Below is a comprehensive discussion of the requirements, procedures, and legal considerations for a building donated without a deed under Philippine law. This includes relevant statutory provisions, Bureau of Internal Revenue (BIR) requirements, local government unit (LGU) protocols, and practical pointers. Please note that while this overview provides general information, it should not be considered formal legal advice. If you are dealing with a specific case, always seek assistance from a qualified Philippine attorney.

1. Governing Law on Donations of Real Property

In Philippine law, a building is generally considered an immovable (or real) property under Article 415 of the Civil Code. Therefore, donations involving a building are governed primarily by the Civil Code provisions on donations of real property, particularly Articles 748, 749, and related provisions.

1.1 Formalities of Donation of Real Property

Written Instrument: Article 749 of the Civil Code requires that a donation of immovable property must be made in a public instrument (i.e., a notarized deed).
Acceptance: Under the same provision, the donee’s acceptance of the donation must also be made in a public instrument. If acceptance is in a separate document, the donor must be formally notified thereof to perfect the donation.
Non-Compliance: A donation of real property that is not executed in a public instrument (or where the acceptance is not properly documented) is considered void and produces no legal effect.

Because of these stringent requirements, a “donation without a deed” will typically fail to satisfy these formal requirements. In effect, there is no valid transfer of ownership if the donor merely “hands over” the building verbally or via informal documents.

2. What Happens If a Building Is Donated Without a Proper Deed?

2.1 Nullity of Donation

If there is no proper deed (public instrument) and the acceptance is not executed in a similar manner, the donation is void ab initio. This means:

The donee cannot legally register the building under his or her name.
No valid transfer of title or ownership occurs.
The donee could potentially be treated as a mere possessor, occupant, or usufructuary without a valid document of title.

2.2 Potential Equitable Remedies

Sometimes, a donor and donee genuinely intend to donate a building, but they neglect the formalities or do not realize the legal requirements. In certain instances, legal counsel may explore remedies such as:

Reformation of Instrument: If there is some written proof of the intended donation, a court may be petitioned to reform the instrument to meet legal requirements. This is limited to cases of mistake, fraud, inequitable conduct, etc.
Execution of a New Deed: Often, the most straightforward remedy is for the donor to execute a valid “Deed of Donation” in a public instrument, which the donee will then accept, also in a public instrument.

3. The Certificate Requirement: BIR and LGU Documentation

3.1 BIR Certificate Authorizing Registration (CAR / eCAR)

Even if a valid deed of donation has been executed, Philippine law requires payment of donor’s tax (or obtaining the donor’s tax exemption, if applicable). The Bureau of Internal Revenue (BIR) issues a Certificate Authorizing Registration (CAR or eCAR) once:

The donor’s tax (and any other applicable taxes) have been settled; or
The BIR verifies the transaction is exempt from donor’s tax (for instance, certain gifts to qualified charities or specific exempt transactions, subject to compliance with BIR rules).

This CAR/eCAR is crucial because registries and local governments often require it as proof that the tax obligations have been complied with. Without it, the donee cannot proceed with updating the property tax declaration or registering the building under his or her name in the local assessor’s office.

3.2 Updated Tax Declaration from the Local Assessor’s Office

Once the BIR issues the CAR/eCAR:

The donee must submit the notarized Deed of Donation, the CAR/eCAR, and other required documents (e.g., IDs, sworn statements of the market value of the property) to the local government (municipal or city assessor’s office).
The assessor will then issue a new Tax Declaration in the name of the donee.
This Tax Declaration certifies the donee’s ownership for local real property tax purposes.

In the context of a building, especially if the land and building are assessed separately (which often happens if the donor owns the land but is only donating the building or if the building is distinct from the land title), the local assessor’s office will maintain a separate tax declaration for that building.

4. Effects of Non-Compliance and Practical Steps

4.1 Without a Valid Deed or CAR, No Effective Transfer

If you attempt to update the local tax declaration or claim ownership without a valid notarized Deed of Donation and the corresponding CAR/eCAR, the local assessor’s office will generally refuse to update the records. The donation remains invalid for all practical intents and purposes.

4.2 Back Taxes and Penalties

Should a donor attempt to formalize a donation belatedly, the BIR might impose surcharges, interest, or penalties for late donor’s tax filing. The longer the delay, the higher these costs can accumulate.

4.3 Protection for the Donee

For the donee’s protection, it is critical to have:

A properly executed public instrument (Deed of Donation).
Duly acknowledged acceptance in a public instrument.
BIR tax compliance (payment or exemption).
Registration and issuance of a new Tax Declaration under the donee’s name.

Without these steps, the donee will have difficulty enforcing any claim of ownership over the building.

5. Frequently Asked Questions

5.1 Is a simple letter or privately signed document enough to donate a building?

No. Under the Civil Code, the donation of real property (including a building) must be in a public instrument (notarized). A private document or a letter will not suffice.

5.2 Can the donor just transfer physical possession of the building to effect the donation?

No. Transfer of possession alone is insufficient for immovable property. The law explicitly states that donations of real property must be accomplished via a notarized deed, with the donee’s acceptance also in the same or another notarized document.

5.3 What if the building stands on land that is not part of the donation?

In many LGUs, the tax declaration for the building and the land can be separated. However, the building is still considered an improvement or immovable property under the law. The donation of the building alone must still satisfy the formal requirements. If the land belongs to someone else, that legal relationship (whether lease or permission to build) also must be documented properly.

5.4 Does a donated building need to be covered by a Transfer Certificate of Title (TCT)?

By itself, a building does not get a TCT—rather, TCTs or Certificates of Title in the Philippines typically cover land. Buildings and other improvements are usually reflected in the property’s tax declaration. Nonetheless, if the building is on titled land, a note or annotation can sometimes be made in the Registry of Deeds records, but the primary local registration for the building is through the city or municipal assessor’s office in the form of the Tax Declaration.

5.5 What happens if the donor is deceased?

If the donor died without finalizing the deed of donation (i.e., no public instrument, no acceptance, no payment of donor’s tax), then the building typically falls back into the donor’s estate. It may then become subject to estate proceedings. The alleged donee must check if there is any testamentary disposition (will) or any enforceable document acknowledging the donation. Otherwise, the building will be distributed among the heirs according to law on intestate succession.

6. Summary and Key Takeaways

Donations of Buildings Must Be in a Public Instrument: Under Philippine law, any donation of immovable property (including a building) executed without a properly notarized deed is void.
Acceptance Must Be in a Public Instrument: The donee’s acceptance must be similarly documented; if separate from the main deed, the donor must be notified.
BIR Certificate Authorizing Registration (CAR/eCAR) Is Required: To update the local tax records and reflect the donee’s name, the donee must secure a CAR/eCAR after paying donor’s tax or securing exemption from the BIR.
Tax Declaration Update: With the deed and CAR/eCAR in hand, the donee can proceed to update the building’s tax declaration with the local assessor’s office.
No Deed, No Valid Donation: If the building was purportedly donated without a deed, the donation is not legally effective. The proper remedy is to execute a valid Deed of Donation with acceptance, then process the BIR documentation.
Seek Legal Advice: Because non-compliance can lead to invalid transfers, potential penalties, and disputes, it is always best to consult a Philippine lawyer experienced in property and taxation law.

Final Word

The donation of a building in the Philippines must satisfy the strict requirements on form (public instrument) and acceptance, as well as the tax filing obligations with the BIR. In practical terms, any donation “without a deed” is highly likely to be void and will not allow the donee to acquire lawful ownership. To ensure a valid and fully recognized donation, both donor and donee should:

Execute a notarized Deed of Donation describing the building.
Confirm acceptance by the donee in a public instrument.
Pay the donor’s tax (or secure an exemption) and obtain a BIR CAR/eCAR.
Update the local tax declaration at the assessor’s office.

Following these steps will provide both parties with legal security, avoid later disputes, and ensure the building is validly transferred to—and recognized as owned by—the donee.