Why Real Estate Matters

Most of the time, issues with real estate documents arise from improper ownership transfers, often leading to protracted legal proceedings. This seemingly minor mistake is often the main cause of prolonged court battles in numerous cases.

When the property title is not appropriately transferred to a new owner, it often results in future conflicting claims. Resolving such disputes, especially after an extended period, demands significant resources, encompassing financial investments, time, and energy.
Situations you don’t want to get into

Presented below are problematic real estate scenarios witnessed among our past and current clients. These cases highlight the risks involved in real estate transactions when proper procedures are not followed. Understanding these situations can help you avoid legal complications and ensure smooth real estate title transfers.

One common issue arises when a real estate property is sold, but the buyer fails to transfer the title to their name. In one case, a deed of absolute sale was executed, but the buyer neglected to process the title transfer with the Registry of Deeds.

Years later, the buyer passed away, and their children inherited the property—still without completing the real estate title transfer. Meanwhile, the original seller also passed away, and during the settlement of his estate, the property was included in his real estate assets. A new title was issued under one of the seller’s children.

This resulted in conflicting ownership claims between the seller’s heirs and the buyer’s heirs. This case emphasizes the importance of promptly transferring real estate titles to avoid ownership disputes and legal complications.

Another major issue in real estate transactions involves fraudulent title transfers due to incomplete documentation. In one case, an individual obtained a Transfer Certificate of Title (TCT) through an insider contact at a government agency. However, the supporting documents required for the transfer were missing.

Later, a new buyer purchased the real estate property, believing the title was legitimate. When they attempted to transfer the title to their name, they discovered that crucial legal documents from the previous transaction were missing and untraceable.

This resulted in a legal impasse, preventing the completion of the real estate title transfer. This case highlights the importance of conducting independent real estate title verification before purchasing a property. Buyers must always ensure that all real estate documents are complete and legally processed.

A particularly challenging real estate issue can occur when a corporation sells a property, but no steps are taken to finalize the title transfer.

In one case, a corporate seller completed a deed of sale, and the buyer fully paid for the property. However, the deed of sale was neither registered nor notarized, a costly oversight.

Several years later, the corporation dissolved, and the buyer attempted to transfer the real estate title. Unfortunately, because the corporation no longer existed, there was no one authorized to sign the necessary legal documents.

This made it nearly impossible to complete the title transfer, leaving the buyer in a difficult legal situation. This case underscores the importance of executing proper real estate title transfers immediately after purchase.

In corporate real estate transactions, buyers should verify that the seller is in good legal standing and ensure that all documents are notarized and properly filed. This step is crucial in preventing ownership issues in the future.

These cases illustrate the risks involved in real estate transactions and the importance of proper title transfers. Whether you are purchasing residential real estate, commercial property, or land, ensuring a legally transferred and registered real estate title is critical.

Delays in title transfers can lead to disputes, financial losses, and legal challenges. Registering the deed of sale with the Registry of Deeds immediately after purchase helps protect your ownership rights.

To avoid real estate legal disputes, conduct independent title verification, ensure documents are properly notarized, and confirm the seller’s legal standing. These best practices help you navigate the real estate market with confidence.

By following these steps, you can secure your real estate investments, protect your ownership rights, and avoid costly legal battles.

 

THE PROPER AND COMPLETE PROCESS

I. Preparation

1. Prepare the necessary documents for the execution of the deed of sale:

• Deed of Absolute Sale (or other variants, as appropriate in your case)
• Acknowledgment of Payment (from buyer to seller)
• Affidavit of non-tenancy and/or no pending case (as appropriate)
• Affidavit of land holdings by the buyer (as applicable)

2. Signing of documents.

Both parties should sign the following:

1. Deed of Absolute Sale:
2. acknowledgment of receipt of payment by the buyer to the seller

The seller should sign the following:

• Affidavit of non-tenancy and/or no pending case

The buyer should sign the following:

• Affidavit of land holdings

3. Secure the following documents to be needed later:

• 2 government-issued IDs of both the seller and the buyer
• Tax Identification Number (TIN) of each party
• Original Owner’s duplicate of Title
• Marriage contract, if applicable
• Previous Certificate Authorizing Registration (CAR)
• Tax declaration
• Receipt(s) of Real Property Tax (RPT) payments
• Special Power of Attorney (SPA), if dealing with an attorney-in-fact (an authorized representative),

4. Notarization of documents: all documents signed by the parties should be notarized.

II. Secure payment computations and certified copies of the following documents:.

1. Bureau of Internal Revenue (BIR):

• Secure computation of fees for Documentary Stamp Tax (DST) and for
• Capital Gains Tax (CGT)

Notes: Go to ONETT for DST and CGT computation; ask for the specific payee to be named in the manager’s check (if paying in check); and take note of their accredited banks so you’ll know where to submit the payments.

2. City (or Municipal) Treasurer’s Office:

• Secure computation of Transfer Tax
• Secure Tax Clearance

Notes: Ask for computation of the transfer tax; ask for the specific payee to be named in the manager’s check for payment (if paying in check).

3. City (or Municipal) Assessor’s Office:

• Secure Certified True Copy of the Tax Declaration

4. Registry of Deeds:

• Secure computation of the registration fee
• Secure a certified Copy of the existing Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT), as appropriate

Notes: Ask for computation of the registration fee; ask for the specific payee to be named in the manager’s check for payment (if paying in check).

III. Preparation of payments.

Now that you know the exact fees you must pay, you should prepare these amounts. These fees are preferably paid using the manager’s checks. But you can also pay them in cash.
Take note of the following deadlines for the settlement of these fees:.
1. BIR:

• CGT: 30 days after the date of notarization of the Deed of Sale
• DST: 5th day of the following month from notarization of the Deed of Sale

2. City Treasurer’s Office:

• Transfer Tax: 60 days from the date of execution of the Deed of Sale or the Acknowledgment of Payment

3. Registry of Deeds:
Registration Fee: 1 year from the date of release of CAR from BIR + 6 months extension if approved by BIR upon due submission of the request

IV. Process payments to BIR.

1. Present the following requirements to ONETT to obtain the official computation sheet:

• Certified True Copy of the Title (TCT or CCT)
• Certified True Copy of the Tax Declaration
• IDs of the buyer(s) and the seller(s)
• TIN of the buyer(s) and the seller(s)
•  Filled out online DST & CGT BIR Forms
• Deed of Sale
• Acknowledgment of Payment

2. Pay the DST & CGT at the Accredited Agent Bank (AAB) of the BIR-RDO (Revenue District Office)

• Fill out the bank form for the BIR payments
• Present the verified DST & CGT BIR returns together with the MCs (or cash payment) and the bank form
• Don’t forget the transaction slip!

3. Then go back to BIR to file the above-listed documents together with the transaction slip for the processing of the new CAR

V. Process payment to the city treasurer.

1. Present the following requirements to the officer in charge (OIC):

• Deed of Sale
• IDs of the buyer(s) and the Seller(s)

2. Submit the manager’s check or cash payment to the designated cashier.
3. Bring the receipt to the OIC together with the above-mentioned documents to process the transfer tax clearance.

VI. Process payment to the Registry of Deeds.

1. Fill out an application form for the transfer of title and present the following requirements to the Examiner of the Day:

• CAR from the BIR
• Deed of sale
• Transfer Tax Clearance

2. Submit the manager’s check or cash payment to the cashier for registration. Then, attach the receipt to the application form and the documents stated above.

VII. Follow up with the Registry of Deeds.

1. Contact the assigned examiner to check on the progress of your application for a new title.
2. Once the new title has been released, file a copy with the City Assessor’s Office.

VIII. New Tax Declaration.

1. Finally, when the new title under the buyer’s name has already been released, present it to the assessor’s office for the issuance of the new tax declaration.
2. Congratulations! You’ve now completed the proper transfer of title.

Conclusion of on Why Real Estate Matters

Navigating this process demands meticulous attention to detail and a commitment to accuracy. Patience is a virtue, as it involves substantial waiting periods and, at times, enduring long queues.

Even minor errors along the way can lead to significant delays and potentially serious complications in the future. Therefore, exercise the utmost care to save yourself from unnecessary troubles. When uncertainty arises, seek clarification from relevant authorities rather than relying on general advice.

Additionally, if you ever doubt whether an original or a copy of a document is required, err on the side of caution and bring the original. Copies can be made on-site if only duplicates are necessary.

For even more information, consider checking this out: Click Here.

 

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