In the Philippines, a Deed of Donation is a solemn contract where a person (the donor) gratuitously transfers property or rights to another (the donee), who accepts it. Unlike a typical commercial contract, a donation is rooted in "liberality"—the pure desire to give.
Because it involves the transfer of ownership without getting anything in return, the Civil Code of the Philippines imposes strict requirements to ensure the act is genuine and to protect the interests of the donor’s forced heirs.
Does a Deed of Donation Expire?
Strictly speaking, a Deed of Donation does not have an "expiration date." Once a donation is perfected and completed, it is generally irrevocable. However, its "validity" can be challenged, and the right to claim the property can be lost through prescription or revocation.
- Perfection of the Donation: A donation does not exist legally until the donor knows of the donee's acceptance. If the donor dies before learning that the donee accepted, the donation is void.
- Prescription: If a donee fails to take possession or register the property for decades, and another person occupies the land openly and adversely, the donee might lose the right to the property through acquisitive prescription.
Essential Requisites for Validity
For a donation to be legally binding in the Philippines, it must meet specific formal requirements depending on the type of property:
1. Personal Property (Movable)
- If the value is P5,000 or less, the donation can be oral, provided there is simultaneous delivery.
- If the value exceeds P5,000, the donation and the acceptance must be in writing to be valid.
2. Real Property (Immovable)
The rules for land or buildings are much stricter (Article 749, Civil Code):
- The donation must be made in a Public Instrument (notarized Deed of Donation).
- The Acceptance by the donee must be made in the same deed or in a separate public instrument.
- If the acceptance is in a separate document, the donor must be notified in an authentic form, and this step must be noted in both instruments.
Note: Failure to comply with these formalities renders the donation void ab initio (void from the beginning), meaning the law treats it as if it never happened.
Grounds for Revocation or Reduction
Even if a deed is validly executed, it can be "undone" or reduced under specific legal circumstances:
| Ground | Description | Prescription Period |
|---|---|---|
| Birth, Adoption, or Survival | If the donor subsequently has a child, or a child thought dead returns. | 10 years from the birth/survival. |
| Non-fulfillment of Conditions | If the donation was "onerous" (subject to a condition) and the donee fails to comply. | 4 years from non-compliance. |
| Ingratitude | If the donee commits an offense against the donor, falsely accuses them of a crime, or refuses them support. | 1 year from the time the donor knew. |
| Inofficiousness | If the donation exceeds what the donor could give by will, impairing the "legitime" (inheritance) of forced heirs. | After the donor's death. |
Common Pitfalls and Misconceptions
- "Donation Mortis Causa" vs. "Inter Vivos": A donation Inter Vivos takes effect during the donor's lifetime. A donation Mortis Causa takes effect after death and must follow the strict formalities of a Last Will and Testament (including witnesses and probate). If a Deed of Donation is actually Mortis Causa but is only notarized like a regular deed, it is void.
- The "Notice of Acceptance": In many disputes, the donation is invalidated because the donee accepted the gift in a separate document but failed to formally notify the donor, or failed to record that notification in the deed.
- Taxes: A donation is not "complete" in the eyes of the Bureau of Internal Revenue (BIR) until the Donor’s Tax is paid. While failure to pay tax doesn't necessarily void the contract between parties, you cannot transfer the Title (TCT) to the donee's name without a Certificate Authorizing Registration (CAR).
Summary of Steps for a Lasting Donation
- Draft the Deed: Clearly describe the property and the intent to donate.
- Formal Acceptance: Ensure the donee signs the "Acceptance" clause.
- Notarization: Both parties must appear before a Notary Public.
- Pay Donor's Tax: This must be done within 30 days of the notarization.
- Register with the Register of Deeds: To protect the gift against third parties, the title must be transferred.
Would you like me to draft a basic template for a Deed of Donation for real property?