When you buy a property (residential lot, house-and-lot, or condo unit), what are the important things to consider? Actually, there are only two documents: (1) the License to Sell when you buy a property from the developer/dealer; and (2) the Transfer Certificate of Title when you buy a property from the private individual.
PROJECT SELLING
Buying a property from the developer
License to Sell — Check the License to Sell of the subdivision or condominium project. When a project has License to Sell, you don't need to verify the land title as it is presumed that the developer complies all the legal requirements including the land title of the property to be developed.
Certificate of Registration — The developer/owner/dealer of the property registered the subdivision project in the HLURB/DHSUD.
When you have the License to Sell, you don't really need to see the certificate of registration.
However, there are unscrupulous developers who will show you only the certificate of registration as proof that the project is registered in the HLURB/DHSUD.
The ownwer or dealer (developer) who was issued a registration certificate is not yet authorized to sell any subdivision lot or condominium unit in the registered project.
Selling of subdivision lot or condo unit is prohibited without the requisite license to sell.
So, ask for the License to Sell (LTS), which is issued in the specific subdivision or condominium project. If the subdivision has phases of development, each phase must have a separate LTS. Look for the LTS where your house-and-lot is located. If the condominium projects has towers, look for the LTS of the tower where you buy your unit.
Brokers and salespersons — are expected to know the details of the project. Even if you don't ask for the LTS, a broker or a salesperson should give you the LTS and explain its importance. As much as possible, deal only with licensed broker and registered salesperson.
Contract to Sell — is a contract document you entered with the developer/seller in the sale of the property. The seller promises to sell the property to the buyer and the buyer promises to buy the property under certain conditions. There is no transfer of ownership until the stipulated conditions are fulfilled. On the part of the developer/seller, the construction of the house-and-lot or condo unit. On the part of the buyer, full payment of the home equity or down payment, letter of guarantee from the loan provider, and payments of the "miscellaneous fees". The contract to sell was submitted and approved by HLURB/DHSUD to be used in the sell of the house-and-lot or condo unit.
BROKERAGE
Buying a property from private individuals
Unlike the developer, a private individual is not required to get a License to Sell when he sells his property, even if he bought the property from the developer and sell the same to another party.
The process is tedious and more complicated than the buying a property from the developer. You will only deal with one document, the certificate of title but the verification process needs patience. Other documents will follow.
Transfer Certificate of Title — is a only the best proof of ownership of a piece of land but cannot always be considered as conclusive evidence of ownership. The Torrens system of land registration merely confirms ownership and does not create it. Thus, the lawful owner can dispute the certificate of title. Nonetheless, unless disputed in court, the registered owner in the TCT is deemed the owner of the property.
Make sure that the CTC is authentic or genuine. Ask a certified true copy from the Register of Deed. I discussed the process here.
Compare the Owner's CTC to the certified true copy. These two must be identical.
Is the seller the same as the registered owner in the title? Ask for valid IDs.
Is it a clean title? If there is no emcumbrances (e.g. mortgage, liens, etc.) at the back of the title, then it is a clean title.
Visit the property. Hire a surveyor to ensure that the property you are buying matches the description in the title.
Make sure that the real estate taxes are paid.
I have written a more detailed discussion about buying a property from private seller . You may be interested to read it.
Again, this is just a general view and some cases are more complicated like buying a land with adverse claimants, a property not yet subdivided and one of the heir refused to sign the extra-judicial settlement, etc. Always consult a lawyer when you buy a property.
For more information about the topic or any inquiries about buying a property in Cebu, please contact us at 0908-301-7398 or send us an email at cebuhousefinder@yahoo.com. We help home buyers to find their dream house at the best price and location… for free!