Dear Attorney,
I would like to seek your advice regarding a legal concern. What will happen if an adverse claim lapses after the 30-day period? How does this affect the rights of the claimant and the property in question?
Concerned Property Owner
Answer
When an adverse claim lapses after the 30-day period, its effects on the property in question and the rights of the claimant can be significant. Under Philippine law, specifically under Section 70 of Presidential Decree No. 1529 (the Property Registration Decree), an adverse claim is designed to protect the rights of a person who has a claim on the property that is adverse to the registered owner.
Here’s what typically happens after an adverse claim lapses:
Automatic Cancellation: If no action is taken by the claimant within the 30-day period, the adverse claim is automatically canceled by operation of law. This means that the annotation on the title, which serves as notice to third parties of the adverse claim, is no longer valid. Consequently, the claimant's interest or claim against the property is no longer recognized in the land title records.
Impact on Claimant's Rights: Once the adverse claim is canceled, the claimant loses the legal protection provided by the adverse claim annotation. This does not necessarily mean that the claimant loses the right to pursue their claim, but it does make it more challenging. Without the adverse claim, the claimant’s interest is no longer evident to third parties or potential buyers, making it harder to assert their claim.
Next Steps for the Claimant: If the claimant still wishes to pursue their interest in the property, they would typically need to file a court case to establish their rights. A favorable court decision can lead to a new annotation on the title reflecting the court's judgment, effectively reinstating the claim.
Effect on the Property and Third Parties: For third parties, such as potential buyers or mortgagees, the cancellation of the adverse claim makes the title appear "cleaner" and free from disputes. This can lead to transactions that might disregard the claimant's interest, complicating future recovery efforts by the claimant.
Possible Remedies: The claimant may consider filing a new adverse claim if there are grounds to do so. However, repeatedly filing adverse claims without substantive basis might be seen as harassment or an abuse of process, potentially leading to legal consequences.
In summary, the lapse of an adverse claim after 30 days results in its automatic cancellation, removing the protection and notice it provided to the claimant. This does not eliminate the claimant's rights but significantly weakens their position, making legal action the likely next step to assert any remaining interest in the property.