In the Philippines, real estate and real estate transactions are regulated to a comprehensive set of rules and regulations. Local governments also control property ownership and sale through a variety of locality-specific regulations.

Regardless of the size of the land, property transfers are usually a huge issue. Along with the lack of a uniform set of rules and regulations governing transactions in the Philippines, the legal structure has made negotiating the real estate market tough and hard. Because of the high stakes involved, adequate documentation must be provided to safeguard the rights of both the buyer and the seller.

Legal Documents Required in Real Estate

Reservation Letter

The Reservation Letter includes the expiration date of the property reservation and the validity of the paid amount. Once signed, this document indicates that the seller agrees to the conditions and that the estate can’t be offered to anybody else and must be removed from the market. Typically, the deposit and supporting documentation must be presented within 30 days of the reservation price being received. If you do not do so, the property will become available to other possible buyers.

Letter of Intent

This is a document filed by the buyer to signify his or her desire to purchase the house and must include crucial transaction records such as the price and the cost of the first deposit. A Letter of Intent should be kept short and should include a realistic timeframe for the seller to sign and agree to the conditions. This must also include a time frame for the buyer to examine the property to determine if it is suitable for purchase, as well as the manner of payment, amongst many other things.

Letter of Guarantee

This document is issued by a banking institution on behalf of the buyer to notify the seller that the buyer has obtained financing for the property acquisition. This agreement ensures that the bank will bear any fees incurred if the buyer defaults.

Deed of Absolute Sale

This documentation must be signed by both the seller and buyer, which states that the seller has totally ceded all legitimate interests and rights in the property and has passed them to the buyer.

The Deed of Absolute Sale, like the Contract to Sell, must be notarized. Once the buyer has paid the complete purchase value of the home, documentation stamp taxes, registration fees, and other registration-related charges, a Deed of Absolute Sale must be issued.

Certificate Title

A Transfer Certificate of Title is documentation of ownership of a subdivision lot issued by the appropriate city or municipality’s Registry of Deeds. The Certificate Title must then be issued in duplicate, with one copy going to the new owner and the other remaining at the Registry of Deeds.

Tax Declaration

This is the income data sent to the tax administration once a year in order for them to assess and track how much tax is paid.

With all the transactions completed, the purchaser must now seek a Tax Declaration from the Assessor’s office, as well as submit the new title and a photo of the property for approval. Once acquired, all tax liabilities will be moved to the new owner’s name.

Real Estate Laws You Should Know

The benefits of having an expert real estate attorney that can provide you with legal guidance can’t be denied. Nothing, however, tops the concept of being educated and having the appropriate information about your home and landholdings.

Owning a Land

The reserve of the right to own private land to Philippine residents and nationalities is established in the Philippine Constitution of 1987. Foreign nationals and foreign corporations are forbidden from holding private.

Real Property Taxation

As a property owner, you must also be aware of the appropriate taxes that must be paid. This law specifies how real estate should be evaluated and appraised for tax purposes. It should only be appraised at its current and fair market worth, it should be consistent across all locations, and the property should be assessed based on its usage.