Purchasing Land Philippines

Purchasing Land from a Corporation Without a License to Sell in the Philippines

Question: Is it okay to buy land from a corporation if they do not have a license to sell yet, but the corporation is already registered with the SEC?

Answer: In the Philippines, the mere registration of a corporation with the Securities and Exchange Commission (SEC) does not automatically grant the corporation the right to engage in the sale of real estate. Here are the key points to consider:

1. License to Sell:

   • For corporations engaged in the real estate business, such as real estate developers, a License to Sell issued by the Housing and Land Use Regulatory Board (HLURB) or its successor agency is required before they can offer and sell subdivided lots or condominium units to the public.
   • Buying from a corporation without a License to Sell, especially in the context of a subdivision or a condominium project, can be risky. This is because the License to Sell is an assurance that the developer has complied with governmental requirements to make the project viable and legitimate.

2. Risks of Purchasing Without a License to Sell:

   • If a corporation sells property without the necessary License to Sell, the sale might be considered null and void.
   • The buyer may not get any legal title to the property or may face legal complications later on.
   • The HLURB or its successor agency may impose sanctions or penalties on the corporation for selling without a license.

3. Direct Land Sales:

   • If the corporation is selling a parcel of land that is not part of a subdivision or condominium project (i.e., it's a direct sale of a land asset), then the requirement for a License to Sell may not apply. However, the buyer must exercise due diligence to ensure that the corporation has the proper authority and clear title to sell the land.

4. Due Diligence:

   • Before making any purchase, especially from a corporation, it's essential to conduct thorough due diligence. This includes verifying the legal status of the property, ensuring there are no encumbrances or liens on the title, and checking the corporation's authority to sell.

Recommendation: If you're considering buying land from a corporation in the Philippines, it's crucial to consult with a lawyer who specializes in real estate transactions. They can guide you on the requirements, potential risks, and necessary steps to ensure that the purchase is legal and secure.

Conclusion: While a corporation's registration with the SEC is an important factor, it's not the only consideration when purchasing land. A License to Sell, when applicable, and proper due diligence are essential to ensure that the transaction is legitimate and that your rights as a buyer are protected.