>>>>Buying and Selling Real Estate in the Philippines

Buying and Selling Real Estate in the Philippines

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by Ramon L. Miraflores Jr.

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Buying and Selling Real Estate in the Philippines

Buying and Selling Real Estate in the Philippines

by Ramon L. Miraflores Jr.

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Buying and Selling real estate in the Philippines is fascinating and intriguing.

It is fascinating because it is easy to buy or sell in the sense that when both buyer and seller orally agree on the object of the sale and the price, what comes next is to reduce the agreement into writing (Deed of Absolute Sale). Then the parties exchange performances – the seller delivers the title, or any other evidence of ownership, and the buyer delivers the money to the seller. That’s it and then the handshake follows.

If the buyer wants to protect his ownership against the whole world, as he should, he must register the deed of sale with the proper government offi ce, like the register of deeds of the province or city where the property is located upon payment of required fees and taxes. Once registration is done, the whole buying and selling is completed.

It is intriguing because what is seemingly a fast and easy process as described above, in reality it is more alarming than settling. Let me explain what I mean in the succeeding paragraphs.

In a hotel where I stayed for a short vacation, I became acquainted with one of the female food servers in the hotel’s restaurant. One morning, I noticed that she was absent. The following day when she came back to work, I asked her whether she was off-duty the day before. She said she asked for a day off because she showed real properties to a customer or client in the morning of that day. I asked her, so you are a real estate agent and how did it go? She said that it was disappointing because after showing the property in the morning, another person showed the same property to her customer in the afternoon. Her customer got interested in the property and so they went to see the property owner and there they ealed the transaction – her customer bought the property. In short, she lost the sale. Then I asked her if she is a licensed real estate agent. She said no.

I followed up my question with another question, whether or not she had previously talked to the property owner, or requested authority, or at least a permission to sell the property. She said no. Then I asked, “how would you expect the owner to deal with you? You just showed the property at your own volition.” She answered, “well, I expected the owner will entertain my prospect because I brought in an interested buyer – and that is the practice here. Anybody can sell real estate properties and represent himself or herself as an agent and can expect some commissions.”

This is an example of how real estate transactions are done in that part of the country. This may work very well if the unfortunate situation which befell on that hardworking server never happens!

In another instance with a personal connection to me happened when my siblings were trying to sell our inherited property in the province. As directed in the estate settlement papers the titles and/or tax declarations were issued in our names as heirs. Thereafter, we decided to sell the property. My siblings gave me a Special Power of Attorney (SPA) to sell. As it became so inconvenient and hard for me to perform my duties under the SPA because I live abroad, I executed a written waiver of all my rights and interests to the property in favor of all my siblings, but I committed myself to continue helping them in any effort to sell especially on legal and documentation matters. As a matter of course, the rest of my siblings appointed two among them as their attorneys-in-fact, replacing me, to dispose of the property.

Here’s how it happened. A motorboat operator in the northern part of the province who came to know of my sibling’s interest in selling the property found a “hot buyer” of the property. He contacted them in Manila to give him, the operator, an SPA to sell the property for a certain price. The operator is not a licensed real estate agent or a broker. So far so good at this point!

My siblings contacted me for assistance. They emailed me the SPA draft for review before they would sign it. I went over the draft and noticed that the list of the sellers’ names is an exact replication of the names appearing in the titles and/or tax declarations which did not seem right. So I made some changes in the enumeration. I deleted my name as a co-seller citing my waiver of rights and interests as the reason for it. I also deleted a deceased brother’s name and changed it to all his heirs’ names as part of the party sellers.

I also included some normal business and legal protection clauses.

To my mind, the change was important because with my name in the document as one of the sellers it will create some problems for me with the BIR on the matter of capital gains taxes and/or other charges, let alone Philippine and U.S. income tax liabilities, and probably many more. And the most signifi cant reason is that I was no longer a co-owner of the property.

The change in my deceased brother’s part was necessary because upon his death, his heirs became co-owners of the property and therefore the proper party co-sellers. With my deceased brother’s name on it, is obvious that no one can sign the SPA.

Another barrier to the documentation was that two of our other siblings, and the surviving spouse of my brother, all live in the U.S. It will take time and effort, let alone expensive, for them to execute the power of attorney and have it authenticated at the Philippine Consulate. The “hot buyer” will have to wait until all of these are done and it may be too late.So I advised my siblings not to sign the document unless it incorporates my amendments. They presented my suggested amendments to the “agent” for inclusion in the draft and when it was emailed back to me but it did not contain the amendments and the other important business and legal protections that I wanted to be inserted. So I returned the draft and I told them to ask the drafter to integrate all my amendments, otherwise no deal. The instrument came back to me in a garbled language and form. I asked my siblings whether it was drafted by an attorney. They said yes, but it did not appear to have been written by a knowledgeable document preparer. I got tired of the document going back and forth without any progress. So I told my siblings to freeze the deal.

Here again is a so-called “agent” trying to make things happen without a government license to sell real estate in the Philippines, and even failed and neglected, or probably even avoided, to get help from reputable or experienced real estate and legal professionals where such help is needed to consummate a deal. Result? He failed. Very discouraging!

However under Republic Act 9646, enacted on June 29, 2009, things could change and go better for the protection and benefi t of the buying and selling public, the industry, the brokers and the agents. I will show these changes in this book.

ISBN978-971-23-6066-4
Author(s)Ramon L. Miraflores Jr.
Copyright2011
CoverPB
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