buying a home

Three tips on how to know if it’s legally safe to buy a home

Buying a home – this is almost everyone’s dream, whether you’re thinking of  a house and lot, a condominium unit or a more novel living space. You may be a young professional, single or married, an overseas worker, or perhaps in the middle of growing your career, or even looking towards retirement. You want to have your own space.

Howdo you legally protect yourself when buying a home?

 

 1. Are you buying a home  from the registered owner?

You’ll know this by checking the title to the property. For lots located in the Philippines, look for the Original Certificate of Title (OCT), or Transfer Certificate of Title (TCT). For condominium units, get a copy of the Condominium Certificate of Title (CCT).

Check the names appearing as registered owners. This will show you if you are dealing with the proper persons. Secure a copy and verify it with the Register of Deeds (RD). Examine every page of the title on file with the RD because that is the most updated one that reflects all transactions involving the property.

2. If you’re dealing with a representative, is he / she duly authorized by the owner?

Some owners do not deal directly with buyers because they are too busy, out of the country, or would rather entrust the transaction to a real estate agent or someone they trust. In any case, it will be safe for you to ask for a Special Power of Attorney (SPA) signed by the property owner (the principal) naming a specific person as his or her representative (the agent).

Examine the contents of the SPA to know the extent of authority given by the property owner. Is it to sign the Deed of Sale on the owner’s behalf, or just to negotiate? Did the owner authorize the representative to receive partial payment, even full payment, or merely to cause the payment to be deposited to a specified bank account? Is the authority of the representative limited to a specific time? These are all important.

Some people ask if a SPA is valid even when the owner has passed away. The answer is no. Legally, the SPA automatically loses its effect when the principal dies. In that case, the persons to deal with are the heirs.

3. Have the real property taxes been paid? Is the title clean?

The owner has to pay an annual real property tax to the local government where the property is located, if you are buying in the Philippines. This known as “amelyar”.  Ask the seller for a copy of the tax declaration and the latest real property tax receipt, so you will know if there are outstanding liabilities to the government. Best to re

quire the owner to settle this with the local government during your negotiations, before finalizing the sale.

You want to buy property with a clean title. By clean title, I mean the title is not mortgaged or there is nobody making a claim against it. To verify this, get a certified copy from the Register of Deeds and examine the whole title including the portion known as “Memorandum of Encumbrances”. This is where transactions and claims  are recorded. Here you will see if the property was mortgaged and released, and if there is any adverse claim, or if the property is involved in a court case. You will know that there is a court case if there is a “notice of lis p

endens” recorded in the memorandum of encumbrances.

If there is a mortgage, an adverse claim or a court case, you would be buying the property subject to the outcome of these.

Once convinced that the title is clean, the representative is duly authorized, and all taxes have been settled, you can negotiate the terms of purchase.

I hope you find this helpful. Join our Forum on Family Matters for more free and practical legal tips on how to keep your family, funds and properties secure and in order so you can enjoy peace of mind. Just click this link.

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