DISCLAIMER: This article does not create an attorney-client relationship between the author and the reader.  The answer of the author on the issue is just an expression of his general opinion based on Philippine law and hence does not constitute legal advice.

The real estate sector seems to have bounced-back after the pandemic. Several residential condominiums in Metro Manila are being constructed, left and right, from affordable to high end.  Several properties are being offered by various real estate brokers.  In fact, we tried to check one after our Sunday church.  When we reached the site, we were surprised many interested buyers were also there checking. 

Similarly, my cousin received an offer to buy a residential lot in Cabanatuan City.  For her benefit and for the benefit of other buyers, I made this article as a quick guide when buying real property.

For untitled lot or lot not yet registered under the Torrens System, refer to my previous article (BUYING UNTITLED LOT). Torrens System is a system of registering land titles in the Philippines. Land title issued under the Torrens System is an indefeasible, incontrovertible, and imprescriptible proof of ownership.

For titled lot, checking is a bit simple and straightforward.  Thanks to the “mirror doctrine”!  The mirror doctrine provides that every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go behind the certificate to determine the condition of the property.  As such, the first step when buying a registered land is to secure a certified true copy of the Transfer Certificate of Title (TCT) (or OCT, if the title is an Original Certificate of Title) from the Registry of Deeds (RD) nearest you.  Do not just rely on the copy of the TCT or OCT given by the seller or broker.

The mirror doctrine admits of certain exceptions, namely: (a) when the buyer has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make further inquiry; (b) when the buyer has knowledge of a defect or the lack of title in his vendor; or (c) when the buyer/mortgagee is a bank or an institution of similar nature as they are enjoined to exert a higher degree of diligence, care, and prudence than individuals in handling real estate transactions (Benito Chua vs Republic, G.R. No. 253305, August 2, 2023).

To simplify the application of the mirror doctrine and its exceptions, if your answer to the following is in the affirmative, you are considered in law an “innocent purchaser for value and in good faith”.   As such, you may proceed to buy the property.

1) Upon your ocular inspection of the property, there is no occupant.  (If there is improvement or permanent structure in it, ask for a certified true copy of the tax declaration to check who is the owner of the improvement.  The owner of the improvement must also be the seller.)

2) You are not aware of any defect or fraud surrounding the registration of the property under the seller’s name.

3) The certified true copy of the TCT or OCT from the RD does not show any encumbrance or claim against the property or if there is any encumbrance or claim, you agree with it.

4) You have verified that the name of the seller is the name written in the TCT or OCT as the registered owner.

For added protection:

1) Require a special power of attorney (SPA) if you are only dealing with an agent and such SPA must be registered with the RD as provided under Section 64 of PD 1529.  Under Article 1874 of the Civil Code, sale through an agent of an immovable property or any interest therein without a written authority is void.

2) Require tax clearance to check for any unpaid real property tax.  If there is any, you may require the seller to pay it before executing a contract to sell (CTS) or a deed of absolute sale (DOAS) or you may want to shoulder it or agree to deduct it from the contract price.

3)     Verify if the seller’s price is within market.

4)     Secure the service of a geodetic engineer to conduct survey of the property for any error in the technical description and for any encroachment on the property. 

3) Sign the CTS or the DOAS only when in the presence of a notary public.

4) After the execution of the DOAS, immediately process the transfer of the TCT or OCT in your name to avoid any penalty due to late payment or late transfer.

For buyers of condominium unit with issued condominium certificate of title (CCT), the above guides are also applicable except what you secure from the RD is the certified true copy of the CCT.

For buyers of preselling condominium units or subdivisions:

1) Always require the developer’s license to sell issued by the Department of Human Settlements and Urban Development (DHSUD).

2) Require official receipt (or any proof) for every payment.

3) Transact only with the developer’s accredited and license real estate agent.

4) Sign a CTS only when in the presence of a notary public.

5) Make a regular visit of the project to check progress in relation to the promised date of delivery of the project.

For taxes and fees on the sale of real property, refer to my article (TAXES AND FEES ON THE SALE AND OTHER DISPOSITIONS OF REAL PROPERTIES). 

(April 27, 2024)