Property Ownership in the Philippines isn’t always a easy topic and can get complex. Below I give you my opinion on how I would handle it.
Property Ownership in the Philippines
You must be a Citizen of the Philippines to own property in your name, Period.
Getting married, investor visas, residency or even getting a Philippines passport does not entitle you to own property in your name, sorry. You must be born here.
That being said, you can still safely invest and control your property LEGALLY.
There are a few procedures you will need to understand first:
This is still a paper society so hard copies of documents are important. To ensure your legal rights you will need to go personally go to the Registrar of Deeds with your documents. They will take your copy of the Property Title, match it with the copy of the Title that is on file at the Land Registry, then place a carbon paper between the two titles and type your agreement on both titles.
Notarized documents are very important. Every signature must be witnessed by a Legal witness known as a Notary Public.
All parties involved in the transaction must be present with suitable government ID, like a passport, at the time of the signing. Their fingerprints must be present beside their signatures, using an ink pad just like the police. Take pictures of everybody signing the documents. Get a video of this if possible.
Law, contracts & business are normally transacted in English here so you take the time to research the laws governing property sales in the Philippines. Go to the Registry office and ask questions. Do not be shy, they speak English. Then you can easily write your own contracts, Deeds of Sale, memorandums of agreement etc.
Do Your Research
It is imperative, just like anywhere else in the world, when preparing to for property ownership in the Philippines to do your due diligence and research. Trust no one and do the research yourself first. Hiring a lawyer is not a quick fix here and ultimately you are libel for any mistakes. Again, everything is written in English so no excuses.
You will need to research the title for any back taxes, liens or claims on the property. Inherited properties require the signatures of all the children, etc.
It is also advisable to get a survey done to be sure the property title matches the property you are being shown. Seriously !
Ok, so this is how you protect yourself:
You can legally Lend Money in the Philippines so create the proper documents and “ lend’ the money to the purchaser to buy the land. Then REGISTER A MORTGAGE ON TITLE that is higher than the value of the property. Make it a Demand Mortgage so that, at any point in time, you can demand payment for the property. The “owner” of the property defaults in your favor, and you can sell or transfer to another name.
This gives you Financial & Legal Control.
Now, Lease property from the “owner”. This is legal also.
Write a Lease Contract on the property for 75 years. Pay 10 pesos per year in advance and get a receipt to prove payment. Then REGISTER THIS LEASE ON TITLE.
You now have Physical Control.
A Foreigner can Legally have property ownership in the Philippines on buildings that are on someone else’s property through a process called TAX DECLARATION. This means you pay the taxes on the building and proves your ownership.
If you want to build on that property or there is already an existing building then create a document from the “owner” of the property saying that you have permission to build or purchase the building from the “owner “. Should you ever vacate the property, the owner must reimburse you for construction costs. Under Article 1678, the lessor upon the termination of the lease shall pay you one-half of the value of the improvements at that time. Should the lessor refuse to reimburse you said amount, you may remove (demolish) the improvements, even though the principal thing may suffer damage thereby.
Take the MORTGAGE & LEASE to be NOTARIZED & REGISTERED ON THE TITLE.
This entire process can be done quickly and easily. Use standard contracts and have them all notarized & registered at the same time.
You now have FULL LEGAL control of your Property.
If you really want property ownership in the Philippines, buy a condo. It is entirely legal to buy, sell & rent these as a foreigner. Renting these can be a good source of income if you have the marketing to keep them occupied. Please remember however it is much, much easier to buy a condo than to sell one so purchase wisely.