Table of Contents

Chapters
I. Legal Requirements of Property Ownership
II. Code of Ethics & Responsibilities
III. Fundamentals of Property Ownership
IV. Real Estate Brokerage Practice
V. Subdivision Development
VI. Condominium Concepts & other types of Real Estate Holdings
VII. Real Estate Finance & Economics
VIII. Basic Principles of Ecology
IX. Urban& Rural land use
X. Planning, Development & Zoning
XI. Legal Aspects of Sales, Lease & Mortgage
XII. Documentation & Registration
XIII. Real Property Laws & Taxation
XIV. Other related topics
Basic Principles of Real Estate Appraisal
Site Location & Maps Reading
Public land survey
Salient features of Pag-ibig Housing Financing (HDMF)
Q&A

Pages

I
Fundamentals of Property Ownership
REGALIAN DOCTRINE
All Lands of the public domain belong to the state*.
"All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential
energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State.
With the exception of agricultural lands and all other natural resources shall not be alienated. The exploration
development and utilization of natural resources shall be under the full control and supervision of the State. The
State may directly undertake such activities, or it may enter into co-production, joint venture, or productionsharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose
capital is owned by such citizens.
x x x" [Sec. 2. Art. XII]

I. RIGHT TO OWN LAND

The right to own real estate in the Philippines is governed by:
A. Constitution [1987 Philippine Constitution] and
Art.XII. Sec. 3. Philippine citizenship may be lost or reacquired in the manner provided by law.
Art. XII. Sec.4. Citizens of the Philippines who marry aliens shall retain their citizenship, unless by their
act or omission they are deemed, under by law, to have renounced it.
Art.XII. Sec.7. Save in cases of hereditary succession, no private lands shall be transferred or
conveyed except to individuals, corporations or associations qualified to acquire or hold lands of the
public domain.
Art. XII. Sec.8. Notwithstanding the provisions of Section 7 of the article, a natural- born citizen of
Philippine citizenship may be transferee of private lands, subject to limitations provided by
law.
B. Other Special or Pertinent Laws

II. LANDS OF THE PUBLIC DOMAIN

1. Lands of the public domain are classified into:
(1) agricultural,
(2) forest or timber,
(3) mineral, and
(4) national parks.

the

2. Alienable lands of the public domain shall be limited to agricultural lands.

3. Private corporations and associations may hold such alienable lands of the public domain only by lease,for a
period not exceeding 25 years, renewable for not more than 25 years, and not to exceed 1,000 has.
4. Filipino citizens may lease not more than 500 hectares, or acquire not more than 12 hectares by purchase,
homestead, or grant.
III. STEWARD CONCEPT OF OWNERSHIP
Ownership carries with it a distinct social obligation. As stewards of their land, owners are obliged to use their
properties to promote not only their properties to promote not only their interest but also the general welfare.
When a person's landholdings exceed the requirements of his needs, or their utilization is not conducive to general
welfare, the state may exercise its power to regulate and control ownership.
IV. BUNDLE OF RIGHTS THEORY
This refers to the rights or attributes which are inherent in, or appurtenant to ownership, and
the rights.
to possess
BUNDLE
to use,
to the fruits,
OF
to dispose, and
RIGHTS
to recover
V. RESTRICTIONS OR LIMITATIONS TO BUNDLE OF RIGHTS
1. Government or Legal:
a. Zoning - refers to use restrictions in particular areas or the delineation of allowable uses in
particular areas.
b. Subdivision Regulations - requirements which must be complied within subdivision
specifications, etc.,
c. Police Power - the power of the state to regulate the use of the property
d. Building Code - regulations pertaining to specifications such as height, setbacks
e. Eminent Domain - the power of the State to take the private property for public use upon
payment of just compensation.
f. Escheat - the reversion of the State to take private property for public use upon payment of just
compensation.
g. Taxation - power of the State to impose and collect tax and other charges.
2. Contractual or Voluntary:
a. Lease Contract - the temporary surrender of the right to possess, use and enjoy in favor of
person who pays a consideration.
b. Right of Way Easement - the right given to an owner of an adjoining land to pass or have
access thru another land.
c. Usufruct - conveyance of the right to enjoy the fruits of the property.
d. Use Restrictions in Subdivision Contract

include

VI. ESTATE AND REAL ESTATE

Estate

- refers to the totality of the assets owned by a person which includes real estate
and personal properties.

Real State

- refers to the land and all permanent improvements thereon.

VII. CONCEPT OF TITLE

"TITLE" is not synonymous with the Torrens Certificate of Title. It is a term which means evidence or proof of
ownership, such as tax declaration, realty tax receipts, deed of sales, and Torrens Certificate of Title.
The best evidence of ownership of title is the Torrens Certificate of Title because it is imprescriptible and
indefeasible. A person is deemed to have title to a property when he can exercise or has the bundle of rights over
it.
VIII. MODES OF ACQUIRING TITLE
1. Private Grant

- voluntary transfer or conveyance such as sale or transfer.

2. Public Grant

- acquisition of alienable public land by homestead patent, free patent,

sales patent, or other government award.

3. Involuntary Grant

- acquisition against consent of owner, such as foreclosure or executive

sale.

4. Inheritance

- acquisition by hereditary succession.

5. Reclamation

- filling of submerged land subject to government regulations and

existing laws.

6. Accretion

- acquisition of land adjoining banks of rivers due to gradual deposit of

soil.

7. Prescription

- acquisition of title by actual, open continuous and uninterrupted

possession for a period of time under claim of title.
- Ten (10) years in good faith and
- Thirty (30) years if in bad faith.

IX. GENERAL RULE ON OWNERSHIP OF LAND

1. Only Filipino citizens
1.
2.
3.
4.
5.

By birth
Naturalization Process
Act of Congress
Repatriation
Dual Citizenship

2. Corporations or partnership at least 60% of the capital of which is owned by Filipinos are
entitled to acquire land in the Philippines.
.
NOTE: FOREIGN OWNERSHIP OF HOUSE/IMPROVEMENTS
A foreigner may own a house and improvements, which may be constructed on the land owned by a
Filipino [e.g. under lease]
EXCEPTIONS
1. As exceptions to the general cases to the rule, alien acquisition of real estate in the Philippines is allowed in the
following cases.

a) Acquisition before the 1935 Constitution;

b) Acquisition by hereditary succession [LEGAL HEIR] ;
c) Purchase by aliens of not more than 40% of the units in a condominium project;
d) Purchase by former natural-born Filipino citizens, subject to the by law requirements or
limitations prescribed.
Under Batas Pambansa Bilang 185 (B.P. 185)
aa) Acquisition shall not exceed
- 1,000 square meters for urban land or
- 1 hectare for rural land to be used solely for residence of the buyer
WHAT IS URBAN LAND?
Urban land shall refer to land located in an urban area. The urban areas shall include:
(1)

In their entirety, all municipal jurisdictions which, whether designated or not as chartered cities,
provisional capitals, have population density of at least 1,000 persons per square kilometer;

(2)

Poblaciones or central districts of municipalities and cities which have a population density of at least
500 persons per square kilometer;

(3) Poblaciones or central districts (not included in 1 and 2 above) regardless of population size
have the following:

which

(a) A street pattern, i.e., a network of streets in either at parallel or right angle orientation; and
(b) At least six establishments (commercial, manufacturing, recreational and/ or personal
services); and
(c) At least three of the following:
1. A town hall, church or chapel with religious services at least once a month;
2. A public plaza or cemetery;
3. A market place or building where trading activities are carried on at least once a week; and
4. A public building like a school, hospital, puericulture and health center or library.
(d) Barangays having at least 1,000 inhabitants which meet the conditions set forth in the
preceding subparagraph [sub-par. (3)] and in which the occupation of the inhabitants is
predominantly other than farming or fishing.
Rural lands shall refer to land located in a rural area. The rural areas shall refer to all the areas of the Philippines
which do not meet the conditions set forth in the definition of urban areas in the immediately preceding paragraph
(par. 3) of this Section. (Sec. 1. IRR. BP 185)
bb) In case of married couples, one or both of them may avail of the privilege provided that the total area shall
not exceed the maximum limit.
cc) When the transferee already owns urban or rural lands for residential purpose, he shall be entitled to acquire
additional urban or rural land for residential purpose which, when added to those already owned by him shall not
exceed maximum area allowed by law.
BP 185: Mechanics for registration of transfer
No deed of conveyance in favor of a transferee under Batas Pambansa Blg. 185 shall be registered by the Register
of Deeds unless accompanied by a sworn statement showing the;
1.
2.
3.
4.
5.

date and place of the transferee's birth;

names and addresses of his parents, of his spouse and children if any;
area, location and mode of acquisition of his landholdings in the Philippines if any;
his intention to reside permanently in the Philippines;
date he lost his Philippine citizenship, and

6. country of which he is presently a citizen.

The sworn statement herein above mentioned shall be in addition to the documentary requirements prescribed as
prerequisites for the registration of titles under existing law and regulation. (Sec.4, IRR. BP 185)
Under Foreign Investments Act of 1991
e) Any natural born citizen who has lost his Philippine citizenship and who has the legal capacity to enter
into a contract under Philippine laws may be a transferee of a private land.
aa) up to a maximum area of five thousand (5,000) square meters in the case of urban land or 3
hectares in the case of rural land to be used by him for business or other purposes.
bb) In the case of married couples, one of them may avail of the privilege herein granted: provided that if
both shall avail of the same, the total area acquired shall not exceed the maximum herein fixed.
cc) In the case of the transferee already owns urban or rural land for business or other purposes, he shall
still be entitled to be a transferee of additional urban or rural land for business or other
purposes which when
added to those already owned by him shall not exceed the maximum areas
herein authorized.
dd)

A transferee under this Act may acquire not more than two (2) lots which should be situated in
different municipalities or cities anywhere in the Philippines: Provided. That the total land area
shall not exceed

thereof

- five thousand (5,000) square meters in the case of urban land or

- three (3) hectares in the case of rural land
- for use by him for business or other purposes.
A transferee who has already acquired urban land shall be disqualified from acquiring rural land and
vice versa".(Sec.10. RA 7042 as amended by R.A 8179. Approved March 28,1996)

IMPLEMENTING RULES AND REGULATIONS OF RA 7042

(As amended by Republic Act No.8179)
SECTION 5. Land acquired under this Act shall be primarily, directly and actually used by the transferee in the
performance or conduct of his business or commercial activities in the broad areas of
1. agriculture
2. industry and
3. services,
4. including the lease of land.
but excluding the buying and selling thereof.
A transferee shall use his land to engage in activities that are not included in Negative List or in those areas
wherein investment rights have been granted to him under this Act.
2.
A Filipina who married an alien retains her Philippine Citizenship (unless by her act or omission she is
deemed under the laws to have renounced her Philippine Citizenship) and may therefore acquire real estate in the
Philippines.
3.
A former natural-born citizen of the Philippines who became of another country and reacquires
citizenship under R.A. No. 9225(Dual Citizenship Law).

d. DUAL CITIZENSHIP LAW [REPUBLIC ACT NO.9225 ]

Filipino

AN ACT MAKING THE CITIZENSHIP OF PHILIPPINE CITIZENS WHO ACQUIRE FOREIGN

CITIZENSHIP PERMANENT, AMENDING FOR THE PURPOSE COMMONWEALTH ACT NO. 63 AS
AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:
SECTION1. Short Title - This Act shall be known as the "Citizenship Retention and Re-acquisition Act of
2003."
SEC.2.Declaration of Policy - It is hereby declared the policy of the state that all Philippine citizens who
become citizens of another country shall be deemed not to have lost their Philippine citizenship under the
conditions of this Act.
SEC.3. RETENTION OF PHILIPPINE CITIZENSHIP - Any provision of law to contrary notwithstanding,
natural-born citizens of the Philippines who have lost their Philippine citizenship by reason of their naturalization
as citizens of a foreign country hereby deemed to have reacquired Philippine citizenship upon taking the
following oath of allegiance to the Republic:
"I
, solemnly swear (or affirm) that I will support and depend the Constitution of the Republic of the
Philippines and obey the laws and legal orders promulgated by the duly constituted authorities of the Philippines:
and I hereby declare that I recognize and accept the supreme authority of the Philippines and will maintain true
faith and allegiance thereto; and that I impose this obligation upon myself voluntarily without mental reservation
or purpose of evasion."
Natural-born citizens of the Philippines who, after the effectivity of this Act, become citizens of a foreign country
shall retain their Philippine citizenship upon taking the aforesaid oath.
SEC. 4 Derivative Citizenship - The unmarried child, whether legitimate or adopted, below 18 years of age, of
those who re-acquire Philippine citizenship upon effectivity of this Act shall be deemed citizens of the
Philippines.
SEC. 5 Civil and Political Rights and Liabilities - Those who retain or reacquire Philippine citizenship under this
Act shall enjoy full civil and political rights and be subject to all attendant liabilities and responsibilities under
existing laws of the Philippines and the following conditions:
(1) Those intending to exercise their right of suffrage must meet the requirements under
Sec.1,Article V of the Constitution, Republic Act No. 9189, otherwise known as the, "The
Overseas Absentee Voting Act of2003".and other existing laws.
(2) Those seeking elective public office in the Philippines shall meet the qualifications for holding such
public office as required by the Constitution and existing laws, and at the time of the filing of the certificate of
candidacy, make a personal and sworn renunciation of any and all the foreign citizenship before any public
authorized to administer an oath;
(3) Those appointed to any public office shall subscribe and swear to an oath of allegiance to the
Republic of the Philippines and its duly constituted authorities prior to their assumption of
office: Provided, that they renounce their oath of allegiance to the country where they took
that oath;
(4) Those intending to practice their profession in the Philippines shall apply with the proper
authority for a license or permit to engage in such practice; and
(5) That right to vote or be elected or appointed to any public office in the Philippines cannot be
exercised by, or extended to, those who:
(a)
Are candidates for or are occupying any public office in the country of which
they are naturalized citizens; and/or
(b)
Are in active service as commissioned or non-commissioned officers in the
armed forces of the country which they are naturalized citizens.

SEC.6. Separability Clause - If any section or provision of this Act is held unconstitutional or invalid, any other
or provision not affected thereby shall remain valid and effective.
SEC. 7. Repealing Clause - All laws, decrees, orders, rules and regulations inconsistent with the provisions of this
Act are hereby repealed or modified accordingly.
SEC.8. Effectivity Clause. - This Act shall take effect after fifteen (15) days following its publication in the
Official Gazette or two newspapers of general circulation.
Approved.
EFFECTIVITY
: SEPTEMBER 18, 2003
PUBLICATION
: SEPTEMBER 2, 2003 (Manila Times and Today)
APPROVED BY GMA : AUGUST 29, 2003

X. PROPERTY ACQUISITION AND THE AFFIDAVIT OF WAIVER

REPUBLIKA NG PILIPINAS
KAGAWARAN NG KATARUNGAN
PANGASIWAAN SA PATALAAN NG LUPAIN
(LAND REGISTRATION AUTHORITY)
East Avenue cor. NIA Road
Quezon City
In RE: Consulta
REGISTRAR of DEEDS FOR
PUERTO PRINCESA CITY,
Petitioner.

CONSULTA No. 3543

CONSULTA No. 3554

X***********************X

RESOLUTION
May a Filipina who contracted marriage with an alien husband after the passage of the Family Code and
has acquired real property in the Philippines through a Deed of Absolute Sale register the same in her own
exclusive name? This is the very issue that this consulta seeks to resolve.
The instant case actually involves two months (2) consultas. These consultas were consolidated
considering they were mistakenly docketed separately, they actually involve the same issues, the same set of
documents sought to be registered, the same property and the same parties.
From the records of case, the facts are as follows:
On April 27, 1999,Nelly Rodriguez, A Filipino citizen, and Estratios N. Varsamos, a Greek national got
married without an ante-nuptial agreement at the Greek Embassy in the country of Abu Dhabi. That, sometime in
July 4, 2002,Nelly Rodriguez-Versamos bought a parcel of land described as Lot No. 3787 of Pls - 1117-D with
an area of 30,355 sq. m. located at Brgy Luzvminda, Puerto Princesa City, covered by OCT No. 568 issued by the
Register of Deeds of Puerto Princesa City. The Deed of Absolute Sale executed by the registered owner, Joseph
Ibanez Genon dated July 4, 2002 in favor herein petitioner, was presented for registration to the Register of Deeds
who however entertained doubts as to its registrability in view of Consulta No. 2738 promulgated on June
30,2000,wherein this Authority ruled against the registration of a sale in favor of a Filipina who is married to a
foreigner on the ground that, under the Family Code, in the absence of an agreed property regime, the spouses are
deemed to have adopted an absolute community property regime. Under this system, which supposedly makes the

foreigner spouse a co-owner of real property acquired by the Filipino spouse, the constitutional fiat prohibiting
aliens from acquiring lands in the Philippines should apply.
Hence, this Consulta.
The seeming complication was brought about by the advent of Article 93 of the Family Code which
pertinently provides that;
Art. 93. Property acquired during the marriage is presumed to belong to the community, unless it is proved that
it one of those excluded therefrom.
From the aforequoted provision of law, it is clear that under the regime of absolute community, all properties
acquired during marriage are presumed to belong to the community. Pescinding from the basic principle. It is
axiomatic, that all properties acquired by either spouse during the existence of that absolute community, shall be
presumed to be co-owned by both spouses, such that a foreigner husband married to a Filipina wife shall be a coowner with respect to that property. That presumption of co-ownership is however merely created by fiction law.
As a matter of fact, Article 90 of the Family Code even provides that: "The provision on co-ownership shall
apply to the absolute community of property between the spouses in all matters not provided in this Chapter".
However, that "[T]he partnership having been created by law, it has no object and it is unsafe to extend it on
pretext of tacit consent."(Gutierrez, 3d Ed., vol. 1,p. 579, cited in Nable Jose,41 Phil. 713) "Which means that
either of the spouses holds merely an inchoate right over the co-owned property, a mere right of expectancy,
because of it will be discovered during the liquidation of the marriage that there is no absolute community
property to be divided, there will be no share for either husband or the wife" (supra). Moreover, as Article 93 of
the family Code further provides, the presumption of co-ownership of properties acquired during the existence of
the absolute community is a rebuttable one, "unless it is proved that it is one of those (properties) excluded there
from." Thus, if a Filipina spouse buys a certain real property in the Philippines under her name she acquired the
same in her personal individual capacity and intends to put the same under her individual name, not under the
legal fiction of the Absolute community. Stated otherwise, her marriage to an alien spouse merely created a legal
presumption of co-ownership which will not in anyway deprive her of her right to acquire real properties in the
Philippines in her own right.
A natural born citizen's right to acquire real property is a basic right enshrined in the constitution. In this
regard, the interplay of four (4) basic constitutional provisions should be enlightening, thus:
Art.XII. Sec.3. Philippine citizenship may be lost or reacquired in the manner provided by law.
Art.XII. Sec.4. Citizens of the Philippines who marry aliens shall retain their citizenship, unless by their act or
omission they are deemed, under the law, to have renounced it.
Art.XII. Sec. 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except
to individuals, corporations or associations qualified to acquire or hold lands of the public domain
Art.XII.Sec.8. Notwithstanding the provisions of Sec.7 of this article, a natural-born citizen of the Philippines who
has lost his Philippine citizenship may be transferee of private lands, subject to limitations provided by law.
Certainly in the case at bar, there is no showing that the registrant Filipina spouse is not qualified to own real
property in the Philippines nor it is shown that she possesses any of the disqualification. The fact that she
married a Greek husband does not automatically make her Greek. The Constitution requires a positive act of
renunciation of citizenship, i.e, by naturalization in a foreign state or by taking an oath of allegiance to a foreign
country, before a Filipino citizen may lose his citizenship. None of these conditions are obtaining in the instant
case.
Applying now these constitutional provisions in relation to the provisions in the relation to the Family Code
provision cited above, it goes without saying that if we deny registration of a Deed of Sale of land in favor of the

Filipina spouse by mere reason that it shall ultimately redound to the benefit of the absolute community which as
discussed earlier, is a mere legal fiction of co-ownership. Certainly this is an absurd spectacle. A regime of
absolute community of property has no citizenship. This is not within preview of the constitutional prohibition
against aliens owning lands in the Philippines. We should not be confused that here, it is the Filipina wife who is
buying the land and not the absolute community regime.
It is so fundamental in our jurisdiction that a mere statutory provision of law cannot constrict, delimit or
otherwise expand a basic constitutional principle. To deny the Filipina wife the registration of her Deed of Sale is
a direct affront on her basic constitutional right as it will unnecessarily constrict and unjustly deprive her of her
right to own lands in the Philippines. The Family Code cannot prevail over the constitution in view of the basic
principle in law that the Constitution, being the supreme law of the land, all other laws must be subordinate to it.
In addition, the denial of registration of a Deed of Sale of land in favor of the Filipina spouse married to a
foreigner is a great inequity which evens the Constitution looks upon with disfavor. In this regard, it is apropos to
mention Section 8 &Art.XII of the Constitution, which provides that even natural born Filipino citizen who has
lost his/her citizenship may still acquire lands or be a transferee of private lands in the Philippines, subject to
limitations provided by law. A still valid law - Batas Pambansa Bilang 185- implements the constitutional
provision as it allows a former Filipino citizen who has lost and or renounced his Filipino citizenship, to be a
transferee of private land in the Philippines, subject to certain limitations. Applying the statutory provision in the
case at bar, we will be placing the Filipina registrant who has not lost her citizenship nor renounced her Filipino
citizenship at a rather iniquitous and lesser standing if we deny registration of her title.
The Authority is not unaware in the past, it has accepted practice that before a Filipino a wife married to an
alien husband registers a real property under her name , the Registrar of Deeds, as a matter of pre-requisite,
requires that an "Affidavit of Waiver of Rights" executed by the foreigner spouse must also be presented. This
authority finds that such requirement finds no basis in law as it directly collides with Article 89 of the Family
Code which provides that "no waiver of rights, interests, shares and effects of the absolute community of property
during the marriage can be made except in judicial separation property" or "after the marriage has been dissolved
or annulled". This provision precisely applies to voluntary waiver, the reason being to avoid undue influence
between the spouses, and does not, therefore, affect judicial transfers. Thus, in the light of the foregoing
ratiocination, we opine that the requirement of such "Affidavit of the Waiver of Rights" has become a mere
surplus age as it serves no useful purpose, other than being void.
WHEREFORE, in view hereof, this Authority rules and so holds that the Deed OF Absolute Sale covering
transfer of lot No. 3787, Pls-1117D with an area if 20,355 sq. m. located at Luzvminda, Puerto Princesa City,
covered by OCT No. 568 in favor of Nelly Rodriguez Versamos, is registrable, provided that all requirements for
its registrability are complied with.
Consulta No. 2738 and all other consultas inconsistent with this ruling are deemed to be abandoned and or
superseded.
SO ORDERED.
Quezon City, Philippines, March 12, 2003
HON. BENEDICTO B. ULEP
Administrator

XI. SELECTED SUPREME COURT CASES

ACQUISITION OF LAND BY FOREIGNERS
1. G.R. No. L-630 November 15, 1947

ALEXANDER A. KRIVENKO vs. THE REGISTER OF DEEDS, CITY

OF MANILA, respondent and appellee.
PERTINENT PORTIONS OF DECISION IN KRIVENKO vs. REGISTER OF DEEDS
"Section 7, Article XII of the 1987 Constitution states:
Save in the cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands of the public domain.
Aliens, whether individuals or corporations, are disqualified from acquiring lands of the public domain. Hence,
they are also disqualified from acquiring private lands. The primary purpose of the constitutional provision is the
conservation of the national patrimony. In the case of Krivenko v Register of Deeds, the Court held:
Under section 1 of Article XIII of the Constitution, "natural resources, with the exception of public agricultural
land, shall not be alienated," and with respect to public agricultural lands, their alienation is limited to Filipino
citizens. But this constitutional purpose conserving agricultural resources in the hands of Filipino citizens may
easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor of aliens.
It is partly to prevent this result that section 5 is included in Article XIII, and it reads as follows;
"Sec.5. Save in cases of hereditary succession, no private agricultural land will be transferred or assigned except
to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the
Philippines."
This constitutional provision closes the only remaining avenue through which agricultural resources may leak into
aliens' hands. It would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all,
they may be freely so alienated upon their becoming private agricultural lands in the hands of Filipino citizens. x
xx
xxxx
If the term "private agricultural lands" is to be construed as not including residential lots or lands not strictly
agricultural, the result would be that " aliens may freely acquire and possess not only residential lots and houses
for themselves but entire subdivisions, and whole towns and cities," and that " they may validly buy and hold in
their names lands of any area for buildings homes, factories, industrial plants, fisheries, hatcheries, schools, health
and vacation resorts, markets, golf courses, playgrounds, airfields, and a host of other uses and purposes that are
not, in appellant's words strictly agricultural." (Solicitor General's Brief, p.6.) That this is obnoxious to the
conservative spirit of the Constitution is beyond question."
- - - - - - - - - -0- - - - - - - - - 2. BORROMEO VS. DESCALLAR
G.R. No. 159310, February 24, 2009
"WHAT ARE THE RIGHTS OF A FOREIGNER WHO ACQUIRED LAND VS. FILIPINA GIRLFRIEND IN
WHOSE NAME THE TCT WAS PLACED UNDER
This is the issue discussed by the Supreme Court in the case of Borromeo vs. Descallar, G.R. No. 159310,
February 24, 2009.
The facts are stated in the decision are:
Jambrich, an Austrian arrived in the Philippines in 1983 being assigned in the country and was transferred to
Cebu and met and fell in love with a separated Filipina [herein referred to as respondent with two kids and who

had no means of livelihood. Thereafter, they bought their house and lots but the Register of Deeds refused
registration of the Deed of Absolute Sale on the ground that Jambrich was an alien and could not acquire alienable
lands of the public domain and therefore his name was erased and the titles issued in the name of the Filipina.
In 1986, Jambrich sold his rights and interests in the said property to a Filipino buyer, Borromeo, [the petitioner in
this case] to pay for his debt but when Borromeo sought to register the deed assignment, he discovered that the
titles to the lots had been transferred to the name of the Filipina and that the same had been mortgaged.
The buyer, Borromeo then filed a complaint for recovery of the properties. The Filipina girlfriend claimed that she
bought it with her own funds and that Jambrich being a foreigner, was not entitled to own a land in the
Philippines. The Regional Trial Court rendered a decision in favor of the buyer and declared him to be the owner
of the properties since the facts show that the Filipina had no means of livelihood or funds to have bought the
property.
The Filipina appealed and the decision was reversed by the Court of Appeals stating that the foreigner Jambrich,
could not have acquired land being a foreigner.
The buyer, Borromeo, appealed by way of petition to the Supreme Court which stated the issues;
1. Who purchased the subject properties?
2. What is the effect of registration of the properties in the name of the Filipina?
In upholding the decision of the lower court, the Supreme Court stated:
The evidence presented showed that Jambrich had all the authority to transfer all his rights, interests and
participation in the subject properties by the virtue of the Deed of Assignment to the buyer, Borromeo, as it was
shown that the funds to purchase the properties came from the Jambrich, who was therefore the true buyer of the
property, and
"Further, the fact that the disputed properties were acquired during the couple's cohabitation does not help the
respondent. The rule that co-ownership applies to a man and woman living exclusively with each other as
husband and wife without the benefit of marriage, but otherwise capacitated to marry each other does not apply.
In the instant case, the respondent was still legally married to another when she and Jambrich lived together. In
such adulterous relationship, no co- ownership exists between the parties. It is necessary for each of the partners
to prove his or her actual contribution in the acquisition of property in order to be able to claim any portion of it.
Presumptions of co- ownership and equal contribution do not apply."
As to the registration of the properties in the name of the Filipina, the Supreme Court said,
"It is settled that the registration is not a mode of acquiring ownership. It is only a means of confirming the fact of
its existence with notice to the world at large. Certificates of title are not a source of right. The mere possession of
a title does not make one true owner of the property. This is the situation in the instant case. Respondent did not
contribute a single centavo in the acquisition of the properties. She and her two properties were then fully
supported by Jambrich."
As to the capacity of Jambrich, being an alien, to acquire land, the Supreme Court said,
"xxxx the transfer of land to Jambrich, who is an Austrian, would have been declared invalid if challenged, had
not Jambrich conveyed the properties to petitioner who is a Filipina citizen. xxxxxx

The rationale behind the Court's ruling in the United Church Board for World Ministries, as reiterated in the
subsequent cases, is this - since the ban on aliens is intended to preserve the nation's land for future generations of
Filipinos, that aim is achieved by making lawful the acquisition of real estate by aliens who became Filipino
citizens by naturalization or those transfers made by aliens to Filipino citizens. As the property in dispute is
already in the hands of a qualified person, a Filipino citizen, there would be no more public policy to be protected.
The objective of the constitutional provision to keep our lands in Filipino hands has been achieved."

3. MULLER VS. MULLER, G. R. No. 149625, August 29, 2006

IN REPITITION FOR
SEPARATION OF PROPERTY
ELENA BUENAVENTURA MULLER,
-versusHELMUT MULLER,
"Aliens, whether individuals or corporations, are disqualified from acquiring lands of the public domain. Hence,
they are also disqualified from acquiring private lands. The primary purpose of the constitutional provision is the
conservation of the national patrimony. In the case of Krivenko vs. Register of Deeds, the Court held:
xxxxxx
Thus, in the instant case, respondent cannot seek reimbursement on the ground of equity where it is clear that he
willingly and knowingly bought the property despite the constitutional prohibition.
Further, the distinction made between transfers of ownership as opposed to recovery of funds is a futile exercise
on respondent's part. To allow reimbursement would in effect permit respondent to enjoy the fruits of a property
which he is not allowed to own. Thus, it is likewise prescribed by law. As expressly held in Cheesman v.
Intermediate Appellate Court:
4. CHEESEMAN VS. INTERMEDIATE APPELLATE COURT
G.R. No. 74833 January 21, 1991
THOMAS C. CHEESEMAN, petitioner, vs.
INTERMEDIATE APPELLATE COURT:
Finally, the fundamental law prohibits the sale to aliens of residential land. Section 14, Article XIV of the 1973
Constitution ordains that, "Save in cases of hereditary succession, no private land shall be transferred or conveyed
except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain."
Petitioner Thomas Cheeseman was, of course, charged with knowledge of this prohibition. Thus, assuming that it
was his intention that the lot in question be purchased by him and his wife, he acquired no right whatever over the
property by virtue of that purchase; and in attempting to acquire a right or interest in land, vicariously and
clandestinely, he knowingly violated the Constitution; the sale as to him was null and void. In any event, he had
and has no capacity or personality to question the subsequent sale of the same property by his wife on the theory
that in so doing he is merely exercising the prerogative of a husband in respect of conjugal property. To sustain
such a theory would permit indirect controversion of the constitutional prohibition. If the property were to be
declared conjugal, this would accord in the alien husband a not substantial interest and right over land, as he
would then have a decisive vote as to its transfer or disposition. This is a right that the Constitution does not
permit him to have.
As already observed, the finding that his wife had used her own money to purchase the property cannot and will
not at this stage of the proceedings be reviewed and overturned. But even if it were a fact that said wife had used
conjugal funds to make the acquisition, the considerations just set out to militate on high constitutional grounds,
against his recovering and holding the property so acquired, or any part thereof. And whether in such an event, he
may recover from his wife any share of the money used for the purchase or charge her with unauthorized
disposition or expenditure of conjugal funds is not now inquired into, that would be, in the premises, a purely
academic exercise. (Emphasis added)

XII. LEASING OF REAL PROPERTIES BY FOREIGNERS [SALIENT FEATURES]

REPUBLIC ACT NO.7652

AN ACT ALLOWING THE LONG-TERM LEASE OF PRIVATE LANDS BY FOREIGN INVESTORS
Section

1. Title This Act shall be known as the "Investors' Lease Act".

Sec.2. Declaration of Policy It is hereby declared the policy of the State to encourage foreign investments
consistent with the constitutional mandate to conserve and develop our own patrimony. Towards this end, the
State hereby adopts a flexible and dynamic policy of the granting of long-term lease on private lands to foreign
investors for the establishment of industrial estates, factories, assembly or processing plants, agro-industrial
enterprises, land development for industrial, or commercial use, tourism and other similar priority productive
endeavors.
Sec.3. Definitions For purposes of this act, unless the context indicates otherwise, the term:
(1) "Investing in the Philippines" shall mean making an equity investment in the Philippines through actual
remittance of foreign exchange or transfer of assets, whether in the form of capital goods, patents,
formulas or other technological rights or processes, upon registration with the Securities and Exchange
Commission; and
(2)" Withdrawal of approved investment" shall mean either: (a) the failure to operate the investment project for
any three (3) consecutive years; or (b) outright abandonment of the investment project at any time during the
approved lease period: Provided, that failure to pay lease rental for three (3) consecutive months coupled with the
failure to operate the investment project for the same period shall be deemed as outright abandonment of the
project.
Sec.4. Coverage Any foreign investor investing in the Philippines shall be allowed to lease private lands in
accordance with the laws of the Republic of the Philippines subject to the following conditions:
(1) No lease contract shall be for a period exceeding fifty (50) years, renewable once for a period of not
more than twenty-five (25) years;
(2) The leased area should solely for the purpose of the investment upon the mutual agreement of the parties;
(3) The leased premises shall comprise such area as may reasonably be required for the purpose of the
investment subject however to the Comprehensive Agrarian Reform Law and the Local Government Code.
The leasehold right acquired under long-term lease contracts entered into pursuant of this Act may be sold,
transferred, or assigned: Povided. That when the buyer, transferee, or assignee is a foreigner or a foreign-owned
enterprise, the conditions and limitations in respect to the used of the leased property as provided for under this
Act shall continue to apply.
Sec.5. Limitations (1) Foreign individuals, corporations, associations, or partnerships not otherwise investing
in the Philippines as defined herein shall continue to be covered by Presidential Decree No. 427 and other existing
laws in lease of lands to foreigners.
(2) Withdrawal of the approved investment in the Philippines within the period of the lease
agreement
entered into under this Act, or use of the leased area of the purpose other than that
authorized,
shall
warrant the ipso facto termination of the lease agreement without the prejudice to the right of the lessor to be
compensated for the damages he may have suffered thereby.

(3) Any lease agreement under this Act which is renewable at the option of the lessee subject to the same
terms and conditions of the original contract shall be interpreted to mean as renewable upon
the
mutual
agreement of the parties.
(4) In addition to the conditions for the renewal of a lease agreement after the period of fifty (50)
years as
provided herein, the foreign lease shall show that it has made social and economic
contributions to the
country.
(5) In the case of tourism projects, lease of private lands by foreign investors qualified herein shall be
limited to projects with an investment of not less than five million (5M) US dollars, seventy
percent
(70% ) of which shall be infused in said project within three years from the assigning of the lease contract, Chan
Robles virtual library.
Sec. 6 Termination of Lease Contract The Secretary of Trade and Industry shall terminate any lease contract
entered into under the provisions of this Act, if the investment project is not initiated within three (3) years from
the signing of the lease contract.
Approved: June 4, 1993

SUPREME COURT CASES INVOLVING

LEASE OF LAND/FOREIGNERS
Matthews vs. Taylor, G.R. 164584, [June 22, 2009],
IS THE LEASE OF REAL PROPERTY IN THE NAME OF THE FILIPINA WIFE VALID WITHOUT THE
CONSENT OF THE FOREIGN HUSBAND?

It is not the uncommon that real property is placed under the name of the Filipina wife who married to a foreigner
in as much as a foreigner cannot own land in the Philippines save only in constitutionally recognized exceptions.
In such a case, may the Filipina wife lease out the property without the consent of the foreign husband?
In the Supreme Court case of Matthews vs. Taylor, G.R No. 164584, [June 22, 2009], this issue was raised
wherein the Supreme Court resolved the issue of whether the contract of lease entered into by the Filipina wife
over real property is valid despite the absence of consent of the foreign husband. The facts as stated in the
decision are as follows:
"On June 30, 1988, respondent, Benjamin A. Taylor (Benjamin), a British subject, married Joselyn C. Taylor
(Joselyn), a 17- year old Filipina. On June 9, 1989, while their marriage was subsisiting, Joselyn from Diosa M.
Martin a 1,294 square-meter lot ( Boracay property) situated at Manoc-Manoc, Boracay Island, Malay Aklan, for
and in consideration of P129,000.00. The sale was allegedly financed by Benjamin. Joselyn and Benjamin, also
using the latter's funds, constructed improvements thereon and eventually converted the property to a vacation
and tourist resort known as the Admiral Ben Bow Inn. All required permits and licenses for the operation of the
resort were obtained in the name of Ginna Celestino, Joselyn's sister.
However, Benjamin and Joselyn had a falling out, and Joselyn ran away with Kim Philippsen. On June 8, 1992.
Joselyn executed a special power of Attorney (SPA). In favor of Benjamin, authorizing the latter to maintain, sell,
lease, and sub-lease and otherwise enter into the contract with third parties with respect to their Boracay property.
On July 20, 1992, Joselyn, as lessor and petitioner Philip Matthews as lessee, entered into an Agreement of Lease
(Agreement) involving the Boracay property for a period of 25 years, with an annual rental of P 12,000.00. The
agreement was signed by the parties and executed before a Notary Public. Petitioner thereafter took possession of
the property and renamed the resort as Music Garden Resort.
Claiming that the Agreement was null and void since it was entered into by Joselyn without his (Benjamin's)
consent, Benjamin instituted an action of Declaration of Nullity of Agreement of Lease with Damages against
Joselyn and the petitioner. Benjamin claimed that his funds were used in the acquisition and improvement of the

Boracay property, and coupled with the fact that he was Joselyn's husband, any transaction involving the said
property required his consent."
Was the lease entered into by the Filipina wife without the consent of her foreign husband valid?
To this the Supreme Court said,
"In fine, we are called upon to determine the validity of an Agreement of Lease of a parcel of land entered into by
a Filipino wife without the consent of her British husband. In addressing the matter before us, we are confronted
not only with civil law or conflicts of law issues, but more importantly, with a constitutional question.
It is by undisputed that Joselyn acquired the Boracay property in 1989. Said acquisition was evidenced by a Deed
of Sale with Joselyn as the vendee. The property was also declared for taxation purposes under her name. When
Joselyn leased the property to petitioner, Benjamin sought the nullification of the contract on two grounds; first,
that he was the actual owner of the property since he provided the funds used in purchasing the same; and second,
that Joselyn could not enter into a valid contract involving the subject property without consent. x x x
Citing several decisions on the matter, the Supreme Court reiterated that, 'The rule is clear and inflexible; aliens
are absolutely not allowed to acquire public or private lands in the Philippines, save only in constitutionally
recognized exceptions. There is no rule more settled than this constitutional prohibition, as more aliens attempt to
circumvent the provision by trying to own lands through another. xxxxxx
It therefore ruled as follows;
xxxxxx
In the light of the foregoing jurisprudence, we find and so hold that Benjamin has no right to nullify the
Agreement of Lease between Joselyn and petitioner. Benjamin, being an alien, is absolutely prohibited from
acquiring private and public lands in the Philippines. Considering that Joselyn appeared to be the designated
"vendee" in the Deed of Sale of said property, she acquired sole ownership thereto. This is true even if we sustain
Benjamin's claim that he provided the funds for such acquisition. By entering into such contract knowing that it
was illegal, no implied trust was created in his favor; no reimbursement for his expenses can be allowed; and no
declaration can be made that the subject property was part of the conjugal/community property of the spouses. In
any event, he had and has no capacity or personality to question the subsequent lease of the Boracay property by
his wife on the theory that in so doing, he was merely exercising the prerogative of a husband in respect of the
conjugal property. To sustain such a theory would countenance in direct controversion of the constitutional
prohibition. If the property were to be declared conjugal, this would accord the alien husband a substantial interest
and right over the land, as he would then have decisive vote as to its transfer or disposition. This is a right that the
Constitution does not permit him to have.
In fine, the Agreement of Lease entered into between Joselyn and petitioner cannot be nullified on the grounds
advanced by Benjamin. Thus, we uphold its validity."
- - - - - - - - - - - - - - -0- - - - - - - - - - - - - BASIC PROPERTY RELATIONS UNDER THE FAMILY CODE
EFFECTIVITY OF THE FAMILY CODE: AUGUST 03, 1988
1. BASIS OF PROPERTY RELATIONS UNDER THE FAMILY CODE
Art. 74: Family Code
1.
2.

By marriage settlements executed before the marriage

By provisions of this Code

3. By the local custom

2. Property Relations that may be agreed upon by future spouses in marriage settlement
I. Absolute Community of Property
II. Relative Community of Property or Conjugal Partnership of Gains
III. Complete Separation of Property
IV. Upon any other regime that may be agreed upo
In the absence of marriage settlements or when the same are void, the property relations shall be
governed as provided for below.
3. Property Relations without Marriage Settlement
Before the Family Code

Under the FAMILY CODE

(Effective August 3, 1988)

CONJUGAL PARTNERSHIP OF GAINS

ABSOLUTE COMMUNITY OF PROPERTY

4. ESSENTIAL FEATURES OF THE TYPES OF PROPERTY RELATIONS

1.

CONJUGAL PARTNERSHIP OF GAINS

Conjugal partnership of gains presupposes that there are properties which are to be considered
conjugal and therefore owned both by the husband and the wife, while there are those properties which
still belong exclusively to each of the spouses over which they exercise exclusive
ownership
and
administration.
CONJUGAL PROPERTIES
The following are considered conjugal properties;
(1)
Those acquired by onerous title during the marriage at the expense of the common fund,
whether the acquisition be for the partnership, or for only one of the spouses;
(2)
Those obtained from the labor, industry, work or profession of either or both of
the spouses;
(3)
The fruits, natural, industrial or civil, due or received during the marriage from the
common property, as well as the net fruits from the exclusive property of
each
spouse;
(4)
The share of either spouse in the hidden treasure which the law awards to the finder or
owner of the property where the treasure is found;
(5)

Those acquired through occupation such as fishing or hunting;

(6)
Livestock existing upon the dissolution of the partnership in excess of the number of
each kind brought to the marriage by either spouse; and
(7)
Those which are acquired by chance, such as winnings from gambling or betting.
However, losses therefrom shall be borne exclusively by the loser-spouse, (153a,
154,155,159)

PRESUMPTION OF BEING CONJUGAL PROPERTY

Art. 116. All property acquired during the marriage, whether the acquisition appears to have been,
contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the
country is proved.
ADMINISTRATION AND ENJOYMENT OF CONJUGAL PROPERTY
Art. 116. The administration and enjoyment of the conjugal partnership shall belong to both
spouses
jointly. In case of disagreement, the husband shall prevail, subject to recourse to the court
by the wife for
proper remedy, which must be availed of within five years from the date of the contract implementing such
decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the
administration
of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not
include disposition or encumbrance without authority of the
Court or the written consent of the other spouse.
In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the
transaction shall be construed as a
continuing offer on the part of the consenting spouse and the third
person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by
the Court
before the offer is withdrawn by either or both offerors.
EXCLUSIVE PROPERTIES
The following properties are considered as exclusive, paraphernal or belonging only to one of the spouse:
1. That which is brought to the marriage as his or her own;
2. That which each acquires during the marriage by gratuitous or lucrative title.
3. That which is acquired by right of redemption or by exchange with other property belonging to
only one of the spouse and;
4. That which is purchased with the exclusive money of the wife or the husband.
The general rule is that the conjugal properties cannot be alienated without the consent of both spouses;
while respect to exclusive properties, the owner thereof can alienate the same without
the consent of the other
spouse.
EFFECTS OF SEPARATION IN FACT
Art.127. The separation in fact between the husband and wife shall not affect the regime of
conjugal partnership, except that;
(1) The spouse, who leaves the conjugal home or refuses to live therein, without just cause, shall not
have the right to be supported.
(2) When the consent of one spouse to any transaction of the other is required by law, judicial
authorization shall be obtained in a summary proceeding;
(3) In the absence of sufficient conjugal partnership property, the separate property of both
spouses
shall be solidarily liable for the support of the family. The spouse present shall, upon
petition in a
summary proceeding, be given judicial authority to administer or encumber any specific property of the
other spouse and use the fruits or proceeds thereof to satisfy the latter's share.
ABSOLUTE COMMUNITY OF PROPERTY
Absolute Community of Property presupposes that all the present and future properties of the
shall be considered as belonging jointly to the husband and wife except the following;
1.
Property acquired by gratuitous title by either spouse when it is provided by the donor or
testator that it shall not become part of the community property;

spouses

2.
Property inherited by either husband or wife through the death of a child by a former
marriage, there being brothers and sisters of the full blood of the deceased child;
3.
A portion of the property of either spouse equivalent to the presumptive legitimate of the
children by a former marriage; and
4.

Personal belongings of either spouse.

The ownership, administration and usufruct of the community property pertain to the
spouses jointly.
WAIVER OF RIGHTS
Art. 89. No waiver of rights, shares and effects of the absolute community of property during the
marriage can be made except in the case of judicial separation of property.
When the waiver takes place upon a judicial separation of property, or after the marriage has been
dissolved or annulled, the same shall appear in a public instrument and shall be recorded as
provided in Article 77. The creditors of the spouse who made such waiver may petition the Court to
rescind the waiver to the extent of the amount sufficient to cover the amount of their credits.
(146a)
PRESUMPTION OF ABSOLUTE COMMUNITY PROPERTY
Art. 93. Property acquired during the marriage is presumed to belong to the community unless it is
proved that it is one of those excluded therefrom.
OWNERSHIP, ADMINISTRATIVE, ENJOYMENT AND DISPOSITION OF
PROPERTY

COMMUNITY

Art. 96. The administration and enjoyment of the community property shall belong to both
spouses
jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife
for proper remedy, which must be availed of within five years from the date of the contract implementing such
decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the
administration
of the common properties, the other spouse may assume sole powers of administration. These powers do not
include disposition or encumbrance without authority of the
court or the written consent of the other spouse.
In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the
transaction shall be construed as a
continuing offer on the part of the consenting spouse and the third
person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by
the Court
before the offer is withdrawn by either or both offerors. (206a)
DONATION BY SPOUSE
Art.98. Neither spouse may donate any community property without the consent of the other.
However, either spouse may, without the consent of the other, make moderate donations from the
community property for charity or on occasions of family rejoicing or family distress.
III.

COMPLETE SEPARATION OF PROPERTIES

If the spouse before the marriage agree on complete separation of properties, the separation may refer to
both present and future properties or it may be total or partial.
The ownership, administration and usufruct of those properties which are considered separate
to the spouse to whom they belong.

pertain

Each spouse shall proportionately bear family expenses.

RIGHT TO DISPOSE, POSSESS, ADMINISTER EXCLUSIVE PROPERTY
Art. 145. Each spouse shall own, dispose of , possess, administer and enjoy his her own separate estate,
without need of the content of the other. To each spouse shall belong all earnings from his
or
her
profession, business or industry and all fruits, natural, industrial or civil, due or received during the marriage
from his or her separate property.

RIGHT OF SPOUSE OVER EXCLUSIVE PROPERTY

Art. 110. The spouses retain the ownership, possession, administration and enjoyment of their
exclusive properties.
Either spouse may, during the marriage, transfer the administration of his or her exclusive
property to the other by means of a public instrument, which shall be recorded in the registry of
property of the place the property is located. (137a, 168a, 169a)
Art.111. A spouse of age may mortgage, encumber, alienate or otherwise dispose of his or her
exclusive property, without the consent of the other spouse, and appear alone in the court to
litigate
with regard to the same.
SEPARATION OF PROPERTY DURING MARRIAGE
Art.134. In the absence of an express declaration in the marriage settlements, the separation of
property between spouses during the marriage shall not take place except by judicial order. Such judicial
separation of property may either be voluntary or for sufficient cause. (190a)
Art. 135. Any of the following shall be considered sufficient cause for judicial separation of
property;
(1) That the spouse of the petitioner has been sentenced to a penalty which carries with it civil
interdiction;
(2) That the spouse of the petitioner has been judicially declared an absentee;
(3) That loss of parental authority of the spouse of petitioner has been decreed by the court;
(4) That the spouse of the petitioner has abandoned the latter or failed to comply with his or her
obligations to the family as provided for in Article 101;
(5) That the spouse granted the power of administration in the marriage settlements has abused that
power; and
(6) That at the time of the petition, the spouses have been separated in fact for atleast one year
and
reconciliation is highly improbable.
IV.

ANY OTHER REGIME

Ex. Dowry system

MARITAL CONSENT IN DEED OF SALE

1.

Marital consent is required,

a) when the property relations between the spouse is one of absolute community and the
property is community property; or
b) when the property relations between the spouses is one of the conjugal partnership and
the property involved was acquired by onerous title during the marriage at the expense of
the common fund.

2.

Marital consent is NOT necessary

a) when the property relations between the spouses is one of absolute separation;

or

b) when the property relations between the spouses is one of conjugal partnership and the
property involved;
1. was brought into the marriage by either of the spouses [property nomenclature]
husband's exclusive property
wife's exclusive property

- capital
- paraphernal

2. was acquired by either of the spouses by inheritance; or

3. was acquired with exclusive funds of either of the spouses.

PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE

Art. 147. When a man and woman who are capacitated to marry each other, live exclusively with each
other as husband and wife without the benefit of marriage or under a void marriage, their wages and
salaries shall be owned by them in equal shares and the property acquired by both of them through their
work or industry shall be governed by the rules on co- ownership.
In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to
have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares.
For purposes of this Article, a party who did not participate in the acquisition by the other party of any
property shall be deemed to have contributed jointly in the acquisition thereof if the former's efforts
consisted in the care and maintenance of the family and of the household.
Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired
during cohabitation and owned in common, without the consent of the other, until after the termination of
their cohabitation.
When only one of the parties to void marriage is in good faith, the share of the party
In bad faith in the co- ownership shall be forfeited in favor of their common children. In case of default of
or waiver by any or all of the common children or their descendants, each vacant share shall belong to the
respective surviving descendants. In all cases, the forfeiture shall take place upon termination of the
cohabitation. (144a)
COHABITATION WITH MARRIED PERSON EFFECT ON PROPERTY ACQUIRED
Art. 148. In case of cohabitation not falling under the preceding Article only the properties acquired by
both of the parties through their actual joint contribution of money, property, or industry shall be owned
by them in common in proportion to their respective contributions.
In the absence of proof to the contrary, their contributions and corresponding shares are presumed
to be equal. The same rule and presumption shall apply to joint deposits of money and evidences of
credit.
If one of the parties is validly married to another, his or her share in the co-ownership shall accrue
to the absolute community or conjugal partnership existing in such valid marriage. If the party
who
acted in bad faith is not validly married to another, his or her shall be forfeited in the manner
provided in the last paragraph of the preceding Article.
The foregoing rules on the forfeiture shall likewise even if both parties are in bad faith.
LEGITIMATE AND ILLEGITIMATE CHILDREN
LEGITIMATE CHILDREN
Art. 164. Children conceived or born during the marriage of the parents are legitimate.
Children conceived as a result of artificial insemination of the wife with the sperm of the
or that of a donor or both are likewise legitimate children of the husband and his wife, provided,
both of them authorized or ratified such insemination in a written instrument executed and
by them before the birth of the child. The instrument shall be recorded in the civil
together with the birth certificate of the child. (55a.25a)

husband
that
signed
registry

ILLEGITIMATE CHILDREN
Art.165.Children conceived and born outside a valid marriage are illegitimate, unless otherwise
provided in this code.
SURNAME OF ILLEGITIMATE CHILD UNDER FAMILY CODE

Illegitimate children shall use the surname and shall be under the parental authority of their
and shall be entitled to support in the conformity with this Code.

mother,

The legitime of each illegitimate child shall consist of one-half of a legitimate child. Except for
modification, all other provisions in the civil code governing successional rights shall remain
force. [Art. 176]

this
in

AS AMENDED BY RA 9225
REPUBLIC ACT No. 9225
February 24, 2004
AN ACT ALLOWING ILLEGITIMATE CHILDREN TO USE THE SURNAME OF THEIR FATHER,
AMENDING FOR THE PURPOSE ARTICLE 176 OF EXECUTIVE ORDER NO.209.OTHERWISE KNOWN
AS THE "FAMILY CODE OF THE PHILIPPINES"

SECTION 1.Article 176 of Executive Order No. 209, otherwise known as the Family Code of the Philippines, is
hereby amended to read as follows:
"Article 176 Illegitimate children shall use the surname and shall be under the parental authority of their
mother, and shall be entitled to support in the conformity with this code. However,
illegitimate
children
may use the surname of their father if their filiation has been
1. expressly recognized by the father through the record of birth appearing in the civil register, or
2. when an admission in a public document or
3. private handwritten instrument is made by the father.
Provided, the father has the right to institute an action before the regular courts to prove nonfiliation
during his lifetime. The legitime of each illegitimate child shall consist of one-half of the legitime of a legitimate
child."
Approved: February 24, 2004

REPUBLIC ACT. NO. 9858

AN ACT PROVIDING FOR THE LEGITIMATION OF CHILDREN BORN TO PARENTS BELOW
MARRYING AGE, AMENDING FOR THE PURPOSE THE FAMILY CODE OF THE PHILIPPINES, AS
AMENDED
Section1. Article 177 of Executive Order No. 209, otherwise known as the "Family Code of the Philippines" as
amended, is hereby further amended to read as follows:
"Art. 177. Children conceived and born outside of wedlock of parents who, at the time of conception of
the former, were not disqualified only because either or both of them were below eighteen (18) years of age, may
be legitimated."
"Art. 178. Legitimation shall take place by a subsequent valid marriage between parents. The
annulment of a voidable marriage shall not affect the legitimation."

Approved: DEC. 20, 2009

II
CODE OF ETHICS and RESPONSIBILITIES

REAL ESTATE SERVICE/IRR PROVISIONS ON THE CODE OF ETHICS AND RESPONSIBILITIES

SEC. 5. Powers and Functions of the Board. - The Board is hereby vested the following powers and
functions:
xxxxxx
F.
Adopt a national Code of Ethics and Responsibilities to be strictly observed all licensed real
estate service practitioners:
xxxxxx
SEC.35. Code of Ethics and Responsibilities for Real Estate Service Practitioners. - The Board shall
adopt and promulgate the Code of Ethics and Responsibilities for real estate service practitioners which shall be
prescribed and issued by the accredited and integrated professional organization of real estate service
practitioners. / Secs. 5f and 35, also of IRR of RESA. /

NATIONAL CODE OF ETHICS FOR THE REALTY SERVICE PRACTICE

INTRODUCTION
The Realty Service Practice, a profession, calling or occupation, is dedicated to the promotion,
development including proper zonification and conservation of land and natural resources, including
improvements and rights and interests appurtenant thereto for the benefit and enjoyment of the Filipino people. As
such, those engaged therein are bound by a code of conduct, morals, and values in the performance of their and
obligations towards the obligations towards the government co-practitioners and the people they serve.
It is, therefore, imperative and necessary to adopt this NATIONAL CODE OF ETHICS for REALTY
SERVICE PRACTICE to govern the role of conduct of those who will engage therein.
ARTICLE1. DECLARATION OF PRINCIPLES
SECTION1. - The Realty Service Practice is a noble profession, calling or occupation and those engaged
therein shall abide by and comply with all the laws, decrees, orders and rules and regulations enacted or
promulgated by duly constituted government authorities.
SECTION2 - Utmost fidelity, sincerity, respect for colleagues in the profession, and honesty shall be
observed at all times by those in the realty service practice in their relation client, the community and the nation in
general.
SECTION3 - Adequate knowledge, competence and expertise in real estate development and
management; and the upgrading of the standards of practice shall be affected when need arises; all these for, and
in the interest of the social and economic progress of the country.
SECTION4 - The spirit of camaraderie, cooperation and professional relationship by respecting the rights
of the other practitioners shall be promoted, and every organization to which they shall be encouraged to join shall
have such aims and purposes as it will set up, upgrade, and maintain a high level of integrity, honesty and
competence in the profession for the best interest the community and the nation.
SECTION5 - A high level of professional and respect relationship with colleagues in the Realty Service
Practice shall be maintained, and their dealings with each other shall always be fair, honest and just.
SECTION 6 - The Golden Rule which reads; "Treat others as you like them to treat you" shall be
observed in all the dealings and relation of the practitioners with clients, fellow practitioners, the organization to
which they belong and the general public.

ARTICLE II. SCOPE AND PURVIEW OF THE CODE

SECTION 1- As used in this code and for the purpose thereof. The Realty Service Practice shall embrace
and include all persons, partnerships or corporations who are duly licensed by the Department of Trade and
Industry in accordance with Section3(e) and (ee) of Act No. 2728 as amended by Act No. 3715 and 3969 and
Ministry Order No.39. Series of 1985 as real estate salesman, broker, appraiser or consultant and such other
practitioners as the Directors of the Department of Trade and Industry may now or hereafter license pursuant to
any law, rule or regulation that may be promulgated by the government. They shall be called Realty Service
Practitioners hereinafter known as the Practitioners.
ARTICLE III. RULES OF CONDUCT AND PRACTICE
The practitioners shall be governed by the following rules of conduct and practice;
SECTION1. Relation to the Government
(a) The practitioner should secure all the necessary licenses, permits and authority
from
the Department of Trade and Industry and other government agencies as may required by law, ordinance
or rules and comply with all the requirements thereof before engaging in the same;
(b) He should pay any and all taxes, fees, dues levies or charges that the government
impose in accordance to law, ordinance, or rules and regulations;

may

(c) He should help, assist and cooperate with the Department of Trade and Industry
and all
government agencies and instrumentalities in the promotion, development, proper
zonification and
conservation of lands and other natural resources; its improvements and rights
and interests therein;
(d) He should not encourage, abet, tolerate or participate in the evasion or illegal
reduction in the payment of all taxes, fees, dues, levies or charges that may be imposed by the
government;
(e) He should not offer or agree to pay to, split or rebate any commission, fee or valuable
consideration, directly or indirectly, with any person who is not a duly licensed practitioner or to
cooperate, assist or endorse any transaction or engagement of his services in
violation of any existing
law, rule or regulation;
(f)
He should indicate the license number of the Certificate issued by the
Trade and Industry in his letterhead, dry seal, signboard, billboard, advertisement
announcement in relation to the Realty Service Practice;

Department of
or
other

SECTION 2- Relation to the Public

(a) The practitioner should be imbued with a social conscience for he does not live
and his family alone but he is a part of society with definite social responsibilities.

by

(b) He should ensure the highest and the best use of the land and the equitable distribution
ownership, irrespective of political beliefs, cultural background, sect religion or class;
(c) He should keep himself well informed as to any movement affecting real estate
in
community, city or province, so that he may be able to contribute to the public thinking on
of taxation, land use, city planning, zonificaton and other programs of the government;

himself
of
his
matters

(d) He should cooperate with the government in protecting the public against
deceptive, unfair and
unconscionable acts and practices of some unscrupulous or unlicensed practitioners,
like
fraud,
misrepresentation, concealment of relevant information and other related unethical practices;
(e) He ascertain all pertinent facts concerning every property, and avoid error, exaggeration,
misrepresentation, concealment of pertinent facts in dealing with the general public
concerning real
estate transactions;

(f) He should not be instrumental in introducing in a neighborhood a certain

of property which will tend to impair or erode property values within that

character
or
neighborhood;

(g) He should not be a party to the naming of a false consideration in deed of

use

instrument;

(h) He should keep a special bank account separate and distinct from his own funds,
all
moneys received in trust for other persons, such as deposit in escrow, trust funds, clients earnest money
and similar items;
(i) In his advertisements, brochures or announcements, he should present a true picture of
the
property, its improvements, or rights and interests therein including whatever liens
or
encumbrances it may have, if any, and should indicate his name, firm name, address and license number
of the Certificate issued by the Department of Trade and Industry. In case of real estate salesman,
he
should indicate the name, firm name and license number of the broker under
whom he is employed;
(j) He should see to it that all agreement, terms and conditions, financial obligations
and
commitments in a real estate transaction are in writing, duly signed by all parties concerned,
necessary to be properly authenticated by a Notary Public.
SECTION 3 - Relation to the Client Customer
(a) T he practitioner, in accepting an appointment or Authority to act for and in behalf of a
client or customer, should pledge himself with utmost fidelity and good faith to protect
and promote the interest of his client without in any manner sacrificing the legitimate
interest of the other party in the transaction;
(b) For the sake of justice and fairness to his client who have reposed confidence in him, the
Practitioner should endeavor to be well informed of current legislation, policies and
programs of the government including proposed legislation, which may affect the interest
of his client;
(c) He should not accept any commission, fee or any valuable consideration from any party
in any transaction except from his client unless with the full knowledge and consent of all
the parties in the transaction. He shall not also introduce or work for an overprice from
either the buyer or seller except the usual standard rate of commission on any real estate
transaction;
(d) He should charge or collect only such fees or commissions as are fair and reasonable in
accordance with usual schedule of commission for Metro Manila and provinces;
(e) He should not advertise any property without authority and in any offering, the price
quoted should be in accordance with the price agreed with the owners as the offering
price.
(f) In the event that more than one formal offer on a specific property is made before the
owner has accepted a proposal, all written offers should be presented to the owner for his
decision;
(g) He should endeavor to make his client and customer concludes a fair contract
advantageous to both;
(h) He should assist his customer acquire possession and ownership of the real property
bought in accordance with the terms and conditions agreed upon;
(i) In case he is called upon to act as witness in a court proceeding he should give his
testimonies in the most unbiased, honest, truthful, and professional manner;
(j) As a real estate appraiser, he should not render an
opinion without careful and thorough
analysis and interpretation of all factors affecting the value of the property. His counsel

and

if

and advice constitutes a professional service for which he should make a fair and
reasonable charge;
(k) As an agreement, he should not undertake to make an appraisal or render an opinion that
is outside the field of his experience and competence unless he obtains the assistance of
another practitioner familiar with such type of property or unless the facts are fully
disclosed by the client.
SECTION 4- Relations to Fellow Practitioners
(a) He should not solicit a listing which is currently listed exclusively with another broker
unless the listing agreement has expired or revoked by the owner and the owner offers to
list the same to the new broker without soliciting the same;
(b) When he accepts a listing from another broker, the agency of the broker who offers the
listing should be respected until it has expired and the property has come to the attention
of the accepting broker from a different source, or until the owner without solicitation,
offers to list with the accepting broker. Such a listing should not be passed to a third
broker or published in a daily newspaper without the knowledge and consent of the
listing broker;
(c) Signs giving notice of a property for sale, rent, lease or exchange should not be placed on
any property by more than one broker and only if authorized by the owner;
(d) He should not use information obtained by him from a listing broker through offers to
cooperate or received through multiple listing services or other sources authorized by the
listing broker for the purpose for creating a referral prospect to a third broker or for
creating a buyer's prospect, unless such is authorized by the listing broker;
(e) He should cooperate with other brokers on property listed and share the commission on
an agreed basis. Negotiations concerning property listed exclusively with one broker
should be carried with the listing broker, and not the owner, except with the consent of
the listing broker;
(f) He should not solicit or use the services of an employee or salesman of another
practitioner without the knowledge of the employer;
(g) He should not criticize publicly a competitor nor volunteer an opinion of a competitor's
transaction. If his opinion is sought, it should be rendered with professional integrity and
courtesy;
(h) The practitioners should seek no fair advantage over his fellow practitioners. In the event
of a controversy between practitioners belonging to the same organization or association,
such controversy should be submitted for arbitration to such organization or association
whose decision, if accepted by both parties, will be final and binding as far as the
association is concerned.
(j) If the controversy is between practitioners belonging to different organizations or
associations, it should be submitted to an Arbitration Board considering of one member
from each organization or association chosen by each of the parties to the controversy. A
third member should be chosen from either the organizations or association or from the
national organization or association is affiliated.
(k) In case the practitioners in a controversy are not members of any duly recognized
organization or the Arbitration Boards cannot settle the controversy, the Department of
Trade and Industry shall assume jurisdiction over said controversy;
(f) In case a complaint is filed against a practitioner with his organization or association for
unethical or unfair practice, he should voluntarily submit all pertinent facts before an

investigating body that may be informed by his organization or association for evaluation
and resolution.
SECTION 5 -Relation to his Organization Including the National Association to which his Organization
is affiliated
(a) In the interest of society and his own profession, calling or occupation, the practitioner
should abide by the Constitution and By-Laws of his association or organization and the
National Association to which it is affiliated;
(b) Election as officer or member of the governing body of the organization or association
carries with it the moral obligation to serve honorably, unselfishly, diligently and
efficiently. It should not be subject of the election campaign or use of letters or circulars
announcing one's candidacy or appealing for votes for himself or for other nominees or
candidates or other forms of electioneering or any agreement or any act which will
interfere with the free and wise choice of the officers and members of governing body of
the organization;
(c) He should support his organization morally and financially and actively support its plans,
programs and projects for the benefit of all the members of the organization or
association;
(d) Any practitioner should first exhaust all administrative remedies available under existing
laws, rules and regulations before taking any judicial or quasi-judicial action.
ARTICLE IV.SANCTIONS
Violations of any provision of this Code shall give rise to any sanction that may be imposed by the
organization to which the practitioner belongs as a member, without prejudice, however, to such disciplinary
action that the Department of Trade and Industry may deem expedient thereon when the proper complaint against
the erring practitioner for alleged misconduct is filed with the Department in accordance with existing laws and
regulations. In the case of practitioners who are not members of any organization , any complaint against them
shall be governed by the existing laws, rules and regulations governing controversies.
ARTICLE V. EFFECTIVITY
This code shall take effect immediately.
Done in Makati, Metro Manila, this 29th day of September, 1993
(SGD) RIZALINO S. NAVARRO
Secretary, Department of Trade and Industry

III

Legal Requirements for Real Estate Service Practice

A. MAJOR LAWS GOVERNING REAL ESTATE SERVICE PRACTICE

1. THE REAL ESTATE SERVICE ACT, REPUBLIC ACT NO. 9646 and IRR
2. SUBDIVISION AND CONDOMINIUM BUYERS PROTECTIVE DECREE, PD 957
3. LOCAL GOVERNMENT CODE OF 1991, REPUBLIC ACT NO. 7160
B. THE REAL ESTATE SERVICE ACT OF THE PHILIPPINES

REPUBLIC ACT NO. 8646

IMPLEMENTING RULES AND REGULATIONS
REPUBLIC OF THE PHILIPPINES
PROFESSIONAL REGULATION COMMISSION
Manila
PROFESSIONAL REGULATORY BOARD OF REAL
ESTATE SERVICE
Resolution No. 02
Series of 2010
IMPLEMENTING RULES AND REGULATIONS
OF REPUBLIC ACT NO.9646, KNOWN AS
THE "REAL ESTATE SERVICE ACT OF THE PHILIPPINES"

Pursuant to Section 5, (J), Article II and Section 42, Article V of Republic Act No.9646, "An Act regulating the
Practice of Real Estate Service in the Philippines, Creating for the Purpose a Professional Regulatory Board of
Real Estate Service, Appropriating Funds therefore, and for other Purposes", the Professional Regulation
Commission, herein after referred to as the Commission, hereby adopts, issues and promulgates this resolution
embodying the following Implementing rules and Regulations to carry out, administer, and enforce the provisions
of R.A. NO.9646.
RULE 1
TITLE OF THE RULES, DECLARATION OF POLICY & DEFINITION OF TERMS
SEECTION 1.Title- These Rules shall be known as "THE IMPLEMENTING RULES AND
REGULATIONS OF REPUBLIC ACT NO.9646, known as the Real Estate Service Act of the Philippines", in
short, the "IRR of R.A. No.9646", or merely the IRR.
SEC.2. Declaration of Policy- The State recognizes the vital role of Real Estate service practitioners in the social,
political economic development and progress of the country by promoting the real estate market, stimulating
economic activity and enhancing government income from real property-based transactions. Hence, it shall
develop and nurture through proper and effective regulation and supervision a corps of technically competent,
responsible and respected professional real estate service practitioners whose standards of practice and service
shall be globally competitive and will promote the growth of the real estate industry.
The IRR shall be interpreted, construed, and carried out in the light of the above Declaration of Policy, which
embodies the legislative intent in enacting R.A. NO. 9646.
SEC.3. Definition of terms - As used in the IRR, the following terms shall be understood to mean as follows:
a. "Appraiser" also known as valuer, refers to a person who conducts, valuation/appraisal;
specifically,
one who possesses the necessary qualifications, license, ability and experience to execute or direct the
valuation/appraisal of real property.
b. "Assessor" refers to an official in the local government unit, who performs appraisal and assessment of
real properties, including plants, equipment, and machineries, essentially for
taxation purposes. This
definition also includes assistant assessors.
c. "Real Estate" refers to the land and all those items which are attached to the land. It is the physical
d. "Real Estate development project" means the development of land for residential, commercial,
industrial, agricultural, institutional or recreational purposes, or any combination of such including, but
not limited to tourist resorts, reclamation projects, building or housing projects, whether for individual
or condominium ownership, memorial parks and others of similar nature.
e. "Real estate developer" refers to any natural or juridical person engaged in the business of developing real
estate development project for his/her or its own account and offering them for sale or lease.
f. "Real property" includes all the rights, interest and benefits related ti the ownership of real estate.
g. "Real estate service practitioners" shall refer to and consist of the following:
(1) Real estate consultant - a duly registered and licensed natural person who. For a professional
fee, compensation or other valuable consideration, offers or renders professional advice and
judgment on: (i) the acquisition, enhancement, preservation, utilization or disposition of
lands or improvements thereon: and (ii) the conception, planning, management and
development of development of real estate projects.
(2) Real estate appraiser - a duly registered and licensed natural person who, for a professional
fee, compensation or other valuable consideration, performs or renders, or offers to perform
services in estimating and arriving at an opinion of or acts as an expert on real estate values,
such services of which shall be finally rendered by the preparation of the report in acceptable
written form.

(3) Real estate assessor - a duly registered and licensed natural person who works in a local
government unit and performs appraisal and assessment of real properties, including plants,
equipment, and machineries, essentially for taxation purposes.
(4) Real estate broker - a duly registered and licensed natural person who, for a professional fee,
commission or other valuable consideration, acts as an agent of a party in a real estate
transaction to offer, advertise, solicit, list, promote mediate, negotiate or effect the meeting of
minds on the sale, purchase, exchange, mortgage, lease or joint venture, or other similar
transactions on real estate or any interest therein.

the

(5) Real estate salesperson - a duly accredited natural person who performs service for, and in
behalf of a real estate broker who is registered and licensed by the Professional Regulatory
Board of Real Estate Service for or In expectation of a share in the commission, professional
fee, compensation or other valuable consideration.
h. "Accredited and Integrated Professional Organization (IAPO)" - the national integrated organization of natural
persons duly registered and licensed as Real Estate Service Practitioners that the Board, subject to the approval by
the Commission, shall recognize or accredited as the only AIPO, pursuant to Sec. 34, Art of R.A No.9646
i. "Interim Accredited Professional Organization (IAPO)" - the professional organization accredited by the
Commission only to operate and perform activities or acts prior to and until the recognition or birth of the AIPO
as defined in h. above.
RULE II
PROFESSIONAL REGULATORY BOARD OF REAL ESTATE SERVICE
SEC.4 Creation and Composition of the Board - There is hereby created a Professional Regulatory Board of Real
Estate Service, hereinafter referred to as the Board, under the supervision and administrative control of the
Professional Regulation Commission (PRC), hereinafter reffered to as the Commission, composed of a
chairperson and four (4) members who shall appointed by the President of the Philippines from the three (3)
recommendees chosen by the Commission from a list of five (5) nominees per position submitted by the
accredited and integrated professional organization of real estate service practitioners: Provided, That two (2) of
the members of the Board shall represent the government assessors and appraisers, who are both in active
government service.
The first Board shall be organized within six (6) months from the effectivity of R.A No. 9646.
This provision shall be implemented in accordance with the guidelines of Executive Order No. 496,
Series of 1991 on the selection, nomination, recommendation, and appointment of those who will fill up any
vacancy in the Board.
SEC.5 Power and Functions of the Board - The Board is hereby vested the following specific power and
functions:
(a) Provide comprehensive policy guidelines for the promotion and development of the real estate industry in
relation to the regulation of the practice of the real estate service profession;
(b) Conduct licensure examinations for the practice of the real estate service profession and prescribe the
appropriate, syllabi of the subject for examination with their tables of specification;
(c) Issue, suspend revoke or reinstate, after due notice and hearing, certificates of registration or professional
identification cards for the practice of real estate service;
(a) Maintain a comprehensive and updated register of licensed real estate service professionals;
(b) Monitor the conditions affecting the practice of real estate service and adopt such measures as may be proper
for the enhancement of the profession and/or the maintenance of high professional, ethical and technical
standards;

(c) Adopt a national Code of Ethics and Responsibilities issued by the AIPO to be strictly observed by all licensed
real estate service practitioners;
(d) Hear or investigate any violation of R.A. No. 9646, the IRR and the Code of Ethics and Responsibilities for
real estate service practitioners and issues subpoena duces to secure the appearance of witness and the production
of document in connection therewith;
(e) Safeguard and protect legitimate and licensed real estate service practitioners and, in coordination with the
accredited and integrated professional organization (AIPO) of real estate service practitioners, monitor all forms
of advertisements, announcements, signboards, billboards. Pamphlets, brochures and other similar nature
concerning real estate and, where necessary, exercise its quasi-judicial and administrative powers to finally and
completely eradicate the pernicious practices of unauthorized or unlicensed individuals;
(f) Prescribe, in cooperation with the Commission on Higher Education (CHED) or the concerned state university
or collage, the essential requirement as to the curricula and facilities of schools, colleges or universities seeking
permission to open academic courses or already offering such courses in real estate service, and to see to it that
these requirements, including the employment of qualified faculty members, are properly complied with;
(g) Promulgate, administer and enforce rules and regulations necessary in carrying out the provisions of R.A. No.
9646;
(h) Supervise and regulate the registration, licensure and practice of real estate service in the Philippines;
(i) Assess and fix the rate of reasonable regulatory fees;
(k) Adopt an official seal of the Board with the interpretation of its symbols attached to this Resolution and made
part thereof as Annex "A";
(l) Evaluate periodically the status of real estate service education and profession, and recommend and/or
measures to upgrade and maintain its high standard;
(m) Prescribe guidelines and criteria for the Continuing Professional Education (CPE) program for real estate
service practitioners in consultation with the accredited and integrated professional organization of real estate
practitioners;
(n) Screen, issue and monitor to organizations of real estate professional in the conduct of seminar and accredit
such pursuant to the CPE program, as well as the instructors or lecturer therein , for the purpose of upgrading the
quality and knowledge of the profession;
(o) Monitor and supervise the activities of the accredited and integrated professional organization (AIPO) and
other associations of real service practitioners; and
(p) Discharge such other powers, duties and functions as the Commission may deem necessary to carry out the
provisions of R.A. No. 9646.
The policies, resolutions and rules and regulations issued or promulgates by the Board shall be subject to the
review and approval by the Commission. However, the Board's decisions, resolutions or orders which are not
interlocutory, rendered in an administrative case, shall be subject to review by the Commission only on appeal, in
accordance with Republic Act No. 8981 and its Implementing Rules and Regulations.
SEC.6. Qualifications of the Chairpersons and Members of the Board. The Chairperson and the Members of the
Board shall, at the time of their appointment, possess the following qualifications:
(a) citizen and resident of the Philippines;
(b) holder of bachelor's degree related to real estate;
(c) An active licensed practitioner of real estate service for at least ten (10) years prior to his/her
appointment;
(d) A bona member in good standing of the accredited and integrated professional organization of
real estate service practitioners but not an officer or trustee at the time of his/her appointment;

(e) Neither be a member of the faculty of an institute, school, college or university, nor have any
interest, direct or indirect, in any institution or association where review classes or
lectures in preparation for the licensure examination are being offered or conducted; and
(f) Of good moral character, and must not have been convicted by final judgment by a competent
court of a criminal offence involving moral turpitude.
SEC.7 Term of Office. The chairperson and the members of the Board shall hold office for a term of three (3)
years from the date of their appointment and until their successor/s shall have been appointed: Provided, That the
members of the first appointed Board shall hold office for the following terms: one (1) member as chairperson, to
serve for three (3) years; two (2) members, to serve for two (2) years; and two (2) members, to serve for one (1)
year.
The Chairperson and the Members of the Board may be reappointed for a second term but in no case shall he/she
serve continuously for more than six (6) years. Any vacancy in the Board shall be filled for the unexpired portion
of the members who vacated the position. On the constitution of the first Board, the Chairperson and the Members
of the Board shall automatically be registered and issued Certificates of Registration and Professional
Identification Cards. Each members of the Board shall take the oath to the assumption of duty.
SEC. 8 Compensation and Allowances of the Chairperson and Members of the Board. The chairperson and the
members of the Board shall receive compensation and allowances comparable to the compensation and
allowances received by the chairman and the members of existing professional regulatory boards under the
Commission, as provided for in the General Appropriations Act, the Salary Standardization Law, and the Joint
Circular issued by the Commision and the Department of Budget and Management (DBM).
SEC. 9 Removal of the Chairperson and Members of the Board. The chairperson or any member of the Board
may be suspended or removed by the President of the Philippines, upon the recommendation of the Commission
and after due notice and hearing in a proper administrative investigation to be conducted by the Commission on
the following grounds:
1. Neglect of duly,
2. Abuse of power,
3. Oppression,
4. Incompetence,
5. Unprofessional, unethical conduct,
6. Immoral or dishonorable conduct,
7. Commission or toleration of irregularities in the conduct of examination or tampering of the grades, or
8. For any final judgment or conviction of any criminal offence involving moral turpitude.
The Commission in the conduct of the investigation shall be guided by Sec. 7 (s) of R.A. No. 8981 and its rules
on administrative investigation.
SEC. 10 Supervision of the Board, Custodian of its Records, Secretariat and Support Service. The Board shall be
under the general supervision and administrative control of the Commission. All records of the Board, including
applications for examination, examination papers and results, minutes of deliberations, administrative and other
investigative cases involving real estate service practitioners, shall be kept by the Commission. The Commission
shall designate the secretary of the Board at the office, Secretary, Professional Regulatory Boards and shall
provide the secretariat and other support services to implement the provisions of R.A. No. 9646 subject to the
usual government accounting and auditing rules and regulations
SEC. 11 Annual Report. The Board shall, at the close of each calendar year, submit an annual report to the
Commission, giving a detailed account of its proceedings and accomplishments during the year and
recommending measures to be adopted with the end-in-view of upgrading and improving the conditions affecting
the practice of real estate service in the Philippines.
RULE II
LICENSURE EXAMINATION AND REGISTRATION

SEC. 12 Licensure Examination. Every applicant seeking to be registered and licensed as a real estate service
practitioner, except a real estate salesperson, shall undergo an examination to be given by the Board as provided
for in R.A. No. 9646. Examinations for the practice of real estate service in the Philippines shall be given by the
Board in such places and dates as the Commission may designate in the Master Schedules of Board Licensure
Examinations for Professional for the year as issued by the Commission.
Sec. 13 Scope of Examination. The licensure examination for the applicants for real estate brokers, real estate
appraisers and real estate consultants shall cover, but no limited to the following
(a) For real estate consultants:
1. fundamentals of real consulting;
2. Standards and ethics;
3. Consulting tools and techniques, which include project feasibility study and investment measurement
tools;
4. Real estate finance and economics;
5. Real estate consulting and investment analyses;
6. Consulting for specific engagement, which includes consulting for commercial, industrial, recreation and
resort and hotel properties, and consulting for government and corporate and financial institutions;
7. Land Management system and real property laws; and
8. any other related subjects as may be determined by the Board;
(b) For real estate appraisers:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

Fundamentals of real estate principles and practices;

Standards and ethics;
Theories and principles in appraisal;
Human and physical geography;
Methodology of appraisal approaches
Valuation procedures and research;
Appraisal of machinery and equipment;
Practical appraisal mathematics;
Appraisal report writing;
Real estate finance and economics;
Case studies;
Land management system and real property laws; and
any other related subjects as may be determined by the Board; and

(c) For real estate brokers:

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.

Fundamentals of property ownership;

Code of ethics and responsibilities;
Legal requirements for real estate service practice;
Real estate brokerage practice;
Subdivision development;
Condominium concept and other real estate holdings;
Real estate finance and economics;
Basic principles of ecology;
Urban and rural use;
Planning, development and zoning;
Legal aspect of sale, mortgage and lease;
Documentation and registration;
Real property laws and taxation; and
any other related subjects as may determined by the Board

To conform to technological and modern developments, the Board may re-cluster, rearrange, modify, add to, or
exclude any of the foregoing subjects and their syllabi with tables of specifications as may be necessary.

SEC. 14 Qualification of Applicants for Examinations. In order to be admitted to the licensure examination for
real estate service, a candidate at the time of filing his/her application, shall establish to the satisfaction of the
Board that he/she possesses the following qualifications:
a) A citizen of the Philippines,
b) A holder of a relevant bachelor's degree from a estate university or college, or other educational
institution duly recognized by the CHED: Provided, That he/she has completed at least one hundred
twenty (120) credit units of real estate subjects and training from accredited service providers, as may be
determined by the Board; Provided, further, that as soon as a course leading to a Bachelor's degree in
Real Estate Service is implemented by the CHED, the Board shall make this course a requirement for
taking the licensure examination,
c) Is of good moral character, and must not have been convicted of any crime involving moral turpitude,
d) An application for the licensure examination for real estate consultants must show proof that he/she has at
least ten (10) years experience as a licensed real estate broker, or an assessor, or as a bank, or institutional
appraiser, or an employed person performing real property valuation, or at least five (5) years experience
as a licensed real estate appraiser.
All applications for examination shall be filed with the Board who shall assess and approve said applicants and
issue to the qualified examines the corresponding permits or notices of admission to take such examination upon
submission of the following documents:
1. Original and photocopy of Birth Certificate or Certificate of Live Birth (NSO) and / or valid Philippine
passport, or any other proof of citizenship,
2. Original and photocopy of transcript of records and / or diploma with scanned picture,
3. Original and photocopy of notarized certification by employer of his/her years of experience or prerequisite Certificate of Registration (COR) and / or Professional Identification Card (PIC) or DTI license
(for real estate consultants),
4. Original and photocopy of NBI clearance,
5. Original and photocopy of duly notarized accredited seminar and / or training certificate,
6. Community tax certificate,
7. Four (4) colored passport size pictures with background and complete nametag and other documents in
accordance with the requirements set by the Commission.
SEC. 15 Rating in the Examination. In order that a candidate may be deemed to have successfully passed the
examination, he/she must have obtained an average of at least seventy-five percent (75%) in all subjects, with no
rating below fifty percent (50%) in any subject. The board may adopt its own internal procedure on the
implementation of this provision.
The reports of ratings may be distributed to the successful examinees during their mass oath taking.
SEC. 16 Release of the Results of Examination. The results of the licensure examination shall be released by the
Board within ten (10) days from the last day of the examination. The results shall be published in a daily major
newspaper of general circulation and PRC website.
SEC. 17 Issuance of the Certificate of Registration and Professional Identification Card. A certificate of
registration shall be issued to examinees who pass the licensure examination for real estate service practice,
subject to payment of fees prescribed by the Commission. The certificate of registration shall bear the signature of
the chairperson of the Commission and the chairperson and the members of the Board, stamped with the official
seal of the Commission, indicating that the person named therein is entitled to practice the profession with all the
benefits and privileges appurtenant thereto. This certificate of registration shall remain in full force and effect
until revoked or suspended in accordance with R.A. No. 9646.
A Professional Identification Card bearing the registration number, date of issuance and expiry date, duly signed
by the chairperson of the Commission, shall likewise be issued to every registrant upon payment of the required
fees. The professional identification card shall be renewed every three (3) years and upon satisfying the
requirements of the Board such as, but not limited to, attendance in the CPE program.

SEC. 18 Refusal to Register. The Board shall not register and issue a certificate of registration to any successful
examinee who has been convicted by a court of competent jurisdiction of any criminal offense involving moral
turpitude or has been found guilty of immoral or dishonorable conduct after investigation by the Board, or has
been found to be psychologically unfit.
SEC. 19 Revocation or Suspension of the Certificate of Registration and the Professional Identification Card or
Cancellation of Special/Temporary Permit. The Board may, after giving proper notice and hearing to the party
concerned, revoke the certificate of registration and the professional identification card, or cancel the
special/temporary permit of a real estate service practitioner, or suspend him/her from the practice of the
profession on any of the following instances hereunder.
(a) Procurement of a certificate of registration and or/ professional identification card, or special/temporary permit
by fraud or deceit;
(b) Allowing an unqualified person to advertise or to practice the profession by using one's certificate of
registration or professional identification card, or special/temporary permit;
(c) Unprofessional or unethical conduct;
(d) Malpractice or violation of any of the provisions of R.A. No. 9646, the IRR, and the Code of Ethics and
Responsibilities for real estate service practitioner; and
(e) Engaging in the practice of the professional during the period of one's suspension.
The rules on administrative investigation issued by the Commission shall govern the hearing or investigation of
the case, subject to the applicable provisions of R.A. No. 8981, R.A. No. 9646, and the Rules of Court; Provided,
That the suspension or revocation of the Certificate of Registration and Professional Identification Card, or the
cancellation of the Temporary/Special Permit of the respondent professional shall not prejudice his/her
prosecution for criminal liabilities and the imposition of the penalties under R.A. No. 8981, R.A. 9646, under the
Revised Penal Code, or any other special law.
SEC. 20 Registration Without Examination. Upon application and payment of the required fees, the following
shall be registered, and shall be issued by the Board and the Commission a certificate of registration and a
professional identification card without taking the prescribed examination:
(a) Those whose, on the date of the effectivity of R.A. No. 9646 or as 30 July 2009, are already licensed as real
estate brokers, real estate appraiser or real estate consultants by the Department of Trade and Industry (DTI) by
virtue of Ministry Order No. 39, as amended: Provided, that they are in active as real estate brokers, real estate
appraisers, and real estate consultants, and that they have undertaken relevant Continuing Professional Education
(CPE) or Continuing Education Program (CPE) to the satisfaction of the Board: Provided, further, that the
following practitioners shall be allowed to register:
1. Any holder of the a valid DTI license who has earned fifteen (15) Continuing Education Program (CPE)
or CPE credit units;
2. Those who had failed to renew their DTI License prior to 30 July 2009 but who have earned twenty-four
(24) CPE credit units from accredited service providers as per M.O. 39 or CPE credit units from CPE
Council Accredited Provider from 2007 to July 30, 2011;
3. Those who had passed the 2009 & 2008 licensure examinations given by the DTI but who had failed to
obtain their license upon the affectivity of the R.A. No. 9646 and who have earned fifteen (15) CPE or
CPE credit units;
4. Those who had passed the 2007 licensure examinations given by the DTI but who had failed to obtain
their license upon the effectivity of the R.A. No. 9646 and who have earned eighteen (18) CPE or CPE
credit units;
5. Those who had passed the DTI licensure examinations in 2006 and prior years but who had failed to
obtain their license upon the effectivity of R.A. No. 9646 and who have earned one hundred twenty (120)
CPE or CPE credit units;
Provided, finally, that real estate practitioners falling the above-described categories who fail to comply with the
necessary CPE requirements within two (2) years after the efectivity of R.A. No. 9646, on or before 30 July 2011,
shall be required to take the Board licensure examination for real estate service practitioner;

(b) Assessors and appraisers who, on the date of the effectivity of R.A. No. 9646 or as of 30 July 2009, hold
permanent appointments and are performing actual appraisal and assessment functions for the last five (5) years,
have passed the Real Property Assessing Officer (RPAO) examination conducted and administered by the Civil
Service Commission (CSC) in coordination with the Department of Finance (DOF), and have undertaken relevant
CPE to the satisfaction of the Board; and
(c) Assessors and appraisers who, on the date of the effectivity of R.A. No. 9646 or as of 30 July 2009, hold
permanent appointments and have at least ten (10) years actual experience in real property appraisal or assessment
and have completed at least one hundred twenty (120) hours of accredited training on real property appraisal
conducted by national or international appraisal organizations or institutions/entities, duly certified by the
Department of Finance (DOF) or any other pertinent national government agencies or Government Owned and
Controlled Corporations (GOCC) as the case may be, recognized by the Board and relevant CPE credit units to
the satisfaction of the Board.
Those falling under categories (b) and (c) shall register with the Board after they shall have complied with the
requirements for registration as real estate appraisers, and have completed twenty four (24) CPE credit units.
Provided, that those seeking to be licensed to a new credential level shall be required to take the pertinent Board
licensure examination for real estate practitioners.
Those so exempt under the aforementioned categories shall file their applicant within two (2) years from the
effectivity of Republic Act No. 9646 or until 30 July 2011. Provided, that the renewal of the professional
identification card is subject to the provisions of Section 17, Art. III of R.A. No. 9646.
An applicant for registration without examination must submit the following documents:
1. Original and photocopy of Certificate of Live Birth/Birth Certificate (NSO), or valid Philippine
passport, or any other proof of citizenship;
2. Original and photocopy of Certificate of Registration (COR) and / or Professional Identification Card
(PIC) or DTI License;
3. DTI certificate of Rating (for those who passed the examination but failed to obtain their license),
4. Original and photocopy of NBI Clearance,
5. Duly notarized CEP/CPE Certification,
6. Civil Service Commission Certificate, DOF, or any other national government agencies or, GOCC
Certificate (assessors or government appraisers), or any certificate of accredited seminar/training
provider,
7. Appointment papers and service to prove appraisal or assessment experience (for assessors of
government appraisers),
8. Four (4) passport size colored photos with complete nametag in white background, original and
photocopy of community tax certificate (CTC) , and surety bond for real estate brokers and private
real estate appraisers.
SEC. 21 Reinstatement, Re-issuance or Replacement of Certificate of Registration, Professional Identification
Card and Special/Temporary Permit. The Board may, after the examination of two (2) years from the date of
revocation of a certificate of registration and/or professional identification card, and upon application and
compliance with the required CPE units, and for the reasons deemed proper and sufficient, reinstate any revoke
certificate of registration and reissue a suspended identification card and in so doing, may, in its discretion,
exempt the applicant from the taking another examination; Provided, that the Board shall issue a resolution
subject to the approval of the Commission in granting a petition for reinstatement to the practice of real estate
service profession. A new certificate of registration, professional identification card or special/temporary permit
may be issued to replace lost, destroy or mutilated ones, subject to the rules as may be promulgated by the Board
and the Commission, upon payment of the required fees therefor.
SEC. 22 Roster of Real Estate Service Practitioner. The Board, in coordination with the AIPO of real estate
service practitioners, shall prepare, update and maintain a roster of real estate service practitioners which shall
contain the names of all registered estate service practitioners, their residence and office address, license

numbers, date of registration or issuance of certificates, and other data which the Board may deem pertinent.
Copies thereof shall be made available to the public upon request.
SEC. 23 Issuance of Special/Temporary Permit. Upon application and payment of the required fees and subject to
the approval of the Commission, the Board may issue special/temporary permit to real estate service practitioners
from foreign countries whose services are urgently needed in the absence or unavailability of local real estate
service practitioners for the propose of promoting or enhancing the practices of the profession in the Philippines.
SEC. 24 Foreign Reciprocity. No foreign real estate service practitioners shall be admitted to the licensure
examination, be given a certificate of registration or a professional identification card, be issued a
Special/Temporary Permit, or be entitled to any of the privileges under R.A. No. 9646 and the IRR unless the
country of which he/she is a citizen of specifically allows Filipino real estate service practitioners to practice
within its territorial limits on the same basis as the citizens of such foreign country; Provided, That the guidelines
therefor issued by the Commission, or by the Board subject to approval by the Commission, shall govern the
provisions of foregoing Sec. 23 and of the herein Sec. 24.
RULE IV
PRACTICE OF REAL ESTATE SERVICE
SEC. 25 Oath. All successful examinees qualified for registration, all qualified applicants for registration without
examination and accredited salespersons shall be required to take the oath before any member of the Board or any
officer of the Commission duly authorized by the Commission to administer oaths prior to entering into the
practice of real estate service in the Philippines Provided, That the mass oathtakng of the foregoing may be
initiated and supervised by the Board in coordination with the AIPO.
SEC. 26 Professional Indemnity Insurance/Cash or Surety Bond. All real estate brokers and private real estate
practitioners shall, in addition to the oath referred to in the preceding section, be required to post a professional
indemnity insurance/cash or surety bond, in an amount to be determined by the Board, which in no case shall be
less then Twenty thousand pesos (P20,000.00), without prejudice to the additional requirement of the client. It
will be renewable every three (3) years.
SEC. 27 Acts Constituting the Practice of Real Estate service. Any single act or transaction embrace within the
provisions of Section 3(g), Rule II hereof, as performed by the real estate service practitioners, shall constitute an
act of engaging in the practices of real estate service.
SEC. 28 Exemptions from the Acts Constituting the Practice of Real Estate Service. The provisions of R.A. No.
9646 and the IRR shall not apply to the following:
(a) Any person, natural or juridical, who shall directly perform by himself/herself the acts mentioned in Section
three hereof with reference to his/her or its own property, except real estate developers who are regulated by and
registered with the Housing and Land Use Regulatory Board (HLURB) pursuant to law and other
resolutions/regulations such as but nut limited to Presidential Decree (PD) 957, as amended, and Batas Pambansa
Blg. 220 and their Implementing Rules and Regulations;
(b) Any receiver, trustee or assignee in bankruptcy or insolvency proceedings;
(c) Any person acting pursuant to the order of any court of justice
(d) Any person who is a duly constituted attorney-in-fact for purposes of sales, mortgage, lease or exchange, or
other similar contracts or real estate, without requiring any form of compensation or remuneration; and
(e) Public Officers in the performance of their official duties and functions, except government assessors and
appraisers.

SEC. 29 Prohibition Against the Unauthorized Practice of Real Estate Service. No person shall practice or offer
to real estate service in the Philippines or offer himself/herself as real estate service practitioner, or use the title,
word, figure or any sign tending to convey the impression that the one is a real estate service practitioner, or
advertise or indicate in any manner whatsoever that one is qualified to practice the profession, or be appointed as
real property appraiser or assessor in any national government entity or local government unit, unless he/she
satisfactory passed the licensure examination given by the Board, excepts as otherwise provided in R.A. No. 9646
and the IRR is a holder of valid certificate of registration and professional identification card or a valid
special/temporary permit duly issued to him/her by the Board and the Commission; and, in the case of real estate
brokers and private appraisers, they paid the required bond as provided for in R.A. No. 9646.
SEC. 30 Positions in Government Requiring of Registration and Licensed Real Estate Service Practitioners.
Within three (3) years from the effectivity of R.A. No. 9646, all existing and new position in the national and
local governments, whether career, permanent, temporary or contractual, primarily requiring the services of any
real estate service practitioner, shall be filled only by registered and licensed real estate service practitioners. All
incumbent assessors holding permanent appointments shall continue to perform their functions without need for
re-appointment and without diminution of status, rank and salary grade, and shall enjoy security of tenure.
However, they may not be promoted to a higher position until they meet the qualification requirements of that
higher position as herein prescribed. Nothing in R.A. No. 9646 and the IRR shall be construed to reduce any
benefit, interest, or right enjoyed by the incumbents at the time of the enactment of R.A. No. 9646. The
appointing shall exercise his power to appoint the assessor in accordance of R.A. No, 9646 and the IRR only a
vacancy occurs.
SEC. 31 Supervision of real Estate Salespersons. For real estate salespersons, no examination shall be given, but
they shall be accredited by the Board, provided that they have completed at least two (2) years of college and have
undergone training and seminars of at least twelve (12) credit units in real estate brokerage. Those salespersons
who are registered with the DTI/HLURB or other salespersons who are in the active practice for at least three (3)
years, as may be certified by a licensed broker or a real estate developer, prior to the effectivity of R.A. no. 9646
may also be accredited by the Board until 30 July 2011. Provided, that in both cases, such Real Estate
Salespersons must have undergone at least one hundred twenty (120) training hours in real estate brokerage, and
have submitted original NSO certificate, NBI clearance, certificate of education attainment or its equivalent,
notarized certificate of training or seminar and notarized certificate of their supervising licensed brokers, as may
required by the Board. Real estate salesperson shall be the direct supervision and accountability of real estate
broker. As such, they cannot by themselves be signatories to a written agreement involving a real estate
transaction unless the real estate broker who has direct supervision and accountability over them is also a
signatory thereto. No real estate salesperson, either directly, can negotiate, mediator transact any real estate
transaction for and in behalf of a real estate broker without first securing an authorized accreditation as real estate
salesperson for the real estate broker, as prescribed by the Board. A real estate shall be guilty of violating R.A.
No. 9646 or the IRR for employing or utilizing the services of a real estate salesperson when he/she has not
secured the required accreditation form the Board prior to such employment.
No salesperson shall be entitled to receive or demand a fee, commission or compensation of any kind from any
person, other than the duly licensed real estate broker who has direct control and supervision over him, for any
service rendered or work done by such salesperson in any real estate transaction. No violation of this provision
shall be a cause for revocation or suspension of the certificate of registration of the real estate broker unless there
was actual knowledge of such violation or the broker retains the benefits, profits or proceeds of a transaction
wrongfully negotiated by the salesperson.
SEC. 32 Corporate Practice of the Real Estate Service.

(a) No partnership or coordination shall engage in the business of real estate service unless it is duly registered
with the Securities and Exchange Commission (SEC), and the persons authorized to act for the partnership or
corporation are all duly registered and licensed real estate brokers, appraisers or consultants, as the case may be.
The partnership or corporation shall regularly submit a list of its real estate service practitioners to the
Commission and to the SEC as part for every twenty (20) accredited salespersons.
(b) Division or departments of partnerships and corporations engage in marketing or selling any real estate
development project in the regular course of business must be headed by full-time registered and licensed real
estate brokers.
(c) Branch offices of real estate brokers, appraisers or consultants must be manned by a duly licensed real estate
broker, appraiser or consultant as the case may be.
In case of resignation or termination from employment of real estate service practitioner, the same shall be
reported by the employer to the Board within a period not to exceed fifteen (15) days from the date of effectivity
of the registration or termination. Subject to the provisions of the Labor Code, a corporation or partnership may
hire the services of registered and licensed real estate brokers, appraisers or consultants on commission basis to
perform real estate service and the latter shall be deemed independent contractors and not employees of such
corporations.
SEC. 33 Display of License in the Place of Business. Every registered and licensed real estate service practitioner
shall establish and maintain a principal place of business and such other branch offices as may be necessary, and
shall conspicuously display therein the original and/or certified true copies of registration and professional
identification cards of all the real estate service practitioners employed in such office.
SEC. 34 Accreditation and Integration of Real Estate Service Association. All real estate service association shall
be integrated into one (1) national organization, which shall be recognized by board, subject to the approval of the
commission, as the only accredited and integrated professional organization of real estate service practitioners
pursuant to PRC Res. No 2004-178, series of 2004.
A real estate service practitioner duly registered with the board shall automatically become a member of the
accredited and integrated professional organization of real estate service practitioner, and shall receive the
benefits and privileges appurtenant thereto; Provided That the board, subject to approval by the commission, shall
issue a resolution on the membership and payment of the fee therefore as a requirement fro the renewal of the
professional identification card, the automatic membership in the accredited and integrated professional
organization of real state service practitioner shall not be a bar to membership in other association of real estate
service practitioner
SEC. 35 Code of Ethics and Responsibilities for Real Estate Service Practitioner. The board shall adopt and
promulgated the code of ethics and responsibilities for real estate service practitioner which shall be prescribed
and issued by the accredited and integrated professional organization (AIPO) of real estate service practitioner.
SEC. 36 Continuing Professional Education (CPE) Program. The board shall develop, prescribed and
promulgated guidelines on CPE upon consultation with the accredited and integrated professional organization of
real estate service practitioner, affiliated association of real estate service practitioners and other concerned
sectors, and in accordance with such policies as may have been prescribed by the board, subject to the approval of
the commission .the board shall create a CPE council that shall be composed of a chairperson coming board ,a
member from the accredited and integrated professional organization of real estate service practitioner and a
member from the academe.
SEC. 37 Enforcement Assistance to the Board. The board shall be assisted by the commission in carrying out the
provisions of R.A No. 9646 and the IRR and other policies. The lawyers of the commission shall act as
prosecutors against illegal practitioner and other violations of R.A No. 9646 and the IRR. The duly constituted

authorities of the government shall likewise assist the board and commission in enforcing the provisions of R.A
No.9646 and the IRR.
SEC.38. Indication of the certificate of registration, professional identification card/license number, privilege tax
receipt (PTR) number, accredited integrated professional organization (AIPO)number. Real estate service
practitioner shall be required to indicate the certificate of registration, professional identification card, PTR
number and AIPO membership and or receipt issue in connection with the practice of his/her profession.,
RULE V
PENAL AND FINAL PROVISIONS
SEC. 39 Penal Provisions. Any violation of R.A. 9646, including violations of this IRR, shall be meted the
penalty of a fine of not less than one hundred pesos (P100,000.00) or imprisonment of not less than two (2) years,
or both such fine and imprisonment upon the discretion of the court. In case the violation is committed by an
unlicensed real estate service practitioner, the penalty shall be double the aforesaid fine and imprisonment. In case
the violation is committed, by a partnership, corporation, association or any other juridical person, the partner,
president, director or manager who has committed or consented to or knowingly tolerated such violation shall be
held directly liable and responsible for the acts as principle or as a co-principal with other participants, if any.
SEC. 40 Appropriations. The chairperson of the Professional Regulation Commission shall immediately include
in the Commission's programs the implementation of R.A. No. 9646 and the IRR the funding of which shall be
included in the annual General Appropriations Act and thereafter.
SEC. 41 Transitory Provision. Within ninety (90) days from the effectivity of R.A. No. 9646, the DTI-Bureau of
Trade Regulation and Consumer Protection (BTRCP) shall transfer all pertinent records, documents and other
materials to the Professional Regulatory Board of Real Estate Service.
SEC. 42 Implementing Rules and Regulations. Within six (6) months after the effectivity of R.A. No.9646, the
Commission, together with the Board and the accredited and integrated professional organization of real estate
service practitioners, the Department of Finance, and the CHED, shall prepare the necessary rules and regulations,
including the Codes of Ethics and responsibilities for real estate service practitioners, needed to implement the
provisions of R.A. No. 9646. The Board shall issue and promulgate a resolution for the IRR subject to review and
approval by the Commission.
Nothing in R.A. No. 9646 and the IRR shall be construed or interpreted to effect or prevent the practice of any
other profession legally regulated by any other professional regulatory law.
SEC. 43 Separability Clause. If any clause, sentence, paragraph or part of the IRR shall be declared
unconstitutional or invalid, such judgment shall not affect, invalidate or impair any other part thereof.
SEC. 44 Repealing Clause.
1. Section 3(e) and (ee) of Act No. 2728, as amended by Act No. 3715 and Act No. 3969, Sections 472 and
473 of the Local Government Code of 1991 (Republic Act No. 7160), and pertinent provisions of the
Civil Service Law are hereby modified accordingly.
2. All laws, decrees, executive orders, department or memorandum orders and other administrative
issuances or parts thereof which are inconsistent with the provisions of R.A. No. 9646 and / or the IRR
are hereby modified, superseded or repealed accordingly.
SEC. 45 Effectivity. The IRR shall take effect after fifteen (15) days following its full and complete publication in
the Official Gazette or in a major daily newspaper of general circulation in the Philippines.
Done in the City of Manila this 21st day of July, 2010

Published July 24, 2010 [ Philippines Daily Inquirer and The Philippines Star ]

C. PERTINENT PROVISIONS OF PD 957 AND IRR

PRESIDENTIAL DECREE NO. 957
Subdivision and Condominium Buyer's Protective Decree
(as amended by P.D. 1216)
REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS, PROVIDING
PENALTIES FOR VIOLATIONS THEREOF
Title 1
TITLE AND DEFINITIONS
SECTION 1. Title- This Decree shall be known as THE SUBDIVISION AND CONDOMINIUM BUYERS'
PROTECTIVE DECREE.
SECTION 2. Definition of Terms- When used in this Decree, the following terms shall, unless the context
otherwise indicates, have the following respective meanings:
xxxxxx
b) Sale or sell- "Sale" or "sell" shall include every disposition, or attempt to dispose, for a valuable
consideration, of a subdivision lot, including the building and other improvements thereof, if any, in a subdivision
project or a condominium unit in a condominium project. "Sale" and "sell" shall also include a contract to sell, a
contract of purchase and sale, an exchange, an attempt to sell, an option of sale or purchase, a solicitation of a
sale, or an offer to sell, directly or by an agent, or by a circular, letter, advertisement or otherwise.
A Privilege given to a member of a cooperative, corporation, partnership, or any association and/or the
issuance of a certificate or receipt evidencing or giving the right of participation in, or right to, any land in
consideration of payment of the membership fee or dues, shall be deemed a sale within the meaning of this
definition.
c) Buy and purchase- The "buy" and "purchase" shall include any contract to buy, purchase, or otherwise
acquire for a valuable consideration a subdivision lot, including the building and other improvements, if any, in a
subdivision project or a condominium unit in a condominium project.
xxxxxx
1) Broker- "Broker" shall mean any person who, for commission or other compensation, undertakes to
sell negotiate the sale of a real estate belonging to another.
m) Salesman- "Salesman" shall refer to the person regularly employed by a broker to perform for and in
his behalf, any or all functions of real estate broker.
xxxxxx

Title III
DEALERS, BROKERS AND SALESMEN
SECTION 11. Registration of Dealers, Brokers and Salesmen- No real estate dealer, broker or salesman
shall in the business of selling subdivision lots or condominium units unless he has registered himself with the
Authority in accordance with the provisions of this section.
If the Authority shall find that the applicant is of good repute and has complied with the applicable rules
of the Authority, including the payment of the prescribed fee, he shall register such applicant as a dealer, broker or
salesman upon filing a bond, or other security in lieu thereof, in such sum as may be fixed by the Authority
conditioned upon his faithful compliance with the provisions of this Decree: Provided, that the registration of a
salesman shall cease upon the termination of his employment with a dealer or broker.
Every registration under this section shall expire on the thirty-first day of December of each year Renewal
of registration for the succeeding year shall be granted upon written application thereof made not less than thirty
nor more then sixty days before the first of the ensuing year and upon payment of the prescribed fee, without the
necessary of filing further statement or information, unless specifically required by the Authority. All applications
filed beyond said period shall be treated as original applications.
The names address of all persons registered as dealers, brokers, or salesmen shall be recorded in a
Register of Broker of Brokers, Dealers and Salesmen kept in the Authority which shall be upon to public
inspection.
SECTION 12. Revocation of Registration as Dealer, Brokers or Salesmen- Registration under the
proceding section may be refused or any registration granted thereunder, revoked by the Authority if, after
reasonable notice and hearing, it shall determine that such applicant or registrant:
1. Has violated any provision of this Decree or any rule or regulation made hereunder, or
2. Has made a material false statement in his application for registration; or
3. Has been guilty of a fraudulent act in connection with any sale of a subdivision lot or condominium units;
or
4. Has demonstrated his unworthiness to transact the business of dealer, broker, or salesman, as the case
may be.
5. In case of charges against a salesman, notice thereof shall be given the broker or dealer employing such
salesman.
Pending hearing of the case, the Authority shall have the power to order the suspension of the dealer's,
broker's, of salesman's registration; provided, that such order shall state the cause for the suspension.
The suspension or revocation of the registration of a dealer or broker shall carry with it all the suspension
or revocation of the registrations of all his salesmen.
xxxxxx
Done in the City of Manila, this 12th day of July, in the year of Our Lord, nineteen hundred and seventysix.

(Sgd.) FRDINAND E. MARCOS

President of the Philippines

REVISED RULES AND REGULATIONS

IMPLEMENTING THE SUBDIVISION AND
CONDOMINIUM BUYER'S PROTECTIVE DECREE
(PD 957) AND OTHER RELATED LAWS
Pursuant to Article IV Section 5 c) of Executive Order No. 648 the following rules are hereby promulgated by the
Housing Land Use regulatory Board (HLURB) to implement Presidential Decree No. 957, 1344 and related laws
applicable to open market and medium cost subdivision and condominium projects.
xxxxxx
RULE V
REGISTRATION OF REAL ESTATE DEALERS, BROKERS AND SALESMEN
Section 13. Application for Registration of Brokers and Salesmen
No broker or salesman shall engage in the business of selling subdivision lots or condominium units without
securing a certificate of registration by filing with the Board a registration statement in quadruplicate containing
the following information:
a. Name, age and address
b. If a corporation, partnership, or association, its office address and branch offices and the names and
address of its executive officers and directors.
c. Statement that applicant is qualified to act as real estate broker or salesman pursuant to law.
d. If applicant is a salesman, the name and address of the dealer or broker who employs him, attaching a
copy of appointment
e. If the applicant is a broker, the names and address of salesmen employed by him.
Section 14. Certificate of Registration
The certificate of registration for brokers and salesmen shall expire on the first day of December each year.
Renewal of registration for the succeeding year shall be granted upon filing an applicant made not less than 30 or
more than 60 days of the ensuing year and upon payment of the prescribed fee without the necessity of filling
further statement or information, unless specified by the Board. All applications filed beyond said period shall be
treated as original application.
Section 15. Bonds
The Board required under Section 6 of the Decree may be either a cash or a surety bond issued by a duly
accredited bonding company whether private or government agency. The bond shall contain a clause stating
among others that it shall remain in full force and effect unless it is ordered, cancelled or released by the Board.
The board shall be executed in favor of the Housing and Land Use Regulatory Board conditioned upon the
faithful and honest discharge by the applicant, as well as the salesman working under a broker or dealer, of their
duties and shall further provide that upon failure to discharge those duties, the applicant shall be liable on the
bond to any and all persons who may suffer loss by reason of such failure. The amount of the bond shall be

P5,000 for Dealers/Brokers and P1,000 for Salesmen These bonds shall no longer be required if equivalent bonds
or securities have already been posted by applicants for the purpose with other government agencies pursuant to
law.
A dealer, broker or salesman may apply in writing the Board for the cancellation and release of his bond stating
therein his reasons. Inappropriate cases, the Board may require the applicant to cause the publication of a notice
therefore at the latter's expense in a newspaper of general circulation stating, among others, the fact of such
application. The proof of publication shall be submitted to the Board. Any person, having any claim for money or
property against the dealer, broker or salesman in his real estate service or practice, must file his claim with the
Board within 15 days from the date of publication. If the reason for cancellation of the bond is his cession from
further engaging in the business of selling subdivision lots or condominium units, the dealer, broker or salesman
shall surrender his certificate of registration to the Board and his name shall be cancelled from the Register of
Dealers, Brokers and Salesmen.
xxxxxx
Section 32. Brokers/Salesman as Witness to Sales
The broker or salesman who negotiated the sale of a subdivision lot or condominium units shall act as one of the
witnesses to the sales document with an indication of his Certificate of Registration number and renewal date. If
the sale was directly made by the owner or dealer, that fact must be so stated in the sales document.
xxxxxx
Approved
August 20, 2001
Quezon City
D. LOCAL GOVERNMENT CODE OF 1991,
REPUBLIC ACT NO. 7160 [ PERTINENT PROVISIONS GOVERNING
REAL ESTATE SERVICE PRACTICE]
RESA IRR PROVISION ON PROFESSIONAL TAX
SEC. 38 Indication of the certificate of Certificate of Registration, Professional Identification Card/License
Number, Privilege Tax Receipt (PTR) Number, and Accredited Integrated Professional Organization (AIPO)
Number. Real estate service practitioners shall be required to indicate the certificate of registration, professional
identification card, PTR number and AIPO membership and /or receipt number, and the date of issuance and the
duration of validity on the documents he/she signs, uses or issues in connection with the practice of his/her
profession.
LOCAL GOVERNMENT CODE PROVISION ON PROFESSIONAL TAX
Section 139. Professional Tax.-

(a) The province may levy an annual professional tax on each person engaged in the exercise or practice of his
professional requiring government examination at such amount and reasonable classification as the sangguniang
panlalawigan may determine but shall in no case exceed Three hundred pesos (P300.00).
(b) Every person legally authorized to practice his profession shall pay the professional tax to the province where
he practice his professional or where he maintain his principle office in case he practice his profession in several
places: Provided, however, That such person who has paid the corresponding professional tax shall be entitled to
practice his profession in any part of the Philippines without being subjected to any other national or local tax,
license, or fee for the practice of such profession.
(c) Any individual or corporation employing a person subject to professional tax shall require payment by the tax
on his profession before employment and annually thereafter.
(d) The professional tax shall be payable annually, on or before the thirty-first (31st) day of January. Any person
first beginning to practice a profession after the month of January must, however, pay the full tax before engaging
therein. A line of profession does not become exempt even if conducted with some other profession for which the
tax has been paid Professionals exclusively employed in the government from the payment of this tax.
(e) Any person subject to the professional tax shall write in deeds, receipts, prescriptions, reports, books of
account, plans and designs, surveys and maps, as the case may be, the number of the official receipt issued to him

Date
Mr. JUAN DELE CRUZ
AAA REALTY
Metro Manila

AUTHORITY TO SELL
[SAMPLE]
This will authorize you to procure a buyer for the sale of my property under the following terms and conditions:
1.
2

Location :
Description: Block No.

Lot No.
TCT No.
or
sq. m. more or less

.
3.
Area
:
4.
Improvements:
5
Price
:
P
/sq.m. or P
6.
Mortgage
:
P
with
to expire on
:
7.
Expenses
: Documentary stamps to be affixed on the Deed of Sales, real estate taxes up to the time of sale
and capital taxes if any, shall be for the account of the Seller, Registration and transfer fees shall be for the account of the
buyer.
8.
Commission: Five percent (5%) of the total selling price;
9
Period of Authority:
days exclusive from date hereof until
, 19
;
10. Remarks
: That notwithstanding the expiration of this Authority, you shall still be entitle to your commission in case
your buyer (s) whom you previously registered with us buys the above property within sixty (60) days from the expiration of
this authority;
It is also understood that the term of this Authority, all negotiation regarding the sale of the above property shall be coursed
through you.
You are also authorized to accept and/or receive Earnest Money from the buyer, the same shall be divided equally between
us.
11

Place and Date:

Owner/Seller/Attorney-in-Fact

Address:
Tel. No.:
ACCEPTANCE:
AAA REALTY
By:
Juan De La Cruz, REALTOR
PRC Real Estate Brokers License No. 8001

IV
Real Estate Brokerage & Practice

PRINCIPLES OF REAL ESTATE BROKERAGE & PRACTRICE

I. DEFINITIONS
A. REAL ESTATE- refers to the land and all those items which are attached to the land. It is the physical,
tangible entity, together with all the additions or improvements on, above or below the ground. [Sec. 3(c),
RA 9646]
B. REAL PROPERTY- "Real estate" refers to the land and all those items which are attached to the land. It
is the physical, tangible entity, together with all the additions or improvements on, above or below the
ground, includes all the rights, interests and benefits related to the ownership of real estate [Sec.3(f), RA
9646]
C. REAL ESTATE BROKERS- a duly registered and licensed natural person who, for a professional fee,
commission or other valuable consideration, acts as an agent of a party in a real estate transaction to offer,
advertise, solicit, list, promote, mediate, negotiate or effect the meeting of the minds on the
1.
2.
3.
4.
5.
6.
7.

sale,
mortgage,
purchase,
lease,
exchange,
joint venture, or
other similar transactions
on real estate or any interest therein. [Sec.3(g)(4), RA 9646]

D. REAL ESTATE SALESPERSON- A duly accredited natural person who performs service for, and in
behalf of, a real estate broker who is registered and licensed by the Professional Regulatory Board of Real
Estate Service for or in expectation of a share in the commission, professional fee, compensation or other
valuable consideration. [Sec. 3(g)(5) RA 9646]
E. REAL ESTATE DEALER- Any person, natural or juridical, who is engaged in the trade of selling,
buying, or leasing his own real properties or interest therein, using his own funds and with the purpose of
realizing profit.
II.

DISTINCTIONS

A. REAL ESTATE BROKERS vs. REAL ESTATE DEALER

As to
1. Functions

2. Income
3. License

REAL ESTATE BROKER

A real estate broker performs his
acts on behalf of another

REAL ESTATE DEALER

A real estate dealer performs the
same acts on his own behalf

A real estate broker is an agent

A real estate broker receives a
fee for his services
A real estate broker receives a
fee for his services

A real estate dealer is a principle

A real estate dealer enjoys a gain
or profit in his transactions
A real estate dealer is not
required.

B. REAL ESTATE BROKER FROM REAL ESTATE SALESPERSON

Nature
1. Who

2. Examinations

REAL ESTATE BROKER

REAL ESTATE SALESPERSON
Only
a
natural
person Only a natural person (individual)
(individual) may be licensed as may be a real estate salesman
a real estate broker
Required to pass a written No examination required
examination

3. Bond

Required to file a bond in the No bond required as covered by bond

amount of P20,000.00 by the of real estate broker
PRC/PRBRES and P5,000 by
HLURB
(Exception: Registration with HLURB
under PD 957 requires P1,000.00
bond

4. Operation

A broker is an independent A salesman works under the

entity subject to laws and supervision of the broker or acts on
regulations
behalf of his employer

REAL ESTATE AS PROFESSION vs. REAL ESTATE AS BUSINESS

REAL ESTATE as PROFESSION
REAL ESTATE as a BUSINESS
Real Estate as a business refers to the trade
Real Estate as a professional refers to the
of:
rendition of service by a practitioner, for
buying,
and on behalf of another, to sell, lease,
selling,
mortgage, exchange, appraise, advice on
leasing,
real estate matters, for a fee or other
financing,
valuable consideration.
developing real properties by a real estate
The practitioner does not have any
dealer with the use of his own funds
proprietary interest on the real property
Primary view of making profit in the
involved; neither does he use his own
process.
funds in the process.
III.
1.
2.
3.
4.
IV.

ESSENTIAL ELEMENTS OF REAL ESTATE BROKERAGE

Employment of the broker as an agent- A broker acts on behalf of his principal (owner, etc.)
Functions to be performed by the broker must be specific.
Services rendered- The broker must be the procuring cause and instrumental in effecting the meeting of
the minds of the parties in the transaction during the period of agency.
The service rendered by the broker are for a fee, commission or any other valuable consideration.
ESSENTIAL ATTRIBUTES OF A REAL ESTATE BROKER

A.
B.

Honesty and Integrity

Working knowledge of:

1.
2.
3.
4.
5.
6.
7.

Real estate economics

Real estate market
Laws affecting real estate
Familiarity and understanding of ordinary maps and plans
Financing practices in real estate transactions
Basic features of land and building construction
Working knowledge of government offices/procedures involved in real estate

C.
D.
E.

Salesmanship/Marketing knowledge
Tact and diplomacy (Negotiation skills)
Familiarity with the location and market where the broker expects to operate or specialize in

V.

RELATIONSHIP BETWEEN PRINCIPAL AND BROKER

A.

Rights of the parties

1.

(c)
(d)

Principal
To have full knowledge of all facts and circumstances affecting the transaction:
Unless it is an exclusive right to sell contract, the principal has the right to negotiate and close the deal
himself without being under any obligation to pay commission to the broker;
In the case of an open listing, the principal has the right to employ other brokers:
To accept the offer he deems best suited to his needs.

(a)
(b)
(c)
(d)

Broker
To receive compensation for service rendered;
to be informed of facts concerning the property listed with him;
To be given ample time to complete the negotiations;
To be treated in good faith by the principal.

(a)
(b)

2.

B.

Duties and responsibilities of the parties

1.

Principal
(a) To duly compensate the broker for his services;
(b) To give the broker a reasonable period of time within which to perform his duties. The principal cannot
revoke with impunity the broker's authority when the broker's negotiations are already approaching
success, so as to deprive the agent of his commission.
(c) To act in good faith;
(d) To reimburse the broker for expenses incurred at the request of the principal and which are beyond the
ordinary expenses of the broker in his regular duties;
(e) To indemnify the broker for any damages he may suffer through no fault of his own in the lawful
performance of the principal's instructions.

2.

Broker
(a) To be absolutely loyal to the principal;

(b) To employ skill and care in the performance of his duties. The broker must be the procuring cause of the
sale;
(c) To inform the principal of all facts relevant to the transaction;
(d) To account for all the money entrusted to him;
(e) To protect the interest of his principal;
(f) To act within the scope of authority given to him by the principal;
(g) To carry out all the duties he is expected to perform.
C. Liabilities of the parties
1. Principal
Liable for all the acts of his agents which are executed within the scope of his authority. The mismanagement of
the principal's business by the agent does not relieve the principal from liability to third persons in the absence of
any limitation upon the p[principal's liability as may be expressed in the written contract.
2.

Broker

Liable for any violation of the law on Agency and non-performance of the duties prescribed in the agency
contract.
VI.

REAL ESTATE BROKER'S COMMISSION

A. When the Real Estate Broker is entitled to commission1. For a broker to be entitled to commission, he must find a buyer who will actually buy the property on the
terms and conditions imposed and/or accepted by the owner.
2. The broker is entitled to commission if the sale is made to a buyer procured by his sub-agent or
cooperating broker.
3. If the sale made to a buyer has been referred to the broker by the owner, the broker is entitled to
commission for services rendered.
4. Where there is no mention of the commission due to the broker and his service were engaged and
subsequently a sale is made to buyer procured by the broker, the rate of commission may be determined
by established business practice on the premise that the broker is deemed to be in business and expects to
be compensated for service rendered.
5. Where the property sold by the owner directly to a buyer who has earlier been registered in writing by the
broker during the continuance of the agency contract contains a holdover clause.
B.
When Commission is Due
In real estate transactions, commission is due upon the perfection of the contract, that is, when acceptance in
writing is made by the owner/offeree, with or without the formal execution of a deed. The usual conditions which
the broker must show are:
(a)
(b)
(c)
(d)

That his service were contracted by the person from whom he seeks payment;
That his effort is the procuring cause of the sale;
That his effort is responsible for bringing about the deal under the terms and conditions of his principal;
That he was able to find a buyer who ready, willing and able;

(e) That the transaction is a completed one, that is, an offer in writing is accepted by the owner/offeree;
(f) That he acted in good faith;
C.

WHO PAYS THE COMMISSION

1. Generally, the owner/seller who contracted the service of the broker in promoting the sale of his
property is bond for payment of commission.
2. Where the service of the broker are engaged by the buyer for the former to look for and negotiate
the purchase of a particular property, the buyer pays the commission.

D.

HOLD-OVER OR SAFETY CLAUSE IN LISTING

This is a provision in a listing contract which entities the broker to commission even if the sale were closed after
the period of his authority, provided that the buyer was registered by the broker with the seller during the period
of authority.
E.

WHEN COMMISSION IS PAYABLE

In the absence of any stipulation to the contrary, the commission is payable in full upon the consummation of the
contract even when the price is to be paid in installment.
F.

COMMISSION SHARING

In a case where the property is listed by one broker and the same is sold by a cooperating broker, the commission
is shared generally as follows:
50% < ----- > 50%
Listing broker
selling broker
However, the sharing may vary depending also on the agreement between the brokers and the nature of the
transaction. It is always advised that when dealing with co-broker that the sharing agreement be clarified at the
beginning in order to avoid disagreements and conflict in the sharing of commission.

VII. CERTIFICATES IN REAL ESTATE BROKERAGE

A. Certain pitfall in brokerage
1. After the broker has worked on putting together the papers, data, and other presentations including stirring up
interest in the property, the owner finds fault with certain conditions in the brokerage agreement because:
(a) the owner says new values have affected the property and decides not to sell.
(b) the owner suddenly has found a direct buyer
(c) the owner finds another broker/agent who will be able to handle the sales negotiations for less commission
2. After the broker has obtain the listing and worked on looking for prospective buyers, the buyer and/or owner
connives to effect a direct sale and thereby eliminates the broker by:

(a) waiting for the expiry date of the agency; and if

(b) effecting the sale after original period of agency to a elative or dummy of a buyer whose name was duly
reported by the broker to the owner.
3. After consummating the sale it is found out that there are previous legal attachments or liens on the proceeds of
the sale effected before could collect his commission. moreover, he is under obligation to pay or has in fact paid
the share of cooperating brokers and/or salesman in addition to the usual and other expenses and advances.
B. Effect on the Broker
a)
b)
c)
d)

Loss of investment in the prospective transaction by way of expenses;

Loss of expected income;
Waste of time;
Loss of prestige in attending in the brokerage business and profession.

THE LAW on AGENCY and REAL ESTATE BROKERAGE

I. AGENCY, defined
-it is a contract wherein a person binds himself to render some service or to do something in representation of or
behalf of another, with the consent or authority of the latter.
II. "FIDUCIARY" RELATION -the relation between one who reposes confidence in another who acts as his
agent, based on "trust and confidence"
III. ESSENTIAL ELEMENTS OF AGENCY
1.
2.
3.
4.

Mutual consent of parties to establish relationship

Object is the execution of a juridical act
Agent acts for the principal and not himself
Agent acts within scope of authority

IV. MODES OF EXTINGUISHING AGENCY [EDWARD]

1.
2.
3.
4.
5.
6.

Expectation of period
Death of principal or agent
Withdrawal of agent
Accomplishment of purpose
Revocation
Dissolution of firm which granted or accept agency

V. GENERAL STEPS IN BROKERAGE

1.
2.
3.
4.

Securing Listings
Procuring Prospects
Presentation and Demonstration
Negotiation

5.
6.

Closing
Post-Closing/Report

1.

SECURING LISTINGS

LISTING refers to the authority given by the seller, buyer, lessee, owner, borrower or lender for the broker to
negotiate the sale, purchase, lease, mortgage or exchange of a real estate property for a stipulated period of time,
price and terms, as well as the rate of commission. Listings also refer to the stock in trade or the property which a
broker is authorized to sell.
A. CONTEST OF LISTING (AUTHORITY TO SELL)
1.
Name, address and signature of the principal
2.
Name, address and signature of the broker
3.
Description of the property
4.
Description of improvement, if any
5.
Period and conditions of the authority
6.
Price and items
7.
Rate of commission
8.
Hold-over clause, if any
9.
Mortgage, or other encumbrances, if any
10.
Authority to receive earnest money
B. KINDS OF LISTING:
1.

AS TO FORM
a) Verbal-although a verbal listing, it is still recommended that a written authority still be obtained by the
broker
b) Written-this is the best form of authority/listing

2.

AS RO EXCLUSIVENESS
a) Non-exclusive or open- a listing wherein two or more broker are authorized to negotiate the sale of the
property.
b) Exclusive- a listing wherein only one broker is authorized to negotiate the sale.
1) Exclusive Agency- a listing wherein the exclusive broker will not be entitled to commission if the
owner himself sells the property.
2) Exclusive Right to Sell- one wherein the exclusive broker is entitle to commission even if the
owner himself sells the property

3. AS TO FUNCTIONS
a) SALES AGENCY- an authority given by the owner/seller to the broker for the latter to look for a buyer
and negotiate the sale of property.

b) PURCHASE AGENCY- an authority granted by the buyer to a broker to look for a property for sale and
negotiate the purchase of said property.
c) LEASE AGENCY- an authority given by the owner of an income property for the broker to secure
tenants, or an authority given by the prospective tenants for the broker to look for a space to be rented.
d) EXCHANGE AGENCY- an authority given by the property owner for the broker to look for the
properties which may be exchanged with former's property.
e) MORTGAGE/LOAN AGENCY- an authority given by a borrower for the broker to secure financing, or
an authority given by a financing firm for the broker to procure borrowers.
f) JOINT VEBTURE AGENCY- an authority given by a party for the broker to look fro a joint venture
partner, whether the landowner or the developer
4.

AS TO BASIS OF COMMISSION
a) NET LISTING- one wherein the compensation of the broker depends on the over price.
b) PERCENTAGE (%) LISTING- one wherein the fee of the broker is stipulated as a percentage of the total
consideration/selling price agreed.

C. SOURCE OF LISTINGS:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Personal contacts through friends and relatives or referrals

Newspaper classified ads and advertisements
Internet search (websites)
Physical search/ocular search
Co-broker, real salesmen/agents
Affiliation with different civic clubs, professional and religious organizations, etc.
"For sale", "For rent/lease" signs on the property
Bank acquired assets
Legal notice, i.e foreclosure proceedings, extrajudicial and judicial partitions, auction sale and others.
Multiple Listings

Multiple Listing
This is a cooperative arrangement among real estate brokers whereby properties for sale or wanted by a broker
is circularized to the others and in the event another broker sells the property or gives a listing which is later sold,
the commission is shared between the listing system.
1.

PROJECT SELLING-Listings

In case the real estate broker would prefer to be involved in project selling (such as subdivisions and
condominium projects), then, basically the listings are obtained through the developer or its marketing outfit and
real estate broker would not really undertake securing of listings as these will be already be made available to the
real estate broker.

2.

PROCURING AND QUALIFIYING PROSPECTS

PROSPECT- one who has both the willingness and capacity to buy the property.

SOURCES OF PROSPECTS
1. Adjoining owner of the property which is for sale;
2. Nature of the property which may indicate the class of prospect to be approached.
3. The same sources of listing are also sources of prospects (ads, internet, etc.)
3.

PRESENTATION AND DEMONSTRATION

It is the process of showing the property and pointing out its physical attributes, features and qualities and other
benefits and advantages as to satisfy the needs of the buyer, including the following:
1. Prepare a checklist of the data and information regarding the property which may be asked by the buyer,
i.e. the location plan, vicinity map, lot plan building plan and others.
2. Emphasize the selling points and positive features of the property.
3. Anticipate possible objections by the buyer and map out possible responses thereto.
4. Provide other useful information and tools to enhance the interest of its buyer on the property being
inspected.
4.
NEGOTIATIONS
It is the process of reconciling the opposing views of the transaction- the buyer and the seller- as to price and
terms of the sale.
ITEMS COVERED IN NEGOTIATION:
1.
2.
3.
4.
5.
6.

Price and terms

Expenses for execution and registration of the sale
Delivery of the property
Real estate taxes and other expenses
Pro-rating of rental and other income, if any
Items not included in sale, such as future, fixtures etc.

Legal issues involved in negotiation

As a real estate broker, in the event that legal issues are involved in the negotiations, it is best that the matter is
left to the lawyers of the respective parties, though the broker may still offer options and suggestions on the issue.
5.

CLOSING

It is the process when, thru the mediation of the broker, the minds of the parties meet and the buyer offer of price,
terms and other conditions become acceptable to the seller, or vice-versa.
6.
POST-CLOSING/REPORT
Although the sale is completed, it is always recommended to undertake post closing, activities or report to the
parties. This will provide a more professional service by the broker and could very well lead to future transactions
with the parties or referrals.

a) Post activities
These may involve other minor activities such as assisting the buyer to take possession of the property and in
other matters which may involve obtaining documents or other services.
b) Report
A report would also be recommended which would contain a checklist and copies (or photocopies) of all
documents pertaining to the just concluded transaction properly filed and arranged in a report format to be
submitted to the parties.

VI. OTHER DISTINCTIONS/REAL ESTATE AGREEMENTS

A. EARNEST MONEY vs. OPTION
EARNEST MONEY
Earn money is the amount accompanying an offer to purchase to show the good faith or genuine desire of the
buyer to purchase. If the offer to purchase is accepted by the seller, the earnest money forms part of the purchase
price.
OPTION
It is a contract between the seller and the buyer wherein the former, for a consideration known as option money
binds himself to reserve the property for the latter to purchase within a stipulated period of time and at a specific
price and terms.
Option money is the consideration of an option contract without which the option is not binding. Generally,
option money is separate and distinct from the purchase price.
Reason for Option:
a) Buyer would still like to study and decide whether to actually buy the property or not, but would like to
ensure that the first right to buy the property
b) Buyer does not have sufficient cash in the meantime or has still to arrange for financing
c) Buyer's money is deposited in the money market or time deposit and buyer does not want to preterminate
the placement before its maturity because of the interest income
DISTINCTION BETWEEN EARNEST MONEY vs. OPTION MONEY
EARNEST MONEY
Is the sum accompanying an offer to purchase to
show good faith of buyer
Forms part of the purchase price in case of sale
Generally accompanies the Contract to Sell or

OPTION MONEY
Is t he consideration of an option contract
Does not form part of and is distinct from the
purchase price.
Can be in a separate contract called Option

Agreement to Buy and Sell

Contract or Option to Buy

B. ESCROW
It is an agreement wherein the consideration of a contract, or a portion thereof, is entrusted to a third party known
as escrow agent who is authorized to release payment upon fulfillment or performance of some acts or conditions.
ESCROW AGENT
(Third Party)

SELLER

BUYER

Instances where escrow may be applicablea) When the property is occupied by squatters/or tenants and the seller assumes the responsibility to eject
them.
b) When the seller requests for time to vacate and to ensure delivery within the agreed period, the balance or
portion of purchase price is put in escrow
c) When title to the property has certain encumbrances or annotations which the seller has undertaken to
cancel.
d) In general, when there are certain conditions which will still have to be performed by the seller and the
buyer would like to ensure that the conditions are fulfilled before full payment and the seller, on the other
hand, would like to ensure that the payment will be made and is ready and available.

V
Subdivision Development

SALIENT FEATURES OF PD 957 AND RELATED LAWS

HUDCC
[HOUSING AND URBAN DEVELOPMENT COORDINATING COUNCIL]
The Housing and Urban Development Coordinating Council (HUDCC) was created by then President Corazon C.
Aquino by virtue Executive Order No. 90 dated December 1986. The EO, which also abolished the Ministry of
Human Settlements, placed HUDCC under the direct supervision of the Office of the President to serve as the
highest policy making body for housing and coordinate the activities of the government housing agencies to
ensure the accomplishment of the National Shelter Program.

ATTACHED AGENCIES
1. HGC- THE HOME GUARANTY CORPORATION
The Home Guaranty Corporation (HGC) is the government-owned-and-controlled-corporation (GOCC) mandated
by law (Republic Act 8763) to promote sustainable home ownership by providing risk coverage or Guarantees
and tax/fiscal incentives to banks and financial institution/investors granting housing development loans/credits,
and home financing.
2. HLURB [Housing Land Use and Regulatory Board]
The Housing Land Use and Regulatory Board (HLURB) is a national government agency tasked as the planning
regulatory and quasi-judicial body for land use development and real estate and housing regulation. These roles
are done via a triad of strategies namely, policy development, planning and regulation.
3. National Housing Authority
A National government agency tasked to provide responsive housing programs primarily to homeless low-income
families with access to social services and economic opportunities with excellence while ensuring corporate
viability.
4. National Home Mortgage Finance Corporation
The NHMFC is the major government home mortgage institution. Its main function is to operate a viable
secondary home mortgage market.
5. PAG-IBIG
The birth of the Home Development Mutual Fund (HDMF), more popularly known as the Pag-IBIG Fund, was an
answer to the need for a national savings program and an affordable shelter financing for the Filipino worker. The
Fund was established on 11 June 1978 by virtue of Presidential Decree No. 1530 primarily to address these two
basic yet equally important needs. Under the said law, there were two agencies that administered the Fund. The
Social Security System handled the funds of private employees, while the government Service Insurance System
handled the savings of government workers.

To provide and maintain adequate housing for the greatest possible number of people.

To undertake housing development, resettlement or other activities that would enhance the provision of
housing to very Filipino.
To harness and promote private participation in housing ventures in terms of capital expenditures, and,
expertise, financing and other facilities for the sustained growth of the housing industry.

6. Social Housing Finance Corporation

The lead financial institution that develops and implements social housing programs of the country.
To uplift housing conditions of marginalized Filipinos by providing access to affordable shelter industry.
To continuously administer, promote and enhance the Community Mortgage Program and the Abot-kaya
Pabahay Fund Program.

HOUSING AND LAND USE REGULATORY BOARD

HLURB
A.
LAWS
1. Executive Order No. 648 (1981) The HLRB was reorganized and revitalized and was vested with
quasijudicial powers to make it a more effective regulatory agency. By virtue of said order, it assumed the functions
of the National Housing Authority on real estate management and was mandated to enforce P.D. 957, P.D.
1216 and P.D. 1517 among others.
2. Executive Order No. 90 (1986) The HLURB was designated as the sole regulatory body for
housing
and
land development. It was mandated to encourage greater private sector participation
in low cost housing
through liberalization of development standards,
3. Presidential Decree 957 (PD 957, 1976)
Otherwise known as the Subdivision and Condominium Buyers Protective Decree. Its features
are
regulates sale of subdivision lots and condominium units to buyers
defines sale to be covered by registration
defines duties and responsibilities of owner/developer (o/d) of condominium and
subdivision projects.
defines rights of condominium/subdivision units/lots buyers.
4. Batas Pambansa 220 (BP 220, S. 1982
Authorized HLURB to promulgate different levels of standards and technical requirements for economic and
socialized housing projects from those provided for under PD 957, PD 1216, PD 1096 and PD 1185.
5. Republic Act 7279 (1992)
Provides for Balanced Socialized Housing Program through provision of low cost housing program (SHP)
intended to benefit the underprivileged and homeless and to be sold at the lowest interest
rate.
Requires
developers of residential subdivision projects to allocate 20% of the
projects area/cost into socialized
housing.
6. Republic Act No. 8763 or The Home Guaranty Act
Transferred to HLURB all the powers, authorities and responsibilities with respect to supervision of homeowner
associations.
7. Presidential Decree No. 1216 (1977)

Defines open spaces in residential subdivision and amended Sect. 31 of PD 957. Requires subdivision owners to
provide adequate roads, alleys, sidewalks and reserved open spaces for parks or recreational use equivalent to
30% of the total area of the subdivision project; and are non-saleable/non-alienable public lands.
8. Republic Act 6652 'Maceda Law" (1972)
Provides protection to buyers of residential units on installments against scrupulous
sellers/contracts
(including residential condominium apartments, but excluding industrial lots,
commercial buildings and sales
to tenants).
9. Presidential Decree No. 1517 (1978)
Provides for protection of legitimate tenants and requires clearance for development proposals
and
land
transactions in proclaimed Areas for Priority Development (APDs) and Urban Land
Reform
Zones
(ULRZs). Its important features are under Section 6, defines legitimate tenants as
follows: a) Ten years
residency or more; b) They were the ones who built their homes; c) Legally
occupied the lands by virtue of
contract with landowners continuously for ten years; d) Used the lands for residential purpose only.
10. Republic Act 7160 or the Local Government Code of 1991:
Devolves the following function of HLURB to the local government units:
- Issuance of approval of subdivision plans to local government units (LGUs) subject to
national laws and standards;
-Devolves to the Sangguniang Panlalawigan, subject to national guidelines and standards
the approval of comprehensive land use plans of municipalities.
11. Executive Order No. 71 (1993)
Provides for implementing guidelines and role of HLURB in the devolution of approval of subdivision plans to
the LGUs.
12. Executive Order No. 72 (1993)
a) Provides that HLURB shall review and approve land use plants of provinces, highly urbanized cities, and all of
the independent component cities/municipalities within Metro Manila; b) Devolves the issuance of location
clearance to LGUs.
13. Republic Act 7899 (1995)
Amends Section 4 and 16 of RA 4726 or the "Condominium Act", where HLURB is given the following
authorities: a) Approval of any amendment to or revocation of the enabling or master deed of s condominium
project subject to consent by a simple majority of all registration owners, and where prior notification to all
registered owners is done. b) Approval of the expansion of a condominium corporation or integration of a
condominium project with another project upon the affirmative vote of a simple majority of registered owners.
14. Republic Act 6657 or the Comprehensive Agrarian Reform Law (June 15, 1988)
Implements a comprehensive agrarian reform with the intention that any conversion of a private agricultural land
to non-agricultural uses should first be cleared before hand by the Department of Agrarian Reform. (Please see
attached notes on this RA 6657 or CARP).
15. Presidential Decree No. 1586 (1970)
Requires all person, partnership or corporation to secure an Environment Compliance Certificate prior to

undertaking any activity.

16. Proclamation No. 2146 (1981)
Proclaimed certain areas and types of projects as environmentally critical and within the scope of the requirements
of PD 1586.
B.

DEFINITION OF TERMS

1. SALE: As defined under Section 1(b) of PD 957:

Sale or Sell. "Sale" of "Sell" shall include ever disposition, or attempt to dispose for a
valuable consideration
of a subdivision lot including the building and other improvements thereon, if any in a condominium project.
"Sell" or "Sale" shall also include a Contract to Sell, a contract of purchase and sale, an exchange, an attempt to
sell, an option of sale or purchase, a solicitation of a sale, letter, advertisement or otherwise.
A privilege given to a cooperative, corporation, partnership, or any association and/or the issuance or receipt
evidencing of giving the right of participation in, or right to any land in consideration of payment of the
membership fee or dues, shall be deemed a sale.
2. SOCIALIZED HOUSING PROJECT As defined pursuant to Section 18 of RA 7279:
Refers to housing and projects covering houses and lots or home lots only undertaken by the Government or the
private sector for the underprivileged and homeless citizens which shall include sites and service development,
long term financing, liberalization terms on interest payments, and such other benefits in accordance with RA
7279.
In addition to the definition in RA 7279, it shall refer to projects intended for the under-privileged and homeless
wherein the housing package-selling price is within the lowest interest rate under the Unified Home Lending
Program or any equivalent housing program of the government, the private sector or non-government
organizations.
[As per HUDCC Resolution No. 1, Series of 2008, the socialized housing loan ceiling has been increased from
P3000,000 to P400,000 effective December 2008]
3. BULK BUYING
Refers to the purchase by a person, natural of juridical, of more than one saleable lot or unit within an HLRB
approved subdivision for the purpose of re-selling the same with or without introducing alteration in the approved
plan. (Please refer to notes on exempt transaction).
4. CERTIFICATE OF REGISTRATION (CR)
An issuance of HLURB that is proper only upon compliance with Section 4 of PD 957 and other similar
provisions of the various rules. It vests legal status in a project such that its name may be changed only upon
proper application and publication among other requirements.3
5. LICENSE TO SELL (LS)
A document granting authority to any registered owner/developer to sell lots or units within an approved
subdivision or condominium project and providing for the duties and responsibilities of said owner/developer.
6. TOWN PLAN

a) It is an official public document adopted by a local government unit as guide to decision regarding the physical
and socio-economic development of their community. b) It provides for the directions on how the local leaders
and their population would want their community to develop within a given framework of time. c) It sets the
goals, objectives and policy guidelines of the local government unit after defining the strengths and weaknesses,
identifying its opportunities and threats in relation to its environs. In the Philippines, a town plan is synonymous
to comprehensive development plan, city plan, physical framework plan, comprehensive land use plan, or
municipal development plan.
7. LAND USE PLAN
It is the rational and deliberate allocation of land resources to different uses based on the comprehensive and
integrated plan for area. It translates the social-economics, the infrastructure and environment plan into land
allocations.
8. ZONING
It is the division of the community into functional zones on the present and potential uses of properties for the
purpose of regulating the use growth of properties in accordance with the comprehensive development plan of the
town/city.
9. ZONING ORDINANCE
It is the enacted legislation which among other a) regulations affecting uses allowed or disallowed in each zone
or district; b) conditions for allowing them; c) procedures for processing a request for a clearance and d) penalties
for violating any of its previsions.
10. LOCATIONAL CLEARANCE
It is written authorization or permit to develop or use or construct in certain areas of any parcel of land based on
approved land used plan or zoning ordinance; in the absence of a zoning ordinance the grant of permit shall be
base on HLURB planning standard and guidelines.
11. ECOLOGY
A branch of science concerned with the interrelationship of organism and their environment.
12. ENVIROMENT
Includes the physical factors of the total surroundings of human being includes the land, water, atmosphere,
climate sound, odor, tastes, the biological factors of animals and plants and the social factors of aesthetics. In
abroad since, it shall include the total environment of man such as economics, social, cultural, politics and historic
factors.
13. CONVERSION
The act of authorizing the change of the current use of a piece of agricultural land into non-agricultural use; such
permit is proper only upon issuance of a clearance from the Department of Agrarian Reform.
14. AGRICULTURAL LAND
Refers to land devoted to or suitable to agriculture as defined in RA 6657 and owed by natural or judicial
person/s, or by the government in its proprietary capacity.
15. PRIVATE AGRICULTURAL LAND

Lands devoted to or suitable agriculture as defined in RA 6657 and owed by natural or judicial persons, or by the
government in its proprietary capacity. ( For Nos. 13, 14 & 15 please refer to attached notes on RA 6657 or
CARP).
16. DEALER
Shall mean any person directly engaged as principal in the business of selling; or exchanging real estate whether
on full-time or part-time basis (Section 2 (k), PD 957. A bulk buyer, which is for purposes of this guidelines, is
covered in the definition of a dealer, shall mean any person who acquires a lot or a portion of the subdivision and
who, with or without re-subdividing or introducing housing or other facilities, sell the same, under its previous
license to sell or in a license to sell in his name to the public.
17. SUBDIVISION PROJECT
As defined under Section 2(d) of PD 957, a tract or a parcel of land registered under Act No. 496 which is
partitioned primarily for residential purpose into individual lots with or without improvements thereon and
offered to the public for sale, in cash installment terms. It shall include all residential, commercial, industrial and
recreational areas as well as open spaces and other community and public areas in the project.
18. "HABITUALLY ENGAGED IN REAL ESTATE BUSINESS' IN ACCORDANCE WITH REVENUE
REGULATIONS NO. 2-98
A person or entity habitually engaged in real estate business is one who, as owner or developer undertakes
development and contraction of subdivision/housing for sale to the general public as his/its regular source of
income; and has submitted and update his/its reportorial requirements to HLURB in accordance with the
government standards, rules and regulations.
C. ENVIRONMENTALLY CRITICAL AREA (ECA):
Refer to areas that are ecologically, socially, or geologically sensitive as declared by law such as:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.

Areas declared by law as national parks, watershed reserves, wildlife preserves and sanctuaries;
Areas identified as potential tourist spots;
Areas that are habitats of endangered or threatened species of indigenous Philippine plants and animals;
Areas of unique historic, archeological or scientific interest;
Areas traditionally occupied by indigenous people or cultural communities;
Areas frequently hit by natural calamities (geologic hazards, floods, typhoons and; volcanic activities);
Areas with critical slopes of 18% and above;
Areas classified as prime agricultural lands;
Recharged areas of aquifer;
Water bodies used for domestic supply used to support fisheries and wildlife;
Mangrove areas with critical ecological functions or on people depend for livelihood; or
Coral reefs

D. ENVIRONMENTALLY CRITICAL PROJECTS (ECP) refers to a:

1. Heavily industry involving ferrous metal, iron or steel mills; petroleum or petro-chemical, oil gas, or
smelting plants;
2. Resource extractive project such as major mining and quarrying project, forestry logging project, major
wood processing, introduction of fauna of exotic animals in public or private forest, forest occupancy,
extraction of mangrove products, grazing, fishery dikes, or fishpond development;
3. Major infrastructure project such as dam, power plant (utilizing fossil-fuel, hydroelectric, geothermal,
nuclear power), reclamation, bridge, or a major road; or

4. Golf course project.

E. DIFFERENT TYPES OF PROJECTS REQUIRING CERTIFICATE OF REGISTRATION and
LICENSE TO SELL from HLURB
1. Condominium
1.1 Residential
1.2 Commercial
1.3 Mixed Residential-Commercial
2. Residential
Categories:
PD 957
Open market only
No price ceiling

BP 220
Economic
Socialized
sells @ P/500,000.00/
house & lot
30% open space is
Open space requirements is computed based on the
mandatory PD 1216
density of the project and not covered by 30% open space
requirement
1. Follows the National Building Relaxes the provisions NBC and FC but design should
Code (NBC) and the Fire Code (FC) conform with the minimum design standards by HLURB
and; 2. Follows the minimum in pursuance to the adoption of BP 220; this serves as an
design standards set forth by incentive to developers to engage in housing for the
HLURB
middle income group and the low income group.
What are the latest price ceilings?
The current price ceiling as set by the Housing and Urban Development Coordinating Council (HUDCC) as
per MC No. 5 Series of 2007 Re: Redefinition of Loan Ceiling/Packages are as follows:
Socialized housing=PHP 400,000.00 and below (per HUDCC MC No. 1, Dec. 11, 2008);
Low Cost
-Level 1
=above PHP 300,000.00 to PHP 1,250,000.00 (BP 220 standard);
-Level 2
=above PHP 1,250,000.00 to PHP 2,000,000.00 (PD 957 standard);
Medium cost
=PHP 2,000,000.00 up to PHP 4,000,000.00;
Open Housing
=above PHP 4,000,000.00
3. Commercial Subdivision
4. Industrial Subdivision
5. Industrial Estate
6. Memorial Parks and Cemeteries
F. BASIC REQUIREMENTS IN PROCESSING FOR CERTIFICATE OF REGISTRATION AND LICENSE
TO SELL

1.

For residential projects

1.1 Clearance from DAR, if applicable; conformity with the Zoning to the area
1.2 Development plan approved by the Local Government Unit
1.3 Environment Compliance Certificate
1.4 Verified survey returns from the LMS-DENR
1.5 Right over land, free from liens and encumbrances
1.6 Program of development
1.7 Organizational and financial capability to complete the project
1.8 Copy of contract to sell ads materials to be used in the sale
1.9 Compliance to Sec. 18, of RA 7279 or the Socialized Housing Project

2. For commercial, form lots, memorial parks and industrial estates numbers 1.1 to 1.8 above
3. Condominium Projects
3.1 Plans to be approved by HLURB
3.2 Master Deed with Declaration of Restrictions
3.3 Building Permit
3.4 Number 1.1 up to 1.8 above
In case where the project is not yet started or fully developed, the remaining development shall be covered by a
performance bond. All of these projects can only be registered after the required publications and upon findings
that the sale will not be fraudulent, the owner/developer is not ill refute and that they are organizationally and
financially capable to compete the project.
G. EXEMPTED TRANSACTIONS from securing CR/LS Section 7, P.D. 957
a) Sale of a subdivision lot resulting from partition of land among co-owners and heirs;
b) Sale or transfer of subdivision lot by the original purchase thereof and any subsequent sale of the same
lot;
c) Sale of subdivision lot or a condominium unit for the account of a mortgage in the ordinary course of
business when necessary to liquidate a bonafide debt.
3. Per Resolution No. R-546 s. 1994: Rules on Bulk buying as an Exempt Transaction
a) Bulk Buying as exempt transaction:
Bulk-buying of lots and subsequent introduction of housing unit without altering the original plan.
b) Bulk Buying as not Exempted from securing CR/LS:
Bulk Buying with construction of housing units resulting in increased density from the original plan approval.
Bulk Buying in the re-subdivision of lots and issuance of new TCTs.
4. On site Community Mortgage Projects
5. NHA controlled projects

6. On-site housing projects of non-governmental and non-profit organizations and foundations engaged in
community development for underprivileged and the homeless sector from the licensing requirements of the
HLURB.
H.

Mode of Compliance with Section 18 of R.A. 7279

The developer may choose any of the following as compliance:
1. Development of a New Settlement

2. Slum Upgrading.
Unit concerned.

To be certified by the National Housing Authority or the Local

Government

3. Participation in the Community Mortgage Program (CMP) either as a financier or a developer.

4. Joint Venture Project with the Local Government Unit concerned consisting of:
Joint-Venture Projects. The developer may enter into a joint project or agreement with the concerned local
government unit, with another private developer or any of the housing agencies, to develop a socialized housing
project. His participation shall be equivalent to 20% of project area or 20% of the cost of the main subdivision
project. The developer shall be required to submit to the HLRB a copy of the Joint-Venture Contract as proof of
Participation in a Joint-Venture Project. THE JOINT VENTURE AGREEMENT SHOULD CONTAIN THE
FOLLOWING: THE CONTRIBUTION OF A SPECIFIED SUM TO A COMMON FUND AND THE
SHARING OF PROFITS. (As amended by HLURB Board Resolution No. 806, Series of 2007)
5. Purchase of socialized housing bonds from PAG-IBIG.
I. Duties and Responsibilities of Owners/Developers of Subdivision and Condominium Projects under PD 957
(Please refer to the particular sections of PD 957 as follows:)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Mortgage: Section 18
Advertisement: Section 19
Time of Completion: Section 20
Alteration of Plan: Section 22
Non-Forfeiture of Payments: Section 23
Issuance of Title: Section 25
Donations of Open Spaces: Section 31, as amended by PD 1216
Organization of Homeowners Association: Section 30
Realty Taxes Payment: Section 26
Other Charges: Section 27

J. REVISED RULES AND REGULATIONS TO GOVERN ADVERTISEMENT APPROVAL [HLURB Board

Resolution No. 808, Series of 2007]
1. Scope of Application. These Rules and Regulations shall apply to all applications for Advertisement Approval
for the following projects issued Certificate Of Registration And License To Sell, hereinafter referred to
collectively as Project:

a. Residential/commercial condominium and subdivision

b. Farm lot subdivision
c. Industrial subdivision
d. Memorial park
e. Columbarium project
f. Any other similar project
Advertisement as referred to in this Rules shall mean any form of information dissemination, whether through
words, illustrations, scaled models for public display or in any form of multi-media. [Section 1]
2. Advertisement Approval, approval of the advertisement is required prior to its distribution, display and/or
publication/broadcast. [Section 2]
3. Contests of Advertisement. The following shall be indicated/reflected in the advertisement:
a. The exact location of the project in terms of distance from a well known
b. reference point;
c. The License to Sell Number and date issued;
d. Project completion date per approved work program
e. Maximum selling price in case of economic and socialized housing projects;
f. The name(s) of the owner(s) of the project;
g. Pictures or illustrations if any shall be captioned as "actual photographs"' "architect's perspective" or "artist's
illustrations", as the case may be. [Section 5]
4. What Should Not Be Included In The Advertisement. The following shall not be included in the advertisement:
[Section 6]
1. Disclaimer(s)
2. Any future development not covered by the license to sell
3. Exaggeration or misleading information
5. Advertisement Approval. The Board shall issue the Advertisement Approval when all the requirements of
sections 4 to 6 are complied with. The approval shall consist of a letter from the HLURB Regional Officer stating
approval of the advertisement material and authority to publish, display, distribute or announce the same, and
further stating therein all other conditions as maybe imposed. The letter of approval and the approved copy of
advertisement material shall in all instances bear the HLURB seal. Further, the latter shall be stamped "approved"
indicating date duly signed by the regional officer. Any deviation from the advertisement material shall be a
violation of the approval and a ground for revocation of the approval [Section 7]
6. Warranties. The owner or developer shall be answerable and liable for the facilities, improvements,
infrastructures or other forms of development represented or promised in brochures, advertisements and other
sales propaganda disseminated by the owner or developer or his agents and the same shall form part of the sales
warranties enforceable against said owner or developer, jointly and severally. Failure to comply with these
warranties shall also be punishable in accordance with the penalties provided for in PD 957. [Section 8]

PRESIDENTIAL DECREE NO. 957

THE SUBDIVISION AND CONDOMINIUM BUYER'S PROTECTIVE DECREE
REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS PROVIDING PENALTIES
FOR VIOLATIONS THEREOF.
WHEREAS, it is the policy of the State to afford its inhabitants the requirement of decent human settlement and
to provide them with ample opportunities for improving their quality of life;
WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or
sellers have reneged on their representations and obligations to provide and maintain properly subdivision roads,
drainage, sewerage, water system, lighting systems, and other similar basic requirements, thus endangering the
health and safety of home and lot buyers;
WHEREAS, reports to alarming magnitude also show cases of swindling and fraudulent manipulations
perpetrated by unscrupulous subdivision and condominium seller and operations, such as failure to deliver titles to
the buyers or titles fee from liens and encumbrances, and to pay real estate taxes, and fraudulent sales of the same
subdivision lots to different innocent purchasers for value;
WHEREAS, this acts not only undermine the land and housing program of the government but also defeat the
objectives of the New Society, particularly the promotion of peace and order and the enhancement of the
economic, social and moral condition of the Filipino people;
WHEREAS, this site of affairs has rendered it imperative that the real estate subdivision and condominium
business be closely supervised and regulated, and that penalties be imposed on fraudulent practices and
manipulations committed in connection therewith.
NOW, THEREFORE, I FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested
in me be the Constitution, de hereby decree and order:
TITLE 1-TITLE AND DEFINATIONS
SECTION 1. Title. - This Decree shall be known as THE SUBDIVISION AND CONDOMINIUM BUYER'S
PROTECTIVE DECREE.
SECTION II. Definition of Terms. - When used in this Decree, the following terms shall, unless the context
otherwise indicates, have the following respective meanings:
a) Person. - "Person" shall mean a natural or a juridical person. A juridical person refers to a business firm
whether a corporation, partnership, cooperative or association or a single proprietorship.
b) Sale or Sell. - "Sale or Sell" shall include every disposition, or attempt to dispose for a valuable consideration,
of a subdivision lot, including the building and other improvements thereon. If any in a subdivision project or a
condominium project. " Sale or Sell " shall also include a contract to sell, an exchange , an attempt to sell, an
option of sale or purchase, a solicitation of a sale, or an offer to sell, directly or by an agent, or by a circular, letter,
advertisement or otherwise.

A privilege given to a member of a cooperative, corporation, partnership, or any association and/or the issuance of
a certificate or receipt evidencing or giving the right of participation in, or right to, any land in consideration of
payment of the membership fee or dues, shall be deemed a sale within the meaning of this definition.
c) Buy and Purchase. - The term "buy" and "purchase" shall include any contract to buy, purchase, or otherwise
acquire for a valuable consideration a subdivision lot, including the building and other improvements, if any, in a
subdivision project or a condominium unit in a condominium project.
d) Subdivision Project. - "Subdivision Project" shall mean a tract or a parcel of land registered under Act No. 496
which is partitioned primarily for residential purposes into individual lots with or without improvement thereon,
and offered to the public for sale, in cash or in installment terms. It shall include all residential, commercial,
industrial and recreational areas as well as open spaces and other community and public areas in the project.
e) Subdivision Lot. - "Subdivision Lot" shall mean any of the lots, whether residential, commercial, industrial, or
recreational, in a subdivision project.
f) Complex Subdivision Plan. - "Complex Project" shall mean a subdivision plan of a registered land wherein a
street, passageway or open space is delineated on the plan.
g) Condominium Project. - "Condominium Project" shall mean the entire parcel of real property divided primarily
for residential purpose into condominium units, including all structures thereon.
h) Condominium Project. - "Condominium Unit" shall mean a part of the condominium project intended for any
type of independent be appended thereto.
i) Owner. - "Owner" shall refer to the registration owner of the land subject of a subdivision or a condominium
project.
j) Developer. - "Developer" shall mean the person who develops or improves the subdivision project or
condominium project for and in behalf or the owner thereof.
k) Dealer. - "Dealer" shall mean any person directly engaged as principal in the business of buying, selling or
exchanging real estate whether on a full-time or part-time basis.
l) Broker. - "Broker" shall mean any person who, for commission or other compensation, undertakes to sell or
negotiate the sale of a real estate, belonging to another.
m) Salesman. - "Salesman" shall refer to the person regularly employed by a broker to perform, for and in his
behalf, any or all the functions of a real estate broker.
n) Authority. - "Authority" shall mean the National Housing Authority.
TITLE II- REGISTRATION AND LICENSE TO SELL
SECTION 3. National Housing Authority. - The National Housing Authority shall have exclusive jurisdiction to
regulate the real estate trade and business in accordance with the provisions of this Decree.

SECTION 4. Registration of Projects. - The registered owner of a parcel of land who wishes to convert the same
onto a subdivision project shall submit plan to the Authority which shall act upon and approve the same, upon
finding that the plan complies with the Subdivision Standards and Regulations enforceable at the time case of a
plan for a condominium project except that, in addition, said Authority shall act upon and approve the plan with
respect to the building or buildings included in the condominium project in accordance with the National Building
Code (R.A No. 6541).
The subdivision plan, as so approved, shall then be submitted to the Director of Lands for approval in accordance
with the procedure prescribed in Section 44 of the Land Registration Act (Act No. 496, as amended by R.A. No.
440); Provided, that the CASE OF COMPLES SUBDIVISION PLANS, COURT APPROVAL SHALL NO
LONGER BE REQUIRED. The condominium plan, as likewise so approved, shall be submitted to the Register of
Deeds of the province or city in which the property lies and the same shall be acted upon subject to the conditions
and in accordance with the procedure prescribed in Section 4 of the Condominium Act (R.A. No. 4726).
The owner or the real estate dealer interested in the sale of lots or units, respectively, in such subdivision project
or condominium project shall register the project with the Authority filing therewith a sworn registration
statement containing following information:
a) Name of the owner;
b) The location of the owner's principal business office, and if the owner is a non-resident Filipino, the name and
address of his agent or representative in the Philippines authorized to receive notice;
c) The names and address of all the directors and officers of the business firm, if the owners be a corporation,
association, trust, or other entity, and of all the partners, if it be a partnership;
d) The general character of the business actually transacted or to be transacted by the owner; and
e) A statement of the capitalization of the owner, including the authorized and outstanding amounts of capital
stock and the proportion thereof with is paid-up.
The following documents shall be attached to the registration statement:
a) A copy of the subdivision plan or condominium plan as approved in accordance with the first and second
paragraph of this section.
b) A copy of any circular, prospectus, brochure, advertisement, letter, or communication to be used for the public
offering of the subdivision lots or condominium units;
c) In case of a business firm, a balance sheet showing the amount and general character of its assets and liabilities
and a copy of its articles of incorporation or articles of partnership or association, and the case may be, with all
the amendments thereof and existing by-laws or instruments corresponding thereto.
d) A title to the property which is free from all liens encumbrances; Provided, however, that in case any
subdivision lot or condominium unit is mortgage, it is sufficient if the instrument of mortgage contains a
stipulation that the mortgagee shall release the mortgage on any subdivision lot or condominium unit as soon as
the full purchase price of the same paid by the buyer.

The person filing the registration statement shall pay the registration fees prescribed thereof by the Authority.
Thereupon, the Authority shall immediately cause to be published a notice of the filing of the registration
statement at the expense of the applicant-owner or dealer, in two newspapers of general circulation, one published
in English and other in Pilipino, once a week for two consecutive weeks, reciting that a registration statement for
the subdivision lots or condominium units has been filed in the National Housing Authority; that the aforesaid
registration statement, as well as the prepare attached thereto, are open to inspection during business hours by
interested [arties, under such regulations as the Authority may impose, and that copies thereof shall be furnished
to any party upon payment of the proper fees.
The subdivision project or the condominium project shall be deemed registered upon completion of the above
publication requirement. The fact of such registration shall be evidenced by a registration certificate to be issued
to the applicant-owner or dealer.
SECTION 5. License to Sell. - Such owner or dealer to whom has been issued a registration certificate shall not,
however, be authorized to sell any subdivision lot or condominium unit in the registered project unless he shall
have first obtained a license to sell the project within two weeks from the registration of such project.
The authority, upon proper application thereof, shall issue to such owner or dealer of a registered project a license
to sell the project if, after an examination statement filed by said owner or dealer and all the pertinent documents
attached thereto, he is convinced that the owner or dealer is good repute, that his business is financially stable, and
that the proposed sale of the subdivision lots or condominium units to the public would not be fraudulent.
SECTION 6. Performance Bond. - No license to sell subdivision lots or condominium units shall be issued by the
Authority under Section 5 of this Decree unless the owner or dealer shall have file an adequate performance bond
approved by said Authority to guarantee the construction and maintenance of the roads, gutters, drainage,
sewerage, water system, lighting system, and full development of the subdivision laws and rules and regulations.
The performance bond shall be executed in favor of the Republic of the Philippines and shall authorize the
Authority to use the proceeds thereof for the purpose of its undertaking in case of forfeiture as provided in this
Decree.
SECTION 7. Exempt Transactions. - A license to sell and performance bond shall not be required in any
following transactions:
a)

Sale of a subdivision lot resulting from the partition of land among co-owners and co-heirs.

b)
lot.

Sale or transfer of a subdivision lot by the original purchase thereof and any subsequent sale of the same

c)
Sale of a subdivision lot or a condominium unit by or for the account of a mortgage in the ordinary course
of business when necessary to liquidate a bonafade debt.
SECTION 8. Suspension of License to Sell. - Upon verified complaint filed by a buyer of a subdivision lot or a
condominium unit or any interested party, the Authority may, in its discretion, immediately suspend the owner's
or dealer's license to sell pending investigation and hearing of the case as provided in Section 13 hereof.

The Authority may motu propio suspend the license to sell if, in its opinion, any information in the registration
statement filed by the owner or dealer is or has become misleading, incorrect, inadequate or incomplete or the sale
or offering for sale of the subdivision or condominium project may work or tend to work a fraud upon prospective
buyers.
The suspension order may lifted if, after notice and hearing, the Authority is convinced that the registration
statement is accurate or that any deficiency therein has been corrected or supplemented or that the sale to the
public of the subdivision or condominium project will neither be fraudulent nor result in fraud. It shall also be
lifted upon dismissal of the complaint for lack of legal basis.
Until the final entry of an order of suspension, the suspension of the right to sell project, though binding upon all
persons notified therefor, shall be deemed confidential unless it shall appear that the order of suspension has in the
meantime been violated.
SECTION 9. Revolution of Registration Certificate and License to Sell. - The Authority may, motu propio or
upon verified complaint filed by a buyer of a subdivision lot or condominium unit, revoke the registration of any
subdivision project or condominium project and the license to sell any subdivision lot or condominium unit in
said project by issuing an order to this effect, with his finding in respect thereto, if upon examination into the
affairs of the owner or dealer during hearing as provided for in Section 14 hereof, it shall appear there is
satisfactory evidence that the said owner or dealer:
a)

is insolvent: or

b)
has violated any of the provisions of this Decree or any applicable rule or regulation of the Authority, or
any undertaking of his/its performance bond; or
c)

has been or is engaged or is about to engage in fraudulent transactions; or

d)
has been made any misrepresentation in any prospectus, brochure, circular or other literature about the
subdivision project or condominium project that has been distributed to prospective buyers; or
e)

is of bad business repute; or

f)

does not conduct his business in accordance with the law or sound business principles.

Where the owner or dealer is a partnership or corporation or an unincorporated association, it shall be sufficient
cause for cancellation of its registration certificate and its license to sell if any member of such partnership or any
officer or director of such corporation or association has been guilty of any act or omission which would be cause
for refusing or revoke the registration of an individual dealer, broker or salesman as provided in Section 11
hereof.
SECTION 10. Registers of Subdivision Lots and Condominium Units. - A record of subdivision lots and
condominium units shall kept in the Authority wherein shall be entered all orders of the Authority affecting the
condition or status thereof. The registers of subdivision lots and condominium units shall be open to public
inspection subject to such reasonable rules as the Authority may prescribe.
TITLE III - DEALERS, BROKERS AND SALESMEN

SECTION 11. Registration of Dealers, Brokers and Salesman. - No real estate dealer broker or salesman shall
engage in the business of selling subdivision lots or condominium units unless he has registered himself with
Authority in accordance with the provisions of this section.
If the Authority shall find that the applicant is good repute and has complied with the application rules of the
Authority, including the payment of the prescribed fee, he shall register such applicant a s a dealer, broker or
salesman upon his filing a bond, or other security in lieu thereof, in such sum as may be fixed by the Authority
conditioned upon his compliance with the provisions of this Decree, Provided, that the registration of a salesman
shall case upon the termination of his employment with a dealer broker.
Every registration under section shall expire on the thirty-first day of December of each year. Renewal of
registration for the succeeding year shall be granted upon the written application therefore made not less than
thirty nor more than sixty days before the first day of the ensuing year and upon payment of the prescribed fee,
without the necessity of filing further statements or information, unless specifically required by the Authority. All
applications filed beyond said period shall be treated as original applications.
The names and addresses of all persons registered as dealers, brokers, or salesmen shall be recorded in a Register
or Brokers. Dealers and Salesmen kept in the Authority which shall be open to public inspection.
SECTION 12. Revocation of Registration as Dealer, Brokers or Salesmen. - Registration under the preceding
section may be refused or any registration granted thereunder, revoked by the Authority if, after reasonable notice
and hearing, it shall determine that such application or registrant:
a)

Has violated any provisions of this Decree or any rule or regulation made hereunder; or

b)

Has made a material false statement in his application for registration; or

c)
or

Has been guilty of a fraudulent act in connection with any sale of a subdivision lor or condominium unit;

d)
Has demonstrated his unworthiness to transact the business of dealer, broker, or salesman, as the case
may be.
In case of charges against a salesman, notice thereof shall also be given the broker or dealer employing such
salesman.
Pending hearing of the case, the Authority shall have the power to order the suspension of the dealer's, broker's or
salesman's registration; provided, that such order shall state the cause for the suspension.
The suspension or revocation of the registration of a dealer or broker shall carry with it the suspension or
revocation of the registration; provided that such order shall state the cause for the suspension.
TITLE IV - PROCEDURE FOR REVOCATION OF REGISTRATION CERTIFICATE

SECTION 13. Hearing. - In the hearing for determining the existence of any ground or grounds for the suspension
and/or revocation of registration certificate and license to sell as provided in Section 8 and 9 hereof, the following
shall be complied with:
a)
Notice. - No such hearing shall proceed unless the respondent is furnished with a copy of the complaint
against him or is writing of the purpose of such hearing.
b)
Venue. - The hearing may be held before the officer or officers designed by the Authority on the date and
place specified in the notice.
c)
Nature of proceedings. - The proceedings shall be non-litigious and summary in nature without regard to
legal technicalities obtaining in courts of law. The Rules of Court shall not apply in said hearing except by
analogy or in a suppletory character and whenever practicable and convenient.
d)
Power incidental to the hearings. - For the purpose of the hearing or other proceeding under this Decree,
the officer or officers designated to hear the complaint shall have the power to administer oath, subpoena
witnesses conduct ocular inspections, take depositions, and require the production of any book, paper,
correspondence, memorandum or other record which are deemed relevant or material to the inquiry.
SECTION14. Contempt. a)
Direct Contempt. - The officer of officers designed by the Authority to hear the complaint may summarily
adjudge in direct contempt any person guilty or misbehavior in the presence of or so near the said hearing officials
as to obstruct or interrupt the proceedings before the same or of refusal to be sworn or to answer as a witness or to
subscribe an affidavit or disposition when lawfully required to do so. The person found guilty of direct contempt
under this section shall be punished by a fine not exceeding Fifty Pesos (P50.00) or imprisonment not exceeding
five (5) days, or both.
b)
Indirect Contempt. - The officer or officers designed to hear the complaint may also adjudge any person
in indirect contempt on grounds and in manner prescribed in Rule 71 of the Revised Rules of Court.
SECTION 15. Decision. - The case shall be decided within thirty (30) days from the time the same is submitted
for decision. The decision may order the revocation of the registration of the subdivision or condominium project,
the suspension, cancellation, or revocation of the license to sell and/or the forfeiture, in whole or in part, of the
performance bond mentioned in Section 6 hereof. In case forfeiture of the bond is ordered, the Decision may
direct the provincial or city engineer to undertake or cause the construction of roads and of other requirements for
the subdivision or condominium as stipulated in the bond, chargeable to the amount forfeited. Such decision shall
be immediately executor and shall become final after the lapse of 15 days from the date of receipt of the Decision.
SECTION 16. Cease and Desist Order. - Whenever it shall appear to the Authority that any person is engaged or
about to engage in any act or practice which constitute or will constitute a violation of provision of this Decree, or
of any rule or regulation thereunder, it may, upon due notice and hearing as provided in Section 13 hereof, issue a
cease and desist order to enjoin such act or practices.
SECTION 17. Registration. - All contracts to sell, deeds of sale and other similar instruments relative to the sale
of conveyance of the subdivision lots and condominium units, whether or not the purchase price is paid in full,
shall be registered by the seller in the Office of the Register of Deeds of the province or city where the property is
situated.

Whenever a subdivision plan duly approved in accordance with Section 4 hereof, together with the corresponding
owner's duplicate certificate of title is presented to the Register of Deeds for registration, the Register of Deeds
shall register the same in accordance with the provisions of the Land Registration Act, as amended; Provided,
however, that if there is a street, passageway or required open space delineated on a complex subdivision plan
hereafter approved and as defined in this Decree, the Register of Deeds shall annotate on the new certificate of
title covering the street, passageway of open space, a memorandum lot he effect that except by way of donation in
favor of a city or municipality, no portion of any street, passageway or open space so delineated on the plan shall
be closed or otherwise disposed of by the registered owner without the requisite approval as provided under
Section 22 of this Decree.
SECTION 18. Mortgage. - No mortgage of any unit or lot shall be made by the owner or developer without prior
written approval of the Authority. Such approval shall not be granted unless it is shown that the proceeds of the
mortgage loan shall be used for the development of the condominium or subdivision project and effective
measures have been provided to ensure such utilization. The loan value of each lot or unit covered by the
mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan. The
buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the
payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for, with a
view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereof.
SECTION 19. Advertisement. - Advertisement that may be made by the owner or developer through newspaper,
radio, television, leaflets, circulars or any other form about the subdivision or the condominium or its operations
activities must reflect the real facts and must be presented in such manner that will not tend mislead or deceive the
public.
The owner or developer shall be answerable and liable for the facilities, improvements, infrastructures or other
forms of development represented or promised in brochures, advertisements and other sales propaganda
disseminated by the owner or development or his agents and the same shall form part of the sales warranties
enforceable against said owner of developer, jointly and severally. Failure to comply with these warranties shall
also be punishable in accordance with the penalties provided for in this Decree.
SECTION 20. Time of Completion. - Every owner or developer shall construct and provided the facilities,
improvements, infrastructures and other forms of development, including water supply and lighting facilities,
which are offered and indicated in the approval subdivision or condominium plans, brochures, prospectus, printed
matters, letters or in any form of advertisements, within one year from the date of the issuance of the license for
the subdivision or condominium project or such period of time as may be fixed by the Authority.
SECTION 21. Sales Prior to Decree. - In case of subdivision lots or condominium units sold or disposed of prior
to the effectivity of this Decree, it shall be incumbent upon the owner or developer of the subdivision or
condominium project to complete compliance with his or its obligations as provided in the preceding section
within two years from the date of this Decree unless otherwise extended by the Authority or unless an adequate
performance bond is filed in accordance with Section 6 hereof. Failure of the owner of developer to comply with
the obligation under this and the preceding provisions shall constitute a violation punishable under Section 38 and
39 of this Decree.
SECTION 22. Alteration of Plans. - No owner or developer shall change or alter the roads, open spaces,
infrastructures, facilities for public use and/or other form of subdivision developments as contained in the

approved subdivision plan and/or represented in its advertisements, without the permission of the Authority and
the written conformity or consent of the duly organized homeowner's association or in the absence of the latter by
the majority of the lot buyers in the subdivision.
SECTION 23. Non-Forfeiture of Payments. - No installment payment made by a buyer in a subdivision or
condominium project for the lot or unit he contracted to buy shall forfeited in favor of the owner or developer
when the buyer, after due notice to the owner or developer, desists from further payment due to the failure of the
owner or developer to develop the subdivision or condominium project according to the approval plans and within
the time for complying with the same. Such buyer may, at his option, be reimbursed the total amount paid
including amortization interests but including delinquency interests, with interest thereon at the legal rate.
SECTION 24. Failure to pay installments. - The rights of the buyer in the event of his failure to pay the
installments due for reasons other than the failure of the owner or developer to develop the project shall governed
by Republic Act No. 6552.
Where the transaction or contract was entered into prior to the effectivity of Republic Act No. 6552 on August 26,
1972, the defaulting buyer shall be entitled to be corresponding refund based on the installments paid after the
effectivity of the law in the absence of any provision in the contract to the contrary.
SECTION 25. Issuance of Title. - The owner or developer shall deliver the title of the lot or unit to the buyer upon
full payment of the lot or unit. No fee except those required for the registration of the deed of sale in the Registry
of Deeds, shall be collected for the issuance of such title. In the event a mortgage over the lot or unit is
outstanding at the time of the issuance of the title to the buyer, the owner or developer shall redeem the mortgage
or the corresponding portion thereof within six months from such issuance in order that the title over any fully
paid lot or unit may be secured and delivered to the buyer in accordance herewith.
SECTION 26. Realty Tax. - Real estate tax and assessment on a lot or unit shall be paid by the owner or
developer without recourse to the buyer for as long as the title has not passed to the buyer; Provided, however,
that if the buyer has actually taken possession of the occupied the lot or unit; he shall be liable to the owner or
developer for such tax and assessment effective the year following such taking of possession and occupancy.
SECTION 27. Other Charges. - No owner or developer shall levy upon any lot or unit buyer a fee for an alleged
community benefit. Fees to finance services for common comfort, security and sanitation may be collected only
by a properly organized homeowner's association and only with the consent of a majority of the lot or unit buyers
actually residing in the subdivision or condominium project.
SECTION 28. Access to Public Offices in the Subdivision. - No owner or developer shall deny any person free
access to any government office or public establishment located within the subdivision or which may be reached
only by passing through the subdivision.
SECTION 29. Right of Way to Public Road. - The owner or developer of a subdivision without access to any
existing public road or street, must secure a right of way to public road or street and such right of way must be
developed and maintained according to the requirement of the government authorities concerned.
SECTION 30. Organization of Homeowner's Association. - The owner or developer of a subdivision project or
condominium project shall initiate the organization of a homeowner's association among the buyers and residents
of the project for the purpose of promoting and protecting their mutual interest and assist in their community
development.

SECTION 31. Donation of Roads and Open Spaces to Local Government. - The registered owner or developer of
the subdivision or condominium project, upon completion of the development of said project may, at his option,
convey by way of donation the roads and open spaces found within the project to the city or municipality wherein
the projects are located. Upon acceptance of the donation by the city or municipality concerned, no portion of the
area donated shall thereafter be converted to any other purpose or purposes unless after hearing, the proposed
conversion is approved by the Authority.
SECTION 32. Phases of Subdivision. - For purpose of complying with the provisions of this Decree, the owner or
developer may divide the development and sale of the subdivision into phases, each phase to cover not less than
ten (10) hectares. The requirement imposed by the Decree on the subdivision as a whole shall be deemed imposed
by phase.
SECTION 33. Nullity of Waivers. - Any condition, stipulation, or provision in a contract of sale whereby any
person waives compliance with any provisions of this Decree or of any rule or regulation issued thereunder shall
be void.
SECTION 34. Visitorial Powers. - This Authority, through its duly authorized representative may, at any time,
make an examination into the business affairs, administration, and condition of any person, corporation,
partnership, cooperative, or association engaged in the business of selling subdivision lots and condominium
units. For this purpose, the official authorized to do so shall have the authority to examine under oath the
directors, officers, stockholders or members of any corporation, partnership, association, cooperative or other
persons associated or connected or with the business and to issue subpoena or subpoena duces tecum in relation to
any investigation that may arise thereform.
The Authority may also authorize the Provincial City or Municipal Engineer, as the case may be, to conduct an
ocular inspection of the project to determine whether the development of said project conform to standards and
specifications prescribed by the government.
The books, papers, letters, and other documents belonging to the person or entities herein mentioned shall be open
to inspection by the Authority or its duly authorized representative.
SECTION 35. Tke-over-Development. - The Authority may take over or cause the development and completion
of the subdivision or condominium project at the expense of the owner or developer, jointly or severally, in case
where the owner or developer has refused or failed to develop or complete the development of the Project as
provided for in this Decree.
The Authority may, after such take-over, demand, collect and receive from the buyers the installment payments
due on the lots, which shall be utilized for the development of the subdivision.
SECTION 36. Rules and Regulations. - The Authority shall issue the necessary standards, rules and regulations
for the effective implementation of the provisions of this decree. Such standards, rules and regulations shall take
effect immediately after their publication three times a week for two consecutive weeks in any newspaper of
general circulation.
SECTION 37. Deputization of Law Enforcement Agencies. - The Authority may deputize the Philippine
Constabulary or any law enforcement agency in the execution of its final orders rulings or decisions.

SECTION 38. Administrative Fines. - The Authority may prescribe and impose fines not exceeding ten thousand
pesos for violations of the provisions of this Decree or of any rule or regulations thereunder. Fines shall be
payable to the Authority and enforceable through writs or execution in accordance with the provisions of the
Rules of Court.
SECTION 39. Penalties. - Any person who shall violate any of the provisions of this Decree and/or any rule or
regulation that may issued pursuant ti this Decree shall, upon conviction of not more than ten (10) years;
provided, that in the case of corporations, partnerships, cooperatives or associations, the President, Manager or
Administrator or the person who has charge of the administration of the business shall be criminally responsible
for any violation of this Decree and/or the rules and regulations promulgated pursuant thereto.
SECTION 40. Liability of Controlling Persons. - Every person who directly or indirectly controls any person
liable under any provision of this Decree or of any rule or regulation issued thereunder shall be liable jointly and
severally with and to the same extent as such controlled person unless the controlling person acted in good faith
and did not directly induce the act or acts constituting the violation or cause of action.
SECTION 41. Other Remedies. - The rights and remedies provided in this Decree shall be in addition to any and
all other rights and remedies that may be available under existing laws.
SECTION 42. Repealing Clause. - All laws, executive orders, rules and regulations, or parts thereof inconsistent
with the provisions of this Decree are hereby repealed or modified accordingly.
SECTION 43. Effictivity. - This Decree shall take upon its approval. [July 12, 1976]

HLURB and FUNCTIONS

HLURB in Retrospect
The housing and Land Use Regulatory Board (HLURB) is a national government agency tasked as the planning,
regulatory and quasi-judicial body for land use development and real estate and housing regulation. These roles
are done via a triad of strategies namely, policy development, planning and regulation.
History

Executive Order No. 419 (1973) created the Tax Force on Human Settlements (TFHS) under the
Development Academy of the Philippines (DAP) Presidential Decree No. 933 (1976) renamed the TFHS
into Human Settlements Commission (HSC).

Presidential Decree No. 1396 (1978) renamed HSC as the Human Settlements Regulatory Commission
(HSRC) and was designated as the regulatory arm of the Ministry of Settlements.

Executive Order No. 648 (1981) reorganized the HSRC and transferred the implementation of P.D. No.
957 (Subdivision and Condominium Buyer's Protective Decree) from NHA to HSRC.

Executive Order No. 90 (1986) renamed the HSRC as the Housing and Land Use Regulatory Board
(HLURB) and was designed as the regulatory body for housing and land development under the Housing
and Urban Development Coordinating Council (HUDCC).

Mandates
LAND USE PLANNING
Laws that Ensure Rational Land Use and Sustainable Urban and Regional Development

Executive Order No. 72 - Providing for the Preparation and Implementation of the Comprehensive Land
Use Plans of Local Government Units Pursuant to the Local Government Code of 1991 and Other
Pertinent Laws
Memorandum Circular No. 54 - Prescribing the Guidelines of Sec. 20 R.A. 7160, Authorizing
Cities/Municipalities to Reclassify Lands into Non-Agricultural Uses
Executive Order No. 124 - Establishing Priorities and Procedures in Evaluating Areas for Land
Conversion in Regional Agricultural/Industrial Centers, Tourism Development Areas Sites for Socialized
Housing

REAL ESTATE MANAGEMENT

Laws that Regulate the Relationship between Sellers, Developers and Buyers of Subdivision Lots and
Condominium Units, and provide Quasi-Judicial and Criminal Remedies for Breach of Statutory and Contractual
Obligations
Subdivision and Condominium Buyer's Protective Decree Presidential Decree No. 957 (As Amended By
P.D. 1216) - Regulating the Sale of Subdivision Lots and Condominiums, Providing Penalties For
Violations Thereof
Presidential Decree No. 1216 - Defining "Open Space' in Residential Subdivision and Amending Sec. 31
of Pd 957 Requiring Subdivision Owners to Provide Roads, Alleys, Sidewalks and Reserve Open Space
for Parks or Recreational Use
Presidential Decree No. 1344 - Empowering the NHA to issue Wit of Execution in the Enforcement of its
Decisions Under P.D. 957
Batas Pambansa 220 - An Act Authorizing the Ministry of Human Settlements to Establish and
Promulgate Different Levels of Standards and Technical Requirements for Economic and Social Housing
Projects in Urban and Rural Areas from Those Provided Under Presidential Decrees Numbered Nine
Hundred Fifty- Seven, Twelve Hundred Sixteen, Ten Hundred Ninety-Six and Eleven Hundred EightyFive
Republic Act 7279 - Urban Development and Housing Act. An Act to Provide For a Comprehensive and
Continuing Urban Development and Housing Program, Establish the Mechanism for its Implementation,
and for Other Purposes
Republic Act 4726 - The Condominium Act. An Act to Define Condominium, Establish Requirements for
its Creation, and Govern its Incidents
Republic Act 7899 - Amending Section 4 and 6 of R.A. 4726
Executive Order 71 - Devolution of HLURB Function to Approved Subdivision Plan of LGUS
Executive Order 184 - Creating Socialized Housing One-Stop Processing Centers
Republic Act 6552 - Realty Installment Buyer Protection Act Rational Land Use

Planning is the key to order and rational land development in any local government unit, i.e. a city or
municipality. A Comprehensive Land Use Plan (CLUP) prescribes the developmental pace, directions and
strategies for the optimum use of land resources in a community as well as its role in provincial, regional and
national development. The CLUP is enacted into a zoning ordinance for purposes of enforcement.
Development Role
HLURB has the twin roles of enhancing and reinforcing rational housing and real estate service delivery via triad
of strategies namely; policy, planning, and regulation. Such rules are enunciated and defined in Presidential
Decree (PD), Letters of Instruction (LOI), Republic Acts (RA), Executive Orders (EO), Office of the President
Memorandum Circulars (OP-MC) and Batas Pambansa (BP).
The HLURB pursues activities to attain rational land use as specified in a number of directives.

Extend planning assistance to Local Government Units (LGUs) (LOI No. 729, EO No. 648);

Review and ratify land use plans of Metro Manila cities and municipalities, provinces, highly urbanized
cities and independent component cities (EO No. 72);

Enforce zoning regulations (EO No. 648);

Investigate and adjudicate complaints (EO No. 648)
Assist local government units assume devolved functions via training and consultation;
Coordinate land reclassification clearance (MC No. 54);
Update and revise rules, guidelines and standards on land use (EO No. 648); and
Update and revise National Urban Development and Housing Framework (RA No. 7279).

On Real Estate and Housing Regulations

The HLURB functions are specified in various directions:

Enforce laws, rules, standards and guidelines through:

o
o

Approval of condominium plans (PD No. 957);

Subdivision Plans: HLURB's foremost function is to protect buyers of housing units and home
lots, and condominium units unscrupulous practices in the industry; and

Issuance of License to Sell (PD No. 957)

Assist LGU's perform the devolved function of processing and approving the subdivision plans via
training and consultation (EO No. 71)
o
o

Issue sales and mortgage clearance for the protection of rights of tenants in the urban and land
reform zones and areas for priority development (PD No. 1517)
Update and revise rules guidelines and standards on housing and real estate for:
-Residential subdivisions and condominiums (PD No. 957)
-Economic and socialized project (BP Blg. 220)

Approve expansion of a condominium corporation or integration of a condominium project with another

project upon the affirmative vote of a simple majority of registered owners (RA No. 7899)

-Assurance of completion of project (PD No. 957)

-Investigation and adjudication of complaints (PD No. 957)
-Assurance of compliance to balanced housing development requirement (Sec. 18, R.A. 7279)
-Balanced housing development (RA No. 7279)
-Other types of subdivision and condominium project (EO No. 648 and related laws)

Operate as the lead agency for the HUDCC for the Socialized Housing One-stop Processing Centers
(SHOPCs) and issuance of permits, clearances, certifications and license for the implementation of
socialized housing projects (EO No. 184)
Approve any amendment to or revocation of the enabling or master deed of a condominium project
already decided upon by a simple majority of all registered owners (RA No. 7899)
Approve expansion of a condominium corporation or integration of a condominium project with another
upon the affirmative vote of a simple majority of registered owners (RA No. 7899)

Quasi Judicial Functions

Quasi-Judicial Functions Designated Housing and Land Use Arbiters (HLAs) at the Central Office, in each of the
Regional Offices and for special assignments, hear and decide on complaints against violation of pertinent
legislation's and HLURB rules and regulations. The HLURB Rules of Procedures for adjudication of cases
provides for just speedy and inexpensive proceedings, amicable settlements, summary resolution and other legal
tools.
The aggrieved party in a resolved case may file a petition for review or appeal the decision of the HLA to the
Board of Commissioners. The decision of the Board is appealed to the Officer of the President which decisions
shall be final subject only to review by the Supreme Court.
HOA Functions of HLURB
In January 2000, Republic Act No. 8763 transferred to this Board the functions of the Home Guaranty
Corporation with respect to Homeowners Associations.

"The Magna Carta for Homeowners and Homeowners' Associations"

Devolved Functions

Pursuant to the prescription of RA No. 7160 (Local Government Code of 1991) and as detailed under EO No. 71
and EO No. 72, certain HLURB functions were devolved to the LGU's:

The Sangguniang Bayan or Sangguniang Panglungsod shall, subject to national law, process and approve
subdivision plans for residential, commercial, industrial or other development purpose.
The Sangguniang Panlalawigan shall review and approve the comprehensive land use plans of component
cities and municipalities.
Cities and municipalities with CLUPs reviewed and approved in accordance with EO 72 shall issue
location clearance to locally projects.

CASES NOT UNDER JURISDICTION OF HLURB

1.
2.
3.
4.

Complaints vs. Buyer

Complaints vs. Co-Practitioner
Complaints vs. Owners [Commissions]
Complaints by Developer

VI
Condominium Concepts and Other Types of
Real Estate Holdings
CONDOMINIUM CONCEPTS

BACKGROUND
Condominium housing was basically born out of the condition of limited land space.
In the Philippines, the concept of condominiums was formally recognized with the passage by Congress
on June 16, 1966 of Republic Act No. 4726 entitle "An Act to Define Condominium, Establishment
Requirements for its Creation, and Govern its Incidence."

Although one normally thinks of condominium in the from of a building, a condominium may take the
form of subdivision, or what may be referred to as the "horizontal condominium" or also referred to as a
"townhouse project" vs. the traditional vertical condominium or condominium building.
MAJOR LAWS GOVERNING CONDOMINIUM

The Condominium Act

RA 4796
(As Amended)

The Subdivision and Condominium

Buyer Protective Decree
PD 957

A. ADVANTAGES OF CONDOMINIUMS
Affordability is Enhanced

Maximizing Land Space

It enhance affordability by fractionalizing the cost of land and

building.

There is economy in land space. Families or parties holding title

to contiguous land may obtain adequate housing by
consolidating their land and constructing a condominium

thereon.
Facilities and Services
to build

This is because, unless otherwise provided in the become

cheaper Master Deed, their cost are distributed equally among maintain
and the unit owners.

Exclusive ownership of unit

It involves retention or the psychological and economic

Co-ownership of undivided
Concepts of a family house through exclusive ownership of common
areas and
a unit while holding co-ownership rights in the undivided facilities
common areas and facilities.
Closer neighborhood or
community ties

Due to the physical closeness of each unit and the concepts of

co-ownership of common areas and facilities, unit owners are
bound to uphold the quality of their living standards.

B. DEFINITION OF TERMS
CONDOMINIUM

This is an interest in real estate consisting of absolute ownership

in a unit of residential, commercial or industrial buildings and
common ownership of the land and common areas of the
condominium project.

CONDOMINIUM PROJECT

It is the TOTALITY of the site (land), condominium units and

common areas.

CONDOMINIUM UNIT

This is the SPACE encompassed by the interior surface of the

floor, ceiling, walls, and exterior doors and windows, which is
susceptible of IBDEPENDENT USE and OWNERSHIP.

COMMON AREAS

Refer to the weight bearing walls, columns and beams,

stairways, halls, elevators, etc including the electrical, water and
plumbing systems and amenities in a condominium project.
There are two kinds of common areas, namely: (1) General (or
undivided) common areas and (2) Limited (or divided) common
areas.

C. TYPES OF COMMON AREAS

GENERAL OR UNDIVIDED -

These refer to the parts of the condominium project COMMON

AREAS which are not subject to the exclusive use of any one
group of group of owners. Examples are: swimming, pool,
hallways, stairways, elevators, etc.

LIMITED OR DIVIDED

Common areas which are allocated to the exclusive COMMON

AREAS use of one or group of unit owners.

D. EXTENT OF INTEREST IN COMMON AREAS

1. In the absence of any provision in the Master Deed, all unit owners shall have EQUAL SHARE in the
common areas.
2. The Master Deed may provide any of the following alternatives:
2.1

Equal Sharing

2.2

Sharing Based on VALUE

2.3

Sharing Based on UNIT AREAS in relation to Total Area

E. IMPORTANT DOCUMENTS IN CONDOMINIUM SALES

1. MASTER DEED

This is the ENABLING ACT of any

condominium project. This "enables" the
condominium to exist and governs its existence.

2. DEED OF RESTRICTIONS

The Deed of Restrictions lays down the

provisions for insurance coverage's, the
management body, maintenance cost and
assessment basis and audit.

3. ARTICLES OF INCORPORATION
This establishes the birth guidelines of
LAWS
condominium corporation.
4. RULES AND REGULATIONS

AND

Determines what unit owners and tenants can

and cannot do.

BY-

5. CONDOMINIUM CERTIFICATE
OF TITLE (CCT)

This is the evidence or proof of one's ownership

of the condominium unit (compared to the
transfer certificate of title for land ownership)

6. TAX DECLARATION(S)

This document will determine to what extent the

unit owners are liable with regards to the tax
obligation on the condominium project's land
and common areas and the individual units.

7. CERTIFICATE OF MANAGEMENT

Document issued by the condominium

corporation that the conveyance is in accordance
with the Master Deed/Restrictions.

F. THE MASTER DEED

A condominium project's Master Deed includes the following:
1. Description of LAND(S) include in the condominium project.
2. Description of the BUILDING(S) like the number of storys, basement, number of units and their
attendant accessories.
3. Description of COMMON AREAS and FACILITIES which are part and parcel of the project.
4. Description of the INTEREST acquired by the unit owners in the common areas and land(s)
5. PURPOSE(S) for which the building and units are to be used.
6. CERTIFICATION BY REGISTERED OWNER OF THE P[ROPERTY if he is other than those
executing the Master Deed, that he consents to the registration of the Deed.
7. DEED OF REGISTRATIONS
8. ANNEXES, land survey plan and building diagrammatic floor plans.
G. THE Deed of Restrictions
Deeds of Restriction indicate:
1. Management Body
2. Provision for Insurance Coverage
3. Provision for the Maintenance of Common Areas and Facilities
4. Sharing of Realty Tax on Common Areas
5. Manner of Amending Restrictions
6. Independent Audit
7. Assessments and Dues
8. Project and Dissolution of the Condominium Corporation
H. RIGHTS AND OBLIGATIONS OF UNIT OWNERS

RIGHTS

OBLIGATIONS

1. Absolute ownership of unit.

1. Pay the realty tax on his unit

2. Co-ownership of land and common areas

2. Share in realty tax on common and land

3. Exclusive easement of the air encompassed by his

unit

3. Pay insurance of his unit

4. Non-exclusive easement to common areas

4. Share the insurance of common areas

5. Repair, paint, redecorate the interior surface of

his unit

5. Comply with use restrictions

6. Pay condominium dues/assessments

6. Sell, lease or mortgage his unit

7.Vote in meetings of condominium corporation.

7. Give "right of first refusal" if so required by

Master Deed

I. The NEED for a Condominium Corporation

1. NECESSITY FOR CREATION - The organization of a condominium corporation is OPTIONAL IF NO

UNIT WILL BE SOLD TO FOREIGNERS. The corporation is to the land shall be transferred to the
corporation to comply with the constitutional mandate that corporations may acquire real estate provided
that at least 60% of the capital or membership is Filipino.
2. PURPOSE OF CORPORATION - (a) To hold title to the and (b) Act as the management body.
3. CONFLICTS WITH MASTER DEED - In case of conflict between the provisions of the Articles of
Incorporation of the condominium corporation and the Master Deed, the latter shall prevail based the
following reasons:
3.1 It is Master Deed which gives birth to the condominium project.
3.2 The condominium provides that the Article of Incorporation of the condominium corporation
shall not conflict with the Master Deed.
4. TERM OF CORPORATION - The life of the condominium corporation shall be coterminous with the
existence of the condominium project.
5. EFFECTS OF VOLUNTARY DISSOLUTION (a) The corporation shall be deemed to hold a power of attorney from all stockholders or members to
sell their separate interest the project.
(b) Liquidation of the corporation shall be affected by the sale of the entire project subject to the
rights of the Corporation and individual condominium creditors.
6. EFFECTS OF INVOLUNTARY DISSOLUTION (a) The common areas held by the corporation shall be transferred pro-indiviso and in proportion to
their interest to the members or stockholders.
(b) The transfer shall be deemed full liquidation of the interest of the members or stockholders in the
corporation.
J. CONDOMINIUM vs. TRADITIONAL OWNERSHIP
Major differences between
CONDOMINIUM vs. TRADITIONAL OWNERSHIP

PROPERTY RIGHTS
EVIDENCE OF OWNERSHIP

RESTRICTIONS ON CAPACITY
TO BUY

Alien ownership should not go

beyond 40% of the units in a
condominium corporation

Absolute ownership of land and all

improvements

Aliens are prohibited unless

acquired
through
hereditary
succession or special laws
CONDOMINIUM
Condominium Certificate of Titles
(C.C.T)
Absolute ownership of unit and
Co-ownership of land and common
areas

TRADITIONAL
Transfer Certificate
(OCT/T.C.T)

of

Title

THE CONDOMINIUM ACT

(REPUBLIC ACT NO. 4726)
As amended by republic Act No. 7899,
AN ACT TO DEFINE CONDOMINIUM, ESTABLISH REQUIREMENTS
FOR ITS CREATION, AND GOVERN ITS INCIDENTS
SECTION 1. The short of this Act shall be "The Condominium Act"
SECTION 2. A condominium is an interest in real property consisting of a separate interest in a unit in a
residential, industrial or commercial building and an undivided interest in common directly or indirectly, in the
land on which it is located and in other common areas of the building.
A condominium may include, in addition, a separate interest in other portions of such real property. Title to the
common areas, including the land, or the appurtenant interests in such areas, may be held by a corporation
specially formed for the purpose (hereinafter known as the "Condominium Corporation") in which the holders of
separate interest shall automatically be members or shareholders, to the exclusion of others, in proportion to the
appurtenant interest of their respective units in the common areas.
The interest in condominium may be ownership or any other interest in real recognized by the law of property in
the Civil Code and other pertinent laws.
SECTION 3. As used in this Act, unless the context otherwise requires:
a) "Condominium"
b) "Unit"

means a condominium as defined in the next preceding section.

means a part of the condominium project intended for any type
of independent use or ownership, including one or more rooms
or spaces located in one or more floors 9or part or parts of
floors) in a building or buildings and such accessories as maybe
appended thereto.
c) "Project"
means the entire parcel of real property divided or to be divided
in condominiums, including all structures thereon.
d) "Common Areas"
means the entire project excepting all units separated or held or
reserved.
e) "To divide real property"
means to divide the ownership thereof or other interest therein by
conveying one or more condominiums therein but less than the
whole thereof.
SECTION 4. The provisions of this Act shall apply to property divided or to be divided into condominiums only
if there shall be recorded in the Register of Deeds of the province or city in which the property lies, and duly

annotated in the corresponding certificate of title of the land, if the latter had been patented or registered under
either Land Registration or Cadastral Acts, an enabling or Master Deed which shall contain, among others, the
following:
a) Description of the land on which the building or buildings and improvements are to be located;
b) Description of the or building, stating the number of stories and basements, the number of units and their
accessories, if any:
c) Description of the common areas and facilities:
d) A statement of the exact nature of the interest acquired or to be acquired by the purchaser in the separate
units and in the common areas of the condominium project. Where title to or the appurtenant interests in
the common areas is to held by a condominium corporation, a statement to this effect shall be include;
e) Statement of the purposes for which the building or buildings and each of the units are intended or
restricted as to use;
f) A certificate of the registered owner of the property, if he is other than those executing the Master Deed,
as well as of all registered holders of any lien or encumbrance on the property, that they consent to the
registration of the deed;
g) The following plans shall be appended to the deed as integral thereof:
1. A survey plan of the included in the project, unless a survey plan of the same property
had previously been filed in said office;
2. A diagrammatic floor plan of the building or buildings each unit, its relative location
and approximate dimensions.
h) Any reasonable restrictions not contrary to law, morals or public policy regarding the right of any
condominium owner to alienate or dispose of his condominium.
The enabling or master deed may be amended or revoke upon registration of an instrument executed by a simple
majority of the registered owners of the property: Provided, That in a condominium project exclusively for either
residential or commercial use, simple majority shall be on a per unit of ownership basis and that in the case of
mixed use, simple majority shall be on a floor area of ownership basis: Provided, further, That prior notifications
to all registered owners are done: and Provided, finally That any amendment or revocation already decided by a
simple majority of all registered owners shall be submitted to the Housing and Land Use Regulatory Board and
the city/municipal engineer for approval before it can be registered. Unit registration of a revocation, the
provisions of this Act shall continue to apply to such property. (As amended by R.A. No. 7899, approved Feb. 23,
1995)
SECTION 5. Any transfer or conveyance of a unit or an apartment, office or store or other space therein, shall
include the transfer or conveyance of the undivided interest in the common areas or, in a proper case, the
membership or shareholdings in the condominium corporation; Provided, however, That where the common areas
in the condominium project are held by the owners of separate units as co-owners thereof, no condominium unit
therein shall be conveyed or transferred to persons other than Filipino citizens or corporation at least 60% of the
capital stock of which belongs to Filipino citizens, except in case of hereditary succession. Where the common
areas in a condominium project are held by a corporation, no transfer or conveyance of unit shall be valid if the
concomitant transfer of the appurtenant membership or stockholding in the corporation will cause the alien
interest in such corporation to exceed the limits imposed by existing laws.
SECTION 6. Unless otherwise expressly provided in the enabling or mater deed or the declaration of restrictions,
the incidents of a condominium grant are as follows:
a) The boundary of the granted are the interior surface of the perimeter walls, floors, ceilings, windows and
door thereof. The following are not part of the unit: bearing walls columns, floors roofs, foundations and
other common structural elements of the building; lobbies, stairways, hallways, and other areas of
common use; elevator equipment and shafts, central heating, central refrigeration and central airconditioning equipment, reservoirs, tanks, pumps, and other central services and facilities, pipes, ducts,
flues, chutes, conduits, wires and other utility installations, wherever located, except the outlets thereof
when located within the unit;
b) There shall pass with the unit, as an appurtenance thereof, an exclusive easement for the use of the air
space encompassed by the boundaries of the unit as it exist at any particular time and as the unit may
lawfully be altered or reconstructed from time to time. Such easement shall be automatically terminated in
any air space upon destruction of the unit as to render it untenantable.
c) Unless otherwise provided, the common areas are held in common by the holders of units, in equal share
one for each unit;
d) A non-exclusive easement for ingress, egress, and support through the common areas in appurtenant to
each unit and the common areas are subject to such easement;

e) Each condominium owner shall have the exclusive right to paint, repaint, tile, wax, paper or otherwise
refinish and decorate the inner surface of the walls, ceilings, floors, windows and doors bounding his own
unit;
f) Each condominium owner shall have the exclusive right ti mortgage, pledge or encumber his
condominium and to have the same appraised independently of the other condominium owner is personal
to him;
g) Each condominium owner has also the absolute right to sell or dispose of his condominium unless the
master deed contains a requirement that the property be first offered to the condominium owners within a
reasonable period of time before the same is offered to outside parties.
SECTION 7. Except as provided in the following section, the common areas shall remain undivided, and there
shall be no judicial partition thereof.
SECTION 8. Where several person own condominium project, an action may be brought by one or more such for
partition thereof by sale of the entire project, as if the owners of the condominium in such project were co-owners
of the entire project in the same proportion as their interests in the common areas; Provided, however, That a
partition shall be made only upon a showing:
a) That three years after damage or destruction to the project which renders a material part thereof, unfit for
its use prior thereto, the project has not been rebuilt or repaired substantially to its state prior to its
damage or destruction; or
b) That damage or destruction to the project has rendered one-half or more of the units therein untenantable
and that condominium owners holding in aggregate more than 30 percent interest in the common areas are
opposed to repair or restoration of the project; or
c) That the project has been in existence in excess of 50 years, that it is obsolete and uneconomical, and that
condominium owners holding in aggregate more than 50 percent interest in the common areas are
opposed to repair or restoration or remodeling or modernizing of the project; or
d) That the project or a material part thereof has been condemned or expropriated and that the project is no
longer viable, or that the condominium owners holding in aggregate more than 70% interest in the
common areas are opposed to the continuation of the condominium regime after expropriation or
condemnation of a material proportion thereof; or
e) That the conditions for such partition by sale set forth in the declaration of restrictions duly registered in
accordance with the terms of this Act, have been met.
SECTION 9. The owner of a project shall, prior to the conveyance of any condominium therein, registered a
declaration of restrictions relating to such project, which restrictions shall constitute a lien upon each
condominium owners in the project, and shall insure to and bind all condominium owners in the projects. Such
liens, unless otherwise provided, may be enforced by any condominium owner in the project or by the
management body of such project. The Register of Deeds shall enter and annotate the declaration of restrictions
upon the certificate of title covering the land included within the project, if the land is patented or registered under
the Land Registration or Cadastral Acts.
The declaration of restrictions shall provide for the management of the project any anyone of the following
management bodies: a condominium corporation, an association of the condominium owners, a board of
governors elected by condominium owners, or a management agent elected by the owners of by the board named
in the declaration. It shall also provide for voting majorities, quorums, notices, meeting date, and other rules
governing such body bodies.
Such declaration of restrictions, among other things, may also provide:
a) As to any management body:
1. For the power thereof, including power to enforce the provisions of the declaration of restrictions;
2. For Maintenance of insurance policies insuring condominium owners against loss by fire, casualty,
liability, workmen's compensation and other insurable risk and for bonding of the members of any
management body;
3. Provisions for maintenance, utility, gardening, and other service benefiting the common areas, for the
operation of the building, and legal, accounting and other professional and technical services;
4. For purchase of materials, supplies and the like needed by the common areas;
5. For payment of taxes and special assessments which would be a lien upon the entire project or common
areas, and discharge of any encumbrance levied against the entire project of the common areas;
6. For reconstruction of any portion or portions of and damage to or destruction of the project;
7. the manner for delegation of its powers;
8. For entry by its officers and agents into any unit when necessary in connection with the maintenance or
construction for which such body is responsible;

9. For a power of attorney to the management body to sell the entire project fot the benefit of all the owner
thereof when partition of the project may be authorized under Section 8 of this Act, which said power
shall be binding upon all of the condominium owners regardless of whether they assume the obligations
of the restrictions or not.
b) The manner and procedure for amending such restrictions, Provided, that the vote of not less than a majority in
interest of the owner obtained.
c) For independent audit of the accounts of the management body;
d) For reasonable assessments to meet authorized expenditures, each condominium unit to be assessed separately
for its share of such expenses in proportion (unless otherwise provided) of its power's fractional interest in any
common areas;
e) For the subordination of the liens securing such assessments to other liens either generally or specifically
described;
f) For conditions, other than those provided for in Sections 8 and 13 of this Act, upon which partition of the
project and dissolution of the condominium may be made. Such right to partition or dissolution may be
conditioned upon failure of the condominium owners to rebuild within a certain period or upon specified
percentage of damage to the building, or upon a decision of an arbitrator, or upon any other reasonable condition.
SECTION 10. Whenever the common areas in acondominium project are held by a condominium corporation,
such corporation shall constitute the management body of the project. The corporate of such a corporation shall be
limited to the holding of the common areas; either in ownership or any other in real property recognized by law,
to the management of the project, and to such other purposes as may be necessary, incident or convenient to the
accomplishment of said purpose. The articles of incorporation or by-laws of the corporation shall not contain any
provision contrary to our inconsistent with the provisions of this Act, the enabling or master deed, or the
declaration of restrictions of the project. Membership in a condominium corporation, regardless of whether it is
stock or non-stock corporation, shall not be transferable separately from the condominium unit which it is an
appurtenance. When a member or a stockholder cease to own a unit in the project in which the condominium
corporation owns or holds the common areas, he shall automatically cease to be a member or stockholder of the
condominium corporation.
SECTION 11. The term of a condominium corporation shall be coterminous with the duration of the
condominium project, the provisions of the Corporations Law to the contrary notwithstanding.
SECTION 12. In case of involuntary dissolution of a condominium corporation for any of the cause provided by
law, the common areas owned or held by the condominium shall, by way of liquidation, be transferred proindiviso and in proportion to their interest in the corporation to the members or stockholders thereof, subject to the
superior rights of the corporation creditors. Such transfer or conveyance shall be deemed to be full liquidation of
the interest of such members or stockholders in the corporation. After such transfer or conveyance, the provisions
of this Act governing undivided co-ownership of, or4 undivided interest in, the common areas in condominium
project shall fully apply.
SECTION 13. Unit enabling or the master deed of the project in which the condominium corporation owns the
common areas is revoked, the corporation shall not be voluntarily dissolved through for dissolution under Rule
104 of the Rules Court except upon a showing:
a) That the years after damage or destruction to the project in which the corporation owns or holds the
common areas, which damage or destruction renders a materials part thereof, unfit for its use prior
thereto, the project has not been rebuilt or repaired substantially to its state prior to its damage or
destruction; or
b) The damage or destruction to the project has rendered one-half or more of the units therein untenantable
and that more than 30 percent of the members of the corporation, if non-stock, or the shareholders
representing more than 30 percent of the capital stock entitle to vote, if a stock corporation, are opposed
to the repair or reconstruction of the project; or
c) That the project has been in existence in excess of 50 years, that it is obsolete and uneconomical, and that
more than 50 percent of the members of the corporation if non-stock, or stockholders representing more
than 50 percent of the capital stock entitle to vote, if a stock corporation, are opposed to the repair or
restoration or remodeling or modernizing of the project; or

d) That the project or material part thereof has been condemned or expropriated and that the project is no
longer viable of that the members holding in aggregate more than 70 percent interest in the corporation if
non-stock, or the stockholders representing more than 70 percent of the capital stock entitle to vote, if a
stock corporation, are opposed to the continuation of the condominium regime after expropriation or
condemnation of a material portion thereof; or
e) That the conditions for such dissolution set forth in the declaration of restrictions of the project in which
the corporation owns or holds the common areas, have been met.
SECTION 14. The condominium may also be dissolved by the affirmative vote of all the stockholders or
members thereof at a general or special meeting duly called for the purpose; Provided, that all the requirements of
Section 62 of the Corporation Law are complied with.
SECTION 15. Unless otherwise provided for in the declaration of restrictions, upon voluntary dissolution of a
condominium corporation in accordance with the provisions of Section 13 and 14 of this Act, the corporation
shall be deemed to hold a power of attorney from all the members or stockholders to sell and dispose of their
separate interests in the project and liquidation of the corporation shall be effected by a sale of the entire project as
if the corporation owned the whole thereof, subject to the rights of the corporation and of individuals
condominium creditors.
SECTION 16. A condominium corporation shall not during its existence, sell, exchange, lease or otherwise
depose of the common areas owned or held by it in the condominium project unless authorized by the affirmative
vote of a simple majority of the registered owners: Provided, that prior notifications to all registered owners: are
done: and Provided, further, that the condominium corporation may expand or integrate the project with another
upon the affirmative vote of a simple majority of the registered owners: Provided, that prior notifications to all
registered owners are done: and Provided, further, that the condominium corporation may expand or integrate the
project with another upon the affirmative vote of a simple majority of the registered owners, subject only to the
final approval of Housing and Land Use Regulatory Board. (As amended by R.A. No. 7899, approved Feb. 23,
1995)
SECTION 17. Any provisions of the Corporation Law to the contrary notwithstanding, the by-laws of a
condominium corporation shall provide that a stockholder or member shall not be entitle to demand payment of
his share or interest in those case where such right is granted under the Corporation Law unless he consents to sell
his separate interest in the project to the corporation or to any purchaser of the corporation's choice who shall also
buy from the corporation the dissenting member or stockholder's interest. In case of disagreement as to price, the
procedure set forth in the appropriate provision of the Corporation Law for valuation of shares shall be allowed.
The corporation shall have two years within which to pay for the shares or furnish a purchaser of its choice from
the time of award. All expenses incurred in the liquidation of the interest of the dissenting member or stockholder
shall be borne by him.
SECTION 18. Upon registration of an instrument conveying a condominium, the Register of Deeds shall, upon
payment of the proper fees, enter and annotate the conveyance on the certificate of title covering the land included
within the project and the transferee shall be entitled to the issuance of a "condominium owner's" copy of the
pertinent portion of such certificate of title. Said "condominium owner's" copy need not reproduce the ownership
status or other condominium in the project. A copy of the description of land, a brief description of condominium
conveyed, name and personal circumstances of the condominium owner would be sufficient for purposes of the
"condominium owner's" copy of the certificate of title. No conveyance of condominiums or part thereof,
subsequent to the original conveyance thereof from the owner of the project, shall be registered unless
accompanied by a certificate of the management body of the project that such conveyance is in accordance with
the provisions of the declaration of restrictions such project.
In cases of condominium projects registered under the provisions of the Spanish Mortgage Law or Act 3344, as
amended, the registration of the deed of conveyance of a condominium shall be sufficient if the Register of Deeds
shall keep the original or signed copy thereof, together with the certificate of the management body of the project,
and return a copy of the deed of conveyance to the condominium owner duly acknowledge and sampled by the
Register of Deeds in the same manner as in the case of registration of conveyances of real property under said
laws.
SECTION 19. Where the enabling or master deed provides that the land included within a condominium project
are to be owned in common by the condominium owners therein, the Register of Deeds may, at the request of all
the condominium owners and upon surrender of all their "condominium owner's" copies, cancel the certificates of
title of the property and issue a new one in the name of the said condominium owners as pro-indiviso co-owners
thereof.

SECTION 20. An assessment upon any condominium made in accordance with a duly registered declaration of
restrictions shall be an obligation of the owner thereof at the time the assessment is made. The amount of any such
assessment plus any other charges thereon, such as interest, cost (including attorney's fees) and penalties, as such
may be provided for in the declaration of restrictions, shall be and become a lien upon causes a notice of
assessment to be registered with the Register of Deeds of the city or province where such condominium project is
located. The notice shall state the amount of such assessment and such other charges thereon as may be authorized
by the declaration of restrictions, a description of condominium unit against which same has been assessed, and
the name of the registered owner thereof. Such notice shall be signed by an authorized representative of the
management body or as otherwise provided in the declaration of restrictions. Upon payment of said assessment
and charges of other satisfaction thereof, the management body shall cause to be registered a release of the lien.
Such lien shall be superior to all other liens registered subsequent to the registration of said notice of assessment
except real property tax liens and except that the declaration of restrictions may provide for the subordination
thereof to any other liens and encumbrances.
Such liens may be enforced in the same manner provide for by law for the judicial or extra-judicial
foreclosure of mortgages of real property. Unless otherwise provided for in the declaration of restrictions, the
management body shall have power to bid at foreclosure sale. The condominium owner shall have the same right
of redemption as in case of judicial or extra-judicial foreclosure of mortgages.
SECTION 21. No labor performed or service or material furnished without the consent of or at the request of a
condominium owner of his agent or his contractor or sub contractor, shall be the basis of a lien against
condominium of any other condominium owner, unless such other owner have expressly consented to or
requested the performance of such labor of furnishing of such materials or service. Such express consent shall be
deemed to have been given by the owner of any condominium in the case of emergency repairs of his
condominium unit. Labor performed or services or materials furnished for the common areas, if duly authorized
by the management body provided for in a declarations governing the property, shall be deemed to be performed
or furnished with the express consent of each condominium owner. The owner of any condominium may remove
his condominium from a lien against two of the lien or the fraction of the total sum secured by such lien which is
attributable to his condominium unit.
SECTION 22. Unless otherwise provided for the declaration of restrictions, the management body provided for
herein, may acquire and hold, for the benefit of the condominium owners, tangible personal property and may
dispose of the same by sale or otherwise, and the beneficial interest in such personal property shall be owned by
the condominium owners in the same proportion as their respective interest in the common areas. A transfer of a
condominium shall transfer to the transferee ownership of the transferor's beneficial interest in such personal
property.
SECTION 23. Where, in an action for partition of a condominium corporation on the ground that the project or a
material part thereof has been condemned or expropriated, the court finds that the conditions provided in this Act
or in the declaration of restrictions have not been met, the Court may decree a reorganization of the project
declaring which portion or portions of the project shall continue as a condominium project, the owners thereof,
and the respective rights of the remaining owners and the just compensation, if any, that a condominium owner
may be entitle to due deprivation of his property. Upon receipt of a copy of the decree, the Register of Deeds shall
enter and annotate the same on the pertinent certificate of title.
SECTION 24. Any deed, declaration or plan for a condominium project shall be liberally construed to facilitate
the operation of the project, and its provision shall be presumed to be independent and severable.
SECTION 25. Whenever real property has been divided into condominium, each condominium separately owned
shall be separately assessed, for purpose or real property taxation and other tax purposes, to the owners thereof,
and tax on each such condominium shall constitute a lien solely thereon.
SECTION 26. All Acts or parts of Acts in conflict or inconsistent with this Act are hereby amended insofar as
condominiums and its incidents are concerned.
SECTION 27. This Act shall take effect upon its approval.

APPOVED, JUNE 18, 1966

K. PROVISION UNDER PD 957 APPLIED TO CONDOMINIUM PROJECTS

1.

DUTIES AND RESPONSIBILITIES OF OWNERS/DEVELOPERS OF SUBDIVISION AND

CONDOMINIUM PROJECTS UNDER PD 957
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Mortgage: Section 18
Advertisements: Section 19
Time of Completion: Section 20
Alteration of Plan: Section 22
Non-Forfeiture or Payments: Section 23
Issuance of Title: Section 25
Donations of Open Spaces: Section 31, as amended by PD 1216
Organization of Homeowners Association: Section 30
Realty Taxes Payment: Section 26
Other Charges: Section 27

OTHER REALTY HOLDINGS

VII
Real Estate Finance and Economics

REAL ESTATE FINANCING & ECONOMICS

Real estate economics is the application of economic techniques to real estate market. It tries to describe, explain,
and predict patterns of
1. price,
2. supply, and
3. demand
MULTIPLIER EFFECT OF REAL ESTATE
Multiplier effect simply means the effect of one aspect of the economy with the other economic activities.

An effect in economics in which an increase in spending produces an increase in national income and
consumption greater than the initial amount spent. For example, if a corporation builds a factory, it will employ
construction workers and their supplies as well as those who work in the factory. Indirectly, the new factory will
stimulate employment in laundries, restaurants, and service industries in the factory's vicinity.
Real estate has been said to be one section with a big multiplier effect on the Philippine economy. It is said that
for every P1 million invested in housing it is translated to P16.6 million of economic housing activity in the
country. [HUDCC]
MULTIPLIER EFFECT ON PHILIPPINE ECONOMY- 1:16.6
The housing or real sector provides and sets of a domino effect on other economic activities which can be referred
to the "multiplier effect of real estate", such as, but not limited to the following:

Employment opportunities
Construction
Architecture
Cement
Steel
Wood
Paint
Financing
Furniture
Others

PRINCIPLE OF SUPPLY AND DEMAND VS. PRICE

Price is basically a result of the interplay of supply and demand of a certain product, such as real estate housing.

SELLERS MARKET

In the case where there are more buyers than sellers, then it is considered a seller's market as there are fewer real
properties available vis--vis a higher demand for it. In this case, the movement of prices will tend to go up
because of the higher demand.

BUYERS MARKET

In a buyers' market, there are many real properties available or more sellers than there would be a demand from
the buyers and is normally referred to as a "BUYERS MARKET" where the price of real estate has a tendency to
go down in view of the excess in supply vs. the actual demand of the market.
REAL ESTATE FINANCING
Another element which affects the movement of real estate is the availability financing, both for the production
side or the developers, and the demand side which is the buying market. Real estate financing involves generally
the acquisition of property through loan financing source, which may be sourced from the following:
1.
2.
3.
4.
5.
6.

Borrowed Funds from Relatives/Friends

Bank Financing
Lending Companies
Assumption of Loan/Mortgages
Government Financing
Other Sources [In-house Financing, etc.]

BASIC COMPUTATION
A very important formula for the computation involving real estate financing is:
MONTHLY AMORTIZATION [MA] = Principal to be Financed x Amortization Factor
where,
Amortization Factor = Factor based on the no. of years payment and interest rate
or,

MA = P x Factor

A. SAMPLE PROBLEM 1
Ms. Roxas pays a monthly amortization of P54,100.00 for a parcel of land. The amortization factor for 5 years at
21% interest is 0.02705. If Ms. Roxas paid a downpayment of 20% of the contract price, compute the following:
a.
b.
c.

The principal obligation on which the monthly amortization is based.

The contract price
The amount of downpayment

Solution:
a) Principal Balance = Mo. Amortization
Factor

= P54,100.00
02705

= P2,000,000.00

b) Contract Price

= Balance
(100%-20%)

= P2,000,000.00
80%

= P2,500,000.00

c) Downpayment

= 20% of P2,500,000.00

B. SAMPLE PROBLEM: LOAN/BALANCE OUTSTANDING

Juancho bought a 1,060 sqm. lot at P1,400.00 sqm. on installment basis with 50% downpayment and the balance
payable in 5 years at 21% interest per annum. After 3 regular monthly amortizations, he decided to pay in the full
the balance. Compute the following: (Factor is 0.02705)
a.
b.
c.
d.
e.

Amount of downpayment
Monthly amortization
Interest expense for 3 months
Balance after 3 months
Final cost/sqm. after full payment

Solution:
a) Downpayment = 1,060 sqm. x P1,400.00/sqm. x 50% =

P742,000.00

b) Monthly amortization = Principal Balance x factor

= P742,000.00 x 0.02705
= P20,701.10
c) Amortization

Interest

P20,071.10
20,071.10
20,071.10

P12,985.00
12,860.99
12,734.81

Total Interest

P38,580.80

Principal

Balance

P7,086.10
7,210.01
7,336.29

P742,000.00
734,913.90
727,703.89
720,367.60

d) P720,367.60
e) Total payments made
Downpayment

P742,000.00

Total Installment Payments

=
=

P20,071.10 x 60 mos.
P1,204,266.00

Plus Downpayment

=
=

742,000.00
P1,946,266.10

Total price/sqm

=
=

P1,946,266.10/1,060 sqm.
P1,836.00/sqm.

NOTES:

Monthly interest is 21% divided by 12 months = 1.75%

1.75% of previous balance = amount applied to interest
Amortization less interest = Amount applied to principal
Previous balance less amount applied to principal = New principal balance

VIII
Basic Principle of Ecology
Ecology (from the Greek: oikos, oikos, "household"; and
, logos, "knowledge') is the scientific study of the
distribution and abundance of life and the interactions between organisms and their environment.
The word "ecology" is often used more loosely in such terms in common parlance as a synonym for the natural
environment or environmentalism.

A. Law on creation of DENR

Executive Order No. 192 dated June 10, 1987
"Providing for the Reorganization of the Department of Environment, Energy and Natural Resources, Renaming it
as the Department of Environment and Natural Resources, and for other Purposes"
The Department is mandated to be the primary agency responsible for the conservation, management,
development, and proper use of the country's environment and natural resources.
To accomplish this mandated, the Department shall be guided by the following objectives:
1. Assure the availability and sustainability of the country's natural resources through judicious use and
systematic restoration or replacement, whenever possible;
2. Increase the productivity of natural resources in order to meet the demands for forest, mineral, and
resources of a growing population;
3. Enhance the contribution of natural resources for achieving national economic and social development;
4. Promote equitable access to natural resources by the different sectors of the population;
5. Conserve specific terrestrial and marine areas representative of the Philippines natural and cultural
heritage for present and future generations.
B. Terms-Definition
1. ENVIRONMENTAL IMPACT ASSESSMENT (EIA)

An Environment Impact Assessment (EIA) is a "process that involves predicting and evaluating the likely impacts
of a project (including cumulative impacts) on the environment during construction, commissioning, operation
and abandonment.
It also includes designing appropriate preventive, mitigating and enhancement measures addressing these
consequences to protect the environment and the community's welfare".
2. ENVIRONMENTAL COMPLIANCE CERTIFICATE
A certificate of Environment Compliance Commitment to which the Proponent conforms to, after DENR-EMB
explains the ECC conditions, by signing the sworn undertaking of full responsibility over implementation of
specified measures which are necessary to comply with existing environmental regulations or to operate within
best environment practices that are not currently by existing laws.
Content of an ECC
An ECC shall contain specific measure and conditions that the project Proponent has to undertake before and
during the operation of a project, and in some cases, during the project's abandonment phase to mitigate identified
environment impacts.
In general, the following are salient features of an ECC:

Scope of project or undertaking

Conditions conformed with by the Proponent to implement the mitigation measures for potentially
negative impacts and/or enhancement measures for potentially positive impacts as identified in the EIA
Report.

Suggestions/recommendations to assist LGUs and other agencies of the government to incorporate the
EIA Results in their decision-making process.

3. CERTIFICATE OF NON-COVERAGE (CNC)

A Certificate of Non-Coverage (CNC) is issued by the EMB certifying that, based on the submitted project
description, the project is not covered by the EIS System and is not required to secure an environment compliance
certificate or ECC
4. ENVIRONMENTALLY CRITICAL PROJECT (ECP)
Projects belonging to protect types declared thru Proclamation No. 2146 and Proclamation No. 803 which may
pose significant negative environmental impact at certain thresholds of operation regardless of location.
Updating of technical descriptions of ECPs is vested on the DENR-EMB thru Section 2-d of AO 42 (2002), in
coordination with the DTI as provided for in Section 3-A of AO 42.
5. ENVIRONMENTALLY CRITICAL AREA (ECA)
A general area declared thru Proclamation 2146 as environmentally sensitive such that significant environmental
impacts are expected if certain types/thresholds of proposed projects are located, developed or implemented in it.
Updating of technical descriptions of ECAs is vested on the DENR-EMB thru Section 2-D of AO 42 (2002).

IX
Urban and Rural Land Use
Republic Act No. 7279

AN ACT TO PROVIDE FOR A COMPREHENSIVE AND CONTINUING URAN DEVELOPMENT AND

HOUSING PROGRAM, ESTABLISH THE MECHANISM FOR IT S IMPLEMENTATION, AND FOR OTHER
PURPOSES
ARTICLE 1

TITLE, POLICY, PROGRAM AND DEFINITION OF TERMS

Section 1. Title This Act shall be known as the Urban Development and Housing Act of 1992
Section 2. Declaration of State Policy and Program Objectives It shall be the policy of the State to undertake,
in cooperation with the private sector, a comprehensive and continuing Urban Development and Housing
Program, hereinafter referred to as the Program, which shall :
a) Uplift the conditions of the privileged and homeless citizens in urban areas and in resettlement areas by
making available to them decent housing at affordable cost, basic services, and employment
opportunities;
b) Provide for the rational use an d development of urban land in order to bring about the following:
(1) Equitable utilization of residential lands in urban and urbanizable areas with particular attention
to the needs and requirements of the privileged and homeless citizens and not merely on the
basis of market forces;
(2) Optimization of the use and productivity of land and urban resources;
(3) Development of urban areas conducive to commercial and industrial activities which can
generate more economic opportunities for the people;
(4) Reduction in urban dysfunctions, particularly those that adversely affect public health safety
and ecology; and
(5) Access to land and housing by the underprivileged and homeless citizens.
c) Adopt workable policies to regulate and direct urban growth and expansion towards a dispersed urban
net and more balanced urban-rural interdependence;
d) Provide for an equitable land tenure system that shall guarantee security of tenure to Program
beneficiaries but shall respect the rights of small property owners and ensure the payment of just
compensation;
e) Encourage more effective peoples participation in the urban development process; and
f) Improve the capability of local government units in undertaking urban development and housing
programs and projects.
Section 3. Definition of Terms For purposes of this Act:
a) Affordable Cost refers to the most reasonable price of land and shelter based on the needs and
financial capability of Program beneficiaries and appropriate financing schemes;
b) Areas for priority development refers to those declared as much under existing status and pertinent
executive issuances;
c) Blighted Areas refers to the areas where the structures are dilapidated, obsolete, and unsanitary, tending
to depreciate the value of the land and prevent normal development and use of the area;
d) Consultation refers to the constitutionally mandated process whereby the public on their own or
through peoples organizations, is provided an opportunity to be heard and to participate in the decisionmaking process on matters involving the protection and promotion of its legitimate collective interests,
which shall include appropriate documentation and feedback mechanisms;
e) Idle Lands refers to non-agricultural lands in urban and urbanizable areas on which no improvements,
as herein defined, have been made by the owner, as certified by the city, municipal or provincial assessor
f) Improvements refers to all types of buildings and residential units, walls, fences, structures or
construction of all kinds of a foxed character or which are adhered to the soil but shall not include trees,
plants and growing fruits, and other fixtures that are mere superimpositions on the land, and the value of
improvements shall not be less that fifty percent ( 50%) of the assessed value of the property;
g) Joint Venture refers to the commitment or agreement by (2) or more persons to carry out a specific or
simple business enterprise for their mutual benefit, for which purpose they combine their funds, land
resource, facilities and services;
h) Land assembly or consolidation refers to the acquisition of lots or varying ownership through purchase
or expropriation for the purpose of planned and national development and socialized housing programs
without individual property boundary restrictions;

i)

Land Banking refers to the acquisition of at values based on existing use in advance of actual need to
promote planned development and socialized housing programs;

j)

Land Swapping refers to the process of land acquisition by exchanging land for another piece of land of
equal value, or for shares of stock in a government or quasi-government corporation whose book value is
of equal value to the land being exchanged, for the purpose of planned and national development and
provision for socialized housing where land values are determined based on land classification, market
value and assessed value taken from existing tax declarations; Provided, That more valuable lands owned
by private persons may exchanged with less valuable lands to carry out the objectives of this Act;

k) Land use plan refers to the rational approach of allocating available land resources as equitably as
possible among competing user groups and for different functions consistent with the development plan
area and the Program under this Act;
l)

On-site development refers to the process of upgrading and rehabilitation of heighted and slum urban
areas with a view of minimizing displacement of dwellers in said areas, and with provisions for basic
services as provided for in Section 21 hereof;

m) Professional squatters refers to individuals or groups who occupy lands without the express consent of
the landowner and who have sufficient income for legitimate housing. The term shall also apply to
persons who have previously been awarded home lots or housing units by the Government but who sold,
leased, or transferred the same to settle illegally in the same place or in another urban area, and non-bona
fide occupants and intruders of lands reserved for socialized housing. The term shall not apply to
individuals or groups who simply rent land and housing from professional squatters or squatting
syndicates;
n) Resettlement areas refers to areas identified by the appropriate national agency or by the local
government unit with respect to areas within its jurisdiction, which shall be used for the relocation of the
underprivileged and homeless citizens;
o) Security of tenure refers to the degree of protection afforded to qualified Program beneficiaries against
infringement or unjust, unreasonable and arbitrary eviction or disposition, by virtue of the right of
ownership, lease agreement, usufruct and other contractual arrangements;
p) Slum improvement and Resettlement Program or SIR refers to the program of the National Housing
Authority of upgrading and improving blighted squatter areas outside of Metro Manila pursuant to
existing statutes and pertinent executive issuances;
q) Small property owners refers to those whose only real property consists of residential lands not
exceeding three hundred square meters (300 sq. m.) in highly urbanized cities and eight hundred square
meters (8000 sq, m,) in other urban cities;
r) Socialized housing refers to housing programs and projects covering houses and lots or home lots only
undertaken by the Government or the private sector for the underprivileged and homeless citizens which
shall include sites and services development, long-term financing, liberalized terms on interest payments,
and such other benefits in accordance with the provisions of this Act;
s) Squatting syndicates refers to groups of persons engaged in the business of squatter housing for profit
or gain;
t)

Underprivileged and homeless citizens refers to the beneficiaries of this Act and to individuals or
families residing in urban and urbanizable areas whose income or combined household income falls
within the poverty threshold as defined by the National Economic and Development Authority and who
do not own housing facilities. This shall include those who live in makeshift dwelling units and do not
enjoy security of tenures;

u) Unregistered or abandoned lands refers to lands in urban and urbanizable areas which are not registered
with the Register of Deeds, or with the city or municipal assessor's office concerned, or which are
uninhabited by the owner and have not been developed or devoted for any useful purposes, or appears
unutilized for a period of three consecutive years immediately prior to the issuance and receipt or
publication of notice of acquisition by the Government as provided under this Act. It does not include
land which has been abandoned by reason of force majeure or any fortuitous event; Provided that prior to
that event, such land was previously used for some useful or economic purpose;
v) Urban areas refers to all cities regardless of their population density and to municipalities with a
population density of at least five hundred (500) persons per square kilometer;
w) Urbanizable areas refers to sites and lands which, considering present characteristics and prevailing
conditions, display marked and great potential of becoming urban areas within the period of five ( 5 )
years; and
x) Zonal Improvement Program or ZIP refers to the program of the National Housing Authority of
upgrading and improving blighted squatter areas within the cities and municipalities of Metro Manila
pursuant to existing statutes and pertinent executive issuances.

ARTICLE II
COVERAGE AND EXEPTIONS
Section 4, Coverage.- The program shall cover all Lands in urban and urbanizable areas, including
existing area for priority development, zonal improvement sites, slum improvement and resettlement
sites, and in other areas that maybe identified by the local governments units as suitable for socialized
housing.
Section 5, Exemption. - The following land shall be exemption from the coverage of this Act:
a) Those include in the coverage of Republic Act No.6657, otherwise known as the comprehensive
Agrarian Reform law:
b) Those actually used for national defense and security of the Stare;
c) Those used, reserved or otherwise set aside for government offices and installations, whether owned
by the National Government, its agencies and instrumentalities, including government owned or
controlled corporations, or by the local government unit : Provide that the lands herein mentioned , or
portions thereof , which have not been used for the purpose for which they have been reserved or set
aside for the past ten (10) years from the affectivity of this Act, shall be covered by this Act;
d) Those used or set aside for parks, reserved for flora fauna, forest and watersheds, and other areas
necessary to maintain ecological balance or environment protection, as determined and certified to by
the proper government agency :and
e) Those actually and primary used for religious, charitable, o educational purposes, cultural historical
sites, hospital and health center, and cemeteries or memorial parks.
The exemption herein provided shall not apply when the use or purposed of the abovementioned lands has ceased
to exist.
ARTICLE III
NATIONAL URBAN DEVELOPMENT AND HOUSING FRAMEWORK
Section 6. Frameworks for Rational Development.- There shall be National Urban Development an Housing
Frame work to be formulated by the Housing and Land Used Regulatory Board under the direction of the Housing
Urban Development Coordinating Council in coordination with all local government units and other concerned
public sector within one (1) year from affectivity of this Act.
The Framework shall refer to the comprehensive plan for urban and urbanizable areas aimed at achieving the
objectives of the Program. In the formulation of the framework, a review and rationalization of existing town and
land use plans, housing programs, and all other projects and activities of government agencies and the private
sector which may substantially affect urban land use patterns, transportation and public utilities, infrastructure,

environment and population movements shall be undertaken with the concurrence of the local government units
concerned.
ARTICLE IV
LAND USE, INVENTORY, ACQUISITION AND DISPOSITION
Section 7. Inventory of Lands. Within one (1) year from the effectivity of this Act, all city and municipal
governments shall conduct an inventory of all lands and improvements thereon within their respective localities.
The inventory shall include the following:
a. Residential lands;
b. Government-owned lands, whether owned by the National Government or any of its subdivisions,
instrumentalities, or agencies, including government-owned or controlled corporations and their
subsidiaries;
c. Unregistered or abandoned and idle lands; and
d. Other lands.
In conducting the inventory, the local government units concerned, in coordination with the Housing and Land
Use Regulatory Board and with the assistance of the appropriate government agencies, shall indicate the type of
land use and the degree of land utilization, and other data or information necessary to carry out the purposes of
this Act.
For planning purposes, the Housing and Urban Development Coordinating Council shall be furnished by each
local government unit a copy of its inventory which shall be updated every three (3) years.
Section 8. Identification of Sites for Socialized Housing. After the inventory, the local government units, in
coordination with the National Housing Authority, the Housing and Land Use Regulatory Board, the National
Mapping Resource Information Authority, and the Land Management Bureau, shall identify lands for socialized
housing and resettlement areas for the immediate and future needs of the underprivileged and homeless in the
urban areas, taking into consideration the degree of availability of basic services and facilities, their accessibility
and proximity to job sites and other economic opportunities, and the actual number of registered beneficiaries.
Government-owned lands under paragraph (b) of the preceding section which have not been used for the purpose
for which they have been reserved or set aside for the past ten (10) years from the effectivity of this Act and
identified as suitable for socialized housing, shall immediately be transferred to the National Housing Authority
subject to the approval of the President of the Philippines or by the local government unit concerned, as the case
may be, for proper disposition in accordance with this Act.
Section 9. Priorities in the Acquisition of Land. Lands for socialized housing shall be acquired in the
following order:
a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies, including
government-owned or controlled corporations and their subsidiaries;
b) Alienable lands of the public domain;
c) Unregistered or abandoned and idle lands;
d) Those within the declared Areas for Priority Development, Zonal Improvement Program sites, and
Slum Improvement and Resettlement Program sites which have not yet been acquired;
e) Bagong Lipunan Improvement of Sites and Services or BLISS sites which have not yet been
acquired; and
f) Privately-owned lands.
Where on-site development is found more practicable and advantageous to the beneficiaries, the priorities
mentioned in this section shall not apply. The local government units shall give budgetary priority to on-site
development of government lands.
Section 10. Modes of Land Acquisition. The modes of acquiring lands for purposes of this Act shall include,
among others, community mortgage, land swapping, land assembly or consolidation, land banking, donation to
the Government, joint-venture agreement, negotiated purchase, and expropriation: Provided, however, That
expropriation shall be resorted to only when other modes of acquisition have been exhausted. Provided, further,
that where expropriation is resorted to, parcels of land owned by small property owners shall be exempted for
purposes of this Act: Provided, finally, That abandoned property, as herein defined, shall be reverted and
escheated to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court.
For the purpose of socialized housing, government-owned and foreclosed properties shall be acquired by the local
government units, or by the National Housing Authority primarily through negotiated purchase: Provided, That
qualified beneficiaries who are actual occupants of the land shall be given the right of first refusal.

Section 11. Expropriation of Idle Lands. All idle lands in urban and urbanizable areas, as defined and identified
in accordance with this Act, shall be expropriated and shall form part of the public domain. These lands shall be
disposed of or utilized by the Government for such purposes that conform with their land use plans.
Expropriation proceedings shall be instituted if, after the lapse of one (1) year following receipt of notice of
acquisition, the owner fails to introduce improvements as defined in Section 3 (f) hereof, except in the case of
force majeure and other fortuitous events. Exempted from this ownership of which is subject of a pending
litigation.
Section 12. Disposition of Lands for Socialized housing- The National Housing Authority , with respect to lands
belonging to the national Government , and the local government units with respect to other lands within their
respective localities, shall coordinate with each other to formulate and make available various alternative
schemes for thereof the disposition of lands to the beneficiaries of the Program. These schemes shall not be
limited to those involving transfer of ownership in fee simple but shall include lease, with option to purchase,
usufruct or such other variations as the local government units or the National Housing Authority may deem most
expedient in carrying out the purposes of this Act. Consistent with this provision, a scheme for public rental
housing may be adopted.
Section 13. Valuation of Lands for Socialized Housing.- Equitable land valuation guidelines for socialized
housing shall be set by the Department of Finance on the Basis of the market value reflected in the zonal
valuation, or in its absence, on the latest real property tax declaration.
For sites already occupied by qualified program beneficiaries, the Department of Finance shall factor into the
valuation the blighted status of the land as certified by the local government unit or the National Housing
Authority.
Section 14. Limitations on the Disposition of Lands for Socialized Housing.- No land for socialized housing,
including improvements or rights thereon, shall be sold, alienated, conveyed, encumbered or leased by any
beneficiary of this program except to qualified program beneficiaries as determined by the government agency
concerned.
Should the beneficiary unlawfully sell, transfer, or otherwise dispose of his lot or any right thereon, the
transaction shall be null and void. He shall also lose his right to the land, forfeit the total amortization paid
thereon, and shall be barred from the benefits under this Act for a period of ten (10) years from the date of
violation.
In the event the beneficiary dies before full ownership of the land is vested on him, transfer to his heirs shall take
place only upon their assumption of his outstanding obligations. In case of failure by the heirs to assume such
obligations, the land shall revert to the Government for disposition in accordance with this Act.
ARTICLE V
SOCIALIZED HOUSING
Section 15. Policy.- Socialized housing, as defined in Section 3 hereof, shall be the primary strategy in providing
shelter for the underprivileged and homeless. However, if the centurial arrangement in a particular socialized
housing program is in the nature of leasehold or usufruct, the same shall be transitory and the beneficiaries must
be encouraged to become independent from the Program within a given period of time, to be determined by the
implementing agency concerned.
Section 16. Eligibility Criteria for Socialized Housing Program Beneficiaries.- To qualify for the socialized
housing program, a beneficiary:
a) Must be a Filipino citizen;
b) Must be an underprivileged and homeless citizen, as defined in Section 3 of this Act;
c) Must not own any real property whether in the urban or rural areas ; and
d) Must not be a professional squatter or a member of squatting syndicates.
Section 17. Registration of Socialized housing Beneficiaries.- The Housing and Urban development
Coordinating Council , in coordination with the local governments units, shall design a system for the
registration of qualified Program beneficiaries in accordance with the Framework. The local governments
units, within (1) year from the effectivity of his Act, shall identify and register all beneficiaries within their
respective localities.
Section 18. Balanced Housing Development. - The Program shall include a system to be specified in the
Framework plan whereby developers of propose subdivision projects shall be required to develop an area for

socialized housing equivalent to at least twenty percent (20%) of the total subdivision area or total subdivision
project cost, at the option of the developer, within the same city or municipality, whenever feasible, and in
accordance with the standards set by the Housing and Land Use Regulatory Board and other existing laws.
The balanced housing development as required may also be complied with by the developers concerned in
any of the following manner:
a). Development of new settlement;
b). Slum upgrading or renewal of areas for priority development either through zonal improvement programs
or slum improvement;
c). Joint-venture projects with either the local governments units or any the housing agencies; or
d). Participation in the community mortgage program.
Section 19. Incentives for the National Housing Authority. -The national housing Authority, being the
primary government agency in charge of providing housing for the underprivileged and homeless, shall be
exempted from the payment of all fees and charges of any kind, whether local or national, such as income
and real taxes. All documents or contacts executed by and of the National Housing Authority shall also be
exempt from the payment of documentary stamp tax and registration fees, including fees required for the
issuance of transfer of titles.
Section 20. Incentives for Private Sector Participating in Socialized housing. - To encourage greater
private sector participation in socialized housing and further reduced the cost of housing units for the benefit
of the underprivileged and homeless, the following incentives shall be extended to the private sector:
a) Reduction and simplification of qualification and accreditation requirements for participating private
developers
b) Creation of one stop offices in the different regions of the country for the processing, approval and
issuance of clearances, permits and licenses: Provided , That clearances, permits and licenses shall be
issued within ninety ( 90) days from the date of submission of all requirements by the participating
private developers;
c) Simplification of financing procedures; and
d) Exemption from the payment of the following:
Project related income taxes;
Capital gains tax on raw use for the project;
Value-added tax for the project concerned;
Transfer tax for both raw and completed projects; and
Donors tax for both lands certified by the local government units to have been donated for
socialized housing purposes.
Provided, that upon application for exemption, a lien on that title of the land shall be annotated y the Register of
deeds: provider, further, that the socialized housing development plan has already been approved by the
appropriate government agencies concerned: Provided, finally, That all the savings acquired by virtue of this
provision shall secure in favor of the beneficiaries subject to the implementing guidelines to be issued by the
Housing and Development Coordinating Council.
Appropriate implementing guidelines shall e prepared by the Department of Finance, in consultation with the
Housing and Urban Development Coordinating Council, for the proper implementation of the tax exemption
mentioned in this section within one (1) year after the approval of this Act.
Property owners who voluntarily provide resettlement sites to illegal occupants of their lands shall be entitled to a
tax credit equivalent to the actual non-recoverable expenses incurred in the resettlement, subject to the
implementing guidelines jointly issued by the Housing and Urban Development Coordinating Council and the
Department of Finance.
Section 21. Basic Services. - Socialized housing or resettlement areas shall be provided by the local government
unit or the National Housing Authority in cooperation with the developers and concerned agencies with the basic
services and facilities:
a) Potable water;
b) Power and electricity and an adequate power distribution system;
c) Sewerage Facilities and an efficient and adequate solid waste disposal system; and
d) Access to primary roads and transportation facilities.
1)
2)
3)
4)
5)

The provision of other basic services and facilities such as health, education, communication, security, recreation,
relief and welfare shall be planned and be given priority for implementation by the local government unit and
concerned agencies in cooperation with the sector and the beneficiaries themselves.
The local Government unit, in coordination with the concerned national agencies, shall ensure that these basic
services are provided at the most cost-efficient rates, and set a mechanism to coordinate operationally the thrusts,
objectives and other government agencies concerned with providing basic services to housing projects.
Section 22. Livelihood Component. - To the extent feasible, socialized housing and resettlement projects shall be
located near areas where employed opportunities are accessible. The government agencies dealing with the
development of livelihood programs and of livelihood loans shall give priority to the beneficiaries of the Program.

Section 23. Participation of Beneficiaries.- The local governments units, in coordination with the Presidential
Commission for the Urban poor and concerned government agencies, shall afford program beneficiaries or their
duly designated representatives an opportunity to be heard and to participate in the decision-making process over
matters involving the protection and protection and promotion of of there legitimate collective interests which
shall include appropriate documentation and feedback mechanisms. They shall also be encouraged to organized
themselves and undertake self-help cooperative housing and other livelihood activities. They shall assist the
Government in preventing the incursions of professional squatters and members of squatting syndicates into their
communities.
In instances when the affected beneficiaries have failed to organized themselves or form an alliance within a
reasonable period prior to the implementation of the program or projects affecting them , consultation between
the implementing agency and the affective beneficiaries shall be conducted with the assistance of the Presidential
Commission for the Urban Poor and the concerned non-government organization.
Section 24. Consultation with Private Sector.- Opportunities for adequate consultation shall be accorded to the
private sector involved in socialized housing project pursuant to this Ac
ARTICLE VI
AREAS FOR PRIORITY DEVELOPMENT, ZONAL IMPROVEMENT PROGRAM, SITES AND SLUM
IMPROVEMENT AND RESETTLEMENT PROGRAM SITES
Section 25. Benefits. - In addition to the benefits provided under existing laws and other related insurances to
occupants of areas for priority development, zonal improvement program site, such occupants shall be entitled to
priority in all government projects initiated pursuant to this Act. They shall also be entitled to the following
support services:
a) Land surveys and titling at minimal cost;
b) Liberalized terms on credit facilities and housing loans and one hundred percent (100%) deduction from
every homebuyers gross income tax of all interest payments made on documented loans incurred for the
construction or purchase of the homebuyers house.
c) Exemption from the payment of documentary stamp tax, registration fees, and for the issuance of transfer
certificate of titles;
d) Basic services as provided for in Section 21 of this Act. And
e) Such other benefits that may arise from the implementation of this Act.

ARTICLE VII
URBAN RENEWAL AND RESETTLEMENT
Section 26. Urban Renewal and Resettlement. - This shall include the rehabilitation and development of
blighted and slum areas and the resettlement of Program beneficiaries in accordance with the provisions of this
Act. On- Site development shall be implemented whenever possible in order to ensure minimum movement of
occupants of blighted lands and slum areas. The resettlement of the beneficiaries of the program from their
existing places of occupancy shall be undertaken only when on-site development is not feasible and after
compliance with the procedures laid down in Section 28 of this Act.
Section 27. Action Against Professional Squatters and squatting Syndicates. - The Local government units, in
cooperation with the Philippine national Police, the Presidential Commission for the urban Poor (PCUP), and the
PCUP-accredited urban poor organization in the area, shall adopt measures to identify and effectively curtail the
nefarious and illegal activities of professional squatters and squatting syndicates, as herein defined.

Any person or group identified as such shall be summarily evicted and their dwellings or structures demolished,
and shall be disqualified to avail of the benefits of the program. A public official who tolerates or abets the
commission of the abovementioned acts shall be dealt with in accordance with existing laws. For purposes of this
Act, professional squatters or members of squatting syndicates shall be imposed the penalty of six (6) years
imprisonment or a fine of not less than Sixty thousand pesos (P60,000) but not more than One hundred thousand
pesos (P100,000), or both, at the discretion of the court.
Section 28. Eviction and Demolition. - Eviction or Demolition as a practice shall be discouraged.
Eviction or demolition, however, may be allowed under the following situations:
(a) When persons or entities occupy danger areas such as esteros, railroad tracks, garbage dumps, riverbanks,
shorelines, waterways, and other public places such as sidewalks, roads, parks, and playgrounds;
(b) When government infrastructure projects with available funding are about to be implemented; or
(c) When there is a court order for eviction and demolition.
In the execution of eviction or demolition orders involving underprivileged and homeless citizens, the
following shall be mandatory:
1) Notice upon the effected persons or entities at least thirty (30) days prior to the date of eviction or
demolition;
2) Adequate consultations on the matter of resettlement with the duly designated representatives of the
families to be resettled and the affected communities in the areas where they are to be relocated;
3) Presence of local government officials or their representatives during eviction or demolition;
4) Proper identification of all persons part in the demolition;
5) Execution of eviction or demolition only during regular office hours from Mondays to Fridays and
good weather, unless the affected families consent otherwise;
6) No use of heavy equipment for demolition except for structures that are presents and of concrete
materials;
7) Proper uniforms for members of the Philippines National Police who shall occupy the first line of law
enforcement and observe proper disturbance control procedures: and
8) Adequate relocation, whether temporary or permanent: Provided, however, That in cases of eviction
and demolition pursuant to a court order involving underprivileged and homeless citizens, relocation
shall be undertaken by the local government unit concerned and the National Housing Authority with
the assistance of other government agencies within forty-five (45) days from service of notice of final
judgment by the court, after which period the said shall be executed: Provided, further, that should
relocation not be possible within the said period, financial assistance in the amount equivalent to the
prevailing minimum daily wage multiplied by sixty (60) days shall be extended to the affected
families by the government unit concerned.
The Department of the Interior and Local government and Housing an Urban Development Coordinating
Council shall jointly promulgate the necessary rules and regulations to carry out te above provision.
Section 29. Resettlement. - Within two (2) years from the effectivity of this Act, the local government units, in
coordination with the National Housing Authority, shall implement the relocation and resettlement of persons
living in danger areas such as esteros, railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and in
other public places such as sidewalks, roads, parks and playgrounds. The local government unit, in coordination
with the Housing authority, shall provide relocation or resettlement sites with basic services and facilities and
access to employment and livelihood opportunities sufficient to meet the basic needs of the affected families.
Section 30. Prohibition Against New Illegal Structures. - It shall be unlawful for any person to construct any
structure in areas mentioned in the preceding section.
After the effectivity of this Act, the barangay, municipal or city government units shall prevent the
construction of any kind or illegal dwelling units or structures within their respective localities. The head
of any government unit concerned who allows, abets or otherwise tolerates the construction of any
structure in violation of this section shall be liable to administrative sanctions under existing laws and to
penal sanctions provided for in this Act.
ARTICLE VIII
COMMUNITY MORTGAGE PROGRAM
Section 31. Definition. - The Community Mortgage (CMP) is a mortgage financing program of the National
Home Mortgage Finance Corporation which legally organized associations of underprivileged and homeless
citizens to purchase and develop a tract of land under the concept of community ownership. The primary objective

of the program is assists resident of blighted or depressed areas to own the lots they occupy, where they choose to
relocate to, eventually improve their neighborhood and homes to the extent of their affordability.
Section 32. Incentives. - To encourage its wider implementation, participants in the CMP shall be granted with
the following privileges or incentives:
a) Government-owned or controlled corporations and local government units , may dispose of their idle
lands suitable for socialized housing under CMP through negotiated salt at prices based on acquisition
cost plus financial carrying cost;
b) Properties sold under the CMP shall be exempted from the capital gains tax; and
c) Beneficiaries under the CMP shall not be evicted nor dispossessed of their lands or improvements
unless they have incurred arrearages in payments of amortizations for three (3) months
Section 33. Organization of Beneficiaries. - Beneficiaries of the Program shall be responsible for their
organization into associations to manage their subdivisions or places of residents, to secure housing loans under
existing Community Mortgage Program and projects beneficial to them. Subject to such rules and regulations to
be promulgated by the National Home Mortgage Finance Corporation, associations organized to this act may
collectively acquire and own lands covered by this program. Where the beneficiaries fail to form an association
by and among themselves, the National home mortgage Finance corporation shall initiate the organization of the
same in coordination with the Presidential Commission for the Urban poor and the local government units
concerned. No person who is not a bona fide resident of the area be a member or officer of such association.

ARTICLE 1X
RELATED STRATEGIES
Section 34. Promotion of Indigenous Materials and Technologies. - The local government units, in cooperation
with the national housing Authority, Technology and Livelihood Resource Center, and other concerned agencies,
shall promote the production and use of indigenous, alternatives, and low-cost construction materials and
technologies for socialized housing.
Section 35. Transport System. - The local government units, in coordination with the departments of
transportation and Communications, Budget and management, Trade and Industry, Finance, and Public Works
and Highways, the home Insurance Guaranty Corporation, and other concerned government agencies, shall device
a set of mechanisms include incentives to the private sector so that a viable transport system shall evolve and
develop in the urban areas. It shall also formulate standards designed to attain these objectives:
(a) Smooth flow traffic;
(b) Safe and convenient of travel;
(c) Minimum use of land space;
(d) Minimum damage to the physical environment; and
(e) Adequate and efficient transport service to the people and goods at cost
Section 36. Ecological Balance. - The local government units shall coordinate with the Department of
Environment and Natural Resources in taking measures that will plan and regulate urban activities for the
conservation and protection of vital, unique and sensitive positive ecosystems, scenic landscapes, cultural sites
and other similar resource areas.
To make the implementation of this function more effective participation of the citizenry in environmental
rehabilitation and decision-making process shall be promoted and encouraged. The local government units shall
recommend to the environment and Management Bureau the Immediate closure of factories, mines and transport
companies which are found to be causing massive pollution.
Section 37. Population Movements. - The local governments units shall set up an effective mechanism, together
with the appropriate agencies like the population commission, the National Economic and development Authority
and the National Statistics office, to monitor trends in the movements of population from rural to urban, and urban
to rural areas. They shall identify measures by which such movements can be influenced to achieve balance
between urban capabilities and population, to direct appropriate segments of the population into areas they can
have access to opportunities to improve their lives and to contribute to national growth and recommend proposed
legislation to congress , if necessary.
The population Commission, the national Economic and development authority, and the National Statistics Office
shall provide advanced planning information to national and local government planners on population projections

and the consequent level of services needed in particular urban and urbanizable areas. This service will include
early-warning systems on expected dysfunctions in a particular urban area due to population increases, or age
structure changes.
Section 38. Urban-rural Interdependence. - To minimize rural to urban migration and pursue urban
Decentralization, the local government units shall coordinate with the National Economic and Development
programs that will stimulate economic growth and promote socioeconomic development in the countryside.
ARTICLE X
PROGRAM IMPLEMENTATION
Section 39. Role of Local Government Units. - The local government units shall be charged with the
implementation of this Act in their respective localities, in coordination with the Housing and Urban development
Coordinating Council, the housing agencies, the Presidential Commission for Urban poor, the sector and other
non- government organizations.
They shall prepare a comprehensive land use plan for their respective localities in accordance with the provisions
of this Act.
Section 40. Role of Government Housing Agencies. - In addition to their respective existing powers and
functions, and those provided for in this Act, the hereunder mentioned housing agencies shall perform the
following:
(a) The housing and Urban Development coordinating council shall, through the key housing agencies,
provide local government units with necessary support such as:
(1) Formulation of standards and guidelines as well as providing technical support in the
preparation of town and land use plans;
(2) In coordination with the National Economic and development Authority and the National
statistics Office, provide data and information for forward-planning by the local government
units in their areas, particularly on projections as to the population and development trends in
their localities and the corresponding investments programs to provide appropriate types and
levels of infrastructure, utilities, services and land use patterns; and
(3) Assistance in obtaining funds and other resources needed in the urban development and
housing programs in their areas or responsibility.
(b) The National Housing Authority, upon request of local government units , shall provide technical and
other forms of assistance in the implementation of their respective urban development and
(c) housing programs with the objective of augmenting and enhancing local government capabilities in the
provision of housing benefits to their constituents;
(d) The National home Mortgage Finance Corporation shall administer the Community Mortgage Program
under this Act and promulgate rules and regulations necessary to carry out the provisions of this Act; and
(e) The Home Insurance Guarantee Corporation shall design an appropriate guarantee scheme to encourage
financial institutions to go into direct lending for housing.
Section 41. Annual Report. - The Housing and Urban Development Coordinating Council and the local
government units shall submit a detailed annual report with respect to the implementation of this Act to the
President and the Congress of the Republic of the Philippines.
ARTICLE XI
FUNDING
Section 42. Funding. - Funds for the urban development and housing program shall come from the following
sources:
(a) A minimum of fifty percent (50%) from the annual net income of the Public Estate authority, to be used
by the National Housing Authority to carry out its programs of land acquisition for resettlement purposes
under this Act;
(b) Proceeds from the disposition of ill-gotten wealth, not otherwise previously set aside for any other
purpose, shall be applied to the implementation of this Act and shall be administered by the National
Home Mortgage Finance Corporation;
(c) Loans, grants, bequest and donations, whether from local or foreign sources;
(d) Flotation of bonds, subject to the guidelines to be set by the Monetary Board;
(e) Proceeds from the social housing tax and, subject to the concurrence Code of 1991 and other existing
laws;
(f) Proceeds from the sale of disposition of alienable public lands in urban areas; and

(g) Domestic and foreign investment or financing through appropriate arrangements like the build operate
and-transfer scheme.
Section 43. Socialized Housing Tax. Consistent with the constitutional principle that the ownership and
enjoyment of property ear a social function and to raise funds from the Program, all local government units are
hereby authorized to impose an additional one-half percent (0.5%) tax on the assessed value of all lands in urban
areas in excess of Fifty thousand pesos (P50,000).
ARTICLE XII
TRANSITORY PROVISION
Section 44. Moratorium on Eviction and Demolition. - There shall be a moratorium on the eviction of all
program beneficiaries and on the demolition of their houses or dwelling units for a period of three (3) years from
the effectivity of this Act: Provided, That the moratorium shall not apply to those persons who have constructed
their structures after the effectivity of this Act and for cases enumerated in Section 28 hereof.
ARTICLE XII
COMMON PROVISIONS
Section 45. Penalty Causes. - Any person who violates any provision of this Act shall e imposed the penalty of
not more than six (6) years of imprisonment or a fine of not less than Five thousand pesos (P5,000) but not more
than One hundred thousand pesos (P100,000), or both, at the discretion of the court: Provided, That, if the
offender is corporation, partnership, association or other juridical entity, the penalty shall be imposed on the
officer or officers of said corporation, partnership, association or juridical entity who caused the violation.
Section 46. Appropriations. - The amount necessary to carry out the purposes of this Act shall be included in the
annual budget of implementing agencies in the General Appropriations Act of the year following its enactment
into law and every year thereafter.
Section 47. Separability Causes. - If for any reason, any provision of this Act is declared invalid or
unconstitutional, the remaining provisions not affected thereby shall continue to be in full force and effct.
Section 48. Repealing Clause. - All laws, decrees, executive orders, proclamations, rules and regulations, and
issuance, or parts thereof which are inconsistent with the provisions of this Act, are hereby repealed or modified
accordingly.
Section 49. Effictivity Clauses. - This Act shall take upon its publication in least two (2) national newspapers of
general circulation.
Approved,
(Sgd.) NEPTALI A. GONZALES (Sgd.) RAMON V. MITRA
President of the Senate Speakers of the House of Representatives
This Act which is a consolidation of House Bill No. 34310 and Senate Bill No. 234 was finally passed by the
House of Representative and the Senate on February 3, 1992
(Sgd.) ANACLETO D. BADOT, JR. (Sgd.) CAMILO L. SABIO
Secretary of the Senate Secretary General
Approved March 24, 1992
(Sgd.) CORAZON C AQUINO
President of the Philippines

X
Planning, Development and Zoning
LAND USE PLANNING
Laws that Ensure Rational Land Use and Sustainable Urban and Regional Development
Executive Order No. 72 - Providing for the Preparation and Implementation of the Comprehensive Land
Use Plans of Local Government Units Pursuant to the Local Government Code of 1991 and Other
Pertinent Laws
Memorandum Circular No. 54 - Prescribing the Guidelines of Sec. 20, R. A. 7160, Authorizing
Cities/Municipalities to Reclassify Lands into Non-Agricultural Uses
Executive Order No. 124 - Establishing Priorities and Procedures in Evaluating Areas for Land
Conversion in Regional Agricultural/Industrial Centers, Tourism Development Areas Sites for Socialized
Housing
Planning is the key to orderly and rational land development in any local government unit, i.e. a city or
municipality. A Comprehensive Land Use Plan (CLUP) prescribes the developmental pace, directions and
strategies for the optimum use of land resources in a community as well as its role in provincial, regional and
national development. The CLUP is enacted into a zoning ordinance for purposes of enforcement.

Development Role
HLURB has the twin roles of enhancing and reinforcing rational housing and real estate service delivery via a
triad of strategies namely; policy, planning and regulation. Such rules are enunciated and defined in Presidential
Decrees (PD), Letters of Instruction (LOI), Republic Acts (RA), Executive Orders (EO), office of the President
Memorandum Circulars (OP-MC) and Batas Pambansa (BP).
The HLURB pursues activities to attain rational land use as specified in a number of directives.
Review and ratify land use plans of Metro Manila cities and municipalities, provinces, highly urbanized
cities and independent component cities (EO No. 72);
Enforce zoning regulations (EO No. 648);

and

Investigate
adjudicate

complaints (EO No. 648);

Assist local government units assume devolved functions via training and consultation;
Coordinate land reclassification clearance system (MC No. 54);
Update and revise rules, guidelines and standards on land use (EO No. 648); and

Update and revise National Urban Development and Housing Framework (RA No. 7279).

Legal Aspect of Sale, Lease and Mortgage

I. CONTRACTS
A. DEFINITION: A contract is a MEETING OF MINDS between two persons whereby one binds himself, with
respect to the other, to give something or to render some service (Art. 1305, NCC).
B. ESSENTIAL REQUISITES OF CONTRACT (Art. 1318 NCC).
1. Consent of the contracting parties;
2. Object certain which is the subject matter of the contract;
3. Cause or consideration of the obligations which is established.
C. FORM OR STYLE OF CONTRACTS FOR REGISTRATION: [Public Instrument]
1. Sale - in order that the same may be registered, must be in public instrument (Art. 1403 & 1406, NCC).
2. Lease - if for a period longer than one year and in order that the same may be registered, must be in public
instrument (Art. 2126, NCC)
3. Mortgage - in order that the same may be registered, must be in public instrument (Art. 2126, NCC)

II.

SALE OF REAL ESTATE PROPERTIES

A. DEFINITION: By the Contract of Sale, one of the contracting parties obligates himself to transfer the
ownership of and to deliver a determinate thing, and the other to pay therefore a price certain in money or its
equivalent. (Art. 1456, NCC).
B. KINDS OF SALE (Art. 1458, NCC).
1. Absolute or Unconditional
2. Conditional
C. CAPACITY TO BUY OR SELL REAL ESTATE PROPERTIES
1. As a rule, all persons, natural or juridical, who are authorized by the Constitution to own lands (Art. XIV)
and by the New Civil Code to obligate (Art. 1469), may buy or sell real estate.
2. Only Filipino citizens or corporation at least sixty (60%) per centum of the capital of which is owned by
Filipino citizens can acquire land in the Philippines.
3. A Filipina married to a foreigner retains her Philippine citizenship and, thus, also retains the right to
acquire land in the Philippines
4. A Filipino citizen, who acquires citizenship of another country, can retain ownership of land acquired by
him prior to his change of citizenship.
5. The husband and wife cannot sell property to each other, except (Art. 1390), NCC):

a. when a separation of property has been agreed upon in their marriage settlement; or
b. when there has been a judicial separation of the property under Art. 134 of the Family
Code.
6. [FIDUCIARY RELATIONSHIP] - Persons who cannot acquire by purchase because of fiduciary
relationship
1. GUARDIAN - the property of the person or persons who may be under his guardianship
2. AGENTS - the property whose administration or sale may have been entrusted to them, unless the
consent of the principal has been given
3. EXECUTORS and ADMINISTRATORS - the property of the estate under administration
4. PUBLIC OFFICERS and EMPLOYEES - the property of the State or of any subdivision thereof,
or of any government owned or controlled corporation or institution, the administration of which
has been entrusted to them; this provision shall apply to judges and government experts who, in
any manner whatsoever take part in the sale
5. JUSTICES, JUDGES, PROSECUTING ATTORNEYS, CLERKS OF SUPERIOR AND
INFERIOR COURTS, AND OTHER OFFICERS and EMPLOYEES CONNECTED with the
administration of justice - the property and rights in litigation or levied upon an execution before
the court within whose jurisdiction or territory they exercise their respective functions
6. ANY OTHERS disqualified by law.
(Art. 1491, NCC)
APPLICABILITY TO LEASE
The persons disqualified to buy referred to in the above are also disqualified to become lessees of the
things mentioned therein. (Art. 1646, NCC)
D. OBLIGATIONS OF THE VENDOR
1. The vendor is bound to transfer the ownership of, and deliver, as well as warrant, the thing which is the
object of the sale (Art. 1495, NCC).
2. Unless a contrary intention appears, the sale carries (Art. 1547, NCC):
an implied warranty on the part of the seller that he has a right to sell the thing at the time when
the ownership is to pass, and that the buyer shall, from that time, have and enjoy the legal and
peaceful possession of the property; and
an implied warranty that the thing shall be free from any hidden faults or defects, or any charge or
encumbrance not declared or unknown to the buyer.
E. OBLIGATIONS OF THE VENDEE (Art. 1582, NCC)
1. The Vendee is bound to accept delivery of the property sold at the time and place stipulated in the
contract; and
2. The Vendee is bound to pay the price of the property sold at the time and place stipulated in the
contract.

F. RULE IN CASE AREA IS DIFFERENT FROM THAT STATED IN THE CONTRACT (Art.
1539, 1540 and 1542, NCC)

If the sale is for a lump sum, there shall be no increase or decrease of the price, although there be a greater
or lesser area than that stated in the contract.
If the sale be made with a statement of its area at the rate of a certain price per square meter, the
VENDEE may:
a) If the area is bigger, choose to:
1. accept the area included in the contract and reject the excess; or
2. accept the whole are, but must pay for the excess area at the contract rate.
b) If the area is smaller, choose to:
1. have a proportional reduction of the price; or
2. rescind the contract, provided:
a. that the lack in are be not less than 10% of that in the contract; or
b. that he would not have bought the land had he known of its smaller
area.

G. RULE ON HAS A BETTER RIGHT TO OWNERSHIP OF PROPERTY SOLD TO TWO OR

MORE BUYERS (Art. 1544, NCC)
1. The buyer in good faith who first recorded the sale in the Registry of Property.
2. Should there be no inscription, then the buyer in good faith who was first in possession.

3. Should there be neither inscription nor possession, then the buyer in good faith who can present the
oldest title.

H. DIFFERENCE BETWEEN CONTRACT TO SELL AND CONTRACT OF SALE.

CONTRACT TO SELL
CONTRACT OF SALE
is merely a mutual promise to buy and sell a Consists of actual sale of the property
property
no transfer of ownership of title takes place
there is transfer of ownership and title
I. DIFFERENCE BETWEEN SALE WITH MORTGAGE AND SALE WITH ASSUMPTION OF
MORTGAGE.
A DEED OF SALE WITH MORTGAGE is a contract of sale whereby part of the purchase price is paid
upon the execution of the contract with the balance to be paid within a stipulated period and the property is
mortgaged by the VENDEE to the VENDOR to secure the payment of the
said balance.
On the other hand, a DEED OF SALE WITH ASSUMPTION OF MORTGAGE is a contract of sale
whereby the property being sold is presently mortgaged and the VENDEE pays a certain amount
to
the
VENDOR and assumes as well the existing obligation which is secured by a
mortgage over the property.
J. WHEN CONTRACT SHALL BE PRESUMED TO BE AN "EQUITABLE MORTGAGE"
(Art. 1602, NCC)
1. When the price of sale with right to repurchase is usually inadequate.
2. When the vendor remains in possession as lessee or otherwise.
3. When, upon or after the expiration of the right to repurchase, another instrument extending the period of
redemption or granting a new period is executed.
4. When the purchaser retains for himself to pay a part of the purchase price.
5. When the vendor binds himself to pay the realty taxes on the property sold.
6. In any other case where it may be fairly inferred that the real intention of the parties is that the transaction
shall secure the payment of a debt or the performance of any other obligation.
7. When there is doubt as to whether the contract is a contract of sale with right to repurchase or an equitable
mortgage (Art. 1602, 1603 NCC).
K. MARITAL CONSENT IN DEED OF SALE
1. Marital consent is required a. when the property relations between the spouses is one of absolute community; or
b. when the property relations between the spouses is one of conjugal partnership and the
property involved was acquired by onerous title during the marriage at the expense of the
common fund.
EFFECT OF NO CONSENT
(Art. 96, Art. 124 Family Code)
If one spouse acts without the written consent of the other or without court authority, the disposition or
encumbrance shall be void.
However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and
the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by either or both offerors.
Period to file questioning transactions by the wife:
Within FIVE (5) years from the date of the contract

2. Marital consent is NOT necessary -

a. when the property relations between the spouses is one of absolute separation; or
b. when the property relations between the spouses is one of conjugal partnership and the
property involved:
1. was brought into the marriage by either of the spouses (property nomenclature:
husband's - capital, wife's paraphernal);
2. was acquired by either of the spouses by inheritance; or
3. was acquired with exclusive funds of either of the spouses.

LAWS ON INSTALLMENT PAYMENTS

AND THE MACEDA LAW
I.

APPLICABLE LAWS:
1. Republic Act No. 6552
Realty Installment Buyers Protection Act
MACEDA LAW
Approved: August 26,1972
2. Presidential Decree No. 957
Subdivision and Condominium Buyers Protective Decree
Approved: July 12, 1976

II.

RIGHTS OF BUYERS UNDER R.A. NO. 6552

(Otherwise known as Realty Installment Buyers Protection Act or MACEDA LAW)

REPUBLIC ACT NO. 6552

AN ACT TO PROVIDE PROTECTION TO BUYER OF REAL ESTATE ON INSTALLMENT
PAYMENTS
Be it enacted by the Senate and House of Representative of the Philippines in Congress assembled:
SECTION 1. This Act shall be known as the Realty Installment Buyer Protection Act
SECTION 2. It is hereby declared a public policy to protect buyers of real estate on instalment payments
against onerous and oppressive conditions.
SECTION 3. In all transaction or contracts, involving the sale or financing of real estate on instalment
payments, including residential condominium apartments but excluding industrial lots, commercial buildings and
sales to tenants under Republic Act Numbered Thirty-Eight hundred forty-four as amended by Republic Act
Sixty-three hundred eighty-nine, where the buyer has paid at least two years of instalment, the buyer is entitled to
the following rights in case he defaults in the payment of succeeding instalments:
(a) To pay without additional interest, the unpaid instalments due within the total grace period for every one
year of instalment payments made; provided , That this right shall be exercised by the Buyer only once in
every five years of the life contract and its extensions, if any.
(b) If the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the payments on
the property equivalent to fifty percent of the total payments made and, after five years of instalments,
and additional five percent every year but not to exceed ninety percent of the total payments made;
provided, that the actual cancellation or the demand for rescission of the contract by a notarial act upon
full payment of the cash surrender value to the buyer.
Down payments, a deposits or options on the contract shall be included in the computation of the total
number of instalment payments made.

SECTION 4. In case where less than two years of instalments were paid the seller shall give the buyers a
grace period of not less than sixty days from the date the installements become due. If the buyer fails to pay the
instalments due at the expiration of the grace period, the seller may cancel the contract after thirty days from
receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act.
SECTION 5. Under Section 3 and 4, the buyer shall have the right to sell his rights or assign the same to
another person or to reinstate the contract by updating the account during the grace period and before actual
cancellation of the contract. The deed of sale or assignment shall be done by notarial act.
SECTION 6. The buyer shall have the right to pay in advance any instalments or the full unpaid balance
of the purchase price any time without interest and to have such full payment of the purchase price annotated in
the certificate of title covering the property.
SECTION 7. Any stipulation in any contract hereafter entered into contrary to the provisions of Section
3,4,5 and 6, shall be null and void.
SECTION 8. If any provisions of the Act is held invalid or unconstitutional no other provision shall be
affected thereby.
SECTION 9. This Act shall take effect upon its approval.
Approved August 26, 1972.
Cash Surrender Value (Refund) = Total Payments x Percentage (%age) Refund
II.
PERTINENT PROVISIONS OF PD 957 ON INSTALLMENT PAYMENTS
Section 23. Not-Forfeiture of Payments. No instalment payment made by a buyer in a subdivision or
condominium project for the lot or unit he contracted to buy shall be forfeited in favour of the owner or developer
when the buyer, after due notice to the owner or developer, desists from further payment due to the failure of the
owner or developer the subdivision or condominium project ma, at his option, be reimbursed the total amount
paid including amortization interests but excluding delinquency interests, with interest thereon at the legal rate.
Section 24. Failure to pay instalments. The rights of the buyer in the event of this failure to pay the instalments
due for reasons other than the failure of the owner or developer to develop the project shall be governed by
Republic Act No. 6552
Where the transaction or contract was entered into prior to the effectivity of Republic Act No. 6552 on August 26,
1972, the defaulting buyer shall be entitled to the corresponding refund based on the instalments paid after the
effectivity of the law in the absence of ay provision in the contract to the contrary.

LEASING AND RENTALS

& EJECTMENT
LEASE OF REAL ESTATE PROPERTIES
A. DEFINITION: A contract whereby one of the parties binds himself to give to another the enjoyment or
use of a thing for a price cetain and for a period which may be definite or indefinite. However, no lease
for more than 99 years shall be valid (Art. 1643, NCC).
B. LEGAL IMPLICATION OF LEASE

1. Unless a lease is recorded, it shall not be binding upon third persons (Art. 1648, NCC).
2. The LESSEE cannot assign the lease without the consent of the LESSOR, unless there is a stipulation
to the contrary (Art. 1649, NCC)
3. Where there is no express prohibition, the lessee may sublet the property leased, in whole or in part,
without prejudice to his responsibility for the performance of the contract toward the lessor (Art.
1650, NCC).
C. OBLIGATIONS OF LESSOR (Art. 1654, NCC)
1. To deliver the property which is the object of the contract in such a condition as to render it to fit the
use intended;
2. Ti make on the property during the lease all the necessary repairs in order to keep it suitable for the
use to which it has been devoted, unless there is stipulation to the contrary; an
3. To maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of
the contract.

D. OBLIGATIONS OF LESSEE (Art. 1657 and 1663, NCC)

1. To pay the price of the lease according to the terms stipulate.
2. To use the property leased as a diligent father of a family, devoting it to the use stipulated and in the
absence of stipulation, to that which it is pre-disposed;
3. To pay the expenses for the deed of lease;
4. To inform the lessor, within the shortest possible time, of every usurpation or untoward act which any
third person may have committed or maybe openly preparing to carry out upon the property leased;
and
5. To advise the lessor, within the shortest possible time, of the need to carry out necessary repairs of the
leased property in order to keep it suitable for the use to which it has been devoted.
E. GROUNDS FOR JUDICIAL EJECTMENT OF LESSEE (Art. 1673, NCC)
1. Expiration of stipulated period of lease;
2. Lack of payment of the rent stipulated;

3. Violation of any of the conditions agreed upon in the contract; or

4. Misuse of leased property which has resulted in its deterioration.
F. RENT CONTROL LAW
Coverage of this Act. All residential units in the National Capital Region and other highly urbanized
cities, the total monthly rent for each of which ranges from One peso (P1.00) to Ten thousand pesos
(P10,000) and all residential units in all other areas, the total monthly rent for each of which ranges from
One peso (P1.00) to Five thousand pesos (P5,000) as of the effectivity date of this Act shall be covered,
without prejudice to existing contracts.
RENT CONTROL ACT OF 2009
REPUBLIC ACT No. 9653
[Approved July 14, 2009]
SALIENT FEATURES
SEC. 4. Limit on Increases in Rent. For a period of one (1) year from its effectivity, no increase shall
be imposed upon th rent of any residential unit covered by this Act:
Provided, That after such period until December 31,2013, the rent of any residential unit covered by this
Act shall not be increased by more than seven percent (7%) annually as long as the init is occupied by the
same lessee: Provided, further, That when the residential unit becomes vacant, the lessor may set the
initial rent for the next lessee: Provided, however, That in the case of boarding houses, dormitories, rooms
and bedspaces offered for rent to students, no increase in rental more than once per year shall be allowed.
1. Residential unit shall refer to an apartment, house and/or land on which anothers dwelling is
located and used for residential purposes and shall include not only buildings, parts or units thereof
used solely as dwelling places, boarding houses, dormitories, rooms and bedspaces offered for rent
by their owners, except motels, motel rooms, hotels, hotel rooms, but also those used for home
industries, retail stores or other business purposes if the owner thereof and his or her family actually
live therein and use it principally for dwelling purposes.
2. Rent and Requirements of Bank Deposit. Rent shall be paid in advance within the first five (5)
days of every current month or the beginning of the lease agreement unless the contract of lease
provides for a later date of payment. The lessor cannot demand more than one (1) month advance
rent. Neither can he demand more than two (2) months deposit which shall be kept in a bank under

the lessors account name during the entire duration of the lease agreement. Any and all interest that
shall accrue therein shall be returned to the lessee at the expiration of the lease contract.
In the event, however, that the lessee fails to settle rent, electric, telephone, water or such other utility
bills or destroys any house components and accessories, the deposits and interests therein shall be
forfeited in favour of the latter in the amount commensurate to the pecuniary damage done by the former.
3. Assignment of Lease or Subleasing. Assignment of lease or subleasing of the whole or any
portion of the residential unit, including the acceptance boarders or bedspaces, without the written
consent of the owner/lessor is prohibited.
4. Grounds for Judicial Ejectment. Ejectment shall be allowed of the following grounds:

(a) Assignment of lease or subleasing of residential units in whole or in part, including the
acceptance of boarders or bedspaces, without the written consent of the owner/lessor;
(b) Arears in payments of rent for a total of three (3) months: Provided, That in the case of refusal by
the lessor to accept payment of the rental agreed upon, the lessee may either deposit, by way of
consignation. The amount in court, or with the city or municipal treasurer, as the case may be, or
in a bank in the name of and with notice to the lessor, within one month after refusal of the lessor
to accept payment.
The lessee shall thereafter deposit the rent within ten (10) days of every current month. Failure to
deposit the rentals for three (3) months shall constitute a ground for ejectment.
The lessor, upon authority of the court in case of consignation or upon joint affidavit by him and
the lessee to be submitted to the city or municipal treasurer and to the bank where deposit was
made, shall be allowed to withdrawn the deposits;
(c) Legitimate need of the owner/lessor to repossess his or her own use for the use of any immediate
member of his or her family as a residential unit: Provided, however, That the lease for a definite
period has expired: Provided, further, That the lessor has given the lessee formal notice three (3)
months in advance of the lessors intention to repossess the property and : Provided, finally, That
the owner/lessor is prohibited from leasing the residential unit or allowing its use by a third party
for a period of a least (1) year from the time of repossession;
(d) Need of the lessor to make necessary repairs of the leased premises which is the subject of an
existing order of condemnation by appropriate authorities concerned in order to make said
premises safe and habitable. Provided, That after said repair, the lessee ejected shall have the first
preference to lease the same premises: Provided, however, That the new rental shall be
reasonably commensurate wih the expenses incurred for the repair of the said residential unit and:
Provided, finally, That if the residential unit is condemned or completely demolished, the lease of
the building will no longer be subject to the aforementioned first-preference rule is this
subsection; and
(e) Expiration of the period of the lease contract.
5. Prohibition Against Ejectment by Reason of Sale or Mortgage No lessor or his successor-ininterest shall be entitled to eject the lessee upon the ground that the leased premises have been sold or
mortgaged to a third person regardless of whether the lease or mortgage is registered or not.
6. Rent-to-Own Scheme. At the option of the lessor, he or she may engage the lessee in a written
rent-to-own agreement that will result in the transfer or ownership of the particular dwelling in favour
of the latter. Such an agreement shall be exempt from the coverage of Section 3 of this Act.
7. Coverage of this Act. All residential units in the National Capital Region and other high urbanized
cities the total monthly rent for each of which does not exceed Ten thousand pesos (P10,000.00) and
all residential units in all other areas the total monthly rent for each of which does not exceed Five

thousand pesos (P5,000.00) as of the effectivity date of this Act shall be covered, without prejudice to
existing contracts.
G. PURCHASER OF LEASED PROPERTY BOUND TO RESPECT THE LEASE (Art. 1678, NCC)
1. When the lease is indicated in the deed of sale;
2. When the lease is registered in the Registry of Property; and/or
3. When the buyer has knowledge of the existence of the lease even if the same is not duly registered in
the Registry of Property.

[SAMPLE]
CONTRACT OF LEASE
KNOWN ALL MEN BY THESE PRESENTS:
This Contract of Lease, made and entered into this ______________________by and between:
JOUSE S. PORRENT, of legal age, Filipino, married to_____________________and with
residence at No. 2 Paupahan St., Muntinlupa City, hereinafter referred to as the LESSOR;
-andPA U. PA, of Legal age, Taiwanese, married, with address at 10 th Flr. ABC Towers, Herrera St., Makati
City hereinafter referred to as the LESSEE.
WITNESSETH : THAT
WHEREAS, the LESSOR is the registered and absolute owner of a house and lot, including all
improvements found thereon, located at No. 1 Paupahan St., Ayala Alabang Village, Muntinlupa City and
covered by TCT No.__________of the Registry of Deeds for Muntinlupa, and equipped with two (2) telephone
lines, lighting fixtures, and those provide for in Annex A, hereinafter referred to as the PREMISES;
WHEREAS, the LESSEE, desires to lease the above-mentioned PREMISES, and the LESSOR is
willing to lease the same unto the LESSEE subject to the terms and conditions hereinafter specified;
NOW, THEREFORE, for and in consideration of the foregoing and mutual covenants hereinafter
contained, the LESSOR has let and these presents do hereby let and lease unto the LESSEE the PREMISES and
the LESSEE hereby accepts the same by way of lease subject to the following terms and conditions:
1. PERIOD The terms of this Contract of Lease shall be for a period of one (1) year commencing from
March______________, to March______________. The LESSEE has the option to renew this Lease
Contract on terms to be mutually agreed upon by the parties and in case the LESSEE desires to renew
this lease, the LESSEE shall notify the LESSOR at least 60 days prior to the expiration of the current
lease.
2. RENTAL The parties herein agree that the rental for the period of lease of the PREMISES shall be a
gross monthly rental of ONE HUNDRED THIRTY FIVE THOUSAND PESOS (P135,000.00), Phil.
Currency, inclusive of 5% withholding tax. Value-added tax, if any, shall be for the account of the
LESSE.
I.
On or before the effectivity of this Contract of Lease the LESSEE agrees to pay the LESSOR
the following:
a) The sum of ONE MILLION SIX HUNDRED TWENTY THOUSAND PESOS
(P1,620,000.00), Phil. Currency representing the advance rentals for the period commencing
March___________, to March___________, inclusive of five percent (5%) withholding tax.
b) The sum of TWO HUNDERED SEVENTY THOUSAND PESOS (P270,000.00),
Philippine Currency, representing LESSEEs deposit in case there are unpaid bills for water,
gas, electricity, telephone, association dues, and garbage fees, etc., or damages to the
premises aside from natural wear and tear. Such amount will be refunded to the LESSEE
and in no case later than 90 days after termination of this contract and after LESSEE vacates
the PREMISES. An delay on the return of any amount/s due herein shall be subject to 2%
penalty interest per month.

3. DIPLOMATIC CLAUSE In the event the LESSEE employment in the Philippines is terminated by
reason of transfer to another assignment outside Metro Manila or the Philippines or because of death,
incapacity or similar grounds, during the period of this lease, the LESSESS or his employer or agent shall
give a 60-day notice to the LESSOR of his intention to terminate the contract and vacate the leased
premises. In such the event the LESSOR shall forfeit the amount equivalent to two (2) months rental as
liquidated damages.
In lieu of termination, however, the LESSEE shall have the right to nominate in writing his successor or
any other person to succeed the LESSEE as occupant of the premises, with the written consent of the
LESSOR, which shall not be unreasonably withheld, for the remaining period of this contract, the terms
and conditions of which will remain unchanged except as to the named party occupying the leased
premises. In all cases of termination, the advance rentals, shall, without need of demand, be refunded
back to the LESSEE less the agreed liquidated damages whenever applicable, within SIXTY (60) days
from receipt of written notice by LESSOR and the deposit shall be refunded to the LESSEE as per
clause 2(I)b.
4. WATER, GAS, ETC. All expenses for water, gas, electricity, telephone, association dues, cable T.V.
and garbage fees including garden maintenance and maintenance of the swimming pool and pest control
shall be for the account of the LESSEE.
5. RESIDENTIAL PURPOSE The leased premises shall be used for residential purpose of the LESSEE
or MR. _________________ and his family, including his domestic helps only and for no other purpose
without the written consent of the LESSOR. The PREMISES may not be subleased without the written
consent of the LESSOR.
6. IMPROVEMENTS The LESSEE shall not make any other major structural changes, alterations or
improvements in the leased PREMISES including hammering of nails on the walls for hanging pictures,
etc. Without written consent of the LESSOR. However, any major alterations or improvements made or
introduced by the LESSEE in the leased PREMISES with the written consent of the LESSOR shall,
upon termination of this contract, automatically inure to the benefit of the leased PREMISES and
become the property of the LESSOR without any obligation on the latters part to pay or refund the
values or cost to the LESSEE.
7. SANITATION AND REPAIRS The LESSEE shall keep the PREMISES clean and in sanitary
condition and take good care of the garden and keep it in good condition at all times. Daily cooking is
suggested to be done in the dirty kitchen to maintain the cleanliness and prevent the proliferation of pests
and insects in the main kitchen as well as preserve its good condition.
The LESSE has inspected the leased PREMISES and has found the same to be in good and tenantable
condition. The LESSOR shall be responsible for all major repairs on the premises and on the water,
electrical and sewage installations caused by forced majeure and ordinary wear and tear, except the repair
due to the fault or negligence of the LESSEE, members of his household, guest, or visitors. Minor repairs
on the leased premises under P3,500.00 which are not due to natural disaster, structural defect, nor
attributed to the negligence or fault of the LESSOR shall be for the account of the LESSEE. On the other
hand, maintenance and minor repairs due to force majeure, and inherent defect due to construction and
materials used, shall be for the account of the LESSOR. Minor repairs referred to in this clause are those
not exceeding the amount of THREE THOUSAND FIVE HUNDERE PESOS
ONLY (P3,500.00) per item/occurrence while those exceeding such amount are considered major repairs
in which case the LESSOR shall be liable for the whole cost. Responsibility for both pest controls shall be
LESSEEs.
It is further provided that all repairs to be undertaken by LESSOR as stipulated in this Contract shall be
attended to immediately and in case shall it be later than seven (7) days from the time LESSEE serves
LESSOR notice of such need for repairs, otherwise, LESSEE shall have the right to have such repairs
done, and costs therein shall be reimbursed by LESSOR to LESSEE upon demand by LESSEE.

8. FIRE HAZARD AND OBNOXIOUS SUBSTANCE The LESSEE shall not keep, deposit or store in
the premises any obnoxious substance or inflammable materials or substances that constitute a fire
hazard.
9. TAXES AND INSURANCE 5% withholding tax, Real Estate taxes, government assessments and fire
insurance shall be for the account of the LESSOR, provided that the LESSEE shall pay the value added
tax.
10. THIRD PARTY LIABILITY The LESSEE during its occupancy of the leased premises shall hold the
LESSOR free and harmless from any damage or liability or responsibility to any person or property
arising out of or as a consequence of the use of the PREMISES by the LESSEE, his agents, employee,
domestic helps and guests. When such damage or liability is caused by fortuitous events, or acts of God,
such as typhoon, earthquake, flood, etc. which are beyond the control of the LESSEE, the latter shall not
be liable to the LESSOR.
11. INSPECTION OF THE LEASED PREMISES The LESSOR shall maintain the PREMISES in
good tenantable condition and for such purpose the LESSOR reserves the right at reasonable time of the
day and with prior notice, to enter and inspect the PREMISES and to make the necessary repairs thereof.
The LESSEE likewise agrees to cooperate with the LESSOR in keeping the PREMISES in good and
tenantable condition.
12. RULES AND REGULATIONS The LESSEE agrees to abide by the rules and regulations
promulgated by the Ayala Alabang Village Association.
13. SALE, MORTGAGE and TRANSFER In the event of sale, mortgage, or transfer or any other
encumbrance of the PREMISES or existing sale, mortgage, transfer or encumbrance of the same, the
LESSOR warrants that the purchaser, mortgagee or encumbrance shall respect all the terms and
conditions of this lease agreement including the provisions for renewal thereof.
14. RETURN OF THE PREMISES Upon the termination of this contract, the LESSEE shall immediately
vacate the PREMISES and return possession thereof to the LESSOR, upon the latters request, unless
the contract of lease is extended. THIRTY (30) days prior to the return of the PREMISES, the LESSOR
or its representative may show the PREMISES to prospective tenants at reasonable hours of the day and
with prior notice. The PREMISES must be turned over by the LESSEE to the LESSOR in the same
original condition, normal wear and tear expected.
15. Any violation of the terms provided for in this contract on the part of the LESSEE or the LESSOR shall
be sufficient ground for the termination of this contract of lease by the aggrieved party.
16. Any action arising under this contract shall be brought before the proper courts at Muntinlupa City, M.
Manila, the parties hereto waiving any other venue.
IN WITNESS WHEREOF, the parties have hereunto set their hands: the LESSOR : at
_______________________ on ____________________; and the LESSEE: at_______________________ on
_________________________.
LESSOR
________________________________

LESSEE
____________________________

With my marital consent:

____________________________
SIGNED IN THE PRESENCE OF:
___________________________

_____________________________

ACKNOWLEDGEMENT
REPUBLIC OF THE PHILIPPINES S. S.

Before me, a Nortaty Public for and in the above-named jurisdiction, personally appeared:
NAME
I.D. NO.
DATE/PLACE
JOUSE S. PORRENT
PA U. PA
Known to me and to me known to be the same persons who executed the foregoing instrument and acknowledge
to me that the same is their free and voluntary act and deed.
This instrument refers to a Contract of Lease and consist of five (5) pages including whereon this acknowledge
page is written, signed on page 5 and on the left hand margin of the other pages by the parties and their
instrumental witnesses.
WITNESS MY HAND AND SEAL this ____________________ at ____________________.
NOTARY PUBLIC
Doc. No. ___________
Page No. ___________
Book No. ____________
Series of 2011

MORTGAGE, FORECLOSURES & REDEMPTION

MORTGAGE OF REAL ESTATAE PROPERTIES
DEFINITION: Mortgage is a contract whereby property is given as collateral to secure the performance or
fulfilment of a principal obligation ( Art. 2985, NCC).
A. KINDS OF MORTGAGE
1. Voluntary or conventional mortgage one which is agreed upon by the parties or constituted by the
will of the owner of the property on which it is created (NCC, MORTGAGE LAW, ETC.).
2. Legal mortgage one required by express provision of law ( Art. 169, Mortgage Law). E. G. The
alienation of any parapheral property administered by the husband gives a righ to the wife to require
the constitutions of a mortgage or any other security for the amount of the price which the husband
may have received (Art. 141, NCC).
3. Judicial mortgage one resulting from a judgement of the court.
4. Equitable Mortgage one which commonly occurs in Pacto de Retro sales ( Art.1602, NCC): in
other words, one that is not mortgage in form but in substance.
5. Open Mortgage one that can be paid off even before its maturity.
6. Close Mortgage one that can be paid off only on its maturity.
7. Blanket Mortgage several properties on mortgage for one loan.
B. SUBJECT MATTER OR REAL ESTATE MORTGAGE
(NCC, Mortgage Law, etc.)
1. Immovables
2. Alienable real rights imposed by law upon immovables, such as usufruct, surface right, right of
redemption, etc.
3. Real properties and real rights mortgageable under certain conditions, such as the right in a voluntary
mortgage.
C. ESSENTIAL REQUISITES OF REAL ESTATE MORTGAGE
(NCC, Mortgage Law, etc.)
1. It must be constituted to secure the performance of the principal obligation.
2. The mortgagor must be the absolute owner of the property mortgaged.
3. The mortgagor must have the free disposal of the property mortgaged, and in the absence thereof, he
must be legally authorized for the purpose.

4. Only immovables and alienable real rights imposed upon immovables maybe made objects of
contracts of real estate mortgage.
5. The deed of mortgage must be registered in the Registry if Property in order to bind third persons.
6. The foreclosed property must be sold in a public auction, and may not just be appropriated by the
foreclosing creditor, to answer for the principal obligation.
PACTUM COMMISSORIUM void and of no legal effect.
D. LEGAL IMPLICATIONS OF A REAL ESTATE MORTGAGE
1. Mortgage subjects a real estate property, whoever the possessor of the same maybe, to the fulfilment
of the principal obligation ( Art. 2126, NCC).
2. The owner may alienate the property subject of mortgage, and any stipulation to the contrary shall be
null and void ( Art. 2126, NCC). PACTUM DE NON ALIENDO void and of no legal effect.
3. The mortgage credit may be alienated or assigned to third persons in whole or in part, with the
formalities required by law ( Art. 2128, NCC).
4. The parties cannot stipulate a tipo or offset price at which the property will be sold at the
foreclosure proceedings ( Sec. 3, Rule 68, Rules of Court).
E. GROUNDS FOR FORECLOSURE OF REAL ESTATE MORTGAGE
1. Non-payment of principal obligation upon its maturity.
2. Violation of any condition or warranty stipulated in the deed of mortgage.
F. KINDS OF FORCLOSURE
1. Judicial the mortgage files a petition or complaint in court with competent jurisdiction, in which
petition or complaint he is the plaintiff and the mortgagor, the defendant. He must prove the existence
of the mortgage, the amount thereof, the existence of the principal obligation and the non-payment or
non-fulfilment thereof. If the court is satisfied, it orders the debtor to pay the debt within ninety (90)
days, otherwise, the property will be sold at public auction.
2. Extra-Judicial the creditor or mortgage controls the details of the sale. After the posting and
publication of the notice of sale, the sale itself is conducted under the direction of the sheriff, a judge
of the municipal or metropolitan trial court, or a notary public of the municipality or city where the
property is located.
G. REDEMPTION:
A transaction through which the mortgagor, or one claiming in his right, by means of a payment or the
performance of a condition, re-acquires or buys back the value of one title which may have passed under
the mortgage (42 C.J. 341).
H. KINDS OF REDEMPTION
1. Equity of Redemption the debtor or mortgagor may pay the amount due ordered by the court within
a period of not less than ninety (90) days nor more than hundred twenty (120) days from the entry of
judgment, and that in default of such payment the property shall be sold at public auction to satisfy
the judgment. (Rule 60, 1997 Rules of Civil Procedure).
2. Right of Redemption the mortgagor may redeem the property within the term of one (1) year from
the date of registration of auction sale. (R. A. 3135)
3. Bank Foreclosed Properties of corporations/juridical entities Juridical persons whose property is
being sold pursuant to an extrajudicial foreclosure shall have the right to redeem the property until,
but not after, the registration of the certificate of foreclosure sale with the applicable Register of
Deeds which is no case shall be more than three (3) months after foreclosure, whichever is earlier.
(Sec. 47, General Banking Act of 2000)

XII
Documentation and Registration
CONTRACTS AND DOCUMENTATION OF REAL ESTATE TRANSACTIONS
CONTRACT DEFINITION
A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to
give something or to render some service.
(Art. 1305, Civil Code of the Philippines)
Essential Requisites (Elements) of Contracts
(Art. 1318, Civil Code)
There is no contract unless the following requisites concur:
(1) Consent of the Contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established
(1) CONSENT
Definition it is the meeting of the minds between the parties on the subject matter and the cause of the
contract, even if neither one has been delivered.
Effect of No Consent
(a) If there is absolutely no consent, there is no contract and may be considered VOID or non-existent
(Example : when it was simply a JOKE between the parties who never intended to be bound by the
agreement)
(b) If there is consent but is vitiated such as error, fraud, or undue influence, etc., the contract is not
VOID, but is merely VOIDABLE (valid until annulled)
Applicable Law on Consent Art. 1319, Civil Code, provides:
Art. 1319. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the
cause which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified
acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not bind the offeror except from the time it came to his
knowledge. The contract, in such a case, is presumed to have been entered into in the place where the offer was
made.
Requisites of Consent
1.
2.
3.
4.
5.

There must be two or more parties

The parties must be capable or capacitated
There must be no vitiation of consent
There must be no conflict between what was expressly declared and what was intended
The intent must be declared properly (legal formalities must be complied with)
(Paras, Edgardo L., Civil Code of the Philippines, Vol. IV, 1985)

REQUISITE FOR A PERSON TO CONTRACT IN THE NAME OF ANOTHER

(AGENT, ATTORNEY-IN-FACT)
Under Art. 1317 of the Civil Code, it is provided that
:
a) Art. 1317. No one may contract in the name of another without being authorized by the latter, or unless he
has by law a right to represent him.
b) A contract entered into the name of another by one who has no authority or legal representation, or who
has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the
person on whose behalf it has been executed, before it is revoked by the other contracting party.
IF a person wants to contract in the name of another
(a) He must be duly authorized (expressly or impliedly)
(b) Or he must have by law a right to present him (e.g. guardian, administrator)
(c) Or the contract must be subsequently ratified (expressly, impliedly, by word or deed)
NOTE : IN CASE OF SALE OF A PIECE OF LAND OR ANY INTEREST THEREIN THROUGH AN
AGENT, the following must be followed:
Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the
authority of the latter shall be in writing; otherwise, the sale shall be void.
AUTHORITY MUST BE IN WRITING
OR ELSE, THE SALE IS VOID
OPTIONS
Option Definition
It is a contract granting a person the privilege to buy or not to buy a certain objects at anytime within the agreed
period at a fixed price.
The contract of option is a separate and distinct contract from the contract which the parties may enter into upon
the consumption of the contract. Therefore, an option must have its own cause or consideration, a cause distinct
from the selling price itself. (But the cause or consideration may be liberality or not in money terms)
General Rule
If the offeror has allowed the offeree a certain period to accept, the offer may be withdrawn at any time before
acceptance (of the thing being offered) by communicating such withdrawal. (Art. 1324, Civil Code)
This is commonly applicable in agreements which are options to buy a particular property. (e.g. Option to buy)
Exception
When the option is founded upon a consideration as something paid or promised. (e.g. Option Money)

GENERAL CONTENTS OF A CONTRACT

TITLE
Parties
Object
Consideration
Other Provisions
Notarial Page

II. DOCUMENTATION

It is putting down in writing the terms and conditions and agreement of the parties to the transaction, in the
appropriate legal form

As type of real estate transaction

General/ common Designations
Sale
Lease
Mortgage
Loan
Exchange
Payment
Reconveyance

Deed of absolute sale

Contract of lease
Deed of Mortgage
Loan Agreement/promissory Note
Deed of Exchange/Deed of Assignment
Dation in Payment/ Dacion en Pago
Deed of Reconveyance

As to type of instrument
1. Private of Instrument an agreement which is executed by the parties is binding and valid even though
not duly notarized , except in cases prescribed by law
2. Public instrument an agreement which has been notarized is considered a public instrument

As to type based on parties executing the documents

1. UNILATERAL Deed of Sale - an agreement where only the SELLER shall execute the deed of absolute
sale and will not be signed by the buyer
2. BILATERAL Deed of Sale an agreement where both SELLER and BUYER
A. PARTIES to the transaction
1. Individual

(a) 1. Full name-

the full names of the parties is required in the document for the proper
identification of the parties to the agreement

(b) 2. Legal capacity-

to be able to enter into a contract , parties must be of legal age ,or at least 18
years old and is stated in the document.(if a minor or is incapacitated to

contract ,then the person must be represented by the legal or authorized guardian
)

(c) 3. Marital status-

it is also required that the status of the parties be indicated, i.e., whether single,
married, the name of the spouse, widow, widower or legally separated.
Importance of this is when the parties are married, the consent of the other
spouse may be required by the transaction.

(d) 4. Citizenship-

The citizenship of the parties must likewise be indicated as the general rule is that
only Filipinos may acquire land, unless authorized by special laws. In case of
Dual Citizenship Law, the party /ies may just indicate their Filipino citizenship.

(e) 5.Residence-

Although not essential as the others, the residence must also be indicated in the
deed or the address of the party to the transaction. This will also serve a useful
purpose in case of notices that will be required to be given to the parties.

2. JURIDICAL PERSONS
In case of juridical persons, such corporation or partnership, the document must contain the following:
a. Capacity to buy land- The corporation or partnership must have the capacity to own land in the
Philippines in case it is transferee(60% capital must be Filipino owned , or as allowed by law)
b. Authority to Buy/ sell- The sale or purchases is duly authorized by a board resolution of the Board of
Directors of the corporation or all or the partners in the partnership
c. Authority to sign- The person who shall be authorized to sign in behalf of the corporation or partnership
must be duly stated. Note: It does not follow that the president of the corporation is automatically duly
authorized to sign in behalf of the corporation and any other person may be duly authorized by the Board
of Directors.
d. Principal Office- The principal office of the corporation or partnership or its address must likewise be
indicated in the instrument.
Document required:
Board Resolution duly approved and signed evidenced by Corporate Secretarys Certificate (duly notarized)
Basis and Requirements under PD 1529
Section 55. Grantees name, nationality, etc., to be stated. Every deed or other voluntary instrument presented for
registration shall contain or have endorsed upon it the full name , nationality , residence and postal address of
the grantee or other person acquiring or claiming an interest under such instrument , and every deed shall also
state whether the grantee is married or unmarried , and if married the name in full of the husband or wife . If
the grantee is a corporation or association , the instrument must contain a recital to show that such corporation
or association is legally qualified to acquire private lands .Any change in the residence or postal address of such
person shall be endorsed by the Register of Deeds on the original copy of the corresponding certificate of title ,
upon receiving a sworn statement of such change .All names and addresses shall also be entered on all
certificates.

Notices and processed issued in relation to registered land in pursuance of this Decree may be served upon any
person in interest by mailing the same to the addresses given , and shall be binding, whether such person
resides within or without the Philippines , but the court may, in its discretion, require further or other notice to
be given any case, if in its opinion the interest of justice so requires
B.

OBJECT

The object of real estate contract of sale is the property being sold and purchased. It is re required that a definite
description must be indicated to properly identify the object of the contract or agreement .
It is not really necessary to include the whole description in the original / transfer certificate of title so long as the
properly identified though it is better to indicate the certificate of title no. and the corresponding Registry of
Deeds , when it comes to sale of titled properties.

SAMPLE Technical Description in Deed of Sale

TRANSFER CERTIFICATE OF TITLE NO.12345
A parcel of land (Lot 2, of the cons.-subd. Plan Pcs-12-34567, being a portion of the cons .of Lots 1& 2,
Pasig Cadastre, Psc-14, L.R.C. Rec. No. 984), situated in the Brgy. Alabang, Mun. of Muntilupa, Metro
Manila, Is. of Luzon. x x x x x x containing an area of SIX HUNDRED (600) SQ. METERS.xxxxxx.
C.

CONSIDERATION

The consideration in the real estate transaction is the purchase price of the price of the property agreed upon
(unless payment is made in another form or there is an exchange of property).

NOTARIZATION
It is required under PD 1529, that the instrument be in the form of a public instrument, or must be duly notarized
to be registered.
ACKNOWLEDGMENT
Acknowledgement. - acknowledgment refers to
an act in which an individual on a single occasion:

JURAT
Jurat. - Jurat refers to an act in which an
individual on a single occasion:

(a) Appears in person before the notary public

and presents an integrally complete
instrument or document;
(b) Is attested to be personally known to the
notary public or identified by the notary
public through competent evidence of
identify as defined by these Rules; and
(c) Represents to the notary public that the
signature of the instrument or document
was voluntary affixed by the purposes
stated in the instrument or document,
declares that he has executed the
instrument or document as his free and

(a) Appears in person before the notary public

and presents an instrument or document;
(b) is personally known to the notary public or
identified by the notary public through
competent evidence of identity as defined
by these rules;
(c) signs the instrument or document in the
presence of the notary; and
(d) Takes an oath or affirmation before the
notary public as to such instrument or
document.

voluntary act and deed, and, if he acts in a

particular representative capacity, that he
has the authority to sign in that capacity.
COMPETENT EVIDENCE OF IDENTITY
For acknowledging documents, it is required that the parties present what is called, competent evidence of identity
for notarization, as follows
Component Evidence of Identity. The phrase competent evidence of identity refers to the identification of an
individual based on:
(a) at least one current identification document issued y an official agency bearing the photograph and
signature of the individual, such as but not limited to,
passport
drivers license,
Professional regulations commission ID,
National Bureau of investigation clearance,
Police clearance,
Postal ID,
Voters ID,
Barangay certification
Government Service and Insurance System ( GSIS) e-card
Others, such as, Social Security System (SSS) card, Philheatlh card, senior citizen card, Overseas
Workers Welfare administration (OWWA) ID, OFW ID, seamans book, alien certificate of registration/
immigrant certificate of registration, government office Id, certification from the national Council for the
Welfare of disable persons ( NCWDP), Department of Social Welfare and Development ( DSWD)
certification
Others

SAMPLE
CONTRACT TO SELL
KNOW ALL MEN BY THESE PRESENTS:
This Contract to sell made and executed, by and between:
BELEN
MOO NAH, of
legal
age,
Filipino,
married
to________________________________________________with address at 123 Rizal St.,
Manila, Hereinafter referred to as the BUYER;
-andCEEGUE NAH NGA, of legal age, Filipino, married to Okee Sah Kheen, with address at 123 Rizal St.,
Manila, hereinafter referred to as the BUYER.,
WITNESSETH: THAT
WHEREAS , the SELLER is the absolute and registered owner of a parcel of land with improvements
thereon located at No. 123 Rizal St., Manila consisting of an area of SIX HUNDRED SQUARE METES
( 600 SQMS.), more or less, and covered by Transfer Certificate of Title No.123456 of the Registry of
deeds for Manila, more particularly described as follows:
TRANSFER CERTIFICATE OF TITLE NO.123456

A parcel of land
xxxxxx
WHEREAS, there SELLER is willing to sell and the BUYER is willing to buy the abovementioned property.
NOW, THEREFORE, for and in consideration of the principal sum of SIX MILLION EIGHT HUNDRED
THOUSAND PESOS (P6,800,000.00), Philippine Currency, the SELLER does hereby sell, transfer and convey
unto the BUYER, his successors and assigns the above described property under the following terms and
conditions:
1. TOTAL PURCHASE PRICE
The total purchase price of the above described property shall be SIX
MILLION
THOUSAND PESOS (P6, 800,000.00), Philippine Currency, payable as follows:

EIGHT

HUNDRED

a. The amount of SIX HUNDRED THOUSAND PESOS (P 600,000.00), Philippines Currency,

Representing earnest money, payable upon signing of this agreement.
b. The amount of SIX HUNDRED THOUSAND PESOS (P 600,000.00), Philippine
Currency, to be paid to the SELLER on or before July 1, 2009; and
c. The balance in the amount of FIVE MILLION SIX HUNDRED THOUSAND PESOS (P 5,600,000.00),
Philippine Currency, representing full payment of the total purchase price, to be paid on or before August 31,
2009.
Any amount unpaid on its due date as above provided , shall be subject to TWO PERCENT (2%)
Per month penalty interest until fully paid, without prejudice to right of the SELLER to cancel this agreement as
provided herein.
2. EXECUTION OF DEED OF SALE
Upon full payment of the total purchase price hereinabove provided, the SELLER shall execute and deliver to
the deliver to the BUYER the Deed of Absolute Sale along with the original owners copy of the Transfer
Certificate of Title and all other pertinent do documents thereto.
3. POSSESSION
The BUYER shall be allowed to move in and take possession of the subject property, as agreed with the
SELLER, in view of the sale of the present unit occupied by the BUYER. In the event however of default
in the payments stipulated above, or the cancellation of this contract to sell as provided in this agreement,
the BUYER shall, upon written notice from the SELLER, vacate and turn over the premises to the
SELLER, unless otherwise there is an agreement in writing between the parties regarding the continued
possession of the property by the BUYER.
4. TAXES, EXPENSES
Capital Gains Tax, documentary stamp tax, transfer tax and registration fees for the transfer of the title to
the name of the BUYER shall e for the account of the SELLER. Real Estate taxes up to the end of the
Second Quarter (2nd) of 2007 shall be for the account of the SELLER.
5. CANCELLATION/ FORFEITURE
In case the Buyer fails to pay the above amounts on their due dates abovementioned, or the sale is not
consummated due to the default of the BUYER, this contract may be cancelled by the SELLER, without
need of any judicial declaration, by serving the notice of cancellation to the BUYER and this contract
shall be of no further force and effect, subject to the provisions in par.3 above.

In such event, the earnest money in the amount of SIX HUNDRED THOUSAND PESOS (P 600,000.00)
Philippine Currency, shall be forfeited in favor of the SELLER, as liquidated damages. Any other
amount already paid by the BUYER, in excess of the liquidated damages, shall, however, be returned to
the BUYER, without interest.
IN WITNESS WHEREOF, the
____________________________________.

parties

SELLER
_____________________________________

have

signed

this

___________________

at

BUYER
________________________________________

SIGNED IN THE PRESENCE

______________________________________

_________________________________________

ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES) S.S.
BEFORE ME, a Notary Public in and for the above jurisdiction, personally appeared:
NAME
ISSUED

I.D. NO.

DATE/ PLACE

BEELIN MOO NAH

CEEGEE NAH NGA
Known to me and to be the same persons who executed the foregoing document, and they acknowledge to me that
the same is their free and voluntary act and deed. This document and they acknowledged to me that the same is
their free and voluntary act and deed. This document pertains to a Contract to Sell consisting of three (3) pages
including this pages including this page where in the acknowledgement is written, signed by the parties and their
instrumental witnesses on each and every page thereof .

WITNESS
MY
HAND
_________________________________.

AND

SEAL on ________________________at

NOTARY PUBLIC
Doc: No._____________;
Page No._____________;
Book No._____________;
Series of 2011
DEED OF ABSOLUTE SALE
KNOW ALL MEN BY THESE PRESENTS:
This Deed of Absolute Sale executed by and between:
JUAN P. DE LA CRUZ, of legal age, Filipino, married to Maria D. dela Cruz, Filipino, with address at
No. 123 MADRIGAL AVENUE, Muntinlupa city, hereinafter refered to as the VENDOR,
-andJOSE MA. R. TE, of legal age, Filipino, married to HENDE MA. R. TE, Filipino, with address at 888
Mahinhin St., Paranaque City.

WITNESSETH: THAT
WHEREAS, the VENDOR is the absolute and registered owner of a parcel of land with improvements located at
No. 123 Madrigal Avenue, Muntinlupa City, containing an area of SIX HUNDRED SQUARE METERS (600
SQM.) covered by Transfer Certificate of Title No. 12345 of the Registry of Deeds for Muntinlupa City and
particularly described as follows:
TRANSFER CERTIFICATE OF TITLE NO. 12345
A parcel of land ( Lot 2, of the cons- sub. Plan Pcs-12-34567, being a portion of the cons. of Lots 1 &
2, Pasig Cadastre, Psc-14, L.R.C. Rec. No. 984), situated in the Brgy. Alabang, Mun. of Muntinlupa, Metro
Manila, Is. Of uzon. x x x x x x x containing an area of SIX HUNDRED (600) SQ. METERS. Xxxxxx.
WHEREAS, the VENDEE has offered to buy and the VENDOR has agreed to sell the above described real
property real property to the VENDEE;
NOW, THEREFORE, for and in consideration of the sum of FIFTEEN MILLION PESOS
(P15,000,000.00) Philippine Currency, receipt of which in full is hereby acknowledgement from the VENDEE,
the VENDOR hereby SELLS, TRANSFERS AND CONVEYS in a manner absolute and irrevocable, in favor of
the VENDEE, their heirs, successors and assigns, the above described real property free from all liens and
encumbrances.
Capital gains tax and documentary stamp taxes on the sale shall be for the account of the VENDOR.
Transfer tax and registration fees for the transfer of the property in the name of the VENDEE shall be for the
account of the VENDEE. Real estate taxes and association dues up to the execution of this deed of absolute sale
shall be for the account of the VENDOR.
IN WITNESS WHEREOF, we have hereunto signed this Deed of Absolute Sale at
_____________________________this __________________________________.

VENDOR
_________________________
JUAN P. DELA CRUZ

VENDEE
________________________________
JOSE MA. R. TE

With my marital consent:

______________________
MA. D. dela Cruz
SIGNED IN THE PRESENCE OF:
________________________
ACKNOWLEDGEMENT

_________________________

BASIC OF POWERS OF ATTORNEY

I. What is a power of ATTONEY?
A power of attorney is an authorization to act on someone elses in a legal or business matter.
II. WHY NEED A POWER OF ATTORNEY?

Absence of person
inability to be present
Dont want to be present
physical incapacity
Minimize person / signatories
Future plans/ circumstances
simply busy

III. Types of power of attorney

1. General power of attorney authorizes your agent to act on your behalf in a variety of different situation
for administration and general supervision and management..
2. special power of attorney- authorizes your agent to act on your behalf in specific situations only,
particularly act of dominion or ownership in real estate.
IV. MAIN LAW governing Powers of Attorney
New Civil code [Law on Agency]
TITLE X, AGENCY, CHAPTER 1 [ARTICLE No 1868- 1932 ]
V. AGENCY Defined
By the contract of agency a person binds himself to render some service or to do something in representation or
on behalf of another , with the consent or authority of the latter [ Art. 1868 NCC]
VI. EXPRESS or IMPLIED
1. Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his
failure to repudiate the agency, knowing that another person is acting on his behalf without authority.
2. Agency may be oral , unless the law requires a specific form [ art. 1869,NCC ]

VII. Essential Requisites (Elements) of Contracts

( Art. 1318,civil code)
There is no contract unless the following requisites cocur:
(4) Consent of the contracting parties:
(5) Object certain which is the subject matter of the contract
(6) Cause of the obligation which is established
(2) CONSENT
Definition it is the meeting of minds between the parties on the subject matter and the cause of the
contract, even if neither one has been delivered.
Effect of No Consent

(c) If there is absolutely no consent there is no contract and may be considered VOID or non- existent
(EXAMPLE : when it was simply a JOKE between the parties who never intended to be bound by the
agreement)
(d) If there is consent but is vitiated such as error, fraud, or undue influence, etc., the contract is not
VOID, but is merely VOIDABLE (valid until annulled)
Applicable law on Consent Art.1319,civil code, provides:
Art.1319.Consent is manifested by the meeting of the offer and the acceptance upon the thing and
the cause which are to constitute the contract, The offer must be certain and the acceptance absolute, A
qualified acceptance constitutes a counter- offer.
Acceptance made by letter or telegram does not bind the offeror except from the time it came to
his knowledge. The contract, in such a case, is presumed to have been entered into in the place where the
offer was made.
VIII. REQUISITE FOR A PERSON TO CONTRACT IN THE NAME OF ANOTHER
(AGENT, ATTORNEY IN FACT)
Under Art. 1317 of the civil code, it is provided that:
Art. 1317. No one may contract in the name of another without being authorized by the latter, or
unless he has by law a right to represent him.
A contract entered into the name of another by one who has no authority or legal representation,
or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or
impliedly, by the person on whose behalf it has executed, before it is revoked by the other
contracting party.
If a person wants to contract in the name of another
(d) He must be duly authorized (expressly or ompliedly)
(e) Or he have by law a right to represent him (e,g, guardian,administrator)
(f) Or the contract must be subsequently ratified ( expressly, impliedly,by words or deed)
NOTE : IN CASE OF SALE OF A PIECE OF LAND OR ANY INTEREST THEREIN THROUGH
AN AGEN, the following must be followed:
Art. 1874.When a sale of piece of land or any interest therein is through an agent, the authority of
the latter shall be in writing otherwise, the sale shall be avoid.

AUTHORITY MUST BE IN WRITING

OR ELSE, THE SAME SALE IS AVOID
OFFER MADE THROUGH AN AGENT
Acceptance of an Offer Through an Agent
1. If both the offer and acceptance are made through an AGENT (who is an extension of personality of the
principal), then there is a valid ACCEPTANCE.
2. If made to an AGENT (but who had no authority to bind) but merely a sort of messenger, then there is NO
VALID acceptance.

As provided under Aricle 1322 of the Civil code:

Art.1333. An offer made through an agent is accepted from the time acceptance is communicated
to him
IX. WHEN SPECIAL POWERS OF ATTORNEY ARE NEEDED
(Art 1878, Civil code)

GENERAL POWER OF ATTORNEY

VS.
SPECIAL POWER OF ATTORNEY

What is controlling are the contents of the power of attorney and not the heading or title of the document. It is best to
look into the contents of the power and limitations in the document to determine whether it will be sufficient for the
authority being delegated to the attorney- in fact.
SPECIAL POWER OF ATTORNEY
In general, a special power of attorney is required for the following:
1. Act of strict dominion or ownership ( as compared to acts of mere administration)
2. Gratuituos contracts
3. Contract where personal trust and confidence is of the essence is of the agreement.
Or ,the following:
1) To make such payments as are not usually considered as act of administration.
2) To effect novations which put an end to obligation already in existence at the time agency was constituted
3) To compromise, to submit question to arbitration, to renounce the right to appeal from a judgement, to
waive objections to the venue of an action or to prescription already aquired
4) TO waive any obligation gratuitously
5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either
gratuitously or valuable consideration
6) To make gifts,except customary ones for charity or those made to employess in the business managed by
the agent.
7) To loan or borrow money, unless the letter act be urgent and indispensable for the preservation of the
things which are under administration.
8) To lease any real property to another person for more than one year
9) To bind the principal to render some service without compensation
10) To bind the principal in a contract of partnership
11) to obligate the principal as a guarantor or surety
12) To create or convey real rights over immovable property
13) To accept or repudiate an inheritance
14) To ratify or recognize obligations contracted before the agency
15) Any other act of strict dominion.
X. SUBTITUTION OF AGENT
In general, the agent may appoint a substitute if the principal has not prohibited him from doing so, as
provided under Art.1892 of the civil code:

Art. 1892. The agent may appoint a substitute if the principal has not prohibited him from doing so; but he
shall be responsible for the act s of the substitute:
1) When he was not given the power to appoint one:

2) When he was given such power, but without designating the person, and the person appointed was
notoriously incompetent or insovent.
All Acts of the substitute appointed against the prohibition of the principal shall be void.

XI. MODELS OF EXTINGUISHING AGENCY [EDWARD]

1.
2.
3.
4.
5.
6.

Expiration of period
Death of principal or agent
Withdrawal of agent
Accomplishment of purpose
Revocation
Dissolution of firm which granted or accepted agency

XII. SPECIAL POWER OF ATTORNEY FORM SAMPLE

SPECIAL POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WE, SPOUSE ________________________a ______________, Both of legal age, Filipino and with address at
_________________________do hereby NAME CONSTITUTE and APPOINT,________________________ of
legal age, with address at __________________________, to be our true and lawful attorney, for us and in our
name, place and stead, to do the following acts and things, to wit:

To MORTAGAGE, SELL, TRANSPER AND CONVEY, under terms and conditions he may deem fit and
proper, the parcel of land including any improvements thereon, located at ___________________________,
covered by transfer
certificate of Title No._____________ of
the Registry of Deeds for
____________________________,
consisting
of
____________________________
,________________________SQUARE METERS (____________) , more or less, and more particularly
described as follows:
TRANSFER CERTIFICATE OF TITLE NO:

------A Parcel of Land..

___________________________________________
( Description of Property )
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxz
xxxxxxxxxxxxxxxx more or less.xxxxxxx
To enter into and sign and deliver, the mortgage contract, to sell, deed of absolute sale and any and all
documents related thereto, over the above property.
To collect, receive and demand any monies due or arising out of the mortgage, sale of the above
property, in his name or in the name of _________________________and to encash, deposit any cheque
payment thereto.
To make any payment owing to any third party or government agency arising out of the sale or mortgage
of said property.

To do any and all acts necessary for the purpose of this authority.
HEREBY GIVING AND GRANTING to our said attorney full powers and authority to do and perform
all and every act requisite or necessary to carry into effect the foregoing authority, as fully to all intents and
purpose as we might or could lawfully do if personally present, with full power of substitution and hereby
satisfying and confirming all that our said attorney or his substitute shall lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, WE have her unto set our hands this ____________________, 2006 at
________________________.

____________________________
Principal
_____________________________
Principal

SIGNED IN THE PRESENCE OF:

_____________________
__________________________
ACKNOWLEDGEMENT
REPUBLIC OF THE PHILIPPINES ) S.S
)
BEFORE ME, a Notary Public for and in the abovenamed jurisdiction, personally appeared:

NAME

IDENTIFICATION NO.

DATE/ PLACE

Known to me and to me known to the same person who executed the foregoing Special power of attorney,
consisting of two (2) pages including this page wherein the acknowledgement is written and acknowledge to me
that the same is their free and voluntary act and deed.
WITNESS MY HAND AND SEAL this _______________________ at ______________________ .
NOTARY PUBLIC
Doc. No. _________
page No. _________
Book No. _________
Series of 2010.
XI. DOCUMENTATION IN DEEDS
DEEDS OF ABSOLUTE SALE:
KNOW ALL MEN BY THESE PRESENTS:
This Deed of Absolute sale executed by and between:
JUAN P. LA CRUZ, of legal age, Filipino, married to Maria D. Dela Cruz, Filipino, with address at No.
123 Madrigal Avenue, Muntinlupa City, represented herein by his Attorney-in-Fact, MARIA DELOS
SANTOS, hereinafter referred to as the VENDOR.
- and -

JOSE MA> R> TE> of legal age, Filip[ino ,married to HENDE, MA. R. TE, Filipino, with address at 888
Mahinhin St. Paranaque City, represented herein by his Attorney-in-Fact, MANUEL
D.ASUNCION,
hereinafter referred to as the VENDOR,
xxxxxx

PROPERTY REGISTRATION AND

THE PROPERTY REGISTRATION DECREE
SELECTED PROVISIONS IN REGISTRATION UNDER THE PROPERTY
REGISTRATION DECREE P. D. 1529
CHAPTER IV
CERTIFICATE OF TITLE
SEC. 45. Statement of personal circumstances in the certificate. Every certificate of title shall set forth
the full names of all the persons whose interest make up the full ownership in the whole land, including their civil
status, and the names of their respective spouses, if married, as well as their citizenship, residence and postal
address. If the property covered belongs to the conjugal partnership, it shall be issued in the names of both
spouses.

CHAPTER V
SUBSEQUENT REGISTRATION
VOLUNTARY DEALINGS WITH REGISTERED LANDS
GENERAL PROVISIONS
SEC. 51. Conveyance and other dealings by registered owner. - An owner of registered land may convey,
mortgage, lease, charge or otherwise deal with the same in accordance with existing laws. He may use such forms
of deeds, mortgages, leases or other voluntary instruments as are sufficient in law. But no deed, mortgage, lease
or voluntary instrument, except a will purporting to convey or affect registered land shall take effect as a
conveyance or bind the land, but shall operate only as a contract between the parties and as evidence of authority
to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land insofar as third persons are
concerned, and in all cases under this Decree, the registration shall be made in the office of the Register of Deeds
for the province or city where the land lies.
SEC. 52. Constructive notice upon registration. Every conveyance, mortgage, lease, lien, attachment,
order, judgment, instrument or entry affecting registered land shall, if registered, filed or entered in the office of
the Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all
persons from the time of such registering, filing or entering.
SEC.53. Presentation of owner's duplicate upon entry of new certificate. - No voluntary instrument shall
be registered by the Register of Deeds, unless the owner's duplicate certificate is presented with such instrument,
except in cases expressly for in this Decree or upon order of the court, for cause shown.

The production of the owner's duplicate certificate, whenever any voluntary instrument is presented for
registration, shall be conclusive authority from the registered owner to the Register of Deeds to enter a new
certificate or to make a memorandum of registration in accordance with such instrument, and the new certificate
or memorandum shall be binding upon the registered owner and upon all persons claiming under him, in favor of
every purchaser for value and in good faith.
In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies
against the parties to such fraud without prejudice however, to the rights of any innocent holder for value of a
certificate of title. After the entry of the decree of registration to the original petition or application, any
subsequent registration procured by the presentation of a forged duplicate certificate of title or a forged deed or
other instrument, shall be null and void.
SEC. 54. Dealings less than ownership, how registered. No new certificate shall be entered or issue
pursuant to any instrument, which does not divest the ownership or title from the owner or from the transferee of
the registered owners. All interests in registered land less than ownership shall be registered by filing with the
Register of Deeds the instrument which creates or transfers or claims such interests and by a brief memorandum
thereof made by the Register of Deeds upon the certificate of title, and signed by him. A similar memorandum
shall also be made on the owner's duplicate. The cancellation or extinguishment of such interests shall be
registered in the same manner.
SEC. 55. Grantee's name, nationality, etc., to be stated. Every deed or other voluntary instrument
presented for registration shall contain or have endorsed upon it the full name, nationality, residence and postal
address of the grantee or other person acquiring or claiming an interest under such instrument, and every deed
shall also state whether the grantee is married or unmarried, and if married, the name in full of the husband or
wife. If the grantee is a corporation or association, the instrument must contain a recital to show that such
corporation or association is legally qualified to acquire private lands. Any change in the residence or postal
address of such person shall be endorsed by the Register of Deeds on the original copy of the corresponding
certificate of title, upon receiving a sworn statement of such change. All names and addresses shall also be
entered on all certificates.
Notices and processed issued in relation to registered land in pursuance of this Decree may be served
upon any person in interest by mailing the same to the addresses given, and shall be binding, whether such person
resides within or without the Philippines, but the court may, in its discretion, require further or other notice to be
given in any case, if in its opinion the interest of justice so requires.
SEC. 56. Primary Entry Book; fees; certified copies. - Each Register of Deeds shall keep a primary entry
book in which, upon payment of the entry fee, he shall enter, in the order of their reception, all instruments
including copies of writs and processes filed with him relating to registered land. He shall, as a preliminary
process in registration, note in such book the date, hour and minute of reception of all instruments, in the order in
which they were received. They shall be regarded as registered from the time so noted, and the memorandum of
each instrument, when made on the certificate of title to which it refers, shall bear the same date: Provided, that
the national government as well as the provincial and city governments shall be exempt from the payment of such
fees in advance in order to be entitled to entry and registration.
Every deed of other instrument, whether voluntary or involuntary, so filed with the Register of Deeds
shall be numbered and indexed and endorsed with a reference to the proper certificate of title. All records and
papers relative to registered land in the office of the Register of Deeds shall be open to the public in the same
manner as court records, subject to such reasonable regulations as the Register of Deeds, under the direction of
the Commissioner of Land Registration, may prescribe.
All deeds and voluntary instruments shall be presented with their respective copies and shall be attested
and sealed by the Register of Deeds, endorsed with the file number, and copies may be delivered to the person
presenting them.
Certified copies of all instruments filed and registered may also be obtained from the Register of Deeds
upon payment of the prescribed fees.
(A) CONVEYANCES AND TRANSFERS
SEC. 57. Procedure in registration of conveyances. - An owner desiring to convey his registered land in
fee simple shall execute and register a deed of conveyance in a form sufficient in law. The Register of Deeds
shall thereafter make out in the registration book a new certificate of title to the grantee and shall prepare and
deliver to him an owner's duplicate certificate. The Register of Deeds shall note upon the original and duplicate
certificate the date of transfer, the volume and page of the registration book in which the new certificate is

registered and a reference number to the last preceding certificate. The original and the owner's duplicate of the
grantor's certificate shall be stamped "cancelled". The deed of conveyance shall be filed and indorsed with the
number and the place of registration of the certificate of title of the land conveyed.
SEC. 59. Carry over of encumbrances. - If, at the time of any transfer, subsisting encumbrances or
annotations appear in the registration book, they shall be carried over and stated in the new certificate or
certificates; except so far as they may be simultaneously released or discharged.
(B) MORTGAGES AND LEASES
SEC. 60. Mortgage or lease of registered land. - Mortgage and leases shall be registered in the manner
provided in Section 54 of this Decree. The owner of registered land may mortgage or lease it by executing the
deed in a form sufficient in law. Such deed or mortgage or lease and all instruments which assign, extend,
discharge or otherwise deal with the mortgage or lease shall be registered, and shall take effect upon the title only
from time of registration.
No mortgagee's or lessee's duplicate certificate of title shall hereafter be issued by the Register of Deeds,
and those issued prior to the effectivity of this Decree are hereby deemed cancelled and the holders thereof shall
immediately surrender the same to the Register of Deeds concerned.
SEC. 61. Registration. - Upon presentation for registration of the deed of mortgage or lease together with
the owner's duplicate, the Register of Deeds shall enter upon the original of the certificate of title and also upon
the owner's duplicate certificate a memorandum thereof, the date and time of filing and the file number assigned
to the deed, and shall sign the said memorandum. He shall also note on the deed the date and time of filing and a
reference to the volume and page of the registration book in which it is registered.
SEC. 62. Discharge or cancellation. - A mortgage or lease on registered land may be discharged or
cancelled by means of an instrument executed by the mortgagee or lessee in a form sufficient in law, which shall
be filed with Register of Deeds who shall make the appropriate memorandum upon the certificate of title.
(C) POWERS OF ATTORNEY; TRUSTS
SEC. 64. Power of Attorney. - Any person may, by power of attorney, convey or otherwise deal with
registered land and the same shall be registered with the Register of Deeds of the province or city where the land
lies. Any instrument revoking such power of attorney shall be registered in like manner.
INVOLUNTARY DEALINGS
SEC. 69. Attachments. - An attachment, or a copy of any writ, order or process issued by a court of
record, intended to create or preserve any lien, status, right, or attachment upon registered land, shall be filed and
registered in the Registry of Deeds for the province or city in which the land lies, and, in addition to the
particulars required in such papers for registration, shall contain a reference to the number of the certificate of tile
to be affected and the registered owner or owners thereof, and also if the attachment, order, process or lien is not
claimed on all the land in any certificate of title a description sufficiently accurate for identification of the land or
interest intended to be affected. A restraining order, injunction or mandamus issued by the court shall be entered
and registered on the certificate of title affected, free of charge.
SEC. 70. Adverse claim. Whoever claims any part or interest in registered land adverse to the registered
owner, arising subsequent to the date of the original registration, may, if no other provision is made in this Decree
for registering the same, make a statement in writing setting forth fully his alleged right or interest, and how or
under whom acquired, a reference to the number of the certificate of title of the registered owner, the name of the
registered owner, and a description of the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimant's residence, and a place at
which all notices may be served upon him. This statement shall be entitled to registration as an adverse claim for a
period of thirty days from the date of registration. After the lapse of said period, the annotation of the adverse
claim may be cancelled upon filing of a verified petition therefore by the party in interest; Provided, however,
that after cancellation, no second adverse claim based on the same ground shall be registered by the same
claimant.
Before the lapse of the thirty days aforesaid, any party in interest may file a petition in the Court of First
Instance where the land is situated for the cancellation of the adverse claim and the court shall grant a speedy
hearing upon the question of the validity of such adverse claim, and shall render judgment as may be just and
equitable. If the adverse claim is adjudged to be invalid, the registration thereof shall be ordered cancelled. If, in
any case, the court, after notice and hearing, shall find that the adverse claim thus registered was frivolous, it may

fine the claimant in an amount not less than one thousand pesos nor more than five thousand pesos, in its
discretion. Before the lapse of thirty days, the claimant may withdraw this adverse claim by filing with the
Register of Deeds a sworn petition to that effect.
NOTE: A notice of adverse claim remains valid even after the lapse of the 30 day period
provided by Section 70 of the Property Registration Decree. The cancellation of the adverse
claim is
still necessary to render it ineffective; otherwise the inscription will remain annotated and
shall continue
as lien upon the property. (Sajonas vs. Court of Appeals, 258 SCRA 79)
SEC. 76. Notice of lis pendens. No action to recover possession of real estate, or to quiet a title thereto or
to remove clouds upon the title thereof, or for partition, or other proceedings of any kind in court directly
affecting the title to land or the use or occupation thereof of the buildings thereon, and no judgment, and no
proceeding to vacate or reverse any judgment shall have any effect upon registered land as against persons other
than the parties thereto, unless a memorandum or notice stating the institution thereof, together with a reference to
the number of the certificate of title, and an adequate description of the land affected and the registered owner
thereof shall have been filed and registered.
SEC. 77. Cancellation of lis pendens. - Before final judgment, a notice of lis pendens may be cancelled
upon order of the court, after proper showing that the notice is for the purpose of molesting the adverse party, or
that it is not necessary to protect the rights of the party who caused it to be registered. It may also be cancelled by
the Register of Deeds upon verified petition of the party who caused the registration thereof.
At any time after final judgment in favor of the defendant, or other disposition of the action such as to
terminate finally all rights of the plaintiff in and to the land and/or buildings involved, in any case in which a
memorandum or notice of lis pendens has been registered as provided in the preceding section, the notice of lis
pendens shall be deemed cancelled upon the registration of a certificate of the clerk of court in which the action or
proceeding was pending stating the manner of disposal thereof.
CHAPTER VI
REGISTRATION OF JUDGMENTS; ORDERS; PARTITIONS
SEC. 86. Extrajudicial settlement of estate. - When a deed of extrajudicial settlement has been duly
registered, the Register of Deeds shall annotate on the proper title the two-year lien mentioned in Section 4 of
Rule 74 of the Rules of Court. Upon the expiration of the two-year period and presentation of a verified petition
by the registered heirs, devisees or legatees or any other party in interest that no claim of any creditor, heir or
other person exist, the Register of Deeds shall cancel the two-year lien noted on the title without the necessity of a
court order. The verified petition shall be entered in the Primary Entry Book and a memorandum thereof made on
the title.
No deed of extrajudicial settlement or affidavit of adjudication shall be registered unless the fact of
extrajudicial settlement of adjudication is published once a week for three consecutive weeks in a newspaper of
general circulation in the province and proof thereof is filed with the Register of Deeds. The proof may consist
of the certification of the publisher, printer, his foreman or principal clerk, or of the editor, business or advertising
manager of the newspaper concerned, or a copy of each week's issue of the newspaper wherein the publication
appeared.
CHAPTER XII
FORMS USED IN LAND REGISTRATION AND CONVEYANCING
SEC. 112. Forms in conveyancing. - The Commissioner of Land Registration shall prepare convenient
blank forms as may be necessary to help facilitate the proceedings in land registration and shall take charge of the
printing of land title forms.
Deeds, conveyances, encumbrances, discharges, powers of attorney and other voluntary instruments,
whether affecting registered or unregistered land, executed in accordance with law in the form of public
instruments shall be registrable: Provided, that, every such instrument shall be signed by the person or persons
executing the same in the presence of at least two witnesses who likewise sign thereon, and shall be
acknowledged to be the free act and deed of the person or persons executing the same before a notary public or
other public officer authorized by law to take acknowledgment.
Where the instrument so acknowledged consists of two or more pages including the page whereon
acknowledgment is written, each page of the copy which is to be registered in the office of the Register of Deeds,
or if registration is not contemplated, each page of the copy to be kept by the notary public, except the page where
the signatures already appear at the foot of instrument, shall be signed on the left margin thereof by the person or

persons executing the instrument and their witnesses, and all the pages sealed with the notarial seal, and this fact
as well as the number of pages shall be stated in the acknowledgment. Where the instrument acknowledged
relates to a sale, transfer, mortgage or encumbrance of two or more parcels of land, the number thereof shall
likewise be set forth in said acknowledgment.
REGISTRATION PROCESS
The process of registration of a sale of land or land with improvements from signing of deed of absolute
sale will be as follows:
Execution of Deed of
Absolute Sale

Filing and Payment of

Transfer Taxes
(BIR)

Payment of Transfer Taxes

(Local Government)

Registration with Register of

Deeds

DEALINGS WITH REGISTERED LAND

Legal Incidents and Annotations on Certificates of Title
a. Voluntary Agreements, Involuntary Dealings, Court Processes and Orders
(under P. D. No. 1529, The Property Registration Decree)
1.
2.
3.
4.
5.
6.
7.

Contract of Lease
Mortgage
Cancellation of Mortgage
Certificate of Redemption
Memorandum of Agreement
Special Power of Attorney
Estate Settlement
a. Affidavit of Self-Adjudication
b. Deed of Extrajudicial Settlement
c. Sec. 4 Rule 74 of the Rules of Court (heirs, creditors or person unlawfully deprived of
participation)
8. Adverse Claim
- 30 day validity - No longer applicable.
- in the case of Sajonas vs. C. A., July 5, 1996, the Supreme Court held in effect that a
notice of adverse claim remains valid even after the lapse of the 30-day period provided
by Sec. 70 of PD 1529. The cancellation is still necessary to render it ineffective;
otherwise the inscription will remain annotated and shall continue as lien upon the
property.
RECONSTITUTION OF TITLES
1. Judicial Reconstitution under R. A. No. 26
2. Administrative Reconstitution under LRA Circular No. 13 (July 13, 1990)
a. Only in case of substantial loss or destruction of land titles due to fire, flood or other force
majeure

b. Where the number of lost or damaged certificates of title is at least ten percent (10%) of the
total number of titles in the custody of the Register of Deeds, but
c. In no case shall the number of titles lost or damages is less than five hundred (500)

XIII
Real Property Laws and Taxation
A TAXATION- Definition
Taxation is the inherent power of the sovereign State to raise money or revenue necessary to finance the functions
and operations of the Government.
LAWS GOVERNING REAL PROPERTY TAXATION

NATIONAL TAXATION

LOCAL TAXATION

Tax Code of 1997

Local Government Code of 1991

B. THE PRESENT LAW (National Taxation)

The present law is the Tax Code 1997, or also known as:
1.
2.
3.
4.
5.

Republic act No. 8424

Tax Reform Act of 1997
National Internal Revenue Code of 1997
Tax Code of 1997
Comprehensive Tax Reform Program or CTRP

Affectivity of the Tax Code of 1997: January 1, 1998

B.1 OTHER BIR ISSUANCES
C. TERMS ON SALE OF REAL PROPERTY

LEVEL OF THE HIERARCHY

OF MARKET VALUE, P

FAIR MARKET VALUE

Price at which a willing seller
Is willing to sell and a buyer
Willing to sell and a buyer
Willing to buy, both being under
No abnormal pressure to sell or buy

P10, 000

ZONAL VALUE
Fair market values as determined
by the BIR commissioner
in accordance with Section
6(E) of the Tax Code

ASSESSORS VALUE
Fair market value as determined
by the City or Provincial
Assessor.

P8, 000

P4, 000

D.POWER OF THE BIR COMMISSIONER TO PRESCRIBE ZONAL VALUES

Basis of Power of the Commissioner-Sec.6 (E) of the Tax Code of 1997

E. CAPITAL ASSET
CAPITAL ASSET, as defined, is the property held by the tax payer, whether or not connected with his trade or
business, but does not include:
1. Stock in trade of the taxpayer
2. Other property of a kind which would properly be included in the inventory of the taxpayer if on hand at
the close of the taxable year.
3. Property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or
business.
4. Property use in trade or business, of a character which is subject to the allowance for depreciation
provided under the Tax Code
5. Real property used in trade or business of the tax payer
In short, ORDINARY ASSETS are those included in items No. 1 to 5

F. CAPITAL GAINS TAX ON SALE OF REAL PROPERTY

(ON CAPITAL ASSETS)
Capital Gain Tax- SIX PERCENT (6%) based on the gross selling price or current fair market value as
determined in accordance with Sec.6 (E) of the Tax Code, whichever is higher.
G. BASIS OF VALUATION FOR IMPROVEMENTS
(Under RAMO 1-2001, February 15, 2001)

6.11 Determine the value of improvements by using the formula shown below:
(a) Total Selling Price/ Consideration per deed of sale,
(land and improvement)
Less: Zonal value of land
Value of improvement
THE VALUE OF THE IMPROVEMENT ARRIVED AT UNDER THIS COMPUTATION SHALL
NOT BE LOWER THAN THE FAIR MARKET VALUE (FMV) APPEARING IN THE LATES

TAX DECLIRATION, COVERING THE SAID IMPROVEMENT, AT THE TIME OF THE

AFORESAID TRANSSACTION/TRANSFER.

(b) THE FMV PER LATEST TAX DECLARATION AT THE TIME OF THE SALE OR
DISPOSITION, DULY CERTIFIED BY THE CITY/MUNICIPAL ASSESSOR, SHALL BE
USED. NO ADJUSTMENTS SHALL BE ADDED ON THE SAID VALUE, PROVIDED NTHAT, THE
TAX DECLARATION BEARS THE UPGRADED FAIR MARKET VALUE OF THE SAID
PROPERTY PURSUANT TO SECTION 219 OF R. A. NO. 7160, OTHERWISE KNOWN AS THE
LOCAL GOVERNMENT CODE OF 1991 AND THE LAST PARAGRAPH OF THE, ASSESSMENT
REGULATIONS NO. 1-92 DATED OCTOBER 6, 1992.
IN CASE THE TAX DECLARATION BEING PRESENTED WAS ISSUED THREE (3) OR MORE
YEARS PRIOR TO THE DATE OF SALE OR DESPOSITION OF THE REAL PROPERTY, THE
SELLERY/TRANSPEROR SHALL BE REQUIRED TO SUBMIT A CERTIFICATION FROM THE
CITY/MUNICIPAL ASSESSOR WHETHER OR NOT THE SAME IS STILL THE LATEST TAX
DECLARATION COVERING THE SAID REAL PROPERTY, OTHERWISE, THE TAXPAYER
SHALL SECURE ITS LATEST TAX DECLARATION AND SHALL SUBMIT A COPY THEREFOR,
DULY CERTIFIED BY THE SAID ASSESSOR.
H. WHERE AND WHEN TO PAY CAPITAL GAINS TAX
1. GENERAL RULE
WHERE TO PAY-

In the BIR Revenue District Office (through the authorized agent bank
(AAB) WHERE THE PROPERTY IS LOCATED

WHEN TO PAY-

Within thirty (30) days from date of notarization of the deed of sale

2. EXCEPTION [ Amended by RR No. 5-2009-bac to where property is located]

Large Taxpayers [BIR Revenue Regulations No. 4-2008]
Provided, however, that in case where the sellers thereof is a large taxpayer, the venue for the filling of
the CGT return and payment of CGT as well as the DST Return and DST due thereon shall be with the
AAB of the concerned LTS Office where said large taxpayer-seller is registered.- WHERE THE ARGETAXPAYER SELLER is registered
I. BASIC PENATY FOR LATE FILING AND PAYMENT OF TAXES
PENALTY

25% Surcharge on base tax due

50% Surcharge in case of fraud or intent to evade tax

INTEREST

20% per annum based on basic tax due

COMPROMISE PENALTY -

Subject to type and amount of tax due

J. SALE BY CORPORATIONS OF CAPITAL ASSETS

For corporations, the sale, exchange or other disposition of real property, considered as capital assets, is subject
to the final capital gains tax of
SIX percent (6%)
based on the gross selling price or fair market value as determined in accordance with Sec. 6(E) of the Tax Code,
whichever is higher.
K. EXEMPTION FROM CAPITAL GAINS TAX ON SALE OF PRINCIPAL RESIDENCE

The sale of tour principal residence may be exempted from capita gains tax, subject to the following conditions:
1. Sale or disposition of principal residence
2. By natural person
3. Proceeds of which is fully utilized in acquiring or constructing a new principal residence within eighteen
(18) calendar months from the date of sale or disposition
4. The historical cost or adjusted basis of the real property sold or disposed shall be carried over to the new
principal residence built or acquired
5. The Commission shall have been duly notified by the taxpayer within thirty (30) days from the date of
sale or disposition
6. The said tax exemption can only be availed of ones every ten (10) years
7. Execution of Escrow Agreement
8. If there is no full utilization of the proceeds of sale or disposition, the portion of the gain presumed to
have been realized from the sale or disposition shall be subject to capital gains tax.
ESCROW AGREEMENT
ESCROW AGENT
AAB (Bank)
L. CERTIFICATE AUTHORIZING REGISTRATION (CAR)/TCL
After filing and payment of the capital gains tax, a certificate authorizing registration (CAR)/ TCL (Tax
Clearance) is issued by the BIR Commission or his authorized representative attesting that the transfer and
conveyance of land, buildings/improvements arising from the sea, barter or exchange have been reported and the
taxes due inclusive of the documentary stamps tax, have been fully paid. The CAR will then be submitted with the
corresponding Registry of Deeds.
M. EXTRAJUDICA FORECLOSURE OF CAPITAL ASSETS
INITIATED BY BANKS, FINANCE AND INSURANCE COMPANIES
N. CREDITABLE WITHHOLDING TAX ON SAE OF ORDINARY ASSETS (Or other than capital
assets)
In case of real property sold, other than capital assets, it will be subject to the following taxes:
CREDITABLE WITHHOLDING TAX (CWT)
(Under RR No. 6-2001, as amended by RR 12-2001 : September 2001)
(J) Gross selling price or total amount of consideration or its equivalent paid to the seller/ owner for
the sale, exchange or transfer of real property classified as ordinary asset - A creditable withholding tax based
on the gross selling price/ total amount of consideration or the fair market value determined in accordance with
Section 6(E) of the Code, whichever is higher, paid to the seller/ owner for the sale, transfer or exchange of real
property, other than capital asset, shall be imposed upon the withholding agent,/ buyer, in accordance with the
following schedule:
A. Where seller/ transfer is exempt from creditable
Withholding tax in accordance with Sec 2.57.5 of
These regulations

Exempt

B. Upon the following values of real property, where

the seller/ transferor is habitually engaged in the
real estate business:
With selling price of Five Hundred Thousand
Pesos (P500, 000.00) or less
With a selling price of more than Five Hundred

1.5%

Thousand Pesos (P500,000.00) but not more

than Two Million Pesos (P2,000,000.00)

3.0%

With a selling price of more than Two Million Pesos

(P2,000,000.00)

5.0%

C. Where the seller/ transferor is not habitually engaged

in the real estate business

6.0%

Registration with the HLURB or HUDCC shall be sufficient for a seller/ transferor to be considered as
habitually engaged in the real estate business. If the seller/transferor is not registered with the HLURB or
HUDCC, he/it may prove that he/it is engaged in the real estate business by offering other satisfactory evidence
(for example, he/it consummated during the preceding year at least six taxable real estate transactions,
regardless of amount).
Notwithstanding the foregoing, for purposes of these Regulations, banks shall not be considered as
habitually engaged in the real estate business.
Gross selling price shall mean the consideration stated in the sales document or the fair market value
determined in accordance with Section 6(E) of the Code, whichever is higher. In an exchange, the fair market
value of the property received in exchange shall be considered as the consideration.

O. CREDITABLE WITHHOLDING TAX INSTALLMENT SALES

(J) Gross selling price or total amount of consideration or its equivalent paid to the
seller/owner for the sale, exchange, or transfer of real property classified as ordinary asset.-

XXX

XXX

XXX

If the buyer is an individual not engaged in trade or business, the following rules shall
apply:

(i) If the sale is a sale of property on the installment plan (i.e., payments in the year of
sale do not exceed twenty five percent (25%) of the selling price), no withholding is required t9 be made
on the periodic installment payments. In such case, the applicable rate of tax based on the gross selling
price or fair market value of the property at the time of the execution of the contract to sell, whichever is
higher, shall be withheld on the last installment or installments immediately prior to such last installment,
if the last installment is not sufficient to cover the tax due, to be paid to the seller until the tax is fully
paid.
(ii)xxx
xxx
xxx

However, if the buyer is engaged in trade or business, whether a corporation or

otherwise, these rules shall apply:
(i) If the sale is a sale of property on the installment plan {i.e., payments in the year of
sale do not exceed twenty five percent (25%) of the selling price], the tax shall be deducted and withheld
by the buyer from every installment which tax shall be based on the ratio of actual collection of the
consideration against the agreed consideration appearing in the Contract to Sell applied to the gross
selling price or fair market value of the property at the time of the execution of the contract to Sell,
whichever is higher.

The term consideration refers to the selling price exclusive of interest. Interest earned as
an incident of installment payment, if any, shall be subject to the ordinary income tax rate.
(ii)xxx

xxx

xxx

In any case, no Certificate Authorizing Registration (CAR)/Tax Clearance Certificate

(TCL), shall be issued to the buyer unless the withholding tax due on the sale, transfer, or exchange of
real property has been fully paid.
For sale of property on the installment basis or deferred payment basis where the
Contract to Sell is always executed before the execution of the Deed of Sale, the said Contract to Sell
must be attached to the Deed of Absolute Sale upon completion of the payments and the duly notarized
original duplicate copy of both documents must be presented to the RDO having jurisdiction of the place
where the property is located for validation of the correctness of payment of all applicable taxes before
the issuance of CAR/TCL.
It is to be noted, that in case of sale of real property paid under installment payment or
deferred payment basis, the payment of the documentary stamp tax (DST) shall accrue upon the execution
of the Deed of Absolute Sale but the basis for the imposition thereof shall be the gross selling price or fair
market value of the property, whichever is higher, at the time of the execution of the Contract to Sell.
If upon completion of the payment of the purchase price of real property classified as
ordinary asset, but before the execution of the Deed of Sale, the buyer decides to assign his right over the
property to another person for a consideration, the assignment shall be considered a separate sale or real
property and, therefore, subject to the creditable/expanded withholding tax (EWT) or final
withholding of capital gains tax, as the case may be, which shall be withheld by the assignee of such
property based on the consideration per Deed of Assignment or the fair market value of such property at
the time of the assignment, whichever is higher, and to the DST imposed under Sec. 196 of the same
Code using the same basis.
It is to be clarified, however, that sale of interest in real property(real property purchased
on installment covered by Contract to Sell which was sold by the original buyer before it was fully paid)
shall be taxable on the part of the original buyer ( now seller) based on the realized gain thereon which is
measured by the difference between the agreed consideration and the amount actually paid by the said
original buyer.
xxx

xxx

xxx

P. TRANSFER OR ASSIGNMENT OF RIGHTS OF ORDINARY ASSET

( CAPITAL GAINS TAX AND DOCUMENTARY STAMP TAX)
(Revenue Regulation No. 17-2003)
If upon completion of the payment of the purchase price of real property classified as ordinary
asset, but before the execution of the Deed of Sale, the buyer decides to assign his right over the property
to another person for a consideration, the assignment shall be considered a separate sale or real property
and, therefore, subject to the creditable/expanded withholding tax (EWT) or final withholding or
capital gains tax, as the case may be, which shall be withheld by the assignee of such property based on
the consideration per Deed of Assignment or the fair market value of such property at the time of
assignment, whichever is higher, and to the DST imposed under Sec. 196 of the same Code using the
same basis.
It is to be clarified, however, that sale of interest in real property (real property purchased on
installment covered by Contract to Sell which was sold by the original buyer before it was fully paid)
shall be taxable on the part of the original buyer (now seller) based on the realized gain thereon which is

measured by the difference between the agreed consideration and the amount actually paid by the said
original buyer.

Q. WITHHOLDING TAX ON THE OTHER TRANSACTIONS

1. On Lease of Real Properties

FIVE PERCENT (5%)

2. On Real Estate Brokers Commission

TEN PERCENT (10%) Up to

FIFTEEN PERCENT (15%)
(When cumulative income for
the year reaches P720,000.00)

R. WHEN TO PAY WITHHOLDING TAX

Within the TEN (10) DAYS

after the end of each month

S. VALUE ADDED TAX (VAT)

General Rule- There shall be levied, assessed and collected on every sale, barter or exchange of
real properties, value added tax of twelve percent (12%) of the gross selling price of the property sold,
bartered or exchanged and shall include real properties

held primarily for sale to customers or

held for lease in the ordinary course of trade or business.

SECTION 2. VAT on Sale of Goods or Properties. - Sec. 4.106-1 of RR no. 16-2005 is

hereby amended to read as follows:

SEC. 4.106-1. VAT on Sale of Goods or Properties. - VAT is imposed on every sale, barter or
exchange, or transactions deemed sale of taxable goods or properties at the rate of twelve percent (12%)
(starting February 1, 2006) of the gross selling price or gross value in money of the goods or properties
sold, bartered, or exchanged, or deemed sold in the Philippines.
Section 3. Sale of Real Properties. - Sec. 4. 106-3 of RR No. 16-2005 is hereby amended to read
as follows:
`
SEC. 4.106-3.
Sale of Real Properties. - Sale of real properties held primarily for sale to
customers or held for lease in the ordinary course of trade or business of the seller shall be subject to
VAT.
Sale of residential lot with gross selling price exceeding P1, 500,000.00, residential house and lot or other
residential dwelling with gross selling price exceeding P2, 500,000.00, where the instrument of sale
(whether the instrument is nominated as a deed of absolute sale, deed of conditional sale or otherwise) is
executed on after Nov. 1, 2005, shall be subject to ten present (10%) output VAT, and starting Feb. 1,
2006, to twelve percent (12%) output VAT.
Installment sale of residential house and lot or other residential dwellings with gross selling price
exceeding P1,000,000,00 where the instrument of sale (whether the instrument is nominated as a deed of

conditional sales or otherwise) was executed prior to November 1, 2005, shall be subject to ten percent
(10) output VAT.
Sale of real property on installment means sale of real property by real estate dealer, the initial payments
of which in the year of sale do not exceed twenty-five (25%) of the gross selling price.
In case of installment sale, the seller shall be subject to output VAT on the installment payments received,
including the interests penalties for late payment, actually and / or constructively receive, subject to the
provisions of Sec.4.106-4 hereof. Correspondingly, the buyer of the property can claim the input tax in
the same period as the seller recognized the output tax.
Installment payments, including interests and penalties, actually and/or constructively received starting
February 1, 2006 shall be subject to twelve percent (12%) output VAT.
Sale of real property by a real estate dealer on a deferred payments basis not on the installment plan
means sale of real property, the initial payments of which in the year of sale exceed twenty-five percent
(25%) of the gross selling price.

Initial payments means payment or payments which the seller receives before or upon execution of the
instrument of sale and payments which he expects or is scheduled to receive in cash or property (other
than evidence of indebtedness of the purchaser) during the taxable year when the sale or disposition of the
real property was made. It covers any down payment made and includes all payments actually or
constructively received during the year of sale, the aggregate of which determines the limit set by law.
Initial payments do not include the amount of mortgage on the real property sold except when such
mortgage exceeds the cost or other basis of the property to the seller, in which case the excess shall be
considered part of the initial payments.
Also excluded from the initial payments are notes or other evidence of indebtedness issued by the
purchaser to the seller at the time of the sale.

In the case of the real properties on a deferred-payment basis not on the installment plan, the transaction
shall be treated as cash sale which makes the entire selling price taxable in the month of the sale. Output
tax shall be recognized by the the seller and input tax shall accrue to the buyer at the time of the execution
of the instrument of sale.
Payments subsequent to initial payments shall no longer be subject to output VAT, in the case of sale
on a deferred payments basis.
Pre- Selling of real estate properties by real estate dealers shall no longer be subject to output VAT, in
accordance
SECTION 9. VAT on the Sale of Services and Use or Lease of properties- Sec. 4.108-1 of RR No.162005 is hereby amended to read as follows:

SEC.4. 108-1. VAT on the Sale of Services and Use or Lease of properties-Sale or exchange of services,
as well as the use or lease of properties, as defines in Sec. 108 (A) of the Tax Code shall be subject to Vat,
equivalent to twelve percent (12%) of the gross receipts (excluding VAT) starting February 1, 2006.
xxx

xxx

xxx

SECTION 14. VAT- Exempt Transactions. Sec 4.109-1(B) (1) of RR No. 16-2005 is hereby amended
to read as follows:

(p) The following sales of real properties are exempt from VAT, namely:
(1) Sale of real properties not primarily held for sale to customers or held for lease in the ordinary course
of trade or business.
However , even if the real property is not primarily held for sale to customer or held for lease in the
ordinary course of trade or business but the same is used in the trade or business of the seller , the seller
thereof shall be subject to Vat being a transaction incidental to the taxpayers main business.
xxx

xxx

xxx

(q).
The term residential units shall refer to apartments and houses & lots used for residential purposes, and
buildings or parts or units thereof used solely as dwelling places (e.g, dormitories , rooms and bed
spaces) except motels, motel rooms, hotels, hotel rooms, lodging houses, inns and pension houses.
The term unit shall mean an apartment unit in the case of apartments, house in the case of residential
houses; per person in the case of dormitories, boarding houses and bed spaces; and per room in case of
room for rent.
xxx

xxx

xxx

(x) Sale or lease of goods or properties or the performance of services other than the transactions
mentioned in the preceding, the gross annual sales and/or receipts do not exceed the amount of One
Million Five Hundred thousand pesos (1,500,000.00). Provided, that not later than January 31, 2009 and
every three (3) years thereafter, the amount of P 1,500,000.00 shall be adjusted to its present value using
the Consumer Price Index. as published by the NSO.
For purposes of the threshold of P1, 500,000.00, the husband and wife shall be considered separate
taxpayers. However, the aggregation rule for each taxpayer shall apply, for instance, if professional, aside
from the practice of his profession, also derives revenue from other lines of business which are otherwise
subject to VAT, the same shall be combined for purposes of determining whether the threshold has been
exceeded. Thus, the VAT-exempt sale shall not be included in determining the threshold.

TITLE III
ESTATE AND DONORS TAXAES
CHAPTER I- ESTATE TAX
Section 84. Rates of Estate Tax .There shall be levied, assessed, collected and paid upon the transfer of
the net estate as determined in accordance with Section 85 and 86 of every decedent, whether resident or
nonresident of the Philippines, a tax based on the value of such net estate, as computed in accordance with
the following schedule:

Over

But Not
Over

P200,000

The tax shall

be

Exempt

Plus

Of the Excess
Over

P200,000

550.000

500,000

2,000,000

2,000,000

5%

P 200,000

P 15,000

8%

500,000

5,000,000

135,000

11%

2,000,000

5,000,000

10,000,000

465,000

15%

5,000,000

10,000,000

And Over

1,215,000

20%

10,000,000

Section 85. Gross Estate.- the value of the gross estate of the decedent shall be determined by including
the value at the time of his death of all property, real or personal, tangible or intangible, whether situated:
Provided, however, that in the case of the a nonresident decedent who at the time of his death was not a
citizen of the Philippines, only that part of the entire gross estate which is situated in the Philippines shall
be included in his taxable estate.

Section 86. Computation of Net Estate- For the purpose of the tax imposed in this Chapter, the value of
the net estate shall be determined:

(A) Deductions allowed to the Estate of Citizen or a Resident-In the case of a citizen or resident
of the Philippines, by deducting from the value of the gross estate(1) Expenses, Losses, Indebtedness, and taxes- Such amounts(a) For actual funeral expenses or in an amount equal to five percent (5%) of the gross
estate, whichever is lower, but in no case to exceed Two hundred thousand pesos (P
200,000);
(b) For Judicial expenses of the testamentary or intestate proceedings;
(c) For claims against the estate: Provided, That at the time the indebtedness was
incurred the debt instrument was duly notarized and, if the loan was contracted within
three (3) years before the death of the decedent, the administrator or executor shall
submit a statement showing the disposition of the proceeds of the loan.;
(d) For claims of the deceased against insolvent persons where the value of the
decedentss interest therein is included in the value of the gross estate; and
(e) For unpaid mortgage upon, or any indebtedness in respect to, property where the
value of decedents interest therein, undiminished by such mortgage or indebtedness, is
included in the value of the gross estate but not including any income tax upon income
received after the death of the decedent, or property taxes not accrued before his death, or
any estate tax. The deduction herein allowed in the case of claims against the estate,
unpaid mortgages or any indebtedness shall, when founded upon a promised or
agreement, be limited to the extent that they were contracted bona fide and for an
adequate and full consideration in money or moneys worth. There shall be deducted
losses incurred during the settlement of the estate arising fires, storms, shipwreck , or
other casualties, or from robbery, theft or embezzlement, when such losses are not
compensated for by insurance or otherwise , and if at the time of the filing of the return
such losses have not been claimed as a deduction for the income tax return, and provided
that such losses were incurred not later than the last day for the payment of the estate tax
as prescribed in Subsection (A) of Section 91.

xxxxx
(3) Transfers for Public Use- The amount of all the bequests, legacies, devices or
transfers to or for the use of the Government of the Public of the Philippines, or any
political subdivision thereof, for exclusively public purposes.
(4) The Family Home. - An amount equivalent to the current fair market value of the
decedents family home: Provided, however, That if the said current fair market value
exceeds One million pesos (P 1, 000,000.00), the excess shall be subject to estate tax. As
a sine qua non condition for the exemption or deduction, said family home must have
been the decedents family home as certified by the barangay captain of the locality.
(5) Standard Deduction An amount equivalent to One million pesos
(P 1,000,000.00).
(6) Medical Expenses Medical Expenses incurred by by the decedent within (1)
Year prior to his death which shall be duly substantiated with receipts:
Provided, That in no case shall the deductible medical expenses exceed FIVE
HUNDRED THOUSAND PESOS (P 500,000).
(7) Amount Received by Heirs Under Republic Act No. 4917.- Any amount received by
the heirs from the decedent- employee as a consequence of the death of the decedentemployee in accordance with Republic Act No. 4917: Provided , That such amount is
included in the gross estate of the decedent.
(C ) Share in the Conjugal Property.-the net share of the surviving spouse in the
conjugal partnership property as diminished by the obligations property chargeable to
such property shall, for the purpose of this Section, be deducted from the the net estate of
the decedent.
(D) Miscellaneous Provisions.- No Deduction shall be allowed in the case of a
nonresident not a citizen of the Philippines, unless the executor, administrator, or anyone
of the heirs , as the case may be, includes in the return required to be field under Section
90 the value at the time of his death of that part of the gross estate of the nonresident not
situated in the Philippines.

Section 88. Determination of the Value of the Estate

(A) Usufruct To determine the value of the right of usufruct, use or habitation, as well
as that of annuity, there shall be taken into account the probable life of the beneficiary
accordance with the latest Basic Standard Mortality Table, to be approved by the
Secretary of Finance, upon recommendation of the Insurance Commissioner.
(B) Properties.- The estate shall be appraised at its fair market value as of the time of
death. However, the appraised value of real property as of the death shall be, whichever is
higher of(1) The fair market value as determined by the Commissioner, or
(2) The fair market value as shown in the schedule of values fixed by the
Provincial and City Assessors.

Section 89. Notice of Death to be Field- In all cases of transfers subject to tax, or where, though exempt from tax,
the gross value of the estate exceeds Twenty thousand pesos (P20,000), the executor, administrator or any of any
of the legal heirs, as the case may be, within two (2) months after the decedents death, or within a like period
after qualifying as such executor or administrator, shall give a written thereof to the Commissioner.
Section 90. Estate Tax Return-

(A) Requirements- In all cases of transfers subject to the tax imposed herein, or where , though exempt
from tax, the gross value of the estate exceeds Two hundred thousand pesos ( P200,000), or regardless of
the gross value of the estate, where the said estate consist of registered or registrable property such as real
property, motor vehicle, shares of stock or order similar property for which a clearance from the Bureau
of internal revenue is required as a condition precedent for the transfer of ownership thereof in the name
of the transferee, the executor, or the administrator, or any of the legal heirs, as the case may be, shall file
a return under oath in duplicate, setting forth:
xxxxx
Provided, however, That estate tax returns showing a gross value exceeding Two million pesos
(2,000,000.00) shall be supported with a statement duly certified to by a Certified Public Accountant
containing the following:
xxxxx
(B) Time for filing-For the purpose of determining the tax provided for in Section84 of this Code, the
estate tax return required under the preceding Subsection (A) shall be field within six (6) months from the
decedents death.
xxxxx
(C) Extension of Time- When the Commissioner shall have authority to grant, in meritorious
Cases, a reasonable extension not exceeding thirty (30) days for filing the return.

(D) Place of Filing.- Except in cases where the Commissioner otherwise permits, the return required
under Subsection ( A ) shall be filed with an authorized agent bank , or Revenue District Officer,
Collection Officer, or duly authorized Treasurer of the city or municipality in which the Decedent was
domiciled at the time of his death or if there be no legal residence in the Philippines, with the office of the
Commissioner.

Section 91. Payment of Tax.(A) Time of Payment.- The Estate Tax imposed by Section 84 shall be paid at the time the return
is filed by the executor, administrator or the heirs.
(B) Extension of Time. - When the Commissioner finds that the payment on the due date of the estate tax
or of any part thereof would impose undue hardship upon the estate or any of the heirs, he may extend the
time for payment of such tax or any part thereof not to exceed five (5) years, in case the estate is settled
through the the courts, or two (2) years in case the estate is settled extra judicially. In such case, the
amount in respect of which the extension is granted shall be paid on or before the date of the aspiration of
the period of the extension, and the running of the Statute of Limitations for assessment as provided in
Section 203 of this Code shall be suspended for the period of any such extension. Where the taxes are
assessed by reason of negligence, intentional disregard of rules and regulations, or fraud on the part of the
taxpayer, no extension will be granted by the Commissioner.
If an extension is granted, the Commissioner may require the executor, or administrator, or beneficiary, as
the case may be, to furnish a bond in such amount, not exceeding double the amount of the tax and with
such sureties as the Commissioner deems necessary, conditioned upon the payment of the said tax in
accordance with the terms of the extension.

CHAPTER II- DONORS TAX

Section 98. Imposition of Tax.(A) There shall be levied , assessed , collected and paid upon the transfer by any person , resident or
nonresident, of the property by gift , a tax , computed as provided in Section 99.
(B) The tax shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect,
and whether the property is real or personal, tangible or intangible.
Section 99. Rates of tax Payable by Donor.(A) In General.- The tax for each calendar year shall be computed on the basis of the totalnet gifts made
during the calendar year in accordance with the following schedule:
If the net gift is:
Over

But Not
Over

The Tax shall

be

P 100,000
P100, 000

200,000

200,000

500,000

500,000

Plus

Of the Excess
over

Exempt
2%

P 100,000

2,000

4%

200,000

1,000,000

14,000

6%

500,000

1,000,000

3,000,000

44,000

8%

1,000,000

3,000,000

5,000,000

204,000

10%

3,000,000

5,000,000

10,000,000

404,000

12%

5,000,000

1,004,000

15%

10,000,000

10,000,000

---

(B) Tax Payable by Donor if Donee is a Stranger- When the donee or beneficiary is stranger, the tax payabe by
the donor shall be thirty percent (30%) of the net gifts. For the purpose of this tax, a stranger, is a person who is
not a:

(1) Brother, sister (whether by whole or half-blood), spouse, ancestor and lineal descendant; or
(2) Relative by consanguinity in the collateral line within the fourth degree of relationship.
(C ) Any contribution in cash or in kind to any candidate , political party or coalition of parties for campaign
purposes shall be governed by the Election Code, as amended.

x x x xx x

Section 102. Valuation of Gifts Made in Property.- If the gift is made in property , the fair market value thereof
at the time of the gift shall be considered the amount of the gift. In case of real property, the provisions of Section
88 (B) shall apply to the valuation thereof.

(B) Time and Place of Filing and Payment.- The return of the donor required in this Section shall be filled
within thirty (30) days after the date the gift is made and the tax due thereon shall be paid at the time of filling.
Except in cases where the Commissioner otherwise permits the return shall be filed and the tax paid to an
authorized agent bank , the Revenue District Officer, Revenue Collection Officer or duly authorized Treasurer of
the city or municipality where the donor was domiciled at the time of the transfer
,or if case of gifts made by a nonresident, the return may be filed with the Philippine Embassy or Consulate n the
country where he is domiciled at the time of the transfer , or directly with the Office of the Commissioner.

LOCAL GOVERNMENT ASSESSMENT

AND TAXATION OF REAL PROPERTY
( Local government code of 1991,RA.7160)

A. FUNDAMENTAL PRINCIPLES OF TAXATION

Appraisal,asses,levy and collection of real property for taxation purpose shall be governed by the foowing
fundamental principles:
1. Real property shall be appraised at its current and fair marked value;
2. Real property shal be classified for assessment purposes on the basis of its acyual use;
3. Real property shall be assessed on the basis of a uniform classification within each LGU;
4. The appraisal,assessment,levy,and collection of real property tax shall not be let to any the private
person;
5. The appraisal and assessment of real property shall be equitable.

B. EXEMPTION FROM REAL PROPERTY TAX

1. Real property owned by the republic of the Philippines or any of its political subdivision except when
the beneficial use thereof has been granted to taxable person;
2. Charitable institution,churches,parsonages,convents apputenants thereto.mosque,and all lands.buildings and
improvements actually.directy and exclusively used for charitable,religious or educational purposes;
3. Non-profit or religious cemeteries or burial grounds;
4. machineries and equipment that are actually,directly and exclusivey used by local water
district and government owned or controlled corporations engaged in the supplt of water and / or
generation of electric power;
5. All real property owned by dully registered cooperatives as provided for under R.A. No.6938 and
6. machineries and equipments used for pollution and environmental protection.

C. DIFINITION OF TERMS
1. Fair market value is the highes price in terms of money which a property can command if exposed for sale in
the open market,allowing a reasonable time to find a buyer with knowledge of the use the property is capable or
adopted to.Fair market value has also been defined as the amount which a purchaser,willing but not compelled to
buy, would p[ay an owner of the property, and the latter willing but not compelled to sell, would accept as the
consideration or price thereof.
2.Assessment Level- is a percentage of the fair market value at which the assessed value is set.

3. Tax Rate- is a percentage of the assessed value at which the property tax is i imposed

XIII- Real Property Laws & Taxation- ATM CRESAR 2011/17

4.Assessed value- is the fair market value multiplied by assessed level and is synonymous to taxable
value.
5. Actual Use- refer to the purpose for which the propprty is principally or predominantly
utilized by the person on possession thereof.
D. AMOUNT OF REALTY TAX ( BASIC )
1.In provides
2.In cities or, municipalities

- not exceeding 1% of assessed value

- not exceeding 2% of assessed value within Metro Manila

E. SPECIAL LEVIES
1. Special Education Fund Tax (SEF)- a special levy of one percent (1%) of the assessed value is imposed on real
property, in addition to the basic real property tax.
2.On Idle Lands A province or city, or a municipality within the Metropolitan Manila Area, may levy and
assessed value and is imposed on:
A.. Agricultural lands, more than one (1) hectare in area,suitable for cultivation,dairying inland
dairying, inland fishery and other agricultural uses one-half (1/2) of which remain
uncultivated or unimproved by the owner or owner thereof.
B. Agricultural lands planted to permanent orpernnial crops with at least fifty (50)
trees to a hectare shall not be considered idle lands, including lands actually used for grazing
purposes.
C. Lands,other than agricultural more than 1,000 square meters in area,one half (1/2)
of which remain unutilized or unimproved by the owner or owners thereof.
Regardless of land area, residential lots in subdivisions duly approved by proper authorities,
the ownership of which has been transferred to individual owners,who shall be liable for
for the additional tax; provided,however,that individual lots of such subdivisions,
the ownership of which has not been transferred to the buyer shall be considered as part of
subdivision, and shall be subject to the additional tax payable by subdivision owner or
operator.(Section237,LGC)
3. The special levy on idle lands does not apply to landowners who are unable to improve,
utilize or cultivate their lands due to any of the following causes;
A. Adverse peace and order condition in the place where the lands is situated;
B. Financial losses of the owner due to fire,flood,typoon,earthquake and other causes of similar nature;
C. Existing court litigation involving the land subject to tax;
D. Unforable physical factors such as rocky nature of yhe ground or uneven topography in the use of
agricultural land which land render the aland unsuitable for cultivation.
4. Special Levy by local Government Units- On lands comprised within its territorial
jurisdiction specially benefited by public works projects or improvements funded by the

XII- Real Property Laws & Taxation- ATM CRESAR2011/18

Local government unit; provided,the special levy shall not exceed sixty percent (60) of the actual cost of such
project and improvements,including the cost of aquiring land and such other real property,provided, special levy
shall not aply to lands exempt from basic real property tax and the reminder of the landportions of which have
been donated to the local government unit concerned ffor the constraction of such projects.[ Number of annual
installments to pay the special levy, not ess than 5 years or more than 10 years]
[Sec.240,241,LGC]

G. ASSESSMENT LEVELS FOR LAND

The assessment levels to be applied to the fair maret value of rea property to determine its
assessed value shal be fixed by ordinances of the sangguniang panlalawigan,sangguniang
panglungsod or sangguniang bayan of a municipality within Metro manila Area, at the rates not
exceeding the following; ( Sec. 218,LGTC of 1991 )

CLASSIFICATION

ASSESSMENT

local Water District

10%

Govt.owned or controlled corporations

engaged in the supply and distribution of
water and / or generation and administration
of electric power

10%

Scientific. Cultural, Hospital

15%

Residential

20%

Timber

20%

Agricultural

40%

Commercial, Industrial, Mineral

50%

H. ASSESSMENT LEVELS FOR IMPROVEMENT

FMV over

Not Over

175,00
300,000
500,000
750.000
2,000,000
5,000,000

175,000
300,000
500,000
750,000
1,000,000
5,000,000
10,000,000

10,000,000

Rest

Com/ lnd

Agr

Timber

0%
10%
20%
25%
30%
40%
50%

0%
30%
35%
40%
50%
70%
75%

0%
25%
30%
35%
40%
50%
50%

0%
45%
50%
55%
60%
70%
70%

60%

80%

50%

70%

XII-Real Property Laws & Taxation- ATM CRESAR 2011/19

I. ASSESSMENT WHEN CLASSIFACATION CONFLICT WITH USE:

A. Land is in residential area,building is commercial

B. Land is in commercial area, buiding is residential
C. Land is in residential / commercial area, building is commercial
D. Land is in mixed residential/ commercial area, building is residential
E. Land is in mixed residential/ commercial area, and is vacant
F. Land is in mixed residential/ commercial area, and building
is used for mixed residential/ commercial purpose

FORMULAS for Real Estate Taxes

FMV x AL= AV
Fair Market Value X Assessment Level = Assessed Value
AV x TR = Tax Due
Assessed Value x Tax Rate = Tax Due

J. DECLRATION OF PROPERTY FOR ASSESSMENT

1. By the owner must file a sworn declaration of value of the property once every three(3)
years ,during the period from January 1 to 30 and every three(3) YEARS thereafter.
2. By the person acquiring real property or making improvement thereon- must file a sworn
declaration of the true value of the property within sixty (60) days after the acquisition of the
property or upon completion or occupancy of the improvement, whichever comes ealier..
3. By the assessor- if the owner refuse or fails to mae such declaration within the prescribed
time as required, the assessor may amake a declaration of the true of the property.

K. GENERAL REVISION OF ASESSMENT AND PROPERTY CLASIFICATION

The provincial, city or municipal assessor shall undertake a general revision of real property
assessments every three(3)years.

L. DATE OF EFFECTIVITY OF ASSESSMENT OR REASSESSMENT

General Rule- All assessment and reassessments made after January 1 of any years shall take effect on
January 1 of the next year.

XII-Read Property Laws & Taxation ATM CREASAR 2011/20

OTHER EFFECTIVE DATES Reassesssments whch will take effect at the beginning of the quarter
following the reassessment which shall be made within ninety(90) days date any such causes occurred
due to:
A. A partial or toatal destruction of real property
B. A major change in its actual use
D. Gross illegality of the assessments or
E. Any other abnormal cause

M. APPEALS FROM ASSESSMENT

1. Valuation of assessor- may be appealed to the llical board of assessment appeals
within sixty(60) days counted from receipt of the notice of asessmen.
Local Board Asessment appeals is composed of:
A. Registrar of deeds as Chairman,
B. City or Provincial Prosecutor and
C. City or Provincial Engineer as member thereof.
2. Decision of Local Board of Assessment Appeals- maybe appealed to the central Board
of assessment Appeals, within thirty (30) days from receipt of the decision.
The central board of assessment Appeals is composed of achairman and two(2) members to be appointmented
by the President,where decision shall be final.
N.NOTIFICATION OF TRANSFER OF REAL PROPERTY OWNERSHIP
Person who transper the ownership of real property to another have to notify the assessor of such
transfer within sixty (60) days from the date of such transfer.
O. COLLECTION OF REAL PROPERTY TAX ( basic and SEF)
Date of Accrual of tax January 1 of each year
payment of real Property taxes in installments- on four (4) equal installments without interest
payable on or before:

1. March 31
2. June 30
3. September 30
4. December 31
DISCOUNT- NOT TO EXCEED TWENTY PERCENT(20) Of the annual tax due.
Interest on unpaid Real Property tax- two percent(2%) per month on the unpaid amount or a fraction
thereof but not to exceed thirty-six(36) months

XII- Real Property Law & Taxation- ATM CREsar 2011/21

Q. PAYMENTS UNDER PROTEST

Required:
1. Payments first of tax
2. Annotation of paid under protest
3. Protest in writing filed within 30 days from payment of tax to treasurer
4. decision by treasure to be decided within sixty (60) days from receipt

R. PERIODS WITHIN WHICH TO COLLECT REAL PROPERTY TAXES

The basic real property tax and other taxe herein shall be collected within five(5) years from the
date they become due. No action for the collection of the tax, whether administrative or judicial,
shall be instituted after the experiation of such period.
In case of fraud or untent to evade tax payment- within ten (10) years from discovery of such fraud or intent to
evade payment

S. CONDONATION OR REDUCTION OF REAL PROPERTY TAX AND INTEREST

1. local governments,though the sanggunian concerned,by ordinance passed prior to the first(1 st)
day of January of any year and upon recommendation of the Local Disaster Coordinating council,
may condone,wholly or partially, the taxes and interest for the succeeding year or years in case of:

A. General failure of crops

B . Substanial decrease in the price of agricultural or agribased products, or
C. Calamity
2. The president of the Philipines- when public interest so requires

T. ASSESSMENT OF PROPERTY SUBJECT TO BAC TAXES

The Property declared for the first time shall be assesst for taxes for taxes for the period dring which it
would have been liable but in no case for more than ten(10) years prior to the date of initial
assessment based on the applicable schedule of values in force during the corresponding period.
Maximum period for assessment of taxes- ten (10) years prior to initial assessment.
U. SALE OF PROPERTY DUE TO DELINQUENT TAXES
In case of unpaid or delinquent taxes, the local Government shall cause I notice of delinquency and
and other thereafter the property sold at public auction but with the right of the delinquent owner to
redeem the property within one (1) year from the date of sale and subject to the payment of the
amount of delinquent tax,including the interest thereon and the expenses of sale from the date of
delinquency to the date of sale, plus interest of not more than two percent(2%) per month on the
purchase price from the date of ale to the date of redemption (Art.254,260,261,LGC1991)

XII-Real Property Laws & Taxation ATM cresar 2011/2

V. PROCEED DISTRIBUTION AND ALLCATION

Proceeds Distribution and allocation
A. Basic real Proprty Tax
A. Provincial Collection
Province
Municipality
Barangays
-

35%
40%
25%

B. CITY Collection
Share of city
70%
Share of barangay
30% to be divided as follows:
Barangay where Property is located
- 50%
Other component barangay in city
- 50% to be divided equally

C. Municipal Collection within Metro manila

Share of MMDA
Share of Barangays

- 35%
- 30%

Barangay where property is located

Other component barangays in city

- 50%
- 50% to be divided equally

B.SEF( Special Education Fund)

- Local school boards

C. Idle Land Tax

- General Fund of Province or City where the Land

is located [ if within Municipality in MM, equal
share between MMDA and Municipality]

D. Special Levy

General fund of the local government unit

which financed such public works,projects or improvements

SECTION 135. TAX ON TRANSFER OF REA PROPERTY OWNERSHIP

(a) The province may impose a tax on sale, donation,barter,or on any other mode of
transferring ownership or title of real property at the rate of not more than fifty percent
(50%) of the one percent (1%) of the total consideration involved in the acquisition of
the property or fair market value in case the monetary consideration involved in the
transfer is not substantial whichever is higher, The sale, transfer or other disposition
of real property pursuant to R.A. No. 6657 shall be exempt from this tax.

(b) For the purpose,the register of Deeds of the province concerned shall, before registering
any deed,require the presentation of the evidence of payment of this tax.The provincial
assessor shall likewise make the same requirements before cancelling an old tax
declaration and issuing a new one in plce thereif, notaries public shall furnish the

XIII- Real Property laws & Taxation- ATM CRESAR 2011/23

Provincial treasure with a copy af any deed transferring ownership or title to any real
property within thirty (30) days from the of notarization.
It shall be the duty of the seller,donor,transferor,executor or administrator to pay the tax herein
imposed within sixty (60) days from the date of the execution of the deed or from the date of the decedents death.

XIII-Real Property Laws & Taxation ATM CRESAR 2011/24

XI
OTHER RELATED SUBJECTS
BASIC PRINCIPLES
OF REAL ESTATE APPRAISAL

APPAISAL

.* Is a supportable or defensible estimate of value as a particular point in time.

* An act or process of estimating value
* An estimate expressed as a single peso amount, of the scarcity and place, assuming a specific use

TYPE OF APPRAISAL
1. Oral report
2. letter Reprt
3. Narrative Report

4. Form Report

PURPOSE OF APPRAISAL
1. Sale or purchase
2. Mortgage Loans/ Lending
3. Insurance
4. Tax Assessment
5. Eminent Domain ( condemnation )
6. Property Disputes
7. Inheritance/ partitioning of estate
8. Option- rights to renew/ to buy
9. Urban renewal
10. Corporate Realty- mergers, etc.
11. Foreclosure
12. Other uses

BASIC PRINCIPLES OF PROPERTY VALUATION

The basic principles which are vital to a appraisers opinion of value, and which are mainly concerning
economic and social charges; are:

1. SUPPLY AND DEMAND

Scarcity Influences Supply

Desire Influences Demand
Desire is Effective with Purchasing Power.
2. CHANGE
Change is ever present
Change is fundamentally the law of cause and effect
3. SUBSTITUTION
The value of replaceable property tends to be indicated by the value of an equally
desirable substitute property. the cost of producing usually sets the upper limit or value.
4. HIGHEST AND BEST USE
Its is the use which at the time of appraisal is most likely to produce the greatest net return.
maximum land value is attained in proportion to the equilibrium(balance) in the amount
of the four agents in production.
5. SURPLUS PRODUCTIVITY(BALANCE)
Agents in production are labor,capital,coordination,and land- which has last caim.
Exces results in over improvement,deficiency in under improvement.
6. INCREASING AND DECREASING RETURNS

The application of larger and larger amounts of the agents in production wil produce greater and greater net
income( increasing returns) up to to a point ( surplus productivity).
It arise from the law of supply and demand, and affirms that the greater the amount of a commodity offered for
sale in the market, the lower wil be the price paid for it.
7. CONTRIBUTION
Its application is basic to any feasibility syudy or a remodeling or modernization program
Its is the principle of increasing and decreasing return applied to a portion of an improvement.
8. COMPETITION
It arises from profits, profits create competition. excess profit breed ruinous competition.
9. COMFIRMITY
Highest and best usually conforms to essential and permissible land uses.
zoning regulations and private restrictions affirm the value of conformity.
An over improvement or under reflects lack of conformity between the
property and its environment. conformity is comprised of reasonable degree of social and
economic homogeneity.
10. ANTICIPATION
Value is the worth of al present and future benefits arising from ownership and use of real property
The valuable is not established by what is told for in the past nor the cost to create it.
Recent sales of comparable properties indicate the attitudes of informed buyers and investors
11. REGRESSION AND PROGRESSION
FACTORS THAT CREATE VALUE: FACTORS THAT INFLUENCE VALUE
1. Utility
2. Scarcity
3. Desire
4. Effective Purchasing Power
5. Social ideals and standards
6.Economic Conditions
7. Government controls/ Regulations
8.Environmental conditions

DEPRECIATION
1. Physical deterioration
2. Functional Obsolescene
3. Economic Obsolescene

THE APPOACHES TO VALUE

* Market Data

- Principle of substitution

* Cost Approach

- Reproduction / Subtitution

* Income Approach

- Anticipation

1. THE MARET DATA APPROACH

Is primarily based on the principle of substitution which implies that no prudent purchaser will pay more than
what it wil cost him to acquire an equally desirable substitute property.

It is a comparison process which produces an estimate of value of a property by comparing it with similar
properties of the same type and class which have been sold.
Recently or are currently being offered for sae in the same or comparable areas.

The process involved judgmennt concerning similarity with respect to the value factors such as location,time,
construction,age, and condition,layout and equipments. When appraising vacant land alone,common alue factors
are time,location.corner influence,size and shape, and other physical attributes.

Site Location and Map Reading CPE 2010

4.

2.THE COST APPROACH

likewise based on the principle of substitution,is the summation of cost new existing improvement less accured
depreciation plus the vaue of the and estimated by the market data approach.

Cost new may be reproduction or replacement,depreciation may be straight-ine method, or observed condition
method considering the physical and functional and inadequacies and economic obsolescence,if existing..The cost
per square meter,unit in place, or quantity tae off may be used to estimate the cost new.

3. THE INCOME APPROACH

Based on the principle of anticipation,is a capitalization process. It generally requires an estimate of the actual or
stabilized gross income less provisions for vacancy and bad debts, operating expenses such as building
insurance,rea estate taxes, repairs and maintenance, and administrative charges.

The erstwhile capitilazation process adapted is the residual technique such as property residual,building residual,
or land residual. In the property residual, the net income before provision for depreciation ( or recapture ) (NIBR)
is capitalized into vaue by adapting an overall rate abstracted from the market.

[Direct Capitalization]

GROSS INCOME MUTIPLIER [GIM]

Site Location and Map Reading CPE 2010

5.

Value of Property = Annual Gross Income x GIM

PROCEDURE

Research comparable Property

Research comparable property on annual gross income and selling price

GROSS INCOME MUTIPLIER IS

GIM= Sale price of comparable property

Annual Gross Income of Comparable

= P 7,000,000 = 7
P 1,000,000

GIM = 7

Problem on GIM
A property has an annual gross income of 1,200,000.00. In his market study, an investor found that a comparable
property within an annual gross income of P 1 Million was recently sold for P6 Million.

On the basis of the gross income multiplier indicated by the comparable property, at how much should he buy the
property?

SOLUTION:
Gross Income Mutiplier

= Selling price of comparable property

Annual Gross Income of Comparable

= P6M
P1M
GIM

= 6

Value

= Annual net income of subject x GIM

= P 1,2000,000.00 x 6
= P 7,200,000.00

Price at which property should be bought

= P 7,200,000.00

Site Location and Map Reading CPE 2010 6.

SITE LOCATION AND MAP READING

SITE LOCATION

SITE INSPECTION - Actual ocular field inspection of the site or lot

-

Importance of lot plan

Sites natural features and landmarks
Land monuments and boundaries
Tie line and reference point

Tie line is in imaginary line which connects a parcel of land (at point) to an established reference point.

2,000 m.

Reference point ia an established land

BLMM,BBM,LM,BM,MBM,FH, etc.)

monument at a particular site or location. ( such as :

Sketching while inspecting

use of magnetic compass is a simple hand held instrument with a magnetized needle
which points toward magnetic north.it is used in determining angles and directions and is
well suited for premilinary surveys,

PACING is the counting the numer of steps in a required distance.

Pace - The length of a singe step

Stride - Two paces or a double step

Pace Factor is a value determine by dividing the measured or known length of a line by the mean number of
paces taken to walk or traverse the line.
Length of a Pace

1 Stride
(2 paces or a Double Step)
1 Pace
(Hell to Hell)

1 Pace
(Toe to Toe)

1 Stride
(2 paces or a Double Step)

Bearings and Azimuth

N
38000

AZIMN = 1200
AZIM5 = 3000

Meridian

120
1200

Bearing is always an angle less than 90%

from N or S (medium) which ever is nearest.

1000
W..
2700

Azimuth is always the clockwise horizontal angl

between the time and given meridian.

900 F

600
B
1800

Bearing
SE

MAP READING
Topographic ( TOPO) Map is a map showing all the details that make up the features of the earth.
Contour Lines :

are lines that indicate variation in land elevation, The difference in elevation between
neighboring lines is called the contour Interval.

Hachures (ha shycorz )

are short straight lines

drawn in the direction that water would take down the slopes.
VACINITY MAP
A Map which shows the general location of the property and its vicinity

LOT PLAN
Plan showing the boundaries and shape and distances of the property lot

A = 200
sqms.

SOME SURVEYS SYMBOL

LOCATION AND BOUNDARY MONUMENT
BLLM
BLBM
CBM
PBM
MBM
BBM

Bureau of lands Location and Monument*

Bureau of lands Barrio Monument*
City boundary Monument
Provincial Boundary Monument
Municapal Boundary Monument
Barrio Boundary Monument
XIIV Other Related Subject CREASAR 2011

PUBLIC LAND SURVEY

9.

Ap
H
F
Si
Sc
Mci
Li
Lc
Mli
Mlc

Advance plans
Hometead application
Free Patent application
Sales Application, Individual
Sales Application ,Corporation*
Miscellaneous Sales Application ,individual*
Lease Application ,Individual
Lease Appication, Corporation
Miscelllaneous Lease Application , Individual
Miscellaneous Lease Appplication, Corporation

PRIVATE LAND SURVEY

Psu
Psd
Pcn
Pcs

Private Survey
Private Subdivision
Private Conslidation Surey
Private Consolidation-Subdivision Syrvey

GOVERNMENT LAND SURVEY

Flb
Fls
Fls
Ngl
Ngs

- Friar Land Survey

- friar land Subdivision
- Friar lands Relocation
- National Government Property Lease
- National Government Property Sale

OTHER LAND SURVEYS

Ml
Ms
Prs
Pb
Swo
Amd
Tri
Top
Rs
Rel
Vs
Sgs

- Monument Location Survey*

- Municipal Streets Survey
- Provincial Road survey
- Political Boundary
- Special Work Order
- Amendment Survey
- Triangulation Survey
- Topogrhpic Survey
- Resurvey*
- Recolection Survey*
- Verification Survey*
- Segregation Survey*

SALIENT FEATURE OF PAG-IBIG HOUSING FINANCING [ HDMF ]

HOUSING LOAN AVAILMENT This housing loan Program grants Opportunity to PAG IBIG
Found members to avail of housing loans to finance anny one or a combination of the following:

1. Purchase of a fully developed lot not exceeding 1.000 square meters, which should be within a
a residential area;
2. Purchase of a residential house and Lot; townhouse or condominium unit, inclusive of a parking
slot, which may be:

Old or brand new ;

A Property mortagaged with the found;or
An acquired asset , which is disposed of though sealed public bidding,negotiated
sale, the rent to own Program, or the Magaang Pabahay, Disenting Buhay
Program

3. Construction or completion of residential unit on a lot owned by the member;

4. Home Improvement,i.e any alternation in an existing residential unit intended by a homeowner to be a
permanent integral part thereof, which will enhance its durability and material value;
5. Refinancing of an existing mortagage with an institution acceptable to the found,provided that:

The loan is not in default within 12 months prior to the date of application
The said has a payment history af at least two (2) years with the original
mortgage

6. Combination of loan purposes, which shall be limited to the following:

Purchase of a fully developed lot not exceeding 1,000 square meters and construction
of a residential unit thereon;
Purchase of a residential unit,whether old or new, with home improvement;
Refinancing of an existing mortgage with home improvement;
Re* Refinancing of an existing mortgage, specially a lot loan, with construction
of a residential thereon;

ELIGIBILITY REQUIREMENTS ( housing loan availment)

To qualify for a PAG IBIG housing loan, a member shall Satisfy the following requirements:
1. On PAG IBIG Membbers

Must be a member under the PAG IBIG I , PAG- IBIG Overseas

Program (POP) for at least twenty four (24) months, as evidenced by
the remittance of at least 24 monthly contribution at the time of loan
application.

A member, whether new or with existing monthly contributions that are still short
of the 24-month membership requirements, shall be allowed to mae lump sum

payment based on the mandatory monthly membership contribution rates ( both EE and
ER share) to meet the said requirements at the point of loan application.
lump sum payment of membership contributions shall be considered a single contribution
for the applicable month as of the payment date.

A member whose loan exceeds P500,00.00 shall be required to pa the upgraded

membership contribution rates upon housing loan approval and onwards.

For Purposes of satisfying the required two (2) years membership contributions, the
member may not to pay in lump sum any amount short of the said requirements. in
additional, the period corresponding to the TAV applied earlier to an outstanding loan
shall also be considered when counting the total number of monthly contributions,
provided the remaining TAV after offsetting does not fall below the equivalent amount of
two(2) years membership contributions

.
2. Not more than sixty-five (65) years old at the date of loan application and must be insurable; provided further
that he is not more than seventy(70) years old at loan maturity;
3. Has the legal capacity to acquire and encumber real property;
4. Has passed satisfactory background/ credit and employment/ business checks of the PAG IBIG
FOUND..
5. Has no outstanding PAG IBIG housing loan, either as a principal barroower or co- barrower;

However, should a co-barrower in a tacked loan signifying an intention to avail of a PAG IBIG housing loan for
himself, he shall be allowed to do so provided the tacked loan is updated and the amount proportionate to his loan
entitlement has been fully paid. Hence,the co- barrower shall be released from the original obligation and shall be
allowed to avail of his own PAG-IBIG housing loan, subject to standard evaluation procedures.
6. Had no PAG IBIG housing loan that was foreclosed,cancelled,bought back due to default,or subjected to
dacion en pago, which shall include cases where the borrower is no longer interested to pursue the loan and
surrender the property;
7. Has no outstanding PAG-IBIG Multi-purpose loan in arrears at the time of loan application.A member whose
Multi-pupose loan is in arrears shall be required to pay his arrearages over the counter to update his account.