Essentials of Special Power of Attorney (SPA) to Sell Real Property

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Published — June 1, 2022

The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.

Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.

Related article: Basics of land titles, transactions, and real property registration

Under Article 1305 of the Civil Code, a contract is a meeting of minds between two (2) persons whereby one binds himself, with respect to the other, to give something or to render some service. As you can notice, said provision did not mention any requirement as to a specific form of contract in order to be valid. Hence, as a general rule, there is no requirement that a contract should be in a specific form in order to be valid. Basically, the only essential requisites for the validity of a contract are provided for by Article 1318 of the Civil Code, which states:

“There is no contract unless the following requisites concur: (1) Consent of the Contracting Parties, (2) Object certain which is the subject matter of the contract; and (3) Cause of the obligation which is established.”

As mentioned, the failure to reduce the agreement to writing does not affect its validity or enforceability, provided that no law or regulation requires otherwise. This statement is supported by Article 1356 of the Civil Code which provides that, contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present. However, there are contracts required by law to be in writing in order to be valid, these are:

1. Donation of Real Property in any amount (Article 749 of the Civil Code);
2. Donation of personal properties in the amount exceeding Php 5,000 (Article 748 of the Civil Code);
3. Contribution of Real Property in a Partnership (Article 1773 of the Civil Code);
4. Contract of Antichresis – the principal amount and interest involved must be in writing (Article 2134 of the Civil Code);
5. Agency to Sell Property and any interest thereto (Article 1874 of the Civil Code) and
6. Sale of a Large Cattle (Article 1581 of the Civil Code).

These are the only contracts required by law to be in writing in order to be valid.

Agency to Sell Property and Any Interest Thereto

Formal Requirements

The contract of agency conferred through a Special Power of Attorney (SPA) is one of the contracts required by law to be in writing in order to be valid. This is supported by Article 1874 of the Civil Code which states that when a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. Also, the special power of attorney to sell the land shall also be notarized as expressly mandated by Article 1358 (3) of the Civil Code. The portion of the said provision provides:

“XXX

(3) The power to administer property, or any other power which has for its object an act appearing or which should appear in a public document, or should prejudice a third person;

XXX”

Furthermore, aside from producing the contract of agency to sell in writing and having it notarized, Section 64 of Presidential Decree No. 1529 or the Property Registration Decree requires that the special power of attorney should be registered with the Register of Deeds. Said provision reads as follows:

Section 64: Power of Attorney. Any person may, by power of attorney, convey or otherwise deal with registered land and the same shall be registered with the Register of Deeds of the province or city where the land lies. Any instrument revoking such power of attorney shall be registered in like manner.

Essential Stipulations

In the case of Alcantara vs. Nido, G.R. No. 165133, 618 SCRA 333, April 19, 2010, the Supreme Court explained that for the principal to confer the right upon an agent to sell real estate, a power of attorney must so express the powers of the agent in clear and unmistakable language. When there is any reasonable doubt that the language so used conveys such power, no such construction shall be given the document.

In summary, in order to fully confer rights to the agent and represent the principal to sell his or her real property, the following guidelines shall be observed:

1. The Special Power of Attorney shall be in writing (Art. 1874);
2. The Special Power of Attorney shall be notarized (Art. 1358);
3. The terms on the right of the agent to sell real property of the principal shall be made expressly, in a clear and unmistakable language. This could be further done by particularly specifying the property to be sold by the agent, its nature, location or address, and a copy of the Original Certificate of Title or Transfer Certificate of Title of the property attached to it;
4. The Special Power of Attorney should be registered with the Register of Deeds (Sec. 64 of PD. 1529).

As a remedy, if one of the parties in a contract of agency to sell real property refuses to produce the said contract or special power of attorney in writing, the other party may avail of the remedy provided under Article 1357 of the Civil Code which states that, if the law requires a document or other special form, as in the acts and contracts enumerated in the following article, the contracting parties may compel each other to observe that form, once the contract has been perfected. This right may be exercised simultaneously with the action upon the contract.

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

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