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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 a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is 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.
AT A GLANCE:
- It is an elementary principle of civil law that the owner of real property is entitled to the possession thereof as an attribute of his or her ownership. (Cecilia Javelosa vs. Ezequiel Tapus, G.R. No. 204361, July 4, 2018)
- When a certificate of title is clean and free from any encumbrance, potential purchasers have every right to rely on such certificate. Individuals who rely on a clean certificate of title in making the decision to purchase the real property are often referred to as ‘innocent purchasers for value’ and ‘in good faith.’ (Spouses Jose Manuel vs. The Register of Deeds, G.R. No. 224678, July 3, 2018)
- The voluntary declaration of a piece of property for taxation purposes manifests not only one’s sincere and honest desire to obtain title to the property and announces his adverse claim against the State and all other interested parties, but also the intention to contribute needed revenues to the Government. Such an act strengthens one’s bona fide claim of acquisition of ownership. (Kawayan Hills Corporation vs. Honorable Court of Appeals, G.R. No. 203090, September 5, 2018)
- Registration does not vest title; it is merely the evidence of such title. Land registration laws do not give the holder any better title than what he actually has. (Rosario Banguis-Tambuyat vs. Wenifreda Balcom-Tambuyat, G.R. No. 202805, March 23, 2015)
Many of us dream of owning our own property or real estate, such as land. Because this is indeed a good investment since its value does not depreciate but rather increases over time. Buying a property is a significant decision that involves several steps to ensure a smooth and legally sound transaction. Here is a detailed guide to help you through the process:
Step 1: Verify Ownership and Obtain Land Title
First, if you are interested in buying a property, it is important to determine its ownership. Find out who the registered owner of the property is. This means you need to request a copy of the land title and carefully examine who is named as the registered owner in the title.
Jurisprudence says:
It is an elementary principle of civil law that the owner of real property is entitled to the possession thereof as an attribute of his or her ownership. In fact, the holder of a Torrens Title is the rightful owner of the property thereby covered, and is entitled to its possession. (Cecilia Javelosa vs. Ezequiel Tapus, G.R. No. 204361, July 4, 2018)
Step 2: Confirm the “Cleanliness” of Title and Identify Potential Issues
Aside from determining who the registered owner is, it is also important to double-check for potential issues when buying the property. Remember, for your security, the title should be clean, and free from any encumbrances or liens to avoid complications in the future.
To verify if it is a clean title, simply review the copy of the title you have requested and check for any encumbrances or liens associated with the property. These encumbrances or liens can be found in the Memorandum of Encumbrances, located at the end of the land title. If you do not see any existing encumbrance or liens annotated, then it is a clean title.
Jurisprudence says:
When a certificate of title is clean and free from any encumbrance, potential purchasers have every right to rely on such certificate. Individuals who rely on a clean certificate of title in making the decision to purchase the real property are often referred to as ‘innocent purchasers for value’ and ‘in good faith.’ (Spouses Jose Manuel vs. The Register of Deeds, G.R. No. 224678, July 3, 2018)
Step 3: Secure the Latest Tax Documents and Clearance of the Property
Next, it is also important when purchasing property to obtain a copy of the latest tax declaration and clearance. Determine whether the taxes for the property you are purchasing have been paid.
Jurisprudence says:
The voluntary declaration of a piece of property for taxation purposes manifests not only one’s sincere and honest desire to obtain title to the property and announces his adverse claim against the State and all other interested parties, but also the intention to contribute needed revenues to the Government. Such an act strengthens one’s bona fide claim of acquisition of ownership. (Kawayan Hills Corporation vs. Honorable Court of Appeals, G.R. No. 203090, September 5, 2018)
In order to secure a tax clearance which will serve as proof that the taxpayer had completely paid off his tax liabilities. (Philippine Deposit Insurance Corporation vs. Bureau of Internal Revenue, G.R. No. 172892, June 13, 2013)
Step 4: Finalize Sale Agreement with Contract to Sell
Once you have thoroughly assessed the property and are certain about purchasing it, that is when the contract to sell comes into play. This document formalizes the agreement between you and the seller regarding the property’s price and whether you will make a down payment, among others.
Quick question:
“Is a contract to sell the same as a deed of absolute sale? Can I transfer the title to my name using a contract to sell?”
The answer to that is no. A contract to sell and a deed of absolute sale are not the same.
A contract to sell cannot be considered a deed of conveyance that can be used as a document to transfer the title because, in a contract to sell, the seller still owns the property. And until you have fully paid, ownership of the land will not be transferred to you as the buyer.
But if you have already fully paid, this is where you will execute what we call the Deed of Absolute Sale, which will serve as the Deed of Conveyance for purposes of transferring the title.
So, make sure that both the Contract to Sell and the Deed of Absolute Sale are notarized by a lawyer.
Jurisprudence says:
In a contract of sale, where non-payment of the price is a negative resolutory condition. The effects in law are not identical. In a contract of sale, the vendor has lost ownership of the thing sold and cannot recover it, unless the contract of sale is rescinded and set aside. In a contract to sell, however, the vendor remains the owner for as long as the vendee has not complied fully with the condition of paying the purchase price. (Nicolas Diego vs. Rodolfo Diego, G.R. No. 179965, February 20, 2013)
Step 5: Settle Taxes and Fees After Full Payment
Once you have fully paid for the property, have in your possession a notarized and signed Deed of Absolute Sale, and also have the original transfer certificate of title, it is time to pay the appropriate taxes to the BIR and fees to the City Hall.
Step 6: Title Transfer Process at the Registry of Deeds
After you have paid the taxes and fees, we will proceed to the exciting part: transferring the title to your name.
At this step, the primary requirements include the Deed of Absolute Sale, Original TCT, and other documents from the BIR and City Hall. You will submit these documents to the Registry of Deeds where the land is located. So, if your property is in Quezon City, you will submit it to the Registry of Deeds of Quezon City.
Step 8: Issuance of New Title Under Buyer’s Name
After submitting the documents, the Registry of Deeds will process the cancellation of the old title under the seller’s name and the issuance of the new title under your name.
Remember:
- Registration is not the equivalent of title, but is only the best evidence thereof. Title as a concept of ownership should not be confused with the certificate of title as evidence of such ownership although both are interchangeably used.
- Registration does not vest title; it is merely the evidence of such title. Land registration laws do not give the holder any better title than what he actually has. (Rosario Banguis-Tambuyat vs. Wenifreda Balcom-Tambuyat, G.R. No. 202805, March 23, 2015)
Read also:
Buying property with tax declaration only
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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