Department af Human Settlements and lan Development ‘HigweonyPoratey Por epi Son DEPARTMENT ORDER NO._2.0.9 3-07 SERIES OF 2023 AUTHORIZING THE ISSUANCE OF CERTIFICATE OF REGISTRATION AND LICENSE TO SELL FOR PROJECTS WITH ANNOTATED IEN OR ENCUMBRANCE ON THE CERTIFICATES OF TITLE, AND PRESCRIBING GUIDELINES AND. ‘SAFEGUARDS FOR THE ISSUANCE THEREOF WHEREAS, under Section 4, Rule 74 of the Rules of Court, a real property which has been the subject of an extra-judicial setiement and distrbution shall main charged with liability to creditors, heirs, or ther persons unduly deprived of ther paricipation in the estate of the decedent for the full period of two (2) years after such distibution, rolwithstanding any transfers of real estate that may have been made; WHEREAS, such condition as provided under Section 4, Rule 74 of the Rules of Court creates a legal encumbrance or lien on the real property in favor of the excluded heirs or Creditors and thus, in accordance with Section 44 of Presidential Decree No. 1529, or the “Property Registration Decree’ the same shall be annotated in the certificate of tie: WHEREAS, under Section 7 of Republic Act No. 26 entitled “An Act Providing @ Special Procedure for the Reconstituion of Torrens Certificates of Tile Lost or Destroyed’ Cortificates of tile reconstituled exrajudically shall be without prejudice to any party ‘whose right or interest in the property was duly noted inthe orginal certificate atthe time it was lost or destroyed, bu: entty or notation of which has not been made on the reconstituted certificate, and that reservation shall be noted as an encumbrance on the reconstituted certficate of tte WHEREAS, under Section 9 of Republic Act No, 26, such annotation may only be cancelled upon petition with the proper court, Provided that, if ater the expiration of two years from the date of the reconstitution ofthe certificate of tile no petition was filed by any person whose right or interest was duly noted in the orginal certificate at the time it ‘was lost or destroyed but does not appear so noted on the reconstituted cerficate, then, such annotation may be judicially cancelled; WHEREAS, Section 4 of Presidential Decree No. 957 (PD 957), also known as the “Subdivision and Condominium Buyers’ Protective Decree" requires that the tifa to the property to be developed as a subdivision or condominium project is free from all liens ‘and encumbrances for the issuance of the projects Certficate of Registration and License to Sell (CRILS); o=Page 2 WHEREAS, not only in ccmpliance with the mandate of Republic Act No. 11032, or the "Ease of Doing Business and Eficient Government Service Delivery Act of 2018 Of reducing red tape and expediting business-related transactions in the government, but more importantly, in igh of the exigency of accelerating housing development and production to address the mounting housing needs of the Country, the requirements land procedures in the issuence of the CRILS of residential housing projects should further be relaxed but stil safeguarding buyers’ rights and protection WHEREFORE, pursuantio the foregoing, the folowing Rules is hereby issued, Section 1. Objective. This Rules aims to fasttrack housing development by ‘authorizing the issuance of Certifcates of Registration and Licenses to Sell (CR/LS) {or projects with certificates o te annotated with lien or encumbrance under Section 4, Rule 74 of the Rules of Court or Section 7 of Republic Act No. 26, provided thatthe rules and requirements hereinafter set forth are srtly complied with Section 2. Application for CR/LS of Projects With Certificate of Title Annotated under Section 4, Rule 74 of the Rules of Court, The applications for the issuance of the CRILS for projects with certificates of tite annotated with en or ‘encumbrance under Section 4, Rule 74 of the Rules of Court may be accepted andior ‘ranted provided that: 2.1 The application i fled within the two-year period from date of inscription ‘of the annotation, and the developer shal: 2.11 Post an adequate surety bond in accordance with Secton 4 hereof, to answer for any claim that might be charged against the property; and 2:12 Execute an submit an undertaking under oath that he shall Immediately cause the cancellation of the annotation after the lapse of the two-year period, there being no timely petition fed by any excluded heir or creditor. 22 "If the application is fled after the two-year period from date of inscription, a bond shall not be required, provided thet, the developer submits proof of fling of appropriate petition for the cancellation of such annetation, Section 3. Application for CR/LS of Projects With Reconstituted Certificate of Title Annotated under Republic Act No. 26. The application forthe issuance of the CRILS fora project witha reconstituted certificate of tle annotated with lien or encumbrance under Republic Act No. 26 may only be accepted andlor granted provided that Deparment Order No. OSes of 2023 ‘Authoring The Issuance OFCWILS for Projets with Certifeae of Tle AnnotationsPage3 3.11 The two-year period has lapsed and no petition was filed by any person for the annotation of any right or interest not noted on the ‘reconstituted tile; 3.12 The developer shall submit proof of fling ofthe appropriate petition for the cancellation ofthe annotation; and 3.13 The developer shall posta bond in accordance with Section 4 hereot. Section 4, Surety Bond. The surety bond as raquired under Sections 2 and 3 hereof be fled or posted by the developer in accordance with the following 4.1. It shall be executedin favor ofthe Department of Human Settlements and Utban Development to quarantee the payment or satisfaction of any ciaim that might be charged against the property 42 It shall be at least equivalent tothe zonal valuation of the property atthe time of application of the license to sell, and 43. shall subsist and remain effective, or be renewed, untl such annotation has been ited. Section 5. Delivery of Buyer's Clean Certificate of Title and Cost of Cancellation of the Annotation. Notwithstanding the foregoing, the developer shall timely deliver the united or subdivided tte in favor of the buyer in accordance with the ‘contract to sell or any other purchase agreement, free from any len or encumbrance. The ‘cost of the cancellation of the annotation shall fuly be for the account of the developer ‘and cannot be directy or indirsctly passed on to the buyers as part of the purchase price ‘ras an incidental charge or foe. Section 6. Administrative Fines, Sanctions and Penalties. Administrative fines, ‘sanctions. and penalties shall be imposed for any violation of this Rulles in accordance with existing Schedule of Fines, including therewith, the imposition of cease-and-desist order. Seetion 7. Repealing Clause. All existing issuances or provisions therein that are Inconsistent with this Department Order are hereby repealed or amended accordingly. (\ KK =o uw then i 7 i