Legal Remedies for Discrepancy in Lot Area in the Philippines

What happens if the actual lot area is smaller than the one stated in the title? What can we demand from the developer?

In the Philippines, discrepancies between the actual lot area and the area stated in the title are not uncommon and can lead to legal disputes. The following outlines the legal remedies available for buyers in such situations:

Legal Basis

The primary legal framework governing this issue includes the Civil Code of the Philippines and relevant jurisprudence. The sale of real estate in the Philippines is governed by the principles of contractual obligations, where accuracy in the description of the property sold is fundamental.

Actions for the Buyer

1. Rescission of Contract:

   • Grounds: Under Article 1191 of the Civil Code, if the actual lot area is significantly smaller than what was stated, the buyer may seek to rescind the contract due to a substantial breach.
   • Process: The buyer must file a complaint before the court, demonstrating the discrepancy and its material impact on the agreement.

2. Proportional Price Reduction:

   • Grounds: If the discrepancy is not substantial, the buyer may opt for a proportional reduction in the purchase price.
   • Process: The buyer can negotiate directly with the developer or seek judicial intervention to adjust the price proportionally to the deficiency in the lot area.

3. Damages:

   • Grounds: The buyer can claim damages if the discrepancy causes additional expenses or losses.
   • Process: A claim for damages must be filed in court, and the buyer must prove the extent of the losses incurred due to the incorrect lot area.

Developer’s Obligations

1. Accuracy in Documentation:

   • Developers are obligated to ensure that all representations in the property title and promotional materials accurately reflect the actual property.

2. Rectification of Titles:

   • Developers should facilitate the correction of any discrepancies in the property title. This involves updating the official land records to match the actual lot area.

3. Transparency and Disclosure:

   • Developers must disclose any known discrepancies or issues related to the property’s area before the sale. Failure to do so can be considered a fraudulent act under Article 1338 of the Civil Code.

Practical Steps for Buyers

1. Due Diligence:

   • Buyers should conduct a thorough inspection and survey of the property before purchasing to verify the actual lot area.
   • Engaging a licensed geodetic engineer for an independent survey can help confirm the property's dimensions.

2. Legal Consultation:

   • Consulting with a real estate lawyer can provide clarity on the buyer’s rights and possible actions if discrepancies are found.

3. Documentation:

   • Keeping all transactional documents, communications, and survey results is crucial for supporting any claims against the developer.

Conclusion

When facing a discrepancy between the actual lot area and the title in the Philippines, buyers have several legal remedies. They can demand the rescission of the contract, a proportional price reduction, or claim damages. Ensuring thorough due diligence and seeking legal advice can significantly aid buyers in protecting their interests and obtaining the appropriate remedy.