Can Heirs Sell Inherited Property Without Judicial Settlement in the Philippines?

A practical-legal guide as of 24 April 2025

1. Succession opens at death—what heirs really own

Under Article 777 of the Civil Code, “the rights to the succession are transmitted from the moment of the death of the decedent.” Heirs therefore become co-owners of the entire estate the instant the decedent dies, even before any court proceeding.citeturn4search0
Because the estate is still undivided, each heir merely holds an ideal or undivided share. This temporary co-ownership is governed by Articles 493–494 of the Code, which allow every co-owner to dispose of his or her own aliquot share, but not the shares of the others.citeturn5search1turn5search4

2. Judicial vs. extra-judicial settlement—why it matters

Mode	Typical triggers	Result before a sale is registered
Judicial settlement (Probate or intestate proceedings)	• There is a will
• The estate has debts
• Heirs cannot agree
• A minor, incapacitated or unborn heir is involved without a duly appointed guardian	Partition, approval by court; court order is used in lieu of Deed of Sale
Extra-judicial settlement (EJS) – Rule 74, §1 Rules of Court	• No will and no outstanding debts
• All heirs are of legal age or represented
• Heirs are unanimous	Heirs execute a public instrument (usually “Deed of Extrajudicial Settlement of Estate and Sale”), then publish the fact of settlement once a week for three consecutive weeks in a newspaper of general circulation, post a bond, pay estate tax, and register the deed	citeturn6search0turn6search1

Key point: The Bureau of Internal Revenue (BIR) and Registry of Deeds will not issue a Certificate Authorizing Registration (CAR) or transfer the title to the buyer unless some form of settlement (judicial or extra-judicial) is proven.citeturn0search2

3. Can heirs technically sell before settlement?

Selling the whole property without settlement
• Void as to the shares of non-consenting heirs.
• Buyer becomes a co-owner only to the extent of the seller-heir’s ideal share.citeturn5search1turn5search6
• Title cannot be transferred because the decedent remains the registered owner.
• Remaining heirs may redeem the share within thirty (30) days under Article 1620 (right of legal redemption among co-owners).citeturn0search4turn0search9
Selling after executing an Extrajudicial Settlement with Sale in one deed
• Perfectly valid provided the EJS requisites are met.
• Estate tax must be paid first; CAR is presented to the Registry of Deeds, which then cancels the old title and issues a new one directly in the buyer’s name.

4. When settlement must be judicial

Situation	Legal basis / rationale
A will exists	Probate is mandatory before any disposition (Rule 75 ROC).
The estate owes debts or taxes that will not be fully paid on settlement	Rule 74 bars EJS if “the decedent left … debts.”
An heir is a minor or legally incapacitated	Any sale of a minor’s property requires court approval of the guardian or parents; otherwise the sale is voidable.citeturn0search5turn0search10
Heirs cannot agree on shares	Ordinary action for partition or special proceeding for settlement needed.

5. Step-by-step guide to an Extra-Judicial Settlement with Sale

Draft the deed – Include (a) identification of heirs and shares, (b) complete property description, (c) statement that decedent left no will and no debts.
Notarize & file a bond equal to the value of the personal property, if any (Rule 74 §1).citeturn6search0
Publish notice of the settlement once a week for three consecutive weeks.citeturn6search1
File the Estate Tax Return and pay estate tax or avail of the Estate Tax Amnesty (see below). Present the notarized deed and publication proof to the BIR.citeturn0search2
Secure the eCAR for each parcel; pay Documentary Stamp Tax and transfer taxes.citeturn0search2
Register the deed and eCAR with the Registry of Deeds/Assessor’s Office; new title/tax declaration is issued directly in the buyer’s name.citeturn6search9

6. Estate tax and the 2025 amnesty window

Republic Act 11956 extended the Estate Tax Amnesty until 14 June 2025 and expanded coverage to estates of persons who died on or before 31 May 2022. Heirs who have not yet paid estate tax may settle at a rate of 6 % of the net estate without penalties or interest, file with any BIR Revenue District Office, and pay in installment within two years.citeturn1search0turn1search2turn1search3

Tip: Avail of the amnesty before the sale to avoid surcharges and to obtain the eCAR quickly.

7. Creditors’ and third-party rights after an EJS

Even after registration, any creditor or omitted heir may file a claim within two (2) years from the date of publication (Rule 74 §4). The bond filed with the Register of Deeds answers for such claims. Heirs and buyers should therefore keep a copy of the bond and retain part of the proceeds as contingency.

8. Frequently-asked questions

Question	Short answer
Can one heir force the others to sell?	No. A co-owner may demand partition (Art 494), but cannot compel a sale without consent.
Can heirs include the buyer in the EJS?	Yes, by executing an “Extrajudicial Settlement of Estate and Sale,” streamlining registration.
What if the property is mortgaged?	The mortgage must be settled or assumed; otherwise the mortgagee’s consent is required.
Is publication still needed if the property is just cash or personalty?	Yes—Rule 74 requires publication of the fact of settlement, whatever the composition of the estate.
May the BIR refuse to issue the CAR if there is no settlement?	Yes. Revenue Regulations 10-2023 require proof of settlement (judicial order or EJS) before the CAR is released.citeturn0search3

9. Practical checklist before signing any Deed of Sale

Verify all legal heirs; secure birth/marriage certificates.
Obtain CTC of title; check for liens.
Ascertain outstanding debts/taxes.
Decide: EJS or court proceeding?
Budget for estate tax, DST, transfer tax, registration fees, publication, bond, professional fees.
Ensure minors are represented and a court order is obtained if they will sell.
Keep originals of (a) notarized deed, (b) affidavit of publication, (c) bond, (d) eCAR, (e) new title.

10. Bottom-line

Yes, heirs may sign a sale even before formal settlement, but the buyer gets only the seller’s undivided share, cannot register the title, and remains exposed to redemption, partition suits and BIR refusal.
Practically, an Extrajudicial Settlement (when its strict requisites exist) is the fastest and least expensive route; otherwise a judicial settlement is unavoidable.
With the Estate Tax Amnesty in force until 14 June 2025, settling the estate before the sale is both legally sound and financially wise.

This article is for general information only and is not a substitute for personalized legal advice. Always consult a Philippine lawyer and your local BIR/Registry of Deeds for document-specific requirements.