A prudent buyer’s guide to buying real estate

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The pandemic has taught a lot about the practicality of investing in properties that increase in value over time, i.e. real estate properties. To prevent, or at the very least mitigate, any potential disputes that may arise, here are some of the tips a potential buyer may have to consider before and after buying a property.

VERIFY THE PROPERTY’S CERTIFICATE OF TITLE.
It is prudent for a buyer to verify the authenticity and existence of the Certificate of Title (CoT) with the Registry of Deeds (RoD) where the property is located. In this case, the buyer will be informed if the property is subject to any encumbrances as may be deduced from the notations in the CoT, for example, an immovable mortgage or a notice of lis pendens.

A buyer should be careful if the property is subject to a registered immovable mortgage. Indeed, a mortgage is a real right, which follows the property, even after subsequent transfers by the mortgagor. The mortgage having been registered, the purchaser or the transferee is necessarily required to recognize and respect the charge. Therefore, the mortgage on the property can still be seized despite the transfer. (Garcia v. Villar, GR n° 158891, June 27, 2012)

A buyer may also encounter a notice of lis pendens annotation in the CoT. Lis pendens is a Latin term that literally means an ongoing trial. Notice of lis pendens is filed for the purpose of warning all persons that the title to certain goods is in dispute and that if they purchase the same, they may be bound by an unfavorable judgment. The notice is intended to be a warning to the world that whoever buys the property does so at their own risk. This is necessary to protect innocent third parties from involvement in any future ownership disputes. (Lim v. Vera Cruz, GR n° 143646, April 4, 2001)

DETERMINE SELLER’S AUTHORITY TO ELIMINATE.
The CoT assessment will allow the buyer to confirm whether the seller is the registered owner of the property. If the seller is someone other than the registered owner, he must be able to demonstrate that he is duly authorized to transfer the said property. Indeed, “a person can only sell what he owns or is authorized to sell; the buyer cannot therefore acquire more than what the seller can legally sell” by virtue of the principle that no one can give away what he does not possess. (Nool v. Court of Appeal, GR n° 116635, July 24, 1997)

Consequently, the buyer may require the seller, other than the registered owner, to present his power of attorney, which may be materialized by a special power of attorney.

Additionally, even if the seller is the registered owner of the property, marital consent is also required if he is married. Articles 96 and 124 of the Family Code both require the consent of the other spouse or, failing that, of a judicial authority, to encumber or validly dispose of property belonging to the absolute community or to the conjugal society. spouses. The absence of marital consent renders the sale void.

CONDUCT AN EYE INSPECTION OF THE PROPERTY.
Conducting an eye inspection is essential to protect the buyer. Although a buyer need not go beyond the cost of owning the property, it is also a book of horn principle in law that where circumstances exist which would put a party in custody and would induce him to investigate or inspect the property in question, such as the presence of occupants or tenants, the buyer is expected to inquire first of the status or nature of possession of the occupants, that is that is, whether or not the occupants own the land in the owner concept. (Philippine National Bank v. Heirs of Militar, GR No. 164801, June 30, 2006) Therefore, the buyer is fully informed if the property may be subject to possible litigation in the future.

REGISTER THE SALE OF THE PROPERTY IMMEDIATELY.
After exercising the above precautionary measures and once the parties have signed a deed of absolute sale passing ownership to the buyer, the buyer must immediately register it with the Rod. This is to protect the buyer in case the same good is sold to other people, i.e. a double sale. The principle of the first arrived, the strongest in right gains in importance in the event of double sale of a property. When the thing sold twice is an immovable, whoever acquires it and registers it first in the property register, both done in good faith, is deemed to be the owner. (Rosaroso v. Soria, GR n° 194846, June 19, 2013) not

The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and is not offered as and does not constitute legal advice or legal advice.

Zyra G. Montefolca is a partner in the Davao branch of the law firms Angara Abello Concepcion Regala & Cruz (ACCRALAW).

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