REAL ESTATE

BROKERAGE
AND
PRACTICE

∙ Licensing Rules & Regulations (Legal

Requirements for Real Estate Service Practice) ∙

Code of Ethics and Responsibilities ∙

Principles & Practice of Real Estate

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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

(The following is the summary of the IRR of R. A. 9646)

REAL ESTATE SERVICE ACT OF THE PHILIPPINES

R. A. No. 9646
Real Estate Service Act of the Philippines
 • Effectivity of the law
• Resolution No. 02 of the Professional Regulatory Board of Real Estate Service (PRBRES) – Implementing
Rules and Regulations of R.A. No. 9646

Coverage of the Implementing Rules and Regulations

Rule I -Title of the Rules, Declaration of Policy & Definition of Terms (Sections 1 to 3) Rule II
-Professional Regulatory Board of Real Estate Service (Sections 4 to 11) Rule III -Licensure
Examination & Registration (Sections 12 to 24) Rule IV- Practice of Real Estate Service
(Sections 25 to 38) Rule V – Penal and Final Provisions (Sections 39 to 45)

Rule I

Title of the Rules, Declaration of Policy & Definition of Terms

Section 1 - Title
Section 2 - Declaration of Policy
Section 3 - Definition of Terms
a. Appraiser/valuer
b. Assessor
c. Real Estate
d. Real Estate Development Project
Section 3 – Definition of Terms
e. Real Estate Developer
f. Real Property
g. Real Estate Service Practitioners
1. Real Estate Consultant
2. Real Estate Appraiser
3. Real Estate Assessor
4. Real Estate Broker
5. Real Estate Salesperson
h. Accredited and Integrated Professional Organization
(AIPO)
i . Interim Accredited Professional Organization
(IAPO)
Rule II

Professional Regulatory Board of Real Estate Service

Section 4 – Creation and composition of the Board
• Under the supervision and administrative control of the PRC
• Composed of a Chairman and 4 members all appointed by the President from the 3 recommendees chosen
by PRC from a list of 5 nominees per position submitted by the AIPO, Provided 2 of the members of the Board
shall represent the Government Assessors and Appraisers who are both in active service. Section 5 – Powers and
Functions of the Board
a) Provide comprehensive 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 subjects for examination with their tables of specifications;

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c) Issue, suspend, revoke or reinstate, after due notice and hearing, certificates of registration or
professional identification cards for the practice of RES;
d) Maintain a comprehensive and updated register of licensed RES professionals;
e) Monitor the conditions affecting the practice of RES 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;
f) Adopt a National Code of Ethics and Responsibilities issued by the AIPO to be strictly observed by all
licensed RES practitioners;
g) Hear or investigate any violation of R.A. 9646, the IRR and the Code of Ethics and Responsibilities for
RES practitioners and issue subpoena duces tecum to secure the appearance of witnesses and the production
of documents in connection therewith;
h) Safeguard and protect legitimate and licensed RES practitioners and, in coordination with the AIPO of
RES practitioners, monitor all forms of advertisements, announcements, signboards, pamphlets, brochures
and others of similar nature concerning real estate and, where necessary, exercise its quasi-judicial and
 administrative powers to finally and completely eradicate the pernicious practices of unlicensed or
unauthorized individuals;
i) Prescribe, in cooperation with CHED or the concerned state university or college, the essential
requirements as to the curricula and facilities of schools, colleges or universities seeking permission to open
academic courses or already offering such courses in RES, and to see to it that these requirements, including
the employment of qualified faculty members, are properly complied with;
j) Promulgate, administer and enforce rules and regulations necessary in carrying out the provisions of R.A.
No. 9646;
k) Supervise and regulate the registration, licensure and practice of RES in the Philippines;
l) Assess and fix the rate of reasonable regulatory fees;
m)Administer oaths and affirmations;
n) Adopt an official seal of the Board with the interpretation of its symbols attached to this resolution and
made an integral part thereof as annex “A”;
o) Evaluate periodically the status of RES education and profession, and recommend and/or adopt measures
to upgrade and maintain its high standard;
p) Prescribe guidelines and criteria for the CPE program for RES practitioners in consultation with the AIPO
of RES practitioners;
q) Screen, issue and monitor permits to organizations of RES professionals in the conduct of seminars and
accredit such seminars pursuant to the CPE program, as well as the instructors or lecturers therein, for the
purpose of upgrading the quality and knowledge of the profession;
r) Monitor and supervise the activities of the AIPO and other associations of RES practitioners; and s)
Discharge such other powers, duties and functions as the PRC may deem necessary to carry out the
provisions of R.A. No. 9646.

The policies, resolutions and rules and regulations issued or promulgated by the BOARD shall be subject to
review and approval by the PRC. However, the Board’s decisions, resolutions or orders which are not
interlocutory, rendered in an administrative case shall be subject to review by the PRC only on appeal, in
accordance with R.A. No. 8981 and its IRR.

Section 6 – Qualifications of the Chairperson and members of the Board (at the time of appointment)
a) Citizen and resident of the Philippines;
b) Holder of a bachelor’s degree related to Real Estate;
c) An active licensed practitioner of RES for at least 10 years prior to his/her appointment; d) A bona fide
member in good standing of the AIPO of RES 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 pecuniary
interest, direct or indirect, in any institution or association where review classes or lectures in preparation
for the licensure examination are being offered; and
f) Of good moral character, and must not have been convicted by final judgment by a competent court of a
criminal offense involving moral turpitude.

Section 7 - Term of Office

• 3 years and may be reappointed for a second term but not to exceed a total of 6 years (continuous) •
The members of the first Board shall hold office for the following terms
Chairperson - 3 years
2 members - 2 years
2 members - 1 year

Section 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

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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 Commission and the Department of Budget and Management (DBM).

Section 9 - Removal of the Chairperson and members of the Board.

- maybe removed or suspended by the President upon the recommendation of the PRC after due notice and
hearing in a proper administrative investigation to be conducted by PRC on the following grounds:
1. Neglect of duty
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 offense involving moral turpitude.
The PRC, in the conduct of the investigation shall be guided by Sec. 7 (s) of R.A. no. 8981 and its rules on
administrative investigation.
Section 10 – Supervision of the Board, custodian of its records, Secretariat and Support
Services. Section 11 - Annual Report
Rule III
Licensure Examination and Registration
Section 12 – Licensure Examination – Every applicant seeking to be registered and licensed as a RES
practitioner, except a Real Estate Salesperson, shall undergo an examination to be given by the Board.

Section 13 - Scope of Examination

a) For Real Estate Consultants:

1. Fundamentals of real estate consulting;
2. Standards of 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). Real For Estate Appraisers
1. Fundamentals of real estate principles and practices
2. Standards of Ethics
3. Theories and principles in appraisal
4. Human and physical geography
5. Methodology of appraisal approaches
6. Valuation procedures and research
7. Appraisal of machinery and equipment
8. Practical appraisal mathematics
9. Appraisal report writing
10. Real estate finance and economics
11. Case studies
12. Land management system and real property laws
13. Any other related subjects as may be determined by the Board

C) For Real Estate Brokers

1. Fundamentals of property ownership
2. Code of Ethics and responsibilities
3. Legal requirements for real estate service practice
4. Real estate brokerage practice
5. Subdivision development
6. Condominium concept and other types of real estate holdings

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7. Real estate finance and economics
8. Basic principles of ecology
9. Urban and rural land use
10. Planning, development and zoning
11. Legal aspect of sale, mortgage and lease
12. Documentation and registration
13. Real property laws and taxation
14. Any other related subjects as may be determined by the Board.
Section14–Qualifications of applicants for examination (at the time of filing of application)
a. A citizen of the Philippines
b. A holder of a relevant bachelor’s degree from a state university or college, or other educational institution
duly recognized by CHED: Provided, That he/she has completed at least 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 RES is implemented by 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
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 5 years experience as a licensed real
estate appraiser.

Section 14 - Requirements
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 pre requisite 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 white background and complete nametag and other
documents in accordance with the requirements set by PRC

Section 15 - Ratings in the Examination

• The candidate must have obtained an average of at least 75% in all subjects
• With no rating below 50% in any subject.

Section 16 – Release of the results of Examination

• Results of the licensure examination shall be released by the Board within 10 days from the last day of the
examination. The result shall be published in a daily major newspaper of general circulation and PRC
website
•
Section 17 – Issuance of the Certificate of Registration and professional Identification Card

Section 18 – Refusal to register

- convicted by a court of competent jurisdiction of any criminal offense involving moral turpitude - has
been found guilty of immoral or dishonorable conduct after investigation by the Board - has been found to
be psychologically unfit

Section 19 – Revocation or suspension of the COR, ID Card or Cancellation of special Temporary Permit
(GROUNDS)
a) Procurement of a certificate of registration and/or professional ID 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 ID, or 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 RES practitioners

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e) Engaging in the practice of the profession during the period of one’s suspension
∙ The rules on administrative investigation issued by the PRC shall govern
∙ The suspension or revocation of the COR and ID Card or the cancellation of the temporary/special
permit shall not prejudice prosecution for criminal liabilities and the imposition of the penalties under
R.A. No. 8981, R.A. No. 9646, Revised Penal Code or any special law

Section 20 – Registration without Examination

 a) Those whose, on the date of effectivity of R.A. No. 9646 or as of July 30, 2009 are already licensed as
real estate brokers, real estate apraisers or real estate consultants by the DTI by virtue of Ministry Order
No. 39 as amended: Provided, they are in active practice as real estate brokers, real estate appraisers, and
real estate consultants, and that they have undertaken relevant CPE or CEP : provided further, that the
following practitioners shall be allowed to register:
1. Any holder of a valid DTI license who has earned 15 CEP or CPE credit units
2. Those who had failed to renew their DTI License prior to July 30, 2009 but who have earned 24 CEP
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 effectivity of the R.A. No. 9646 and who have earned 15 CEP or CPE
credit units.
4. Those who had passed the 2007 licensure examinations given by DTI but who had failed to obtain
their license upon the effectivity of R.A. 9646 and who have earned 18 CEP or CPE credit units 5. Those
who had passed the DTI licensure examination 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 120 CEP or CPE credit units.

Provided, that real estate practitioners falling under the above-described categories who fail to comply with the
necessary CPE requirements within 2 years after the effectivity of R.A. No. 9646, on or before July 30, 2011, shall
be required to take the Board licensure examination for RES practitioners.

Section 20 – Registration Without Examination

b) Assessors and appraisers who, on the date of the effectivity of R.A. No. 9646 or as of July 30, 2009, hold
permanent appointment and are performing actual appraisal and assessment functions for the last 5 years, have
passed the Real Property Assessing Officer (RPAO) examination conducted and administered by the Civil Service
Commission (CSC) in coordination with the DOF and have undertaken relevant CPE to the satisfaction of the
Board
c) Assessors and appraisers who, on the date of the effectivity of R.A. No. 9646 or as of July 30, 2009, hold
permanent appointments and have at least 10 years actual experience in real property appraisal or assessment and
have completed at least 120 hours of accredited training on real property appraisal conducted by national or
international appraisal organizations or institutions/entities, duly certified by DOF or any other pertinent national
government agencies or GOCC as the case may be, recognized by the Board and relevant CPE credit units

• 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 24 hours CPE credit units.
Provided, that those seeking to be licensed to a new credential level shall be required to take the pertinent
board examination.
• Those so exempt under the aforementioned categories shall file their application within 2 years from the
effectivity of R.A. No. 9646 or until July 30, 2011. Renewal of the ID card is subject to the provision of
Section 17, Article 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 Licenses
3. DTI Certification 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 Certification, DOF, or any other national government agencies, or GOCC
certification (assessors or government appraisers0, or any certification of accredited seminar/training
provider
7. Appointment papers and service records to prove appraisal or assessment experience (for assessors or
government appraisers)
8. Original and photocopy of Marriage certificate/Contract of Marriage (NSO) (if applicable)

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9. 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.

Section 21 – Reinstatement, Re-issuance or Replacement of COR, ID card and special permit • The Board may,
 after 2 years from the date of revocation and upon application and compliance with the required CPE units,
and for reasons deemed proper and sufficient, reinstate any revoked COR and reissue a suspended ID card
and in so doing, may in its discretion, exempt the applicant from taking another examination;
• Provided, the Board shall issue a resolution subject to the approval of PRC in granting a petition for
reinstatement to the practice of RES profession.
• Lost, destroyed or mutilated COR, ID card or permit may be replaced.

Section 22 – Roster of Real Estate Service Practitioner

Section 23 - Issuance of special/temporary permit

• For real estate service practitioners from other countries whose services are urgently needed in the
absence or unavailability of local real estate service practitioners for the purpose of promoting or
enhancing the practice of the profession in the Philippines.
•
Section 24 – Foreign reciprocity
Rule IV
Practice of Real Estate Service
Section 25 – Oath
Section 26 – professional Indemnity Insurance/Cash or Surety Bond
• All Real Estate Brokers and Private Real Estate Appraisers shall in addition to the oath, be required to
post a professional indemnity insurance/cash or surety bond, in the amount to be determined by the
Board, which in no case shall be less than P20,000
• Without prejudice to the additional requirements of client.
• Renewable every 3 years.

Section 27 – Acts constituting the practice of real estate service (section 3 (g))

Section 28 – Exemptions from the acts constituting the practice of Real Estate Service
a) Any person, natural or juridical, who shall directly perform by himself/herself the acts mentioned in section
3 of the IRR with reference to his/her or its own property, except real estate developers who are regulated
by and registered with the HLURB pursuant to law and other resolutions/regulations such as PD 957 as
amended, BP 220 and their IRRs
b) Any receiver, trustee or assignee in bankruptcy or insolvency proceedings

Section 28 – Exemptions from the acts constituting the practice of Real Estate Service
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 sale, mortgage, lease or exchange, or
other similar contracts of real estate, without requiring any form of compensation or remuneration e) Public
Officers in the performance of their official duties and functions, except government assessors and appraisers.

Section 29 – Prohibition against unauthorized practice of Real Estate Service

Section 30 – Positions in government requiring the service of registered and licensed RES practitioners •
Within 3 years from effectivity of R.A. No. 9646, all existing new positions in the national and LGs,
whether career, permanent, temporary or contractual, primarily requiring the services of any RES
practitioner, shall be filled only by registered and licensed RES practitioners.
• All incumbent assessors holding permanent position shall enjoy security of tenure. But they may not be
promoted until they meet the requirements prescribed in R.A. 9646.

Section 31 – Supervision of real Estate Salespersons

• No examination required but shall be accredited with the Board

• Must have completed at least 2 years of college
• Must have undergone training and seminars of at least 12 credit units in real estate brokerage

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• Those who are registered with DTI/HLURB or other salespersons who are in the active practice for at
least 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 July 30, 2011
• In both cases, such real estate salesperson must have undergone at least 120 training hours in real estate
brokerage
 • Must have submitted original NSO certificate of live birth/birth certificate, NBI clearance, certificate of
educational attainment or its equivalent, notarized certificate of training or seminar and notarized
certificate of their supervising licensed brokers as may be required by the Board
• They are under the direct supervision and accountability of a real estate broker
• 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 or indirectly, can negotiate, mediate or 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 broker 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 from 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.

Section 32 – Corporate practice of real estate service

• Must be registered with SEC

• All persons authorized to act for the partnership or corporation must be duly registered and licensed real
estate brokers, appraisers and consultants, as the case may be.
• The partnership or corporation must regularly submit to the PRC and SEC as part of its annual reportorial
requirements a list of its real estate service practitioners
• There shall be at least 1 licensed real estate broker for every 20 accredited salespersons • Divisions or
departments of partnerships and corporations engaged in marketing or selling any real estate development
project in the regular course of business must be headed by a full-time registered and licensed real estate
broker
• 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 a RES practitioner, the same shall be reported
by the employer to the Board within a period not to exceed 15 days from the date of effectivity of
resignation 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 services and the latter shall be deemed independent contractors and not employees of such
corporations.

Section 33 – Display of license in the place of business

Section 34 – Accreditation and integration of Real Estate Service Association
Section 35 – Code of Ethics and Responsibilities for Real Estate Service Practitioners
Section 36 – Continuing Professional Education (CPE) Program
• The Board will promulgate guidelines
• The Board shall create a CPE Council composed of a chairperson coming from the Board, a member
from the AIPO and a member from the academe
Section 37 – Enforcement Assistance to the Board
Section 38 – Indication of the Certificate of Registration, Professional ID Card/License Number,
Privilege Tax Receipt (PTR) Number, and AIPO Number

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Rule V
Penal and Final Provisions

Section 39 – Penal Provision

 • Penalty for any violation shall be fine of not less than P100,000 or imprisonment of not less than 2 years
or both.
• If the violation is committed by unlicensed practitioner, the penalties shall be double • In the case of
partnerships or corporations, the partners, officers, president, director or manager may be liable who
committed, or consented or knowingly tolerated the violation.
Section 40 - Appropriations
Section 41 – Transitory provisions
Section 42 - Implementing Rules and Regulations
Section 43 – Separability Clause
Section 44 - Repealing clause
Section 45 - Effectivity

(Full Text of IRR R. A. 9646)

REPUBLIC ACT NO.9646

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 values, 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

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 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 to 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 the minds on the sale, purchase,
exchange, mortgage, lease or joint venture, or other similar transactions on real estate or any interest therein.

(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 referred 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;

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(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
pecuniary 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.

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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 Commission 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. Fundamentals of real estate principles and practices;
2. Standards and ethics;
3. Theories and principles in appraisal;
4. Human and physical geography;
5. Methodology of appraisal approaches
6. Valuation procedures and research;
7. Appraisal of machinery and equipment;
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8. Practical appraisal mathematics;
9. Appraisal report writing;
10. Real estate finance and economics;
11. Case studies;
12. Land management system and real property laws; and
13. any other related subjects as may be determined by the Board; and

(c)For real estate brokers:

1. Fundamentals of property ownership;
2. Code of ethics and responsibilities;
3. Legal requirements for real estate service practice;
4. Real estate brokerage practice;
5. Subdivision development;
6. Condominium concept and other real estate holdings;
7. Real estate finance and economics;
8. Basic principles of ecology;
9. Urban and rural use;
10. Planning, development and zoning;
11. Legal aspect of sale, mortgage and lease;
12. Documentation and registration;
13. Real property laws and taxation; and
14. 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 pre requisite 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.
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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 of 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;

14
(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
15
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
16
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
17
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
receive (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

18
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
proceeding 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 seventy
six.
19
(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 addresses 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
20
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 DELA 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. Location:
2 Description: Block No. Lot No. TCT No.
or .
3. Area : sq. m. more or less
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
21
Address:
Tel. No.:
ACCEPTANCE:
AAA REALTY
By:

Juan De La Cruz, REALTOR

PRC Real Estate Brokers License No. 8001
 22

CODE OF ETHICS
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.

ARTICLE I. 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
23
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 may
impose in accordance to law, ordinance, or rules and regulations;
(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 Department of Trade
and Industry in his letterhead, dry seal, signboard, billboard, advertisement or other announcement in relation to
the Realty Service Practice;

SECTION 2- Relation to the Public

(a) The practitioner should be imbued with a social conscience for he does not live by himself and his family
alone but he is a part of society with definite social responsibilities.
(b) He should ensure the highest and the best use of the land and the equitable distribution of 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 his community, city or
province, so that he may be able to contribute to the public thinking on matters of taxation, land use, city
planning, zonificaton and other programs of the government;
(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 character or use of property
which will tend to impair or erode property values within that neighborhood;
(g) He should not be a party to the naming of a false consideration in deed of 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, and if 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;

24
(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 pinion without careful and thorough analysis and
interpretation of all factors affecting the value of the property. His counsel 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;
25
(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

26
PRINCIPLES AND PRACTICE OF REAL ESTATE
INTRODUCTION:

What is the basis for real estate brokerage? What constitutes real estate brokerage? How does one engage in real
estate practice In the Philippines?

Real estate brokerage represents a combination of the principal of the law of contract. A real estate broker is an
agent in the fullest sense of the word, in the he represents another (the owner) from whom he has derived his
authority. The interests of three people are involved in a real estate transaction: the owner the broker and the
purchaser, with whom the broker negotiates in the interests of the owner

A. General Definations

1, “Real estate broker – any person who for another person and another person and a fee, commission or
other valuable consideration, or with the intention or with the expectation of upon the promise of
receiving or collecting a free, commission or other valuable consideration, does any of the following:
sells, exchanges, purchases, rents or leases, or negotiate the sale exchange, purchase, rental or leasing of
any real estate, or list or offer, attempts or agrees to list any
real estate agrees to list any real estate or buy, sells or offers to sell or otherwise deals in options on real
estate, or advertises or holds himself out as engaged in the business of selling, exchange, purchasing,
renting or leasing real estate, or assist or prospects or the negotiation or completion of any agreement or
transaction which result in sale, exchange, purchase. leasing or renting of any real estate.

2. “ Real estate salesman “ An individual who performs any act or engages in any transaction include in the
forgoing definition of a broker, except the completion of the negotiation of any agreement or transaction which
results or intended to results in the sale, exchange, purchase, renting or leasing of any real estate. 3. “ Agent “ –
One who represents the interests of another (the principal, i.e. client or real estate broker) 4. “Principal”
–commonly known as the person who engages the agent for representation. 5. “Client” – A person who empower
another to act as his or her representative or agent. Client relationship fiduciary relation.
6.”Customer” – Generally refers to a person without representation involved in the transaction. All agents have a
duty to treat costumers fairly.

B. Real estate Brokerage as a Contract of Agency

1. Definition by the contract of agency, a person binds himself to render some service or to something in
representation or on behalf of another, with the consent or authority of the latter.
(Art.1868 CCP)
2. How The Agency Relationship is Created.
There are three basic ways an agency may be created; appointment; estoppel or
Ratification
a. Appointment means that the principal gives express authorization to the agent. under both common and
statutory law, this requires a writing when the sale of real estate is involved.
b. Estoppel means that if the principal causes third persons to believe that someone is his agent and that third
party deals with the agent, then the principal cannot deny the agency relationship even though it did not
exist in fact.
c. Ratification means that if a person having no authority an agent and the purported principal later adopts the
acts of that agent, an agency relationship has retroactively been created.

3. Power of An Agent .
An agent has the powers which are conferred upon him by the principal. In addition, the agent has such
powers as are necessary, proper, or usual to enable him to accomplish the purpose of the agency. The powers
granted to an agent may be restricted by contract or by statute.
4. Duties of an agent
a. Obedience – agent must carry out all lawful interest of the client. It also requires that the agent refrain from
competing with the client in any way or in making any secret profits in connection with the agency.

27
b. Loyalty – agent must act in the best interest of the client. It also requires that the agent refrain from
competing with the client in any way or in making any secret profits in connection with the agency c.
Disclosure - Of all information which is relevant to client. The fiduciary relationship imposes the affirmative
duty on the agent to give advice on the subject matter of the subject matter of the agency, to disclose all
relevant information affecting the subject matter of agency, and to keep the principal”s affairs confidential. As
such an agent cannot represent both parties to a transaction (dual agency) unless there is full and complete
 disclosure, including advising the principal as to the consequences of the dual agency. d. Confidentiality –
duty to keep confidential client”s information or discussion. Duty survives termination of agency
relationship. ,Duty does not apply to legally required disclosures such as known physical hazardous
conditions of property.
e. Accountability – agent must protect and account for all money, documents. Or other personal property
given to him by the client.
f. Reasonable Care & Due Diligence - agent must act competently, capable of performing duties with scope
of license requirements. An agent must use reasonable skill, care, and diligence in all that he does under
his authority as an agent.
5. Liabilities of Principal
The principal is liable for the actions of his agent under the doctrine of respondent superior. The knowledge of an
agent is imputed to the principal and the principal is deemed to knowledge imputed to the principal includes
relevant knowledge received prior to the commencement of the agency. Torts committed by agents such as
negligence and fraud are also attributed to the principal.
6. Liabilities of the agent
An agent is liable to his principal for any violation f his duties imposed upon him by virtue of the agency may
also be liable to a third party for his acts that have been directed towards that third party. 7. Real Estate Broker”s
Listing as an Agency
a. Listing contract : is an agreement between the brokers and the owner of real property whereby the owner
authorizes the broker to negotiate for the sale, lease, join venture, exchange, or mortgage of his or her real
property for a commission or any valuable consideration.
b. Contents of a listing Contract
∙ Date of the authority
∙ Name and address of the broker, license number
∙ Function to be performed or service to be rendered by the broker
∙ Type of listing
∙ Description of the property: to include location, kind title, area of land and improvement, if any, utilities
included, if any liens and encumbrances, if any.
∙ Price and terms
∙ Duration of the authority

Note: “Hold – over” clause: is a

❖ Provision in the listing contract which entitles the broker to a commission even though if the sale is
consummated after the period of his authority provided that the buyer has been registered by him
the owner/ seller during the period of his authority.
∙ Commission or compensation of the broker and terms of payment
∙ Name address and signature of the owner / seller
∙ Acceptable by the broker
8. Types of Agency / Listing
a. As to forms : Oral or written ( when the law specifically requires in some instances ,e ,g . sale of real
property through an agent or attorney in fact whose authority must be in writing ) (Art. 1869 &
1874,CCP)
b. As to Exclusiveness:
∙ Open or Non-exclusive: the authority is given to any broker
∙ Multiple: the Authority given to one member of the board or association of broker is given
automatically to all the other members. Some real estate boards or chapter’s of broker
associations operate a multiple service (MLS) Under this system, each member receives all
listing of property given to every other member of the multi-service. Under the rules of the
multi-list association, the listing broker receives a percentage of the commission if the listed
property is sold by another broker member, and the selling broker receives a higher
percentage of the commission. The multi- list association receives an over-riding small
percentage of the commission to defray its expenses.
∙ Exclusive agency: the authority is given to only one broker with the exclusion of all, except that
when the owner himself or herself successfully transacts the property, the broker is not
entitled to the commission. This is better kind of listing for the broker.
∙ Exclusive Right to sell: the authority is given to only one broker with the exclusion of all; even
if the owner sells or leases the property, the broker is entitled to the commission. This is the
best kind of listing for the broker.
∙

28
c. As to Function
∙ Sales agency : listing authority where the primary object is to sell
 ∙ Purchase agency: listing authority where the primary object is to buy a property
∙ Lease agency : listing authority where the primary object is to lease or find property for lease ∙
Exchange agency: listing authority where the primary object is to exchange one property with
another.
∙ Loan agency : listing authority where the primary object is to secure a loan
∙ Sub-agency: between the broker and salesman.
∙ Joint venture agreement
d. As to the basis of commission:
∙ Percentage listing: one where the commission is a percentage based on the selling price ∙
Net listing one where the commission is not include in the selling price, hence overprice 9. Termination of
Agency Relationship
a. Expiration of agreement
b. Death or insanity of agent or client principal
c. Withdrawal / Repudiation either principal or agent with draw consent; the court may deem this a breach of
fiduciary obligation and the breaching party may be held liable for damages.
d. Accomplishment : completion of the performance under agreement
e. Revocation : mutual agreement to terminate or rescission
f. Dissolution : in capacity ( i. e. mentally incapable or bankruptcy or either party
g. Impossibility of performance ( i. e. ) destruction of property

C. Real Estate Brokerage as a practice

1. Getting started in real estate brokerage
a. Secure your license
b. Register as Sole Proprietorship, Partnership, or Corporation
c. Business Permit from a Local Government Unit where you will hold office
d. Register with the BIR (TIN, VAT)
e. Set up office
2. Securing Listing: the process of soliciting authority to sell, lease, joint venture, etc. over properties fom
owners.
a. Decide whether to go into general brokerage, project selling (developer based), or a combination of
both. The trend now is to focus on a particular market or a specific geographical location. b. Kinds of
Properties to choose from: Rawland, Residential Lots or House and Lots, Commercial Properties,
Industrial Properties, Condominium, Leisure Properties, and Memorial Lots. c. As to kind of transaction:
sale, lease, joint venture, packaging projects, syndication. d. Learn some negotiating techniques for getting
of listing.
e. Manage your listing: manual or use of information technology.
f. Source of Listing: Relatives, friends, neighborhood associations, civic organizations, Fellow Brokers,
Realty Associations, Banks, Real Estate Developers, and Newspaper Ads.
3. Marketing of listing
a. Prospecting generating leads for customers,
b. Qualifying: evaluating the capacity, need, and urgency of the customer
c. Presenting: making presentation of possible & suitable property for the qualified costumer.
d. Tripping: bringing the customer to the site of the property being offered.
e. Negotiating: bringing the client and the customer into an agreement.
f. Closing: leading the customer and the client to finally sign a contract and make payment.
g. Completing the transaction
h. Documenting & registering

4. What can the Real Estate Practitioners, do to surpass Real estate consumer expectations and satisfaction?

Consumers today have the information and will personally discount the amount effort and level of service they see
the real estate practitioner offer. The practitioner will be delivering quality service. they will do this by adding
value to the home-buying and hoi\me-selling transaction. The practitioner will add value in at least five ways.

First, the real estate professional will be sorting through information that is available and giving the consumer
quality information that more closely meet the needs of that particular consumer. There is no much consumer that
the consumer is information is starting to get overwhelmed. Information will be increasingly available in the
future. The astute real estate professional will assist the consumer by “qualifying” the consumer’s needs and then
helping them find or giving them the information that meets those needs, Real estate Professionals used to have to
qualify the buyers / sellers needs in buying or selling the home. When they were assisting the buyer, they also had
to assess the consumer’s purchasing power. The real estate professional’s job is still the same, but now it also
includes giving consumers the information that meets their needs and helping them find the information that is
most pertinent to their needs, the practitioner of today and tomorrow will be a buffer around all this information
and save the consumer the time, effort and frustrations associated with sorting through all this information...
 29
Second, the real estate professional will be interpreting and integrating the information. In other words, the real
estate professional will turn information into usable knowledge; consumers can get the information on their own.
Unless the consumers have been through the home-buying process numerous what all that information mean. The
real estate professional should not allow the consumer or the availability of all these information to intimidate
them. Take the opportunity to show the consumers how can use this information in ways beyond their thoughts.
You will add value to the relationship by demonstrating your expertise, consumers who value information
especially value someone who can effectively and efficiently use that information, these consumers will more
highly value knowledgeable real estate professional.

Third, the real estate professional will be adding to this knowledge by showing "wisdom" about the marketplace,
the property, the real estate transaction, etc. Wisdom occurs when someone shows significant insight beyond the
information. Effectively identify the buyers'/sellers' needs above and beyond consumers' awareness of their needs,
and then use that information in their home-buying and home-selling experience. For example, note that the buyer
really wants a low maintenance property, even though his or her past property was far from maintenance free.
Show the consumer the pros and cons of certain information you have or he or she has available that relates to that
newly realized need. This is "wisdom." This is the value added service.
Fourth, the real estate professional will give true quality service. This means speedily meeting the needs of
consumer and keeping in contact with the consumer throughout the entire transaction and after the transaction,
etc. Also, the real estate professional will do things that keep the home-buyer and eventual seller emotionally
attached to that particular real estate professional. As people move less often and realized that they do not need a
real estate professional to help them stay where they're at, it will become increasingly important to capture those
who do not move or people they know in their circles that will be moving. Follow-up mechanisms will need to be
put in place to effectively meet these needs.

Fifth, the real estate professional in the future will need to offer the consumer all the services the consumer is
interested in. A "shopping" list of quality services offered by the brokerage or the agent can be given to the home
buyer or seller. Let consumers choose their interests. Because most agents do not like to deal with these ancillary
services, it makes sense that brokers offer to service the real estate agent's client/customer on this dimension.

The real estate broker of the future will have greater services expected of them by the more knowledge and
demanding consumer. To effectively compete in the marketplace, real estate professionals should consider being
more flexible change, being better listeners and being quicker learners.
 30

Legal Aspects of Real Estate

∙ Fundamentals of Land Ownership ∙

Sales, Leases and Mortgage ∙
Documentation and Registration ∙ The
Family Code and the Real Estate
Broker
∙ The Comprehensive Agrarian Reform
Program (CARP)
 31

FUNDAMENTALS OF LAND 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
production-sharing 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 the
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.
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 include 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.

32
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

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. By birth
2. Naturalization Process
3. Act of Congress
4. Repatriation
5. 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;
33
(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 which have the
following:
(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. date and place of the transferee's birth;
2. names and addresses of his parents, of his spouse and children if any;
3. area, location and mode of acquisition of his landholdings in the Philippines if any; 4.
his intention to reside permanently in the Philippines;
5. 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
thereof shall not exceed
- 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
34
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 Filipino
citizenship under R.A. No. 9225(Dual Citizenship Law).

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

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:

35
(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 m0nths (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
36
presumed to be co-owned by both spouses, such that a foreigner husband married to a Filipina wife shall be a co
owner 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,
37
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 x x
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
38
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,
-versus
HELMUT 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
39
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.

40
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?

41
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- - - - - - - - - - - - - -

42
SALE, LEASES & 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.
43
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.

44
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 Buyer’s 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 Buyer’s 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.
45
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
46
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 another’s 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 lessor’s 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 lessor’s 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.
1. Prohibition Against Ejectment by Reason of Sale or Mortgage – No lessor or his successor-in
interest 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.
2. 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.
3. 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.
47
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;

-and

PA U. PA, of Legal age, Taiwanese, married, with address at 10th 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 LESSEE’s 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.
48
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 latter’s 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
LESSEE’s.
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 latter’s 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.

49
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.

50
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)
 51
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. There must be two or more parties
2. The parties must be capable or capacitated
3. There must be no vitiation of consent
4. There must be no conflict between what was expressly declared and what was intended
5. 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

52
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 - Deed of absolute sale

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

53
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 Secretary’s Certificate (duly notarized)
Basis and Requirements under PD 1529
Section 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
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 JURAT

Acknowledgement. - “acknowledgment” refers to Jurat. - “ Jurat “ refers to an act in which an

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
voluntary act and deed, and, if he acts in
a particular representative capacity, that
he has the authority to sign in that
capacity.
individual on a single occasion:
(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.

54
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
∙ driver’s license,
∙ Professional regulations commission ID,
∙ National Bureau of investigation clearance,
∙ Police clearance,
∙ Postal ID,
∙ Voter’s 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, seaman’s 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”;
-and

CEEGUE 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 EIGHT HUNDRED
THOUSAND PESOS (P6, 800,000.00), Philippine Currency, payable as follows:

55
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 owner’s 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 have signed this ___________________ at

____________________________________.

“SELLER” “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 I.D. NO. DATE/ PLACE ISSUED

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

_________________________________.
56
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,

-and
JOSE 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 VENDEE
_________________________ ________________________________ JUAN P. DELA CRUZ JOSE
MA. R. TE

With my marital consent:

______________________
MA. D. dela Cruz

SIGNED IN THE PRESENCE OF:

________________________ _________________________

ACKNOWLEDGEMENT

BASIC OF POWERS OF ATTORNEY

57
I. What is a power of ATTONEY?
A power of attorney is an authorization to act on someone else’s in a legal or business matter.
II. WHY NEED A POWER OF ATTORNEY?
∙ Absence of person
∙ inability to be present
∙ Don’t 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 athorized (expressly or ompliedly)
(e) Or he have by law a right to represent him (e,g, guardian,administrator)
(f) Or the contract must be subsequenctly 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:

58
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.
59
XI. MODELS OF EXTINGUISHING AGENCY [EDWARD]
1. Expiration of period
2. Death of principal or agent
3. Withdrawal of agent
4. Accomplishment of purpose
5. Revocation
6. 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

60
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

61
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

62
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
 63
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

64
(under P. D. No. 1529, The Property Registration Decree)
1. Contract of Lease
2. Mortgage
3. Cancellation of Mortgage
4. Certificate of Redemption
5. Memorandum of Agreement
6. Special Power of Attorney
7. 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)
 65
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. By marriage settlements executed before the marriage
2. 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 CONJUGAL PARTNERSHIP OF GAINS

Under the FAMILY CODE

(Effective August 3, 1988) 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 is 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. 124. 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

66
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 spouses
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;
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 COMMUNITY

PROPERTY
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.

67
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 pertain to
the spouse to whom they belong.
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 - capital
⮚ wife's exclusive property - 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
68
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 husband or that
of a donor or both are likewise legitimate children of the husband and his wife, provided, that both of them
authorized or ratified such insemination in a written instrument executed and signed by them before the birth of
the child. The instrument shall be recorded in the civil registry together with the birth certificate of the child.
(55a.25a)

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 mother, and
shall be entitled to support in the conformity with this Code.
The legitime of each illegitimate child shall consist of one-half of a legitimate child. Except for this
modification, all other provisions in the civil code governing successional rights shall remain in force. [Art. 176]

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

69
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 non- filiation
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

70
Agrarian Reform and its Impact on Urban Development
TRANSACTIONS OF AGRI. LANDS NOT COVERED UNDER CARP:
DAR regulates any form of conveyances of agricultural lands from a landowner/transferor to transferee.
2. The rule is, no person is allowed to own, retain and accumulate more than 5.0 hectares of agricultural
lands.
3. Any excess of 5.0 has. ownership of agricultural lands, the excess shall be covered under CARP for
acquisition by the govt. and distribution to qualified farmer beneficiaries
DAR CLEARANCE - Requirement before transfer is effected on a duly registered Certificate of Title
before the Register of Deeds and/or Tax declarations for unregistered lands before the Municipal
Assessor's Office.
(DAR A.O. No. 1, Series of 1989- Rules and Procedures Governing Land Transactions)
-checklist of requirements available at DAR Provincial Office
WHEN IS DAR CLEARANCE NOT REQUIRED FOR TRANSFER OF TITLE OR TAX DEC.
OF AGRI. LANDS?
-When the land was already reclassified by the LGU from agri. to non-agri. (say, residential,
commercial, industrial, etc.) before June 15, 1988 effectivity of CARP.
DUE DILIGENCE FOR AGRI. LAND TRANSACTIONS:
1. Check proof of ownership of the seller whether it is clean, clear of any liens and encumbrances. (ie.
Title before Register of Deeds & Tax Declaration before Municipal Assessor's Office) 2. If the tax
declaration shows the land to be agricultural such as rice land, coco land, corn, mango, etc., the
presumption is that the land still is classified as agricultural. Thus, DAR Clearance is pre requisite to
transfer of title or tax declaration.
3. If the seller alleged that the land is already reclassified as non-agricultural prior to June 15, 1988, such
allegation maybe verified by virtue of a certification issued by the HLURB. If true, no need of DAR
Clearance to transfer title or tax declaration.
4. If the land is still agricultural or only reclassified as non-agri. subsequent to June 15, 1988, DAR
Clearance is required and that buyer must check whether or not the seller exceeds the aggregate
landownership ceiling of 5.0 hectares by way of obtaining an Aggregate Landholding Certification from
the Provincial Assessor's Office and Municipal Assessor's Office where the land is located and where the
seller resides.
5. If the seller does not exceed aggregate agricultural landholding of 5 has. then, the seller has no
problem of transferring/conveying the lot to the buyer.
6. Furthermore, the buyer must verify from the DAR Provincial Office or the Municipal Office whether
or not the land is listed as covered under agrarian reform coverage.
7. If, however, the seller exceeds 5.0 has., then the seller needs to apply for issuance of Certificate of
Retention over the specific property which is a pre-requisite before DAR Clearance on the transfer
will be issued by the DAR Provincial Office. If there is no certificate of retention, DAR Clearance
application will be denied.
8. The excess from the 5.0 has. Retention area will be subject for land acquisition by DAR and
distribution to qualified farmer beneficiaries subject to payment of just compensation. 9. On the part of
the buyer, he must see to it that his ownership of agricultural lands must not exceed 5.0 has. if the land
to be acquired is added to his existing lots.
If the buyer exceeds 5.0 has., then DAR Clearance application will be denied to the extent of the
excess.
REGULATION ON THE USAGE OF AGRICULTURAL LOTS:
1. The Rule shall apply if the land is still classified as agricultural or if the land was only reclassified as
non-agricultural after June 15, 1988.
2. The Rule shall apply regardless of the size of the agricultural land, tenurial arrangement and
commodity produced.
3. DAR has jurisdiction to regulate the actual usage of this kind of lots to ensure food security. 4. As a
rule, agricultural lands must be actually used for agricultural production. 5. DAR may authorize
conversion of the usage of agricultural lands under the following circumstances*:
a. The land was already reclassified by the LGU as non-agricultural after June 15, 1988. b. the land
ceases to be economically feasible and sound for agricultural purposes, c. The locality has become
urbanized and the land will have greater economic value for residential, commercial or industrial
purpose
*Sec. 22, R.A. 9700
7. “Reclassification” is different from “Conversion”*
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“Conversion" is the act of changing the current use of a piece of agricultural land into some other use
as approved by the DAR while,
"Reclassification" is the act of specifying how agricultural lands shall be utilized for non-agricultural
uses such as residential, industrial, and commercial, as embodied in the land use plan, subject to the
requirements and procedures for land use conversion”
( Alarcon v. CA, Ros v. DAR, CREBA v. DAR)
“Conversion" is within the jurisdiction and authority of the Dapartment of Agrarian Reform (DAR) per
R.A. 6657 as amended by R.A. 9700
"Reclassification" is within the jurisdiction and authority of the Local Government Unit (LGU) like the
Provinces, Cities and municipalities per the Local Government Code R. A. 7160 8. DAR has authority to
approve application for land use CONVERSION of agricultural lands to non agricultural use.
- DOJ Opinion no. 44 Series of 1990
 - ROS V. DEPARTMENT OF AGRARIAN REFORM
- CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA), v. THE
SECRETARY OF AGRARIAN REFORM

(G.R. No. 183409, June 18, 2010)

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA),
v.
THE SECRETARY OF AGRARIAN REFORM
(G.R. No. 183409, June 18, 2010)

“XXX XXX XXX, a mere reclassification of an agricultural land does not automatically allow a
landowner to change its use. He has to undergo the process of conversion before he is permitted to use
the agricultural land for other purposes.”
“It is clear from the aforesaid distinction between reclassification and conversion that agricultural lands
though reclassified to residential, commercial, industrial or other non-agricultural uses must still undergo
the process of conversion before they can be used for the purpose to which they are intended.”
“Nevertheless, emphasis must be given to the fact that DAR’s conversion authority can only be exercised
after the effectivity of Republic Act No. 6657 on 15 June 1988. The said date served as the cut-off period
for automatic reclassification or rezoning of agricultural lands that no longer require any DAR
conversion clearance or authority. Thereafter, reclassification of agricultural lands is already subject to
DAR’s conversion authority. Reclassification alone will not suffice to use the agricultural lands for other
purposes. Conversion is needed to change the current use of reclassified agricultural lands.”
“xxx xxx xxx. For reclassified agricultural lands, therefore, to be used for the purpose to which they are
intended there is still a need to change the current use thereof through the process of conversion. The
authority to do so is vested in the DAR, which is mandated to preserve and maintain agricultural lands
with increased productivity. Thus, notwithstanding the reclassification of agricultural lands to non
agricultural uses, they must still undergo conversion before they can be used for other purposes.

72
73

Land and Property Development

 ∙ Surveying, Site Location and Map Reading ∙
The Housing and Land Use Regulatory Board
(HLURB)
∙ Subdivision and Townhouse Concept and
Development
∙ Urban and Rural Land Use, Planning,
Development and Zoning
∙ Condominium Concepts and Other Types of Real
Estate Holdings
∙ Joint Venture Arrangements
∙ Basic Principles of Ecology

74
SITE LOCATION AND MAP READING

SITE LOCATION

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

- Importance of lot plan
- Site’s 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 is an established land monument at a particular site or location. ( such as :
BLMM,BBM,LM,BM,MBM,FH, etc.)
- 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 preliminary surveys,

PACING is the counting the number 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)

75
Bearings and Azimuth Meridian 38000

AZIMN = 1200
AZIM5 = 3000
N

Bearing is always an angle less than 90%

120
from N or S (medium) which ever is nearest.
1000 1200
A

Azimuth is always the clockwise horizontal angl W……..

0
270 900 F

600
B
Bearing S
S………E
MAP READING
between the time and given meridian.

1800

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

76
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 - Bureau of lands Location and Monument* BLBM -
Bureau of lands Barrio Monument* CBM - City boundary
Monument
PBM - Provincial Boundary Monument MBM -
Municipal Boundary Monument BBM - Barrio
Boundary Monument

PUBLIC LAND SURVEY

Ap - Advance plans
H - Homestead application
F - Free Patent application
Si - Sales Application, Individual
Sc - Sales Application, Corporation* Mci - Miscellaneous Sales
Application, individual* Li - Lease Application, Individual Lc - Lease
Application, Corporation Mli - Miscellaneous Lease Application,
Individual Mlc - Miscellaneous Lease Application, Corporation

PRIVATE LAND SURVEY

Psu - Private Survey
Psd - Private Subdivision
Pcn - Private Consolidation Survey
Pcs - Private Consolidation-Subdivision Survey

GOVERNMENT LAND SURVEY

Flb - Friar Land Survey
Fls - Friar land Subdivision
Fls - Friar lands Relocation
Ngl - National Government Property Lease Ngs - National
Government Property Sale

OTHER LAND SURVEYS

Ml - Monument Location Survey*
Ms - Municipal Streets Survey
Prs - Provincial Road survey
Pb - Political Boundary
Swo - Special Work Order
Amd - Amendment Survey
Tri - Triangulation Survey
Top - Topographic Survey
Rs - Resurvey*
Rel - Relocation Survey*
Vs - Verification Survey*
Sgs - Segregation Survey*

77
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 quasi judicial
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
78
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
79
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
80