Property Ownership in the Philippines isn’t always an easy topic and can get complex. With so many beautiful places in the Philippines, it’s no wonder I am oftentimes asked by many guests and soon-to-be permanent ex-pats. What the requirements are for owning property here in the Philippine?
With a cheap cost of living in the Philippines for the most part, I’m not surprised by this in the least bit. 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, here in the Philippines Period.
Getting married, investor visas, residency or even getting a Philippines passport does not entitle you to own property in your name no if’s and’s or but’s about it, sorry. You must be born here.
That being said, you can still safely invest and control your property LEGALLY here in the Philippines. I will explain just how to do that as you continue to read on.
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 have no matter what it is pertaining to. In order to ensure your legal rights. You will need to 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
Notarized documents are very important here. This is the only way of ensuring your investment is properly protected and valid for that matter. Every signature must be witnessed by a Legal witness known as a Notary Public and there is no exception to this rule.
All parties involved in the transaction must be present with a 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 use for fingerprinting. Take pictures of everybody signing the documents and it is also best to get a video of this whenever possible. Remember it is always best to have as much evidence of this process as possible for your records. Just in case someone down the road denies ever signing this or that. Believe me, you don’t want to know why I know this, and you certainly don’t want to find out the hard way either.
Law, contracts & business are normally transacted in English. It is in your best interest to take the time and research the laws governing property sales here in the Philippines whenever possible. Go to the Registry office and ask questions when you can. The more you know and understand about your particular scenario the better off you will be in the end. Do not be shy, they speak English in this country so don’t be afraid of getting out there to protect your investment and property. 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 for property ownership in the Philippines to do your due diligence and research as much as you possibly can on the subject. Trust no one and do the research yourself first, and then ask questions if you are not entirely clear on something. Hiring a lawyer is not a quick fix here, and ultimately you are liable for any mistakes that may surface regardless of the fact. 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 before any type of formal paperwork is to commence. Inherited properties require the signatures of all the children in the entire family, etc.
It is also advisable to get a survey done to be sure the property title matches the property you are being shown. Seriously this is Important!
Ok, so this is how you protect yourself:
You can legally Lend Money in the Philippines to create the proper documents and “ lend’ the money to the purchaser to buy the land. Then REGISTER A MORTGAGE ON A 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.
Lease of Property
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. It should say 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 the correct amount, you may remove (demolish) the improvements, even though the principal may suffer damage.
Take the MORTGAGE & LEASE to be NOTARIZED & REGISTERED ON THE TITLE.
The whole process can be done quick and easy. Use standard contracts and have them all notarized & registered at the same time.
You now have FULL LEGAL control of your Property.
CONDOS
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 easier to buy a condo than to sell one so purchase wisely.
If you would like more information on owning property in the Philippines. Would like some personal insight on a particular investment opportunity here in the Philippines. Would like a professional opinion from someone who has been living and doing business here on the islands for over 20 years now.
Come visit us at any one of our BADLADZ Adventure Resorts and ask to speak with Sean. Look forward to seeing you soon in the amazing country of the Philippines soon. Don’t forget one of the most beautiful places in the Philippines is none other than Puerto Galera!
Cheers,
Sean
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