Dear Attorney,
I hope this letter finds you well. I write to seek legal guidance regarding the notary fee for a notice of cancellation of the buyer in a property transaction. I am a concerned party who wishes to understand how much the notarial fee might be, as well as any relevant laws or regulations that govern such fees. Any insights on this matter would be highly appreciated.
Sincerely,
A Concerned Seller
LEGAL ARTICLE ON PHILIPPINE LAW: ALL THERE IS TO KNOW ABOUT NOTARIAL FEES FOR A NOTICE OF CANCELLATION OF BUYER
In the Philippines, notarization is a crucial process that ensures the authenticity, due execution, and proper acknowledgement of legal documents. When it comes to preparing and notarizing a notice of cancellation of buyer—often pertaining to real estate transactions or the rescission of a contract to sell—it is vital to understand the relevant legal framework, the standard practices, and the applicable notarial fees. This comprehensive discussion aims to provide a meticulous overview of all legal aspects that come into play when securing the notarization of such a notice of cancellation, paying particular attention to fees, procedures, and related considerations under Philippine law.
I. Importance of Notarization in the Philippines
Authentication of Documents
Under Philippine law, a document that requires notarization must be executed in the presence of a duly commissioned notary public. This act transforms the document into a public instrument, giving it greater weight and credibility in legal proceedings. Pursuant to the 2004 Rules on Notarial Practice (“Notarial Rules”), notarization helps protect the integrity of legal transactions by ensuring that the document’s signatories are properly identified, that they sign willingly, and that they act within their legal capacity.Prevention of Fraud
Notarization mitigates fraud by verifying the identity of the parties involved, ensuring they are the same individuals executing or signing the document. A notice of cancellation of buyer for real estate transactions is significant; thus, it is critical that the notary public confirms the authenticity of the parties and the genuineness of their acts. This process helps avoid unscrupulous activities, such as forging signatures or impersonating a party to a contract.Admissibility in Court
A notarized document is presumed to be genuine and executed voluntarily, unless proven otherwise. Although non-notarized documents can still be recognized in court under certain conditions, notarization bestows upon the instrument a strong evidentiary quality, facilitating the burden of proof in litigation. For a notice of cancellation, which may be used to terminate or rescind contractual relations, a notarial seal serves as strong proof of authenticity and execution.
II. The Legal Framework: The 2004 Rules on Notarial Practice
Supreme Court Regulations
The 2004 Rules on Notarial Practice (A.M. No. 02-8-13-SC) govern the conduct of notarization in the Philippines. These Rules provide guidelines on the qualifications of notaries public, the formalities of notarizing documents, and the fees that notaries may charge. Local and regional chapters of the Integrated Bar of the Philippines (“IBP”) may also issue recommendations on reasonable notarial fees, taking into account various factors such as the complexity of the document, the amount involved in the transaction, and local economic conditions.Duties of a Notary Public
A notary public in the Philippines has the following principal duties, among others:- To ascertain the identity of the party or parties signing the document.
- To ensure the individual is signing voluntarily and knowingly.
- To administer the appropriate oath or acknowledgment as may be applicable.
- To affix the official seal, signature, and necessary details (e.g., commission number, serial number of the notarial register entry, date, and place of notarization).
Failure to comply with these responsibilities can result in administrative, civil, or criminal liability for the notary public.
Scope of Notarization
The Notarial Rules specify categories of documents that typically require notarization, including deeds, affidavits, sworn statements, powers of attorney, and other instruments affecting rights and obligations. A notice of cancellation—particularly one that aims to effect the rescission of a buyer’s interest in a property or to formally cancel a pending transaction—is typically recognized as a document that must be duly notarized for it to have legal effect.
III. Notice of Cancellation of Buyer: Nature and Purpose
Context in Real Estate Transactions
In the realm of real estate transactions, the “notice of cancellation of buyer” is often used when a seller intends to terminate a contract to sell, a reservation agreement, or an installment arrangement with a buyer. This cancellation occurs for various reasons, such as a buyer’s failure to comply with the terms of payment, breach of other contractual obligations, or mutual agreement between the parties.- Failure to Pay Installments: In many cases, the buyer may have failed to fulfill payments on time. Under certain laws, such as the Maceda Law (Republic Act No. 6552), a notice of cancellation is necessary to effect the cancellation or rescission of the contract.
- Breach of Contract: If the buyer fails to uphold key terms of the contract (e.g., refusal to make the necessary down payment or to sign documents essential to closing), the seller may resort to issuing a formal notice of cancellation.
- Mutual Agreement or Other Causes: Sometimes, the parties may mutually decide to terminate the contract, in which case the notice of cancellation may simply memorialize that agreed-upon termination.
Legal Consequences
A properly executed notice of cancellation may serve as strong evidence of the seller’s intent to terminate the transaction, and the buyer’s subsequent failure or refusal to perform can be documented. Once the contract is canceled in accordance with contractual stipulations and applicable laws (e.g., the Maceda Law for installment sales of real property), the seller can typically repossess or transfer the property to another buyer. Notarizing the cancellation ensures that all parties acknowledge the termination in a duly authenticated manner, which is critical if any dispute arises in the future.Benefit of Formality
While some might argue that an unnotarized notice suffices in certain contexts, best legal practice suggests that notarizing such notice of cancellation strengthens its validity and enforceability. It demonstrates that the parties did not act under coercion or undue influence and that an official notary public witnessed the execution. This heightened evidentiary weight can be crucial in preventing future challenges and ensuring a smoother legal process in the event of litigation.
IV. Determining the Notarial Fee
Statutory Guidance
In the Philippines, there is no single comprehensive statute prescribing a uniform notarial fee for every conceivable type of document. Instead, there are generally accepted guidelines under the 2004 Rules on Notarial Practice, which authorize IBP chapters to recommend notarial fee schedules. These recommended rates often take into account the region’s average cost of living, the complexity or nature of the document, and the value involved in the transaction.Role of Local IBP Chapters
Each local IBP chapter may set a suggested notarial fee guideline. This guideline is considered advisory, meaning it is not always strictly enforceable by law, but it is used as a reference for notaries public and the general public. While these guidelines help ensure that fees are neither exorbitantly high nor unreasonably low, in practice, fees can still vary. Notaries have the discretion to charge higher or lower rates, provided they do not violate rules against overcharging or unethical conduct.Factors Affecting the Fee
Several factors influence the notarial fee for a notice of cancellation of buyer, including:- Document Complexity: If the notice of cancellation is a simple, straightforward document, some notaries might charge a relatively minimal fee. Where complexities exist—such as multiple attachments, numerous pages, or the requirement of translations—the fee may increase.
- Transaction Value: If the notice of cancellation relates to a significant real estate transaction involving a high-value property, the notary may consider the property’s value when determining the fee.
- Location and Professional Standing: Notarial fees can vary depending on the city or province. Urban areas typically have higher rates compared to rural locations. The notary public’s professional reputation or demand for services can also come into play.
- Extent of Counsel and Additional Services: If the notary also provides legal advice, drafts or reviews the notice of cancellation, or performs additional legal services, the total fee may go beyond the notarization fee alone.
Typical Fee Range
In practice, notarial fees for a notice of cancellation of buyer may range anywhere from a few hundred pesos to a few thousand pesos, depending on the aforementioned factors. Some notaries charge a flat rate of approximately PHP 200 to PHP 500 for simple documents, but for more complex matters or higher-value transactions, fees may exceed PHP 1,000 or more. The best way to determine the fair and accurate rate for a specific case is to consult directly with the notary public or refer to the local IBP chapter’s fee guidelines.
V. Step-by-Step Procedure for Notarization of a Notice of Cancellation
Preparation of the Document
The notice of cancellation should clearly state the intent to cancel the buyer’s rights under the existing contract. It should contain essential information, including the reference to the contract being canceled, the reason for cancellation, and the effective date of cancellation. While not strictly required, detailing relevant provisions in the original contract or referencing the Maceda Law may strengthen the legal basis for cancellation.Identification of the Signatory
The seller (or authorized representative) who is issuing the notice must present a valid government-issued ID (e.g., passport, driver’s license, Professional Regulation Commission ID) to the notary public for identification purposes. If a representative acts on behalf of the seller, a duly notarized special power of attorney must authorize this act.Confirmation of Voluntary Execution
The notary public will confirm the signatory’s willingness to execute the notice. The signatory must appear in person before the notary and acknowledge or swear to the contents of the document, depending on whether it is an acknowledgment or jurat.Affixing the Notarial Seal and Signature
Upon satisfying himself or herself that all formalities are observed, the notary public will affix the official seal, sign the document, indicate the notarial commission details, and record the act in the notarial register. The signatory must also provide a thumbprint and signature in the notarial register as required by the Notarial Rules.Issuance of the Notarized Document
The original notarized copy of the notice of cancellation, bearing the stamp or seal of the notary, is returned to the signatory. Some notaries also provide certified true copies of the notarized document upon request, which may incur additional fees.
VI. Legal Effects and Enforcement
Binding Rescission of the Contract
With a duly notarized notice of cancellation, a seller can generally establish that the contract has been rescinded or terminated, subject to fulfillment of any mandatory statutory requirements (e.g., under the Maceda Law for installment sales). The notarized notice may be recorded or presented to relevant agencies or offices, especially if it affects title registration or triggers other legal consequences.Documentation in Case of Dispute
In the event that the buyer challenges the cancellation or disputes the validity of the notice, the notarized document serves as strong evidence. Courts typically accord significant weight to notarized instruments, presuming their authenticity and due execution. The buyer would then have the burden of proving that the document was improperly notarized or otherwise invalid.Possible Next Steps for the Buyer
If the buyer believes the cancellation to be erroneous or that the seller wrongfully terminated the contract, the buyer can respond with a written protest, file a complaint, or pursue other legal remedies. Depending on the circumstances, both parties might resort to mediation or arbitration if the contract stipulates such dispute resolution mechanisms.
VII. The Role of the Maceda Law and Other Pertinent Laws
Republic Act No. 6552 (Maceda Law)
Enacted to protect buyers of real estate on installment, the Maceda Law provides certain protections to defaulting buyers, including a grace period within which they may reinstate the contract by paying overdue installments plus interest. It also requires sellers to give a formal notice of cancellation or demand for rescission before an actual cancellation can take effect, especially for buyers who have already paid at least two years of installments.- Notice Requirement: Section 3(b) of the Maceda Law mandates that the seller must provide a notarized notice of cancellation or rescission, which should be sent via registered mail or personal delivery.
- Refund of Payments: Under certain conditions, the seller must refund a percentage of the total payments made by the buyer, depending on how long installments were paid.
Presidential Decree No. 1529 (Property Registration Decree)
If the property is already titled, or if there is a need to annotate the cancellation on the certificate of title, the notice of cancellation may be presented to the Registry of Deeds for proper annotation. While the notarial fee is not governed by P.D. 1529, the necessity of registration highlights the importance of notarization to ensure the document is acceptable to the Registry of Deeds.Civil Code of the Philippines
General provisions on obligations and contracts under the Civil Code also apply. Article 1191 of the Civil Code allows the rescission or cancellation of contracts in cases of reciprocal obligations when one party fails to comply with the agreement. A notarized notice of cancellation can serve as a means of showing that the seller has exercised the remedy of rescission. However, judicial intervention might still be necessary if there is a dispute over the grounds or validity of the cancellation.
VIII. Ethical and Professional Responsibilities of the Notary Public
Reasonableness of Fees
While notaries may set their own fees within acceptable parameters, they are ethically obliged to avoid overcharging. Excessive or exorbitant notarial fees could be considered unethical and may result in disciplinary action by the Supreme Court or the IBP. Notaries must exercise discretion in determining fees while bearing in mind the complexity of the task and the economic conditions of their local area.Refusal to Notarize Improper Documents
If the notary public believes that the notice of cancellation is unlawful, or that the person seeking notarization is not acting with legal authority, the notary may refuse to notarize. A notary’s principal role is not merely to stamp documents but to guard against improper or fraudulent transactions.Maintenance of Notarial Register
Proper maintenance of the notarial register is mandatory. This register contains details of each notarization, including names of parties, details of identification, the type of document, and the fees charged. If a dispute arises concerning whether a notice of cancellation was genuinely notarized, the notarial register is a key piece of evidence.
IX. Practical Tips for Parties Seeking Notarization
Secure a Draft in Advance
Parties should ensure that the notice of cancellation is drafted in a clear and concise manner before approaching the notary public. If necessary, they may seek legal advice to confirm that the document accurately reflects the intended grounds for cancellation and that all essential information is included.Inquire About Fees Upfront
To avoid misunderstandings, it is advisable to ask about the notary’s fees before commencing the notarization process. If the fee seems unreasonably high, you may consider seeking other notaries in your area or referring to the IBP guidelines.Bring Valid Identification
The signatory must bring at least one acceptable government-issued identification document. If a representative is signing, bring the special power of attorney or other proof of authority.Observe Proper Execution
Ensure that the notice is signed in the presence of the notary public. For acknowledgment-type documents, the signatory merely acknowledges the instrument. For jurat-type documents, the signatory must swear to the contents under oath. Verify that the notary affixes the signature, official seal, and complete details, including the day, month, and year of notarization.Obtain Certified True Copies if Necessary
If you anticipate needing certified copies of the notarized notice of cancellation—for example, for submission to a court, financial institution, or government agency—arrange for the notary to prepare them. This may involve an additional fee, but it can save time down the line when you need to produce verifiable copies.
X. Dispute Resolution and Legal Remedies
Settlement or Mediation
If the buyer objects to the cancellation, the parties may opt for negotiation, settlement, or mediation. Many contracts include alternative dispute resolution clauses that require mediation or arbitration before resorting to litigation. A notarized notice of cancellation may help jumpstart these processes by clearly establishing the seller’s position.Court Action
In worst-case scenarios, disputes concerning the validity or enforceability of the notice of cancellation might escalate to court. Here, the notarized document is typically given weight, but the ultimate determination rests with the judge. If the court finds that the seller canceled improperly, the cancellation may be set aside, and the seller could face damages or be ordered to fulfill the original contract.Administrative Actions
In rare situations where the notary public is alleged to have violated notarial laws or ethical rules—such as executing a false or fraudulent notarization—an aggrieved party can lodge a complaint before the local Executive Judge or the Supreme Court. The notary may face administrative penalties, suspension, or cancellation of the notarial commission if found guilty of wrongdoing.
XI. Conclusion
A notice of cancellation of buyer is a legally significant document, particularly in real estate transactions where substantial sums of money and valuable property interests are at stake. Under Philippine law, notarization elevates the notice into a public instrument with enhanced credibility and enforceability. The notarial fee for such a document can vary depending on factors such as complexity, transaction value, and local IBP fee guidelines. Although there is no single statutory provision mandating a fixed notarial fee, parties can refer to IBP recommendations and commonly accepted practices to gauge the reasonableness of the fee charged.
By adhering to the 2004 Rules on Notarial Practice and fulfilling all required formalities, parties ensure that the notice of cancellation meets legal standards for authenticity. Additionally, compliance with special statutes like the Maceda Law, whenever applicable, safeguards the rights of both sellers and buyers, reducing the potential for future disputes. Ultimately, the meticulous preparation and proper notarization of the notice of cancellation pave the way for a legally sound and enforceable rescission process, allowing parties to protect their interests and uphold their contractual and statutory obligations.
Disclaimer: This article is for general informational purposes only and is not intended as legal advice. For specific concerns and personalized guidance regarding a notice of cancellation of buyer and the associated notarial fee, please seek independent counsel from a licensed attorney in the Philippines.