- Assume there is a problem.
- Check the seller.
- Check it out.
- Check the papers.
In the Philippines everyone dreams of owning a home but less people have an idea of how specifically to do it. However we have to follow certain steps so that we can be assured that we will not be taken advantage of. Buying land is not like buying something at the convenience store. There are many layers of possible issues that one must dive through before being absolutely confident that you can “pull the trigger on a transaction.”
1. Assume there is a problem.
People often complain lawyers are pessimists. However, this pessimism is a professional virtue. We expect there to be a problem because there usually is one. The rest of this article will teach you the steps a lawyer would run through before buying a piece of land. It is important to recognize though that just as important to the process of due diligence is the attitude of doubting and the readiness to walk away the moment something seems off.
2. Check the Seller.
I think before anything you should be clear who you’re dealing with. Get copies of current government IDs so that you’re sure that you know who you’ll take to court if something goes wrong. Are they the owner? Are they selling on behalf of the owner? Are they all the heirs of someone who has died and simply seek to sell the property? Each of these things, if answered in the negative, is going to be a problem that will need to be addressed. Generally speaking, you need the consent of everyone who has an interest in the property to validly claim ownership.
3. Check it out
Actually look at the property and make sure it is the one that is referred to by the documents that you and the seller are contemplating. The technical description found in the documents of title are going to be the basis for this. While you are there, ask the people on the adjacent properties who is the owner of the property that you are inspecting. If you plan to construct a structure on the property, is it suitable for the work you intend? Or will extra work need to be spent because it is rough? Are their occupants? What is the relation of the occupants tot he person who was selling you the property?
4. Check the documents
There are many things that you need to look at and honestly this is likely the area where you will need the intervention of a lawyer. However, very quickly, these are the most basic documents you will need to check:
- The Transfer Certificate of Title – found in the Register of Deeds a title will list plainly the name of the who owns the property if the property is titled. It will also list if the property is subject to any encumbrances.
- The Tax Declaration – this is found in your city or municipal assessor’s office. This is how you check if the taxes are up to date.
- The Terms – it should be clear how payment will be made. Because of the difficulty of dealing with land in the Philippines, generally, any serious buyers or sellers should only entertain straight payments. It should also be clear for whose account Capital Gains Tax, Documentary Stamp Tax, and Notarial fees should be.
This is a hyper abbreviated version of the steps that you should take before buying a plot of land. I have to gloss over a lot of details to get the article comprehensible and to a manageable length. I advise if anything here is unclear though that you should set an appointment with a lawyer to clarify if you seek advice on a particular transaction.
Atty. Hourani practices law in Cebu City, Philippines. If you would like to set an appointment with him, you may reach him here.