Buying a property in the Philippines is a substantial investment requiring careful consideration and thorough checks to ensure a smooth and secure transaction. Whether you’re a first-time buyer or a seasoned investor, it is essential to comprehend the crucial aspects to review before finalizing any property purchase.
The land title
Whether buying land, a condominium unit, or Rights-Only property, always verify the land title to ensure it’s authentic and free from any encumbrances. Request a Certified True Copy from the Registry of Deeds and cross-check the details with the seller’s documents. This step will confirm the property’s legal standing and ownership. Additionally, check for any annotations or liens that indicate legal disputes or financial obligations tied to the property.
Seller’s legitimacy
Confirm that the seller has the legal right to sell the property by checking their identification to ensure they are the registered owner. If you are dealing with a representative, make sure to validate their authority through a Special Power of Attorney. This will help prevent fraud and ensure that the person you are dealing with has the legitimate right to transact on the property.
Property boundaries
Make sure you accurately determine the boundaries of the property to avoid disputes. It’s important to hire a licensed surveyor to compare the actual measurements with the title and tax declaration. This will help you understand the exact size and limits of the property. Discrepancies in boundaries can lead to legal issues, so this step is crucial for establishing clear ownership.
Tax payments
Always make sure that all real property taxes are fully paid up to date. Ask for a Tax Declaration from the local Assessor’s Office and verify payment receipts. Unpaid taxes can become your responsibility, so checking this thoroughly is important. Confirming tax payments will also help you understand the property’s tax history and any potential penalties.
Document and agreements
Remember to have a lawyer review all documents and agreements, including the Deed of Sale, Contract to Sell, and other relevant paperwork. A legal expert can provide legal assistance for purchase agreements to identify potential issues and ensure that your interests are protected. Reviewing these documents will help you understand all the terms and conditions and avoid future disputes.
Utility payments
Ensure that all utility bills, such as water, electricity, and association dues, have been paid in full. Ask the seller for the most recent statements and receipts. This is important to prevent inheriting any unpaid balances and to confirm that the property has no service interruptions that could affect your immediate use of the property.
Certified True Copy
Ensure you get a certified true copy of the title from the Registry of Deeds. This official document confirms the authenticity and current status of the title, providing added security for your purchase. It’s essential to verify the property’s legal standing and ensure no recent changes or claims have been made.
Payment terms
Be sure to clearly define and agree upon the payment terms with the seller. Make sure to document all terms, including the total price, payment schedule, and payment method. This will prevent misunderstandings and disputes in the future. Having clear payment terms also assists in financial planning and ensures that both parties are aligned on the transaction process.
Due diligence
Perform comprehensive due diligence on the property. This involves checking for any legal issues, pending cases, or other claims that may affect the property. Research the area for future developments and evaluate the property’s market value. Due diligence is crucial for making an informed decision and ensures there are no hidden problems with the property.
Capital Gains Tax
Determining who is responsible for paying the Capital Gains Tax is crucial. Usually, it is the seller’s responsibility, but it’s important to confirm this in the contract. It is essential to settle this tax to prevent any issues with the Bureau of Internal Revenue (BIR). Understanding who bears this tax burden is vital for accurately calculating the total property cost and avoiding unexpected expenses.
By following these steps, you can make an informed and secure property purchase in the Philippines. Conducting these checks will help safeguard your investment and ensure a smooth transaction process.