Introduction

In the Philippine real estate landscape, the use of a Special Power of Attorney (SPA) is a common mechanism for property owners to delegate authority to agents, particularly in transactions involving the sale or management of land and buildings. An SPA grants specific powers to the attorney-in-fact, allowing them to act on behalf of the principal in defined matters. A frequent issue arises when properties subject to sale under an SPA are occupied by third parties, such as tenants, squatters, or family members. This raises critical questions: Are SPA holders obligated to evict such occupants? What are the boundaries of their authority? And what remedies are available to buyers if possession is not peacefully delivered?

This article explores these aspects within the framework of Philippine law, drawing from the Civil Code of the Philippines (Republic Act No. 386), relevant jurisprudence from the Supreme Court, and related statutes such as the Property Registration Decree (Presidential Decree No. 1529) and rules on ejectment under the Revised Rules of Court. It aims to provide a comprehensive understanding for property owners, agents, buyers, and legal practitioners.

Understanding Special Power of Attorney (SPA)

Under Article 1874 of the Civil Code, an agency is created when a person (the principal) binds themselves to render some service or do something in representation or on behalf of another (the agent), with the latter's consent or authority. An SPA, as distinguished from a general power of attorney, is limited to specific acts enumerated in the document. For real estate transactions, Article 1878 requires an SPA for acts such as selling, mortgaging, or otherwise encumbering immovable property.

The SPA must be in writing and, for acts involving real property, often notarized to be enforceable against third parties. If the principal is abroad, the SPA may need consular authentication. The agent's authority is strictly construed; they cannot perform acts beyond what is expressly or impliedly granted. This principle is rooted in Article 1881, which states that the agent must act within the scope of their authority, and any act outside it does not bind the principal unless ratified.

In the context of property sales, an SPA typically authorizes the agent to negotiate, execute a deed of sale, receive payment, and deliver the title. However, the eviction of occupants is not inherently included unless explicitly stated. Eviction involves legal processes that may require judicial intervention, making it a distinct act from mere conveyance.

Obligations of Sellers in Real Estate Transactions

The sale of real property under Philippine law imposes certain warranties on the seller. Article 1547 of the Civil Code mandates that the seller deliver and warrant the thing sold, including:

The right to sell the thing at the time ownership passes to the buyer.
That the buyer shall have and enjoy legal and peaceful possession.
Freedom from hidden defects or encumbrances not declared.

Peaceful possession means the buyer should not be disturbed by third parties with superior rights. If the property is occupied, the seller (or their agent) must ensure that possession is transferred without legal hindrance. Failure to do so constitutes a breach of warranty against eviction (Article 1548), entitling the buyer to remedies.

In cases where an SPA is used, the principal remains the actual seller, and the agent merely facilitates the transaction. The obligation to deliver possession ultimately rests with the principal, but the agent may be tasked with it if authorized.

Are SPA Holders Required to Evict Occupants?

No, SPA holders are not inherently required to evict occupants unless the SPA explicitly includes such authority. Eviction is a remedial action governed by separate laws and is not an automatic extension of the power to sell.

Nature of Eviction

Eviction in the Philippines typically falls under unlawful detainer or forcible entry actions under Rule 70 of the Rules of Court. Unlawful detainer applies when possession is withheld after the expiration of a right (e.g., lease), while forcible entry involves deprivation through force, intimidation, threat, strategy, or stealth (FISTS). These are summary proceedings filed in the Municipal Trial Court.

Squatters or informal settlers are addressed under Republic Act No. 8368 (Anti-Squatting Law Repeal Act) and related urban development laws, but eviction often requires compliance with relocation provisions under Republic Act No. 7279 (Urban Development and Housing Act). Self-help eviction is prohibited; only courts can order it, except in cases of eminent domain or administrative orders.

An SPA holder, as an agent, cannot unilaterally evict without court approval, as this could expose them to criminal liability for grave coercion (Article 286, Revised Penal Code) or civil liability for damages.

When Eviction Might Be Implied or Required

If the SPA expressly includes "delivering physical possession" or "removing occupants," the agent may initiate eviction proceedings. For instance, the agent could file an ejectment suit in the principal's name. However, jurisprudence, such as in Dela Peña v. Court of Appeals (G.R. No. 127388, 2001), emphasizes that agents must adhere strictly to granted powers. Implied authority under Article 1882 extends only to acts necessary to accomplish the express purpose, but eviction is often seen as extraneous unless the sale contract stipulates "vacant possession."

In practice, buyers may negotiate for the seller (via SPA holder) to handle eviction before closing. If not, the burden shifts to the buyer post-sale, potentially leading to disputes.

Limits of Authority of SPA Holders

The authority of an SPA holder is circumscribed by:

Express Terms: Only acts listed are allowed. For example, an SPA for "selling the property" does not include managing tenants or litigating evictions unless specified.
Fiduciary Duty: Under Article 1887, agents must act with utmost good faith, avoiding conflicts of interest. An agent cannot evict for personal gain.
Ratification Requirement: Unauthorized acts bind the principal only if ratified (Article 1910). If an SPA holder evicts without authority, the principal may disavow it, leaving the agent liable.
Termination of Agency: Agency ends upon completion of the act, death, revocation, or incapacity (Articles 1919-1932). Post-sale, the agent's authority to evict may lapse.
Third-Party Rights: Occupants with valid claims (e.g., agrarian reform beneficiaries under Republic Act No. 6657) cannot be evicted merely by an SPA holder's action; due process is required.

Supreme Court cases like Banate v. Philippine Countryside Rural Bank (G.R. No. 163825, 2010) illustrate that agents exceeding authority can be held personally liable, underscoring the need for clear delineation.

Buyer’s Remedies in Case of Failure to Deliver Possession

If occupants remain after sale, the buyer has several remedies under the Civil Code and jurisprudence:

Specific Performance: Sue the seller (principal) to compel eviction and delivery of possession (Article 1191). The SPA holder may be joined if they warranted possession.
Rescission with Damages: If the breach is substantial, rescind the contract and recover the purchase price plus damages (Article 1191). In Power Commercial and Industrial Corp. v. Court of Appeals (G.R. No. 119745, 1997), the Court allowed rescission for failure to deliver vacant possession.
Damages for Breach of Warranty: Claim actual, moral, or exemplary damages if eviction leads to loss (Articles 1548-1558). The buyer must notify the seller within a reasonable time.
Suspension of Payment: Withhold final payment until possession is delivered, if stipulated in the contract.
Ejectment Action by Buyer: Post-title transfer, the buyer can file their own ejectment suit as the new owner.
Annulment of SPA or Sale: If fraud or ultra vires acts by the SPA holder are proven, the sale may be annulled (Article 1390).

Prescription periods apply: actions for specific performance prescribe in 10 years (Article 1144), while warranty claims against eviction must be brought within specified times under Article 1553.

In agrarian contexts, buyers must navigate Comprehensive Agrarian Reform Program rules, where tenants have retention rights.

Practical Considerations and Best Practices

To mitigate risks:

Principals should draft SPAs with precise language, including clauses on possession if needed.
Buyers should conduct due diligence, inspecting the property and reviewing occupancy status.
Contracts of sale should include warranties for vacant delivery and indemnity clauses.
Mediation through barangay conciliation is mandatory for ejectment cases under Republic Act No. 7160 (Local Government Code).

Conclusion

SPA holders are not automatically required to evict occupants; their duty depends on the SPA's explicit terms and the sale contract's stipulations. Their authority is limited to granted powers, and exceeding them invites liability. Buyers, however, are protected by robust remedies to enforce possession or seek redress. Understanding these dynamics ensures smoother real estate transactions in the Philippines, balancing agency efficiency with legal safeguards. Parties are advised to consult licensed attorneys for case-specific guidance.