A builder in bad faith is one who builds

on land not belonging to him or is

aware of the defect in his title.
What can a property owner do to structures or improvements introduced, without his
consent, by a squatter or a person who claims ownership but is aware of the defects in his
title?

The Civil Code and Supreme Court pronouncements have defined the rights of the property
owners against builders in bad faith. Bad faith on the part of the builder pertains to building,
planting or sowing made knowingly by one on land not belonging to him and without
authority.  Furthermore, the builder is in bad faith if he makes use of the land which he
knows belongs to another. Conversely, to be deemed a builder in good faith, it is essential
that a person asserts title to the land on which he builds, i.e., that he be a possessor in the
concept of owner, and that he be unaware that there exists in his title or mode of acquisition
any flaw which invalidates it [Spouses Espinoza v. Spouses Mayandoc, G.R. No.
211170, 03 July 2017].

A builder in bad faith will lose what he

built without indemnity.
Article 449 of the Civil Code applies to builders in bad faith, to wit:

“He who builds, plants or sows in bad faith on the land of another, loses what is built,
planted or sown without right to indemnity.”

Moreover, Article 450 of the Civil Code will apply. It provides:

“The owner of the land on which anything has been built, planted or sown in bad faith may
demand the demolition of the work, or that the planting or sowing be removed, in order to
replace things in their former condition at the expense of the person who built, planted or
sowed; or he may compel the builder or planter to pay the price of the land, and the sower
the proper rent.”

Furthermore, Article 451 of the Civil Code mandates that “in the case of the two preceding
articles, the landowner is entitled to damages from the builder, planter or sower”.
 The property owner has 3 alternative
rights.
Thus, the following are the three alternative rights of the property owner:

1. To appropriate what has been built, planted or sown in bad faith, without any
obligation to pay any indemnity therefore except for necessary expenses for the
preservation of the land (Art. 452, Civil Code), plus damages; or
2. To ask the removal or demolition of what has been built, etc. at the builder’s, etc.
expense, plus damages; or
3. To compel the builder or planter to pay the price or value of the land, whether or not
the value of the land is considerably more than the value of the improvements, and the
sower, to pay the proper rent, plus damages. [Hector S. De Leon, Comments and Cases
on Property, p. 156, 4th Ed. (2003)]

It bears great emphasis that a builder in bad faith is not entitled to indemnity for his
improvements.  As builder in bad faith, he lost the improvement made by him consisting of
the reconstructed house to the owners of the land without right to indemnity (Santos vs.
Mojica, G.R. No.L-25450, 31 January 1969).

At most, a builder in bad faith may be

reimbursed for necessary expenses.
At most, a builder in bad faith is entitled to be reimbursed the necessary expenses on the
land that he made. This finds support in Article 452 of the Civil Code which provides that
“the builder, planter or sower in bad faith is entitled to reimbursement for the necessary
expenses of preservation of the land.” Necessary expenses are expenses made for the
preservation of the thing or those which seek to prevent waste, deterioration or loss of a
thing [Hector S. De Leon, Comments and Cases on Property, p. 393, 6th Ed. (2011) citing
Manresa].

A builder in bad faith can lose the building, without indemnity for the necessary or useful
expenses for the building, but he must be indemnified the necessary expenses for the
preservation of the land because, after all, the true owner would have borne such expenses
anyway, even if nothing has been built on the land [Edgardo L. Paras, Civil Code of the
Philippines Annotated, p. 226, Vol. II, 14th Ed. (1999)]. However, as provided in Article 546
of the Civil Code, a builder in bad faith does not have the right of retention over the
premises pending payment.
About Nicolas and De Vega Law
Offices
If you need assistance civil or other criminal law-related issues,  we can help you. Nicolas
and de Vega Law Offices is a full-service law firm in the Philippines.  You may visit us at the
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