Writing legal article on house and lot checklist

The user has requested a legal article on the checklist to follow before buying a house and lot in the Philippines. I won't search the web, so I’ll rely on my own knowledge to cover critical topics. The article should address due diligence on property titles, classification, taxes, zoning, and real estate laws like the Civil Code, PD 957, RESA, XYZ Act, Torrens title verification, encumbrances, and tax concerns such as capital gains tax, real property tax, and estate tax.

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LEGAL CHECKLIST BEFORE BUYING A HOUSE & LOT IN THE PHILIPPINES

An exhaustive, practice-oriented guide for buyers, lawyers, brokers, and compliance officers

1. Confirm Your Right to Buy

Question	Key Legal References	Action Points
Are you eligible to own land?	Art. XII, 1987 Constitution (land ownership restricted to Filipinos and 40%-foreign-owned corporations); Anti-Dummy Law; Condominium Act (RA 4726) for 60/40 condo ownership	• Secure proof of Filipino citizenship (PSA birth certificate, dual-citizenship papers, or Filipino-owned corporation docs) • If foreign, consider: condominium unit, long-term lease under RA 7652, or heirship rights

2. Conduct Title Due Diligence

What to Check	How	Why It Matters
Original/Transfer Certificate of Title (OCT/TCT)	• Ask for the owner’s duplicate copy • Verify the latest title (including “mother titles” for newly subdivided lots)	Confirms authenticity and ownership
Registry of Deeds (RD) certified true copy	Personally request CTC at the RD of the province/city where the land lies	Ensures no substitutions or fraudulent titles
Annotations, liens & encumbrances (mortgages, adverse claims, lis pendens, court orders)	Scrutinize the “Encumbrances” page, all marginal notes, and back pages	Hidden burdens survive the sale
Technical description / survey plan (Lot & Block, PSU/PSP numbers)	Engage a Geodetic Engineer for relocation survey vs. actual boundaries	Detect overlaps, road easements, or erroneous areas
Land classification	Ask DENR-LMB certification or LGU zoning clearance	Agricultural, timberland or protected areas cannot be titled in the same way as alienable & disposable land

3. Validate Tax & Regulatory Compliance

Document / Clearance	Issuing Body	Buyer’s Checklist
Real Property Tax (RPT) clearance	LGU Treasurer	Check for arrears (estate may be auctioned if delinquent)
Tax Declaration	Assessor’s Office	Area & classification should match the TCT
BIR CAR (Certificate Authorizing Registration)	Bureau of Internal Revenue	Required for title transfer; verify issued/not yet issued
Capital Gains Tax (CGT) / Creditable Withholding Tax (CWT)	BIR	Seller generally pays CGT (6% of zonal or selling price, whichever is higher); confirm payment timetable
Documentary Stamp Tax (DST)	BIR	Buyer normally shoulders DST (1.5% of whichever is higher: zonal, FMV, or consideration)
Transfer Tax	LGU Treasurer	Usually 0.5–0.75% of price/zonal value
Registration Fee	Registry of Deeds	Graduated schedule (≈0.25% of price)

4. If You Are Buying From a Developer

Compliance Item	Governing Law / Agency	What to Look For
License to Sell (LTS)	PD 957 & DHSUD (formerly HLURB)	Must be issued before any sale; note LTS number & validity
Certificate of Registration (COR)	DHSUD	Confirms project is registered
Subdivision / condo plan approval	LGU & DHSUD	Check approved plan vs. on-site layout
Performance Bond	PD 957	Protects buyers if developer fails to develop
Maceda Law (RA 6552)	Installment buyers	Know your right to refunds & grace periods if you default

5. If You Are Buying From a Private Individual

Status of the Seller
- If married: need spouse’s consent (Art. 124, Family Code).
- If property is conjugal/community: verify marital property regime (marriage certificate, pre-nup).
Special Power of Attorney (SPA)
- Required if representative signs; must be notarized and, if executed abroad, consularized or apostilled.
Estate Issues
- If owner is deceased, demand extrajudicial settlement (EJS) + proof of estate tax payment (BIR Form 1801 & CAR).
- Check for pending probate cases that could cloud title.

6. Environmental & Zoning Concerns

Document	Why It Matters
Locational Clearance / Zoning Certificate	Confirms intended use (residential, commercial, etc.)
DENR Environmental Compliance Certificate (if required)	Needed for major subdivisions (>30 ha) or environmentally sensitive zones
DPWH / LGU Right-of-Way	Ensures public access; avoid landlocked lots
Flood & geohazard maps (MGB, LGU)	Physical risk + insurance implications

7. Financing & Payments

Option	Key Legal/Contractual Notes
Cash purchase	Use an Escrow Agreement with a reputable bank to release funds only upon title transfer
Bank loan / Pag-IBIG	Bank will conduct its own appraisal & annotation of REM (Real Estate Mortgage) on the title
In-house financing	Review interest computation vs. Truth-in-Lending Act (RA 3765)

8. Drafting & Signing the Contracts

Contract to Sell (CTS) – Used when ownership transfers only after full payment; annotated on the title only if agreed.
Deed of Absolute Sale (DOAS) – Transfers ownership upon signing & payment.
Essential Clauses
- Complete description of property (per TCT).
- Purchase price & VAT allocation (if seller is VAT-registered).
- Allocation of taxes & expenses (CGT vs. DST).
- Delivery of vacant & peaceful possession.
- Remedies & penalties for breach.
Notarization – Converts private document into a public instrument; triggers documentary stamp obligations; deed must be acknowledged within the province/city of property or where any party resides.

9. Post-Signing: Transfer of Title

Step	Office	Timeframe*
Pay CGT/CWT & DST → secure BIR CAR	BIR RDO	2–6 weeks
Pay Transfer Tax	LGU Treasurer	1–2 days
Present CAR + docs for Registration	Registry of Deeds	2–4 weeks
Secure new Tax Declaration	LGU Assessor	1–2 weeks

*Typical; delays possible if documents are incomplete or assessments are disputed.

10. Move-in & Ongoing Obligations

Barangay clearance & occupancy permit ― prerequisite to move in.
Real Property Taxes ― due every January 1 (discounts for prompt advance payment).
Homeowners’ Association (HOA) dues ― governed by RA 9904 (Magna Carta for Homeowners).
Property insurance & mortgage redemption insurance (if financed).

FAST REFERENCE: ONE-PAGE CHECKLIST

✔️ Verify buyer’s eligibility to own land
✔️ Secure certified true copy of title & check for liens
✔️ Match technical description with on-ground survey
✔️ Confirm real property tax, zoning & environmental clearances
✔️ Validate DHSUD LTS/COR (if developer sale)
✔️ Review marital/estate status of seller; require SPA if needed
✔️ Allocate and budget for CGT/CWT, DST, transfer & registration fees
✔️ Use escrow or manager’s checks; avoid full cash hand-overs
✔️ Sign properly drafted, notarized CTS/DOAS
✔️ File taxes → obtain CAR → register with RD → secure new tax dec

COMMON PITFALLS TO AVOID

Pitfall	Preventive Tip
Buying property based only on Tax Declaration	Never sufficient for ownership; insist on Torrens Title
Assuming “oral promises” by agents are enforceable	Incorporate warranties in the written contract
Ignoring annotations like “Affidavit of Loss of Title**	Investigate; could signal multiple titles or fraud
Failing to verify subdivision project’s LTS	Buyer may end up with unregistered, un-developed lots
Paying without escrow & simultaneous deed	Risk of seller’s non-delivery or double sale (Art. 1544, Civil Code)

FINAL WORD

Buying land or a house-and-lot in the Philippines is perfectly secure if you respect the Torrens system, observe prudence with taxes and regulatory approvals, and document every peso and promise in writing. Always budget both time and costs for due diligence, engage a licensed real estate broker (RA 9646) or counsel when in doubt, and remember: a day at the Registry of Deeds is cheaper than years in court.

“An ounce of prevention is worth a pound of litigation.”

Good luck on your purchase—may your new home bring peace, security, and a clean title!