Financial Blog

There’s nothing worse than going through the tedious process of buying your new home and realize – just as you’re all set to move in – that the title isn’t clean, or worse, is fake. A dirty title might have so many mortgages, liens and encumbrances attached to it that you’ll begin considering the possibility of living with your parents forever.

Luckily, there are a few guidelines to follow to ensure you’re not setting yourself up for a ton of headache when buying a new property. Here’s hoping these tips will help your transition of moving into your own home a bit easier.

The first step in ensuring a title is what it appears to be is to check for authenticity. A clean title is no good if it isn’t a genuine title in the first place. How do you make sure a title is real?

Check the quality of paper used. The forms used in property titles are exclusively printed by the Banko Sentral ng Pilipinas. The judicial form uses a type of paper which contains various security features. The paper is made out of 50% cotton and 50% chemical wood pulp with colored fibers. If held up against a light, an LRA or Land Registration Association watermark should be visible through the paper. The paper also has a similar texture to a bank check.

Fake titles forms typically use material similar to cartolina or paper of inferior quality. Our real estate experts say there are more than 10,000 fake titles being used and circulating around the Philippines.

Verify authenticity of the “Transfer Certificate of Title” document. The Register of Deeds should be able to provide you a “Certified True Copy” of the title to ensure its authenticity. Request the seller of the property to give you a photocopy of the title since the Register of Deeds will need information such as the title number and the owner’s name. Their office is usually located at the municipal hall where the property is located.

Check the Owner’s Duplicate Certificate and its seal. First, the owner’s duplicate copy of the title should contain the marking “Owner’s Duplicate Copy” on the left side of the form. Second, a red seal with no blotting should be present on the lower corner of the form.

Note that the original copy does not contain any of these features.

Verify the seller’s identity. Any person can pose as a landowner and act as one. Ask for a valid ID to check if the person claiming ownership of the property is really the person mentioned as registered owner.

If the title indicates the seller’s parents are the registered owners, it poses a problem since there might be other heirs claiming the property. Some heirs may want to sell while others refuse. Those who want to sell must file a petition in court before proceeding to transact with any potential buyers. The majority of heirs who wish to sell will not defeat the rights of those who wish to keep the property for themselves.

When dealing with the title of the property, only deal with the real owner and never with an agent who is an unregistered owner.

Now that you’re sure the property title is real, the next thing to do is to check if the title is indeed clean. Keep reading to learn how to make sure your title is clean.

Check for liens and encumbrances. A lien is an encumbrance (legal liability on real property that does not prohibit transfer of the title, but instead, reduces its value) on a person’s property to secure a debt the property owner owes to another person.

The back page of the title contains annotations (if any) for liens and encumbrances like mortgage, adverse claim, etc. This page must be empty if you’ve been promised a “clean” title.

Make sure real estate taxes have been paid. Check with the Assessor’s Office to see if the real estate taxes have been paid up. If, for instance, there are arrears or back taxes, coordinate with the landowner on how you can settle the amount – which at this point should already be part of the property price. You will need a notarized document for the agreement on the payment of back taxes.

Double check the title’s technical description. Ask permission from the land owner to have the land surveyed by a Geodetic Engineer. This is to determine if the land area specified in the title matches the actual land area surveyed.

For example, if the title indicates a 3,000 square meter area but only 2,700 square meters is observed upon survey, then you can ask for a proportional reduction in price.

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