Letter to a Lawyer

Dear Attorney,

I am currently negotiating the purchase of a portion of land from an owner. One concern that has come up is regarding the cost of the geodetic survey necessary for measuring and formally defining the land I am buying. I am unclear as to whether I, as the buyer, am responsible for covering the expense of this survey, or if it falls upon the seller. Could you kindly clarify the legal obligations surrounding this matter under Philippine law?

Sincerely,
A Prospective Land Buyer

Legal Analysis on the Obligation to Pay for a Geodetic Survey in a Land Purchase under Philippine Law

The issue of who bears the cost of a geodetic survey in a land purchase transaction is not only a practical concern but also a legal one. In the context of land sales in the Philippines, a geodetic survey plays a critical role, especially when the property to be sold is not yet properly delineated or subdivided. This comprehensive article will explore the legal obligations of both the buyer and the seller regarding the geodetic survey, using applicable laws and jurisprudence in the Philippines.

What is a Geodetic Survey?

A geodetic survey is an essential process in real estate transactions, particularly in cases involving the sale of a portion of a larger parcel of land. It involves the precise measurement and mapping of the land’s boundaries and dimensions by a licensed geodetic engineer. The survey aims to provide an accurate description of the land being transferred, ensuring that the boundaries are clearly delineated to prevent disputes and encroachments.

In practice, geodetic surveys are crucial when there is a need to segregate a portion of a larger property, especially in subdivisions or partial sales. Without a proper survey, it is difficult for the buyer or seller to ascertain the exact location, size, and limits of the property being sold. Furthermore, the result of the geodetic survey is used to update the title, making it an indispensable part of the transfer process.

Legal Framework Governing Land Sales and Surveys in the Philippines

Under Philippine law, there is no explicit statutory provision that directly imposes the obligation to pay for the geodetic survey on either the buyer or the seller. Therefore, the matter of who pays for the survey generally depends on several factors, including the following:

Contractual Stipulation
Customs of the Place
Nature of the Transaction

Let us examine each of these factors in detail:

1. Contractual Stipulation

The governing principle in any sale, including the sale of real property, is the law on obligations and contracts. Under Article 1306 of the Civil Code of the Philippines, contracting parties may establish such stipulations, clauses, terms, and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. Thus, the matter of who will bear the cost of the geodetic survey can be determined by mutual agreement between the parties.

In many land transactions, the parties agree on who will shoulder the cost of the survey before the sale is consummated. If there is a clear stipulation in the contract of sale that the buyer will bear the cost of the geodetic survey, then the buyer is legally obliged to pay for it. Conversely, if the contract provides that the seller will pay for it, then the seller must shoulder the cost.

It is therefore advisable for both the buyer and the seller to include a provision in the sale agreement or deed of sale that explicitly addresses this matter to avoid disputes in the future. Absent a specific contractual provision, the issue will have to be resolved by looking into the customs and nature of the transaction.

2. Customs of the Place

In the absence of a contractual stipulation, the general rule is to refer to the customs or prevailing practices in the locality where the sale is taking place. According to Article 1376 of the Civil Code, customs which are contrary to law, public order, or public policy shall not be countenanced. However, if there is a customary practice in a specific area regarding who pays for the geodetic survey, that custom may serve as a basis for determining the obligation.

In many provinces in the Philippines, it is customary for the buyer to bear the cost of the survey, as the survey is usually done to benefit the buyer in securing the title and transferring the property to his or her name. However, in some cases, especially in urban areas or high-value transactions, the seller may agree to shoulder the survey cost as part of the total package of preparing the property for sale.

3. Nature of the Transaction

The nature and complexity of the land transaction can also influence the decision regarding the geodetic survey’s cost. For instance:

Sales of Subdivided Lots: When the seller is subdividing a large parcel of land into smaller lots for sale, the seller typically bears the cost of the geodetic survey and subdivision plan, as this is a necessary step to make the lots saleable. The costs associated with these surveys are often factored into the sale price.
Sales of Undivided Portions: If the sale involves an undivided portion of land (for example, 500 square meters out of a larger 1,000-square-meter lot), it is often the buyer who bears the cost of the survey because the buyer needs the land to be segregated and titled in his or her name.

The principle of equitable ownership may also apply here, particularly if the buyer is already in possession of the land before the title transfer is completed. In such cases, it would make sense for the buyer to shoulder the cost of the survey, as this is an essential step in finalizing the title transfer.

Relevant Case Law and Jurisprudence

Although there is limited case law directly addressing the issue of who bears the cost of a geodetic survey, related jurisprudence can provide some guidance.

In the case of Bacungan v. Court of Appeals (G.R. No. L-42113, December 14, 1987), the Supreme Court emphasized the importance of a clear and accurate description of property in land sale transactions. While the case did not directly rule on who should pay for a geodetic survey, it highlighted the necessity of precise land measurements to avoid legal disputes. Thus, it can be inferred that both parties have an interest in ensuring that the survey is conducted, but the cost allocation depends on the agreement between the parties.

Additionally, in Gamboa v. Court of Appeals (G.R. No. 74977, February 28, 1989), the Supreme Court discussed the obligation of the seller to deliver a property free from encumbrances, which includes ensuring that the property is properly delineated and measured. This case suggests that if the seller is expected to deliver a clearly defined portion of land, he or she may be required to cover the costs associated with the geodetic survey.

Costs and Procedures Involved in a Geodetic Survey

The actual process of a geodetic survey in the Philippines is regulated by the Geodetic Engineers Act of 1998 (Republic Act No. 8560), which mandates that only licensed geodetic engineers can perform land surveys. The cost of a geodetic survey can vary depending on the location, size, and complexity of the property. Typically, the fees cover:

Surveying the land and marking the boundaries;
Preparing the survey plan;
Securing approval from the Land Management Bureau (LMB) or the relevant Department of Environment and Natural Resources (DENR) office;
Updating the property’s title to reflect the survey results.

The process can take several weeks or even months, depending on the workload of the geodetic engineer and the availability of government approvals.

Practical Considerations

In practice, whether the buyer or the seller pays for the geodetic survey often comes down to negotiation. In some cases, the parties may agree to split the cost equally, especially if both parties benefit from the survey. For example, the seller may benefit from having an accurate survey of the remaining land, while the buyer requires the survey for title purposes.

It is important to note that the cost of the geodetic survey is usually just one of several expenses associated with the transfer of real property. Other costs may include taxes (such as capital gains tax and documentary stamp tax), notarial fees, and registration fees. Therefore, it is essential for both the buyer and the seller to have a clear understanding of their respective financial responsibilities to avoid misunderstandings.

Conclusion

In summary, the obligation to pay for a geodetic survey in the context of a land sale in the Philippines is primarily determined by the agreement between the buyer and the seller. If there is no explicit agreement, the custom of the place or the nature of the transaction may influence the allocation of costs. Generally, it is advisable for the parties to address this issue in their contract to prevent disputes later on.

Both buyers and sellers should be aware of the importance of a geodetic survey in ensuring the accurate transfer of land ownership and must approach this issue with mutual understanding and transparency. By doing so, they can avoid potential conflicts and ensure a smooth and successful real estate transaction.