Note: This article covers acquisition of titled lands. Acquisition of untitled lands is covered by another article.
Titled lands are lands covered by a Torrens title. A Torrens title is a document issued by the Register of Deeds (ROD). It is identified either as an Original Certificate of Title (OCT) or a Transfer Certificate of Title (TCT).
There is a difference between a Torrens title and the title to the property itself. A person’s title is their legal right to own the property. The Torrens title is merely proof of that title.
Let us say Juan buys a piece of land from Maria. The Deed of Sale was executed on June 1, 2024. The Torrens title in Juan’s name was issued on August 15, 2024. When did Juan acquire title to the property? Answer: June 1, 2024.
Juan’s title was transmitted to him via the Deed of Sale, not via the Torrens title. The Torrens title was issued merely to confirm that the title is now held by Juan.
Below are the things you need to remember when buying a piece of land.
Buy the land from its real owner.
You have to buy the land from its true owner. If you buy the property from an impostor, you will never become its owner. Since an impostor has no title to the property, he cannot transfer title to you. It means that even if you are issued a Torrens title in your name, the land can be taken from you by the person who holds the title.
- Example. According to the Torrens title, the owner of the property is Maria. Juan buys it from the woman who claims to be Maria, but who in truth is really Rina pretending to be Maria. As a result of the transaction, a Torrens title was issued in Juan’s name. Can the real Maria cancel Juan’s Torrens title and recover the land? Answer: Yes.
How to Verify. Do the following:
- Ask the seller to give you a copy of their ID. It should be a laminated government ID, not an ID from a private institution. Make sure the ID is not falsified.
- Government IDs can be falsified. If in doubt, visit the government office that issued the ID and check with their records.
- Ask the seller for a photocopy of the Torrens title. They should be able to give you one. If they cannot, it is a red flag. It means they do not hold the owner’s duplicate of the Torrens title, which probably means that they do not have the authority to sell the property.
- Visit the ROD that issued the Torrens title. Bring the photocopy of the Torrens title to the Register of Deeds (ROD) of the city or province where the land is located. There are no RODs for municipalities, so if the land is located in a town, go to the ROD of the province that has jurisdiction over the town.
- Ask for a Certified True Copy (CTC) of the Torrens title. There are at least two copies of each Torrens title. One copy is given to the owner as the Owner’s Duplicate. The other copy remains in the vault of the ROD. Get a CTC of the copy in the ROD’s vault.
- Check the seller’s ID against the name appearing in the CTC. Check the name of the seller as appearing in his ID against the name of the owner as appearing in the CTC. Be very keen with the spelling, second and third names, prefixes and suffixes, and other forms of variance. Treat each different name as a different person.
- Example: Teresa dela Cruz applied for a bank loan. As collateral, she used a property registered in the name of Maria Teresa dela Cruz. It turned out that Maria Teresa was the grandmother who did not authorize the use of her property for her granddaughter’s loan.
What to Do. If the name of the seller differs in any way from the owner’s name, ask for explanation. If the seller insists that the two names pertain to the same person, ask for proof.
Be aware of defects and encumbrances.
Just because the Torrens title is in the name of one person does not always mean they are its owner.
- Example. Julio bought a property for his illegitimate son, Tony. As Tony was a minor, he placed the Torrens title in the name of Tony’s mother, Patricia. The true owner of the property is Tony, not Patricia.
And a person’s title to the property is sometimes burdened by encumbrances.
- Example. Carmel borrowed money from the bank and used her land as collateral. The mortgage that Carmel executed in the bank’s favor is an encumbrance on her title to the land.
The person who sold the property to you can only transfer whatever title they have. If it is defective, you will get a defective title. If the property is encumbered, it will continue to be encumbered after it is sold to you.
How to Check. Defects and encumbrances will only affect you if they are annotated at the back of the Torrens title. To check, read all pages of the CTC that you got from the ROD. Be wary of any mention of deeds and contracts, and anything else that is annotated there. If unsure about what the annotations mean, bring the CTC to a lawyer.
Check for unpaid taxes and dues.
Here are some taxes and dues that you need to be aware of:
- Estate Tax. If the property is still in the name of a dead parent or grandparent, check for unpaid estate taxes. They can accumulate interests and surcharges, and the property cannot be transferred to you unless all amounts are paid.
- Real Property Tax. Unlike estate tax which is collected by the national government, real property tax (RPT) is collected by the local government. Check for unpaid RPT with the treasurer’s office of the town, city or province where the land is located.
- Association Dues. If the land is located within a subdivision, it will accumulate association dues. Check with the homeowners’ association office for any unpaid dues that may have accumulated.
Who will pay for these amounts? This is a matter that you will need to discuss with the seller before you execute the deed of sale.
Check for power of attorney.
The Deed of Sale must be signed by the owner of the property. If it will be signed by a person other than the one whose name appears on the Torrens title, the representative must have a Special Power of Attorney (SPA) from the owner.
Form of SPA. The SPA should be notarized. And if the owner is not in the Philippines, it CANNOT be notarized in the Philippines. It must be notarized or apostilled in the country where the owner is found.
Risk. Even if the SPA is notarized or apostilled, there is always a risk that it is falsified. This does not mean you should never use an SPA. It simply means that a risk exists, and you have to be aware.
Minimize the Risk. Discuss the sale with the true owner even if you know that the sale will be signed by a representative. If negotiation is handled by the representative, ask to at least be introduced to the owner. When the SPA arrives, ask that you also be given a copy of the owner’s ID showing his signature.
Consider hiring a lawyer.
Some people think that because they know how to draft a deed of sale, and that the form is in fact available online, that they no longer need to hire a lawyer. Wrong. Legal transactions have implications and consequences that laymen often miss. You need a lawyer to tell you of potential risks and weaknesses. Have a lawyer review your document, and possibly conduct due diligence, before you decide to pay. Waiting for disaster to happen before hiring a lawyer can prove to be more costly.
Buying real property is a big commitment, so making sure of certain things is key. Make sure you are buying from the real owner. Check the title for defects and encumbrances. Check for unpaid taxes and dues. And makes sure the person who signs the deed is properly authorized. In all cases, it is always wise to consult a lawyer to guide you through the process. Stay informed and protect yourself from risks!
