A guide to buying properties in the Philippines Part 2
Purchasing or acquiring properties in the Philippines, as with any country, is a long and tedious process primarily due to the technical and legal aspect of it. There are number of specific legal forms and contracts that are required for documentation, rightful ownership, and security purposes. Some of these necessary documents vary depending on the type of buyer and its background (corporate account, individuals, foreigners, etc.) which can be quite confusing especially if the investor is a novice in real estate buying.
Brokers or real estate agents will typically inform buyers beforehand of all the legal documents. If additional papers are needed to support the process of acquisition, buyers may always hire a lawyer or seek legal counsel. Thus, novice buyers need not worry at all. However, since some documents may be harder to obtain, here is a checklist of all legal and documentary requirements for buyers.
Legal and documentary requirements for the purchase of real estate in the Philippines:
1. Photocopy of residence certificate or passport.
2. Taxpayer’s Identification Number (TIN).
3. Photocopy of valid ID with picture & signature of buyer(s).
4. Two (2) Original kind of proofs of billing / billing statements (should show same address as that appearing on the signed Reservation Application)
5. For married individuals, photocopy of marriage certificate.
Note: For married individuals, both spouses need to submit requirements 1, 2, & 3.
For Corporate Accounts
1. Photocopy of By-Laws of the Company.
2. Photocopy of Articles of Incorporation.
3. Notarized Board Resolution of the Company or Secretary’s Certificate stating the ff:
* The date and place of the board meeting
* That a quorum was present in approving the board resolution
* That the board authorized the purchase of the property
* The designated signatory for the sale documents
* The designated playing representatives for corporate golf shares
4. Residence Certificate of the Company and appointed representatives).
5. TIN of the Company and appointed representatives).
6. Two (2) Original kind of proofs of billing / billing statements of the corporation (not the representative).
For Balikbayans (Returnees)
1. Photocopy of passport.
2. Photocopy of valid ID with picture & signature of buyer’s).
3. Two (2) Original kind of proofs of billing/billing statement (should show same address as that appearing on the signed Reservation Application)
4. For married individuals, photocopy of marriage certificate. Note: For married individuals, both spouses need to submit requirements 1 & 2.
5. Affidavit as required by law and is necessary for registration of the lot in his/her name. Affidavit should indicate that buyer was a natural-born Filipino who has lost said citizenship or otherwise has reacquired the same.
Affidavit as required by law and is necessary for registration of the lot in his/her name. Affidavit should indicate that buyer was a natural-born Filipino who has lost said citizenship or otherwise has reacquired the same.
For Capital or Paraphernalia Properties
1. Same requirements as that of INDIVIDUAL buyers.
2. Affidavit from non-buying spouse confirming that the fund used by the buying spouse is indeed exclusive funds.
Note: The non-buying spouse is still required to sign the sale documents.
Legal and documentary requirements related to the purchase of real estate in the Philippines:
A Reservation Application/ Agreement (RA) is a document executed by the buyer, declaring his intent to purchase a specific Unit/House and Lot, together with his payment of the Reservation Fee, and subject to the approval by RLC.
A Contract to sell or CTS is a document where the developer promises to transfer to the buyer the ownership and physical possession of the property upon the buyer’s fulfillment of the terms of the sale, and the buyer obliges himself to pay the purchase price and comply with the other terms and conditions of the sale. Once the property is paid in full, a Deed of Sale (DOS) is executed by the developer and buyer.
A Deed of Sale or DOS is a document executed when buyer pay the developer in cash (whether using his or her own funds or through funds barrowed from bank or financing institutions). In the DOS, the developer transfer ownership of the property to the buyer, subject to the compliance by the buyer with the Deed of Restrictions or Master Deed with Declaration of Restrictions governing the project and the other terms and conditions of the sale.
“Under Philippine law, the purchase of real property must be in a public instrument in order for the purchase to be registered with the Register of Deeds. Thus, the Contract to Sell and Deed of Sale shall only be considered public instruments in the Philippines if attested by a notary public and, if executed outside the Philippines, authenticated by the Philippine consul as to the due execution of the relevant document or instrument in the country where such document or instrument was executed.
Notarization is the process by which the person executing the document personally appears in person before a Philippine notary public and represents to such notary public that the signature on the instrument or document was voluntarily affixed by him for the purposes stated in the instrument or document, declares that he has executed the instrument or document as his free and voluntary act and deed and, if he acts in a particular representative capacity, that he has the authority to sign in that capacity. Consularization is the process by which the consular agent or officer in the foreign service of the Philippines stationed in the country where the record is kept authenticates a document by the seal of its office. A document is deemed consularized when executed before and notarized by a foreign notary, and such notarization is authenticated by the Philippine consular agent or officer, or when directly authenticated by such Philippine consular agent or officer, in either case, sealed by the seal of the office of the Philippine consul. A listing of consular offices may be found in the website of the Philippine Department of Foreign Affairs (DFA)
Execution of documents means the signing and accomplishment of documents under the proper, legally prescribed conditions, such as before witnesses if required.”
A Transfer of Certificate of Title (TCT) is a proof of ownership of a subdivision lot issued by the Register of Deeds of the relevant city or municipality where the subdivision project is located.
A Condominium Certificate of Title (CCT) is proof of ownership of a condominium unit issued by the Register of Deeds of the relevant city or municipality where the condominium project is located.
Ownership of a single-detached house or townhouse constructed on a subdivision lot is evidenced by a Tax Declaration (TD) issued by the City Assessor of the city or municipality where the project is located. Subdivision lots and condominium units are also covered by a TD. The TD shows the assessed value of the property, which is used as basis for charging the real property tax (RPT) imposable on the property.