Buying property is exciting, especially when the property will be your home. For most, it is the biggest expense they will make in their lifetime. There are, however, countless cases of property purchases marred with disputes and saddled with litigation cases.
Instead of enjoying planning and designing their dream home, buyers end up wasting time and resources in resolving problems that can easily be avoided. These simple diligence measures will help you steer clear of stresses of property acquisition.
1. Ask For the Right Documents From the Seller
At the outset, obtain the appropriate property documents from the seller so you can check the property thoroughly. These include the Title, Tax Declaration, and Real Property Tax Receipts.
Lands are generally covered by an Original or Transfer Certificate of Title, which is issued by the Registry of Deeds. It is important to examine the title as it is the best evidence of ownership over a piece of land.
Another type of document is the Tax Declaration, which is issued by the Assessor’s Office of the relevant local government unit. This is issued when property is registered with the local government unit for the purposes of real property taxation. If the property you are acquiring as a building or improvement, there will be separate Tax Declarations for the land and the building.
Finally, it is also prudent to request for the latest Real Property Tax Receipts from the seller showing that the said taxes are timely settled and fully paid. It is worth noting that failure to timely pay real property taxes results in the imposition of penalties, hinders the title transfer process, and worse, may lead to the levying of the property and its sale in a public auction.
2. Deal with the Registered Owner
Once you have the title, have a look at the registered owner stated on the front page and make sure you are dealing with the said owner. If the owner is an individual, request for a government-issued ID such as a driver’s license, or passport to confirm the person’s identity.
A confirmation of whether the registered owner is married is extremely important, as the sale of real property generally requires written consent of the spouse, without which the sale is considered void. A common mistake is foregoing the spousal consent when the title indicates that the registered owner is single, as what would govern is the current marital status of the registered owner.
3. Ensure That All Documents are Authentic and Clean
It is always a good idea to perform an independent check on the authenticity of property documents supplied to you by the owner or seller, as these documents may sometimes be incomplete, no longer current, or even fake. Many problems can be avoided by obtaining certified true copies of the title from the Registry of Deeds, and certified true copies of the Tax Declarations for the land and building from the Assessor’s Office in the appropriate local government unit.
Aside from examining the essential details such as the title number, registered owner, and location on the first page of the title, it is imperative to look at the succeeding pages for any annotations or entries that may come after the technical description portion. Some annotations can be legal woes waiting to happen. Typical annotations include:
A. A real estate mortgage, which means that the property was used as a collateral for a loan;
B. A notice of lis pendens, which is a notice that there is a pending litigation case involving the property and;
C. An adverse claim that means that another party has a claim over the property, which is contrary to the registered owner’s rights.
If the title has any annotation, the cancellation of such has to be arranged with the property owner.
4. Confirm the Link Between the Ownership Documents and the Property
After you’ve thoroughly checked the ownership documents, ensure that these specifically pertain to the property you plan to purchase. While the title and tax declarations provide technical descriptions of the property, you won’t be able to ascertain the exact location or address of the property from these documents alone, unless you’re a geodetic engineer. For subdivision lots, obtain a subdivision plan to determine the exact location of the property.
Hiring a geodetic engineer for the preparation of a lot plan is highly recommended, as they can help determine the exact boundaries of the property, flag any encroachment by neighboring properties, and confirm the correctness of the technical description stated in the title.
5. Documentation of Sale
Finally, the terms and conditions for the sale of the property should be completely documented. A Deed of Absolute Sale is executed when the purchase price for the property is fully paid and there are no other deliverables from both the buyer and seller. This document, once signed and notarized, effectively transfers ownership over the property in favor of the buyer.
If the purchase price shall be paid in installment or if there are other actions to be performed by either party prior to the sale, a Contract to Sell may be executed prior to the execution of a Deed of Absolute Sale. A clear and complete agreement should be signed before any payment is made to the seller.
Keep these in mind to ensure an easy and stress-free property purchase, so you can enjoy your dream home without the worries.
Header image by John Ocampo
