Understanding the Deed of Absolute Sale

In this blog, let us discuss about the Contract of Sale of Real Property, particularly the Deed of
Absolute Sale.

When you buy a real property (residential lot, house-and-lot, or condo unit), you and the seller
will enter into a Contract of Sale. Who will make the Contract of Sale? There are samples in the
internet. To be secure, ask a lawyer to draft the Contract of Sale based on your (you and the
seller) agreements.

Contract of Sale

Article 1458 of The Civil Code of the Philippines (Republic Act 386) defines a contract of sale
as follows:
Article 1458. By the contract of sale one of the contracting parties obligates himself to transfer
the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in
money or its equivalent.
The essential elements of a contract of sale are the following:
1. Consent or meeting of the minds, that is, consent to transfer ownership in exchange for
the price;
2. Determinate subject matter; and
3. Price certain in money or its equivalent.
Full Payment: Deed of Absolute Sale
 If payment of the real property is full, there is immediate transfer of ownership.
 Use the Deed of Absolute Sale
Installment Payment: Deed of Conditional Sale
 If payment of the real property is installments, there is no transfer of ownership.
 Use the Deed of Conditional Sale
Contract of Sale versus Contract to Sell
 In a contract of sale, title passes to the vendee upon the delivery of the thing sold;
whereas in a contract to sell, by agreement the ownership is reserved in the vendor and is
not to pass until the full payment of the price.
 In a contract of sale, the vendor has lost and cannot recover ownership until and unless
the contract is resolved or rescinded; whereas in a contract to sell, title is retained by the
vendor until the full payment of the price,..
 In the contract of absolute sale, there is absolute transfer of ownership upon delivery of
the thing sold.
 In the contract of conditional sale and contract to sell, the ownership of the real property
shall not pass to the buyer until he has fully paid the price.
Difference between Contract of Conditional Sale and Contract to Sell
 In a contract to sell, the full payment of the purchase price does not automatically transfer
the ownership to the buyer, even if the property is previously delivered to him. The
prospective seller must still convey title to the prospective buyer by entering into a
contract of absolute sale.
 In a contract of conditional sale, the full payment of the purchase price renders the sale
absolute and the previous delivery of the property has the effect of automatically
transferring the seller’s ownership to the property to the buyer. No need to enter into a
contract of absolute sale.
Notarization of the Deed of Absolute Sale
 When the seller and the buyer signed the Deed of Absolute Sale, there is already a
transfer of ownership of the real property. It deems that the buyer fully paid the purchase
price, And the seller handed over the owner's certificate of title to the buyer.
 The contract, in our case the Deed of Absolute Sale, even if not notarized, is valid.
 "Contracts shall be obligatory, in whatever form they may have been entered into,
provided all the essential requisites for their validity are present." (Art 1356 of the
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; and
(3) Cause of the obligation which is established." (Art 1318 of the Civil Code)
 The notarization of the Deed of Absolute Sale is need for the registration of the property.
 "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 registerable."
Meaning, for the Deed of Absolute Sale to be registered, it must be notarized.
The discussion is for educational purposes only. For your specific case, consult a lawyer. If you
have some questions, you may ask us. If you are looking for a residential lot, house-and-lot, or
condo unit in Cebu, contact us for free assistance.