The proliferation of fake land titles and fraudulent sales of lands is a major headache to many property buyers. In this blog, let us discuss how to detect fake land titles and how to avoid land scams.
Guidelines by Land Registration Authority
The Land Registration Authority (LRA) offers a guideline in spotting fake titles.
Check if the initials, signatures, technical description, annotation and other component elements appearing on the front and at the back of the original title are exactly the same as that appearing on the owner’s duplicate certificate of title. Any variance is a ground for suspicion;
Every title has a serial number assigned to it. The serial number for the original title is printed in red and the serial number for the owner’s duplicate certificate is in black. The LRA distributes the title forms with serial number in consecutive order to the various RDs. Any certificate of title bearing a serial number which is not among the ones delivered to a particular RD is of doubtful authenticity;
The words Judicial Form appear on the upper left-hand corner of each title. If it is an OCT it shows Judicial Form 108-D and if it is a TCT it shows Judicial Form 109-D. Immediately below the Judicial Form number is the year the form was printed or revised. If, for instance, below the words Judicial Form 109-D, the phrase “(Revised January 1985)” appears, and on the bottom right portion of the title besides the seal it indicates that it was entered on a date in 1980, then this is a ground for suspicion;
The owner’s duplicate copy of the title contains the words “Owner’s Duplicate Certificate” on the left side margin of title. On the lower left corner of the form is affixed a red seal. The seal should not blot or stain when wet;
The last two digits of the title number (usually preceded by either the words Original Certificate of Title or Transfer Certificate of Title) should correspond with the page number of the registration book indicated on the upper right-hand corner of the title. Any variance should be investigated;
The title is printed on security paper which contains security features. The paper is 50% cotton and 50% chemical wood pulp with artificially colored silk fibers. It has a NALTDRA or LRA watermark which can be seen if held against the light. Patently fake titles are usually printed on materials of inferior quality.
Check if the Registrar of Deeds who signed the title was the incumbent Registrar of Deeds at the time the title was issued;
If necessary, trace the history of the title to determine the genuineness of its source. This may entail going back to the mother title, the derivative titles and relevant documents, such as deeds of sale, donation, etc.
Here's a short video from ZipMatch on how to know that the land title is authentic.
THINGS TO DO
You contact the person who sells the property. Most likely, he is not the owner of the property but an agent/broker. Here are the things to do:
(1) Ask the agent/borker if he has the Authority to Sell duly signed by the registered property owner or his attorney-in-fact.
The Professional Regulatory Board for Real Estate Service (PRBRES) issued a memorandum requiring all brokers to secure a written Authority to Negotiate Sale or Authority to Sell from the registered owner of the property prior to selling the property to the market. The broker who has the Authority to Sell can issue an authority to sell to his sales people. If you are not dealing directly to the broker, ask for the authority to sell of the salesperson or agent.
(2) Ask for a photocopy of the certificate of land title.
Once you get a copy of the certificate of land title, visit the nearest Registry of Deeds Office and get a certified true copy of the certificate of land title. I discussed the process here.
Once you get the Certified True Copy of the property, do the following:
Compare it with the Owner’s Duplicate Copy of the Transfer Certificate of Title. Both documents must be identical.
Check the registered name of the property owner.
Check the technical description on the Transfer Certificate of Title.
Check if the property is clean and has no liens, existing mortgage, property ownership claims, or restrictions. Mortgaged property has annotation at the back of the title. If the property has adverse claimant, the same must be annotated in the land title.
Look at the back or subsequent pages of the title to ensure that there are no entries below the words “Memorandum of Encumbrances”. If there are entries, make sure that the encumbrances are duly canceled. If the property has adverse claimants, it should be registered in the land title.
(3) Check the Owner’s Duplicate Certificate and its seal.
The owner’s duplicate copy of the land title has a marking “Owner’s Duplicate Copy” on the left side of the form, and red seal on the lower corner of the form. Original copy does not contain any of these features.
(4) Ascertain the identity of the property owner.
Ask for valid IDs of the property owner. And check if the property owner listed in the land title and the person that you are dealing with are one and the same person. If he is not the property owner, ask for the notarized Special Power of Attorney as evidence that he is the attorney-in-fact of the property owner.
If the seller's parents are the registered property owner, deal with the parents. If one parent is deceased, the surviving parent can only sell his/her share of the property. If both parents are dead, there must be an extrajudicial settlementexecuted by all heirs. Some heirs may want to sell but others are not willing to sell. Even if one heir refused to sell, the heirs must settle the dispute before you buy the property. If possible, talk to all the heirs and verify their agreements to sell the property.
(5) Make sure that the Real Property Tax as been paid.
Ask for the tax clearance and check if the real property taxes are paid. If not, negotiate with the property owner on how to settle the unpaid taxes. You can deduct it from the price of the property. Make sure that you execute a legal instrument for this purpose.
(6) Check the title’s technical description and the actual land area are the same.
Ask permission from the property owner for land survey. If the actual land area is not the same with the technical description, you can negotiate for the reduction of the price. However, some buyers do not really care about slight difference. Should you need some assistance, please contact us at 0920-207-5035