2018 REAL ESTATE TRANSFERS:

Documentation, Registration AND Land Laws

By: CES Real Estate Academy

REGISTRATION OF PROPERTY

PART 1: LEGAL ASPECT

Definition:

 Any entry made in the books of the Registry of Property such as:
 Registration of new owners like land titles
 Annotation of encumbrances

Financial encumbrances:

 Real and chattel mortgages

Physical:

 Right-of-way , easement
 Height limitation,
 Floor area ratio

Ownership claim:

 Adverse claim or lis pendens

TO REGISTER MEANS

 To enter in a register ( the register of Deeds in case of land titles )

 To record formally and distinctly

PURPOSE OF REGISTRATION

To decree land titles that shall be:

 Final, irrevocable and undisputable

 Deemed and sufficient in Law
 Incontestability is the goal
 Prevent fraudulent conveyances – facilitate transactions.
 Binds the land and shall be conclusive upon and against all persons including the
national government.
 Provides greater protection against a claim for adverse possession of land by an
authorized occupier- to make titles indefeasible and imprescriptible
 Believe to be the most effective measure to guaranty the integrity of land titles
 Afford right of priority to the purchaser- registered title is the best evidence of
ownership- ownership is indefeasible and imprescriptible.

EFFECT OF REGISTRATION

 It is a notice to the whole world.

 Registration is the operative act to convey or affect the land in so far as third
persons are concerned.
 Registration is not essential for validity of the sale. Registration is just for
confirmation of sale.
 Registration of a mortgage is an indispensable operative act to bind third
persons.

NOTE: One mode of acquiring land is adverse possession or continues possession of

land in the concept of an owner. Adverse possession is applicable only to
government agricultural land- a public domain land declared as ALIENABLE and
DISPOSABLE by the Government.

 Registration does not vest or confer title. It merely confirms ownership. It is merely
a species of constructive notice. However, a conveyance registered ahead may
defeat or has priority over prior unregistered conveyance (rule in double sale)
 Land is often the most valuable asset of any individual or business – protect it.
 The title register constitutes the evidence of title and replaces proof of ownership by
historic deeds and documents (chain of title)
 If your land is registered, future dealings relating to it are quicker and more efficient
because you have eliminated the requirement for registration.
 Registration is conclusive as to the ownership of the land and provides a state
backed guarantee of the title. If your land is registered under the Torrens System of
 Registration, your ownership is imprescriptible, indefeasible, it binds the grantor
and the grantee as against the whole world.

OTHER ADVANTAGES OF REGISTRATION

 Other advantages of registration:

 There is convincing evidence from around the world that land registration has-
Led to better access to formal credit – preferred by creditor banks
Higher land values- better than tax declaration
Higher investments in land – much safer, more value

Question: Who has the better right if property was sold to 2 or more buyers?

(Article 1544 of the Civil Code)

First: Registration

 Buyer in good faith who first registered the sale is the priority.

Second: Possession

 If there no registration, good faith plus possession.

Third: oldest title (oldest proof of claim)

 No registration, no possession , buyer in good faith who can show oldest title (any
written proof of ownership such as contract to sell )

RULE OF NOTICE OR RULE OF LAW

 It is presumed that the purchaser has examined every instrument of record affecting
the title.
 Caveat Emptor – let the buyer beware
 Ignorance of the Law excuses no one.

BEFORE BUYING
 Conduct due diligence on property to be bought.
 DUE DILIGENCE ON WHAT?

1. Ownership, title , lot identity , encumbrances

2. Legal uses, highest and best use
3. Fair market value of land and improvement
4. Expenses of transfer and whose account
5. Requirements on transfer
6. Contracts to be used
7. Obligation of seller and buyer and agent (if there is any )

VOLUNTARY vs. COMPULSORY REGISTRATION OF LAND

Compulsory registration –
 Registration initiated by the government
 Example is the judicial process of registration by cadastral law

Voluntary registration-
 Registration initiated by the possessor of the land under the adverse
possession or prescription.
 Example: judicial process under ordinary registration

LAWS GOVERNING AND LAND REGISTRATION (sources of legislation)

 Act 496 : Land Registration Act of 1903 ( now PD 1529)

 CA No. 141 or the Public Land Act which became effective on December 1, 1936
 PD 1529 or Property Registration Decree issued on June 11, 1978 ( UNTIL NOW )
 Act No. 2259 or the Cadastral act enacted on February 11, 1913
 Applicable law on Judicial and Compulsory confirmation of title
 RA 8371 or the indigenous People Rights Act approved on October 29, 1997

LAND REGISTRATION AUTHORITY: ITS FUNCTIONS

 Assistance to DAR and other Government agencies in the implementation of land

reform .
 Assistance to courts in ordinary and cadastral land registration proceedings
  Central repository of records relative to original registration of lands titled under
Torrens System.
 Register of Deeds is an extension or field office of LRA
 Headed by Administrator:
 Issues decrees of registration ; this is only ministerial since he acts under the orders
of the court and decree must be in conformity with the court’s decision
 An executive with judicial rank.
 Supervisions and control of all Register of Deeds (field office of LRA )
 Issues consultas ( similar to BIR rulings ) to resolve cases

ACT 469 (1903)

 Land Registration act of 1903 (amended by Property Registration Decree PD 1529 )

 Approved on November 6, 1902 but became effective on January 1, 1903.
 It established the Torrens System in the country. Purpose: to quiet title to the land.
 It created a Court of Land Registration.
 The sole purpose was to bring land title in the Philippines under the operation of
Torrens System

TAX ADMINISTRATION REFORMS

Under RA 10963 or THE TRAIN LAW

Zonal Values

 Insert a provision on the automatic adjustment of zonal values once every 3 years
and the publication or posting requirement in order for the said adjustment in zonal
valuation to be valid.

Sweetened Beverages

 The Food and Drug Administration (FDA) shall all manufacturers and importers of
sweetened beverages covered by the law to put the required labeling with unique
identification of excisable sweetened beverages.

Audit Threshold
  Provides for electronic sales reporting system for taxpayers engaged in the export of
goods and services and Large Taxpayers at their own expense within 5 years from
the affectivity of the Act.

Electronic Sale Reporting System

 Increases the threshold amount required to be examined and audited by

independent CPAs, from gross quarterly sales, earnings, receipts or output of more
than 150,000 to gross annual sales, earnings, receipts or output of more than
3,000,000. It is also removes the threshold before taxpayers are required to keep
books of accounts.

Electronic Receipts

 Requires the issuance of electronic receipts or electronic sales/ commercial invoices

in lieu of the manual receipts and sales/commercial invoices for taxpayers engaged
in the export of goods and services, e-commerce and Large Taxpayers within 5 years
from the affectivity of this Act and upon establishment of a system capable of storing
and processing the required data.