Dear Attorney,

I have a concern about a property I bought, a subdivided lot where I built my house. However, I haven’t had the property titled in my name. Now, I am planning to sell this house and lot. Who should sign the deed of sale—the original owner of the lot or me?

Sincerely,
Homeowner Selling a Lot

Insights

In the Philippines, when selling real property, certain legal requirements must be fulfilled to ensure a valid transfer of ownership. The situation in question involves a person selling a house built on a lot that has yet to be titled in their name. Here's a breakdown of the key legal concepts and steps involved.

Ownership and Title Transfer

Under Philippine law, a title is the best proof of ownership of real property. If the seller has not registered the lot under their name, the original owner remains the registered owner in the eyes of the law, despite the house being built on it. This can complicate the process of transferring ownership to a buyer.

Who Signs the Deed of Sale?

In cases like this, the person selling the property—referred to as the "seller"—must have a legitimate claim to ownership. The seller is the one who should sign the deed of sale. However, if the land title is still under the original owner’s name, the seller may need to coordinate with the original owner for the proper execution of legal documents, such as an extra-judicial settlement or sale deed transferring the title to the seller first before they can legally sell it to another party.

If the title is not transferred, the buyer may demand that the sale include an agreement where the original owner directly transfers the title to them, bypassing the current seller.

Essential Legal Documents

The following documents are typically required in such transactions:

Deed of Sale – This formalizes the sale between the seller and buyer. It must include a detailed description of the property, including the house and lot.
Certificate of Title – Ideally, the title should be in the seller’s name before executing a sale. If it’s still under the original owner's name, additional documents might be required to show the chain of ownership.
Tax Declaration – Updated tax payments are critical to ensure the sale process goes smoothly.
Transfer of Title – After the sale, the buyer must apply for the transfer of title with the Registry of Deeds.

Legal Risks for the Seller

Selling a property without first obtaining a title in one’s name can pose legal risks. The buyer may question the seller's legal capacity to sell the land, resulting in delays or even the nullification of the transaction. To avoid these issues, it is advisable to regularize the title first before selling the property.

Legal advice is crucial in ensuring the sale process complies with the law, and that the seller and buyer are protected in case of disputes.