Contract to Sell Notarial Fees in the Philippines
A comprehensive practitioner-oriented discussion
1. Meaning of a “Contract to Sell”
A contract to sell (CTS) is an executory bilateral agreement in which a would-be seller binds himself to convey title to specific real property upon the buyer’s full compliance with a suspensive condition—usually the complete payment of the purchase price.¹ Title remains with the owner until that condition occurs, unlike in a contract of sale where ownership passes upon delivery even if the price is unpaid. The CTS is widely used in subdivision and condominium projects (pre-selling), in installment purchases, and in lease-purchase schemes.
¹ Spouses Gulles v. Philippine National Bank, G.R. 183566, January 20 2016.
2. Why Notarization Matters
| Effect of Notarization | Explanation |
|---|---|
| Elevates a private writing into a public document | It becomes admissible in evidence without further proof of authenticity (Rule 132, § 19, Rules of Court). |
| Prerequisite for registration | The Registry of Deeds (RD) will not accept an un-notarized CTS for voluntary registration or for annotation on the transfer certificate of title (TCT). |
| Affords presumption of regularity | The notary’s signature and seal carry a presumption that the parties personally appeared, were identified through competent evidence of identity, and executed the instrument freely. |
| Deters fraud | The notary must keep a Notarial Register and retain copies; these records help trace forged or multiple sales. |
Although the validity of a CTS between the parties does not depend on notarization, the added evidentiary weight and registrability make it standard practice.
3. Sources of Law on Notarial Fees
- 2004 Rules on Notarial Practice (A.M. No. 02-8-13-SC, as amended) – national framework.
- Code of Professional Responsibility and Accountability (CPRA) – “fair and reasonable” fees (Canon III, § 40).
- Integrated Bar of the Philippines (IBP) Chapter Schedules – recommended ceilings per locality, periodically approved by the Supreme Court.
- Local Government Code – cities/municipalities may impose a professional tax on lawyers, but not notarial fees.
- Bureau of Internal Revenue regulations – documentary-stamp tax (DST) is a separate fiscal impost, not part of notarial fees.
- Interim Rules on Remote Notarization Outside the Philippines (A.M. No. 20-12-01-SC, 2021) – temporary pandemic-era framework, still cited for guidance.
4. National Maximums under the 2004 Rules
The Rules set national caps (Rule VIII § 1). While they were framed when ₱1 = ≈ US$0.018, they remain in force unless a local chapter schedule approved by the Court allows higher charges.
| Notarial Act | Maximum Fee (₱) |
|---|---|
| Acknowledgment (each principal signature) | ₱100 |
| Jurat | ₱100 |
| Signature witnessing, oath, affirmation | ₱100 |
| Copy certification | ₱100 per page |
| Travel per diem (outside office) | ₱5 /km plus reasonable waiting time |
Key point: Even if the CTS covers property worth ₱50 million, the act of acknowledgment itself is capped at the above amount unless a higher IBP schedule—specifically approved by the Court—applies.
5. Local IBP Schedules (Illustrative)
Because the 2004 figures are outdated, most IBP chapters have recommended schedules reflecting today’s values. A typical Metro Manila schedule (2024) authorizes the following suggested but not mandatory rates for a CTS covering land/condo units:
| Property Value (fair price / zonal value) | Suggested Notarial Fee |
|---|---|
| Up to ₱500,000 | ₱1,500 – 2,500 |
| ₱500,001 – 2 million | 0.4 % of consideration |
| ₱2,000,001 – 10 million | 0.3 % |
| Over ₱10 million | 0.2 % or by agreement |
Important caveats
- The fee remains subject to the lawyer-client agreement and the CPRA’s “fair and reasonable” test.
- The maximum may not exceed what the Supreme Court approved for that chapter; the notary may also charge less or even waive the fee.
- The notary must issue an official receipt (OR) registered with the BIR; the fee is subject to 12 % VAT unless the lawyer’s gross receipts are below VAT threshold (₱3 million).
6. What Costs Are Not Notarial Fees?
| Item | Typical Rate | Paid To |
|---|---|---|
| Documentary-Stamp Tax (DST) on CTS | ₱15 for every ₱1,000 of consideration (Sec. 196, NIRC) | Bureau of Internal Revenue |
| Registration Fee for annotation | Around 0.25 % of consideration + entry fee | Registry of Deeds |
| Homeowners Association / Developer processing | Varies | Private entity |
| Legal service fee (drafting CTS) | By agreement | Lawyer |
7. Ethical and Administrative Constraints on Notaries
- Overcharging or failing to issue an OR constitutes professional misconduct (CPRA § 40).
- Notaries must personally verify identity through competent evidence—current passport, or two government IDs with photo and signature (Rule II § 12).
- Presence requirement: Both seller and buyer (or their agents with special power of attorney duly notarized) must appear and sign in the notary’s presence (Rule IV § 2).
- Venue rule: The notary may act only within the territorial jurisdiction for which his notarial commission was issued.
- Recordkeeping: Each CTS entry in the Notarial Register must include page/line, parties’ names, instrument title, date, fee charged, and ID numbers of signatories (Rule VI).
- Liability: The notary is personally and subsidiarily liable for damages caused by negligence or fraudulent notarization (Art. 19 & 20, Civil Code; disciplinary cases).
8. Remote or Video-Conferencing Notarization
During COVID-19 the Court allowed remote notarization under strict safeguards: secure audio-video link, signatories within Philippine territory, e-copies transmitted, original signed within 30 days, and notary verifies identity twice (on-screen and upon hand-delivery). While the interim rules expired in 2023, many in-person features were absorbed by continuing judicial circulars; always confirm a notary’s current authority before proceeding.
9. Practical Tips for Clients and Practitioners
- Ask for the fee schedule – the notary must post it conspicuously (Rule VIII § 2).
- Bring valid IDs – no IDs, no notarization.
- Review the CTS – a notary is not required to examine business terms, only formalities; hire counsel for substantive review.
- Keep copies – obtain at least two originals: one for each party; extra if you intend to annotate with the RD.
- Pay DST promptly – even though CTS does not transfer ownership, DST applies; late payment incurs surcharges and interest.
- Upgrade to Deed of Absolute Sale (DOAS) when the suspensive condition is met; the CTS is then surrendered to the RD.
10. Frequently Asked Questions
| Question | Short Answer |
|---|---|
| Is notarization mandatory to make a CTS valid? | No, but it is essential for registration and evidentiary weight. |
| Can we use one CTS for multiple units? | Yes, but each unit must be specifically described; RD fees will be computed per title. |
| May the developer’s in-house counsel notarize? | Only if he is commissioned for the city/municipality where the notarization occurs and does not violate conflict-of-interest rules. |
| Can the fee be contingent on the property value? | Yes, if allowed by local IBP schedule and if the overall charge is still reasonable. |
| What if we lost the notarized CTS? | Secure a certified copy from the notary’s retained duplicate and/or the RD if it was annotated. |
11. Sanctions for Violations
- Administrative – suspension or revocation of notarial commission; disbarment for gross misconduct.
- Civil – damages under Art. 2176 (quasi-delict) or Art. 20 (abuse of rights).
- Criminal – falsification of public document (Art. 171, Revised Penal Code) if the notary fabricates appearance or signatures.
12. Checklist for a Compliant Notarization of a CTS
- □ Draft finalized; parties agree on terms.
- □ Parties appear personally with IDs.
- □ Notary verifies IDs, competence, voluntariness.
- □ Instrument signed in notary’s presence.
- □ Notary signs, affixes seal, and records in register.
- □ Official receipt issued; fee noted.
- □ If applicable, DST paid and BIR documentary stamp affixed.
- □ Optional: Annotate with Registry of Deeds.
Conclusion
In Philippine practice, the money you pay the notary public for a contract to sell is modest relative to the property value, yet the legal consequences are enormous. A properly notarized CTS is your ticket to registration, financing, and, ultimately, a trouble-free transfer of title. Understanding the statutory caps, local schedules, ethical rules, and tax overlay ensures that both clients and practitioners stay compliant—and avoid the disciplinary pitfalls that have cost many lawyers their license.