default
«Incurre en mora el obligado desde que el acreedor le exija, judicial o extrajudicialmente, el cumplimiento de su obligación. No es necesaria la intimación para que la mora exista: 1.- Cuando la ley o el pacto lo declaren expresamente.»
↳Artículo 1324read
Interest on money debts in default
«Las obligaciones de dar sumas de dinero devengan el interés legal que fija el Banco Central de Reserva del Perú, desde el día en que el deudor incurra en mora, sin necesidad de que el acreedor pruebe haber sufrido daño alguno. Si antes de la mora se debían intereses mayores, ellos continuarán devengándose después del día de la mora, con la calidad de intereses moratorios.»
↳Artículo 1428read
On breach: demand performance or cancel, plus damages
«En los contratos con prestaciones recíprocas, cuando alguna de las partes falta al cumplimiento de su prestación, la otra parte puede solicitar el cumplimiento o la resolución del contrato y, en uno u otro caso, la indemnización de daños y perjuicios. A partir de la fecha de la citación con la demanda de resolución, la parte demandada queda impedida de cumplir su prestación.»
↳Artículo 1429read
Cancellation by notarial letter with at least fifteen days
«En el caso del Artículo 1428º la parte que se perjudica con el incumplimiento de la otra puede requerirla mediante carta por vía notarial para que satisfaga su prestación, dentro de un plazo no menor de quince días, bajo apercibimiento de que, en caso contrario, el contrato queda resuelto. Si la prestación no se cumple dentro del plazo señalado, el contrato se resuelve de pleno derecho, quedando a cargo del deudor la indemnización de daños y perjuicios.»
↳Artículo 1430read
Express termination clause
«Puede convenirse expresamente que el contrato se resuelva cuando una de las partes no cumple determinada prestación a su cargo, establecida con toda precisión. La resolución se produce de pleno derecho cuando la parte interesada comunica a la otra que quiere valerse de la cláusula resolutoria.»
↳Artículo 1341read
A penalty caps compensation, unless further damage was agreed
«El pacto por el que se acuerda que, en caso de incumplimiento, uno de los contratantes queda obligado al pago de una penalidad, tiene el efecto de limitar el resarcimiento a esta prestación y a que se devuelva la contraprestación, si la hubiere; salvo que se haya estipulado la indemnización del daño ulterior.»
↳Artículo 1343read
No need to prove loss to claim the penalty
«Para exigir la pena no es necesario que el acreedor pruebe los daños y perjuicios sufridos. Sin embargo, ella sólo puede exigirse cuando el incumplimiento obedece a causa imputable al deudor, salvo pacto en contrario.»
↳Artículo 1346read
A judge can reduce a plainly excessive penalty
«El juez, a solicitud del deudor, puede reducir equitativamente la pena cuando sea manifiestamente excesiva o cuando la obligación principal hubiese sido en parte o irregularmente cumplida.»
Ley N.º 29571, Código de Protección y Defensa del ConsumidorArtículo 77, numerales 77.3 y 77.4read
Developer financing: summary sheet with interest and penalty clauses
«77.3 Cuando el financiamiento del precio de venta o parte de este sea ofrecido directamente por el proveedor, debe informar previa y detalladamente e incorporar en una hoja resumen con la firma del proveedor y del cliente lo siguiente: a. El monto de los intereses y las tasas de interés aplicables conforme a las disposiciones del presente Código y las cláusulas penales, si las hubiera. [...] 77.4 En caso de que el financiamiento del precio de venta o parte de este sea otorgado por una entidad financiera, es esta la que detalla las condiciones de aquel de acuerdo a las disposiciones contenidas en el presente Código y de las emitidas por la Superintendencia de Banca, Seguros y Administradoras Privadas de Fondos de Pensiones.»
↳Artículo 78, numeral 78.1, literales f), g) y h)read
The contract must state the payment terms and penalties
«f. Forma de pago y plazo. g. Plazo, fecha o condiciones expresas de entrega del inmueble y penalidades por incumplimiento que se hubieran pactado. h. Supuestos en los cuales se aplican penalidades y el monto de las mismas.»
↳Artículo 49, numeral 49.1read
What an abusive clause is
«En los contratos por adhesión y en las cláusulas generales de contratación no aprobadas administrativamente, se consideran cláusulas abusivas y, por tanto, inexigibles todas aquellas estipulaciones no negociadas individualmente que, en contra de las exigencias de la buena fe, coloquen al consumidor, en su perjuicio, en una situación de desventaja o desigualdad o anulen sus derechos.»
Also searched as: what happens if i stop paying for my off plan apartment in peru · can the developer keep everything i paid peru · how many missed payments before developer cancels contract peru · i fell behind on the down payment installments for my apartment · developer sent me a carta notarial for missed payments · penalty for cancelling a property purchase for non payment peru
Related
What happens if a developer in Peru is late delivering your home?
You don't need to prove your losses to collect a late-delivery penalty. But there is one step you should not skip first.
HousingWhat happens to your money if a real estate project in Peru falls through?
If the project falls through because of the seller, you're owed a full refund just by asking — no need to prove any harm.
HousingBuying a home in Peru: how arras (earnest money) work and when you actually own it
You become a homeowner in Peru when you sign the contract, not when you register it — and earnest money rules vary by type.
HousingReservation payment (separación) on an apartment or house in Peru: do you get it back if you change your mind?
A separación is neither free nor lost by default: the developer may only keep what it told you up front.
ConsumerAdhesion contracts and unfair terms in Peru: do I have to comply with everything I signed?
Accepting a contract does not bind you to everything in it. The law lists clauses that fail even if you sign.
HousingOff-plan purchase contract in Peru: which clauses should you check before signing?
One clause about 'risk' can make you pay for an apartment that was never built. Do you know where to look for it?
HousingBuying a home in Peru: what to check before you sign, pre-construction or already built
Buying from a developer isn't the same as buying from an individual — the law gives you information rights and a 10-year warranty.
ConsumerHow do you file a complaint with Indecopi? Reclamo vs. denuncia, step by step
You are taking this to Indecopi — which of the two routes fits, and how to file.
HousingPenalty for cancelling a home purchase in Peru: is it valid?
You signed, then changed your mind. How much can the developer keep, and who can cut that penalty down?
HousingPaying a developer in installments in Peru: what must the contract say?
If you pay the developer in installments, the law requires a document almost nobody asks for.
What this page already lets you do
- Name the rule that protects you
- Copy the exact article and send it
- Follow the steps, in order