A Legal Article

I. Introduction

Real estate transactions in the Philippines often involve large sums of money, long-term obligations, and legally significant documents. A buyer may pay reservation fees, equity, amortizations, down payments, taxes, association dues, transfer charges, and loan-related costs before receiving the title or possession of the property. Because of this, verifying whether a real estate company is legitimate is not optional; it is a necessary legal and practical safeguard.

A real estate company may appear legitimate because it has a website, social media page, sales agents, glossy brochures, model units, office space, or online advertisements. However, legitimacy in Philippine real estate is not proven by marketing alone. It must be checked through corporate registration, real estate licenses, project permits, title verification, tax records, authority to sell, and regulatory compliance.

This article explains how to verify the legitimacy of a real estate company in the Philippines, the agencies involved, the documents to inspect, the warning signs of fraud, the legal remedies available to buyers, and the practical steps that should be taken before paying money or signing any document.

II. What “Legitimate Real Estate Company” Means

A legitimate real estate company is not merely a business that sells land, condominiums, houses, lots, or subdivision units. In the Philippine context, legitimacy may involve several layers:

Legal existence as a business entity The company must be properly registered with the appropriate government agency, such as the Securities and Exchange Commission for corporations or partnerships, or the Department of Trade and Industry for sole proprietorships.
Authority to engage in real estate business Its business purpose and permits should allow it to engage in development, brokerage, leasing, property management, or sales, depending on what it claims to do.
Compliance with real estate service laws Brokers, appraisers, consultants, and salespersons must comply with professional licensing rules under Philippine law.
Authority to sell the specific project or property A company may be registered as a corporation but still lack authority to sell a particular subdivision lot, condominium unit, house-and-lot project, or memorial lot.
Valid ownership or agency authority The seller must either own the property or be duly authorized by the owner to sell it.
Regulatory permits for projects Developers must have the required permits, licenses, and approvals for subdivision or condominium projects.
No material misrepresentation The company must not mislead buyers about title status, project completion, permits, pricing, financing, or turnover.

A company can be legally registered but still be unsafe to transact with if it lacks the required project permits, uses unlicensed salespeople, misrepresents property ownership, or sells units it has no authority to sell.

III. Relevant Philippine Laws and Regulatory Framework

A. Corporation Code and Business Registration Rules

Corporations and partnerships doing business in the Philippines are generally registered with the Securities and Exchange Commission. Sole proprietorships are registered with the Department of Trade and Industry.

Registration proves legal existence, but it does not automatically prove that the company is trustworthy, financially stable, licensed to sell a specific property, or compliant with real estate regulations.

B. Real Estate Service Act

The Real Estate Service Act regulates real estate brokers, appraisers, assessors, consultants, and salespersons. Real estate brokers and appraisers generally need professional licenses. Real estate salespersons must be accredited and must work under a licensed real estate broker.

A person who sells real estate without proper authority may be violating professional licensing rules.

C. Subdivision and Condominium Buyers’ Protective Decree

The law governing subdivision and condominium sales requires developers or sellers of subdivision lots and condominium units to comply with regulatory requirements, including registration of projects and securing a license to sell before offering units to the public.

This is one of the most important protections for buyers of pre-selling condominiums, subdivision lots, house-and-lot packages, and similar projects.

D. Maceda Law

The Realty Installment Buyer Protection Act, commonly called the Maceda Law, protects buyers of real estate on installment payments. It provides certain rights in case of cancellation of contracts, depending on how much the buyer has paid and how long payments have been made.

This law does not determine whether a company is legitimate, but it becomes relevant when buyers seek refunds or protection after paying installments.

E. Condominium Act and Subdivision Regulations

Condominium and subdivision projects are subject to specific legal rules on ownership, registration, development, master deeds, titles, common areas, and restrictions.

A buyer must verify that the project is legally created, properly registered, and approved by the proper government agencies.

F. Consumer Protection and Civil Code Principles

Misrepresentation, fraud, defective consent, breach of contract, unjust enrichment, and damages may arise under general civil law principles. Buyers may have remedies when a company misleads them, refuses to honor obligations, fails to deliver property, or collects money without authority.

IV. Government Agencies Involved

A. Securities and Exchange Commission

The SEC verifies corporations and partnerships. A buyer may check whether the company:

Exists as a registered corporation or partnership
Has a valid registration number
Has a corporate name matching the seller’s documents
Is active or revoked
Has articles of incorporation authorizing real estate-related activities
Has submitted required reports
Has registered officers and directors

SEC registration is useful but not enough. A corporation may exist but may still not have authority to sell the specific property.

B. Department of Trade and Industry

The DTI verifies sole proprietorship business names. A DTI certificate shows that a business name was registered, but it does not create a corporation and does not by itself prove authority to sell real estate.

A DTI-registered business name is different from a corporation. Buyers should know whether they are dealing with an individual proprietor or a juridical entity.

C. Department of Human Settlements and Urban Development

The DHSUD is central in verifying subdivision and condominium projects. It is the agency commonly involved in project registration, licenses to sell, and complaints involving real estate developers.

For subdivision and condominium projects, buyers should verify:

Certificate of registration
License to sell
Project name
Developer name
Location
Approved plans
Number of units or lots covered
Advertisement approvals, where applicable
Project status
Complaints or enforcement actions, if available

A license to sell is especially important. A developer should generally not sell or offer subdivision lots or condominium units to the public without the necessary registration and license.

D. Professional Regulation Commission

The PRC verifies licensed real estate brokers, appraisers, and consultants. Buyers should check whether the broker handling the transaction has an active PRC license.

The salesperson should also be accredited under a licensed broker.

E. Registry of Deeds

The Registry of Deeds verifies land titles, condominium certificates of title, encumbrances, liens, mortgages, annotations, and ownership.

Before buying property, a buyer should inspect the title and request a certified true copy from the Registry of Deeds.

F. Local Government Unit

The city or municipal government may verify:

Mayor’s permit or business permit
Zoning compliance
Locational clearance
Building permit
Occupancy permit
Real property tax declaration
Real property tax payments
Project location and classification

For raw land and house-and-lot transactions, LGU records are important.

G. Bureau of Internal Revenue

The BIR is relevant for tax identification, capital gains tax, documentary stamp tax, withholding tax, value-added tax, and transfer-related taxes. A buyer should be cautious if a seller refuses to issue proper receipts or insists on irregular tax arrangements.

V. First Level Verification: Business Existence

A. Check the Exact Legal Name

Many real estate scams use names similar to legitimate developers or brokers. Always identify the exact legal name of the company.

Check whether the company name in the advertisement matches the name in:

SEC certificate
DTI certificate
Contract to sell
Official receipt
Reservation agreement
License to sell
Authority to sell
Deed of sale
Project registration
Bank account name

A mismatch is a warning sign.

For example, a social media page may use the name of a known developer, but payment may be requested to a personal bank account or unrelated entity.

B. SEC Registration for Corporations

If the company claims to be a corporation, ask for:

SEC certificate of registration
Articles of incorporation
General information sheet
Latest company profile
Names of directors and officers
Corporate address

Verify whether the company is active and whether its corporate purpose includes real estate development, leasing, brokerage, marketing, construction, or property management, depending on the transaction.

C. DTI Registration for Sole Proprietorships

If the seller is a sole proprietorship, verify:

DTI business name certificate
Name of proprietor
Business address
Business scope
Business permit
Tax registration

Remember that a DTI business name is not a separate juridical person. The proprietor remains personally involved.

D. Business Permit

A legitimate real estate office should have an appropriate mayor’s permit or business permit from the local government. However, a business permit alone does not prove ownership of property or authority to sell.

VI. Second Level Verification: Real Estate License and Accreditation

A. Licensed Real Estate Broker

A person acting as a real estate broker should have a valid PRC license. Ask for:

Full name
PRC license number
Professional identification card
Accreditation details
Official receipt for professional tax, where applicable
Contact information

A broker should be willing to disclose licensing details.

B. Accredited Real Estate Salesperson

A real estate salesperson is not the same as a broker. A salesperson must generally be accredited and must work under a licensed broker.

Ask for:

Name of supervising broker
Broker’s PRC license number
Salesperson accreditation
Authority from the developer or broker
Official company ID

Be cautious if the salesperson cannot identify the supervising broker.

C. In-House Sales Agents

Developers often have in-house sales teams. Even then, buyers should verify that the agent is actually connected with the developer or authorized marketing group.

Ask the developer directly whether the agent is accredited.

D. Unauthorized Agents

Common warning signs include:

Refusal to provide broker information
Requesting payment to a personal account
Selling below-market units with urgency
Claiming “special access” to units
No official receipt
No written authority
No office address
No verifiable license or accreditation

VII. Third Level Verification: Authority to Sell the Specific Property

A company may be legitimate but still lack authority to sell a specific property.

A. If the Company Is the Developer

Ask for:

Certificate of registration for the project
License to sell
Development permit
Approved subdivision or condominium plan
Project location and technical description
Model contract to sell
Turnover schedule
Master deed or restrictions, for condominium projects
Proof of land ownership or development rights

B. If the Company Is a Broker or Marketing Agent

Ask for:

Written authority to sell
Brokerage agreement
Marketing agreement
Developer accreditation
Seller’s authorization
Valid ID of seller or corporate representative
Board resolution or secretary’s certificate, if the owner is a corporation

C. If the Property Is Privately Owned

Ask for:

Owner’s duplicate certificate of title
Certified true copy of title from the Registry of Deeds
Real property tax declaration
Real property tax clearance
Valid IDs of owner
Marriage consent or spousal consent, where applicable
Special power of attorney, if sold through a representative
Authority to sell, if brokered

A person who merely “knows the owner” or “has access to the property” should not be treated as authorized without written proof.

VIII. Fourth Level Verification: License to Sell

For subdivision and condominium projects, the license to sell is one of the most important documents.

A. What a License to Sell Means

A license to sell means the project has passed certain regulatory requirements allowing the developer to sell or offer units or lots to the public.

It usually identifies:

Name of developer
Project name
Location
Type of project
Number of saleable units or lots
Date of issuance
Coverage of the license
Conditions imposed

B. Why It Matters

Without a license to sell, buyers may face risks such as:

Unapproved project
Defective land conversion
Lack of development permit
No clear title
Project not financially or technically ready
Delayed turnover
Difficulty obtaining title
Illegal pre-selling
Refund disputes
Regulatory complaints

C. Warning Signs

Be cautious if the seller says:

“License to sell is still being processed.”
“Reservation is allowed even without license.”
“This is an exclusive pre-launch.”
“No need to check DHSUD.”
“The title is still being consolidated.”
“The project is not yet announced, so documents are confidential.”
“Pay now before prices increase.”

Pre-selling without proper authority is a major red flag.

IX. Fifth Level Verification: Title and Property Records

A. Check the Title

For land, check the Transfer Certificate of Title. For condominium units, check the Condominium Certificate of Title.

Do not rely only on a photocopy given by the seller. Request a certified true copy from the Registry of Deeds.

Check:

Registered owner
Title number
Location
Area
Technical description
Encumbrances
Mortgages
Liens
Adverse claims
Notices of lis pendens
Restrictions
Easements
Annotations
Court cases
Deed restrictions
Date of title issuance

B. Compare Title With Seller Identity

The name of the registered owner must match the seller or the person authorizing the sale.

If the owner is a corporation, check whether the signatory has authority through:

Board resolution
Secretary’s certificate
Corporate secretary certification
Articles and bylaws, if necessary

If the seller is an individual, check whether the property is conjugal, community, exclusive, inherited, or co-owned.

C. Check for Mortgages and Encumbrances

A property may be subject to a mortgage, lien, adverse claim, or pending case. This does not always make the sale impossible, but the buyer must understand the risk.

A seller should disclose encumbrances.

D. Check the Tax Declaration

A tax declaration is not proof of ownership by itself, but it helps verify tax records and property classification. Compare it with the title.

E. Check Real Property Taxes

Ask for updated real property tax receipts and tax clearance. Unpaid real property taxes may affect transfer and closing.

X. Sixth Level Verification: Project and Development Documents

For subdivision, condominium, house-and-lot, and memorial projects, inspect project documents.

A. Development Permit

This indicates local or regulatory approval for the project development.

B. Approved Plans

Check whether the unit, lot, or building being sold is part of the approved project.

C. Building Permit

For buildings, verify that construction is authorized.

D. Occupancy Permit

For completed buildings, an occupancy permit is important before lawful occupancy.

E. Environmental and Zoning Compliance

Large projects may require environmental clearances, zoning approvals, land conversion approvals, or other permits.

F. Completion and Turnover Status

For pre-selling properties, ask for:

Construction timeline
Target completion date
Turnover conditions
Penalties for delay
Buyer remedies
Escrow or financing arrangements, if any
Project development history

XI. Seventh Level Verification: Contracts and Payment Documents

A. Reservation Agreement

Before paying a reservation fee, read the reservation agreement carefully.

Check:

Exact property being reserved
Project name
Unit or lot number
Price
Payment terms
Refundability
Deadline for signing contract
Consequences of cancellation
Name of payee
Official receipt issuance
Developer or seller signature

A reservation fee should not be paid based only on chat messages.

B. Contract to Sell

The contract to sell is commonly used when payment is by installment and ownership transfers only after full payment and compliance with conditions.

Check:

Correct names
Property description
Total contract price
Payment schedule
Taxes and fees
Default provisions
Cancellation provisions
Maceda Law rights
Turnover date
Title transfer process
Association dues
Restrictions
Warranties
Refund rules
Dispute resolution
Governing law
Signatories and authority

C. Deed of Absolute Sale

A deed of absolute sale is usually executed after full payment or when ownership is ready to transfer.

Check:

Seller’s ownership
Buyer’s details
Property details
Consideration
Tax obligations
Spousal consent, if required
Corporate authority, if seller is corporation
Notarial details

D. Official Receipts

Always demand official receipts or acknowledgment receipts issued in the name of the proper seller or developer.

Avoid payments:

To personal accounts of agents
Through untraceable channels
Without receipts
To unrelated companies
To accounts with names different from the contract
Under “cash discount” arrangements not reflected in writing

E. Notarization

Notarization does not prove that a transaction is safe. A notarized document may still be defective if the seller lacks authority or the property cannot be legally sold.

XII. Eighth Level Verification: Reputation and Track Record

Legal documents matter most, but reputation also helps.

Check:

Completed projects
Turnover history
Buyer complaints
Litigation history
Regulatory actions
Delayed projects
Quality of construction
Financial capacity
Customer service
After-sales performance
Title transfer record

A developer may have valid permits but poor delivery history. That is a business risk the buyer should consider.

XIII. Red Flags of Illegitimate or Risky Real Estate Companies

Be cautious if any of the following appear:

No SEC or DTI registration
No DHSUD license to sell for subdivision or condominium project
No PRC-licensed broker
Agent refuses to provide full name and license details
Payment requested to a personal bank account
No official receipt
Huge discount for immediate payment
Pressure to pay reservation fee immediately
Only chat-based documentation
No office address
Office address does not match registration records
Project name differs across documents
Seller’s name differs from title owner
No written authority to sell
No certified true copy of title
Title has unexplained annotations
Property is under litigation
Property is occupied by informal settlers or adverse claimants
Land is agricultural but sold as residential without conversion
Promises of guaranteed high returns
Investment scheme disguised as real estate
No clear turnover date
No cancellation or refund terms
No tax documentation
Unregistered “pre-launch” selling
Fake association with known developers
Use of altered documents or screenshots
Refusal to meet at official office
Refusal to allow independent title verification
Instructions not to contact the developer directly

One red flag may be explainable. Several red flags together should stop the transaction.

XIV. Special Cases

A. Buying From a Developer

When buying from a developer, verify both the company and the project. A large developer may have many projects, but each project must still have proper documentation.

Ask for the project’s license to sell and confirm that the specific unit or lot is covered.

B. Buying From a Broker

When buying through a broker, verify the broker’s PRC license and authority to represent the seller.

A broker is not the owner unless separately shown. The buyer should still verify the title and seller’s authority.

C. Buying From an Agent or Salesperson

A salesperson should be connected to a licensed broker or developer. Ask for proof of accreditation.

Do not pay a salesperson personally unless the seller gives written instructions and the arrangement is reflected in official receipts.

D. Buying From a Corporation

When the seller is a corporation, confirm that the person signing has authority.

Ask for:

Board resolution
Secretary’s certificate
Corporate documents
Valid IDs of signatories
SEC records
TIN and business permit

E. Buying From Heirs

Inherited property is risky if the estate has not been settled.

Check:

Death certificate of registered owner
Extrajudicial settlement or court settlement
Estate tax clearance
Authority of heirs
Consent of all co-owners
Updated title
Possibility of omitted heirs

F. Buying From an Attorney-in-Fact

If the seller is represented by an attorney-in-fact, examine the special power of attorney.

Check:

Principal’s identity
Property specifically described
Authority to sell
Authority to receive payment, if any
Notarization
Consular authentication or apostille, if executed abroad
Date and continuing validity

Payment should generally go to the owner unless the SPA clearly authorizes the representative to receive payment.

G. Buying Foreclosed Property

Verify:

Bank or selling institution authority
Property title
Occupancy status
Redemption period, if applicable
Taxes and association dues
Eviction risks
“As is, where is” terms

H. Buying Agricultural Land

Check land classification, agrarian reform coverage, conversion status, zoning, and restrictions on ownership. Selling agricultural land as a residential subdivision without proper conversion and approvals is risky.

I. Buying Condominium Units

Check:

Master deed
Condominium certificate of title
Condominium corporation
Association dues
Restrictions
Parking rights
Common areas
Turnover condition
Developer obligations
Occupancy permit

J. Buying Memorial Lots

Memorial parks are also regulated. Verify project authority, certificate of ownership or interment rights, transfer rules, and management policies.

XV. Real Estate Investment Schemes

Some companies advertise “real estate investments” rather than direct property sales. These may involve pooled funds, promised returns, rental income sharing, fractional ownership, farm lots, condotel investments, or “guaranteed passive income.”

A buyer or investor should ask:

Am I buying titled property, shares, rights, or an investment contract?
Is there a securities offering?
Is the company authorized to solicit investments?
Is the return guaranteed?
Where is the money going?
Is the project registered?
Is there a title or merely a certificate?
Can I resell or transfer the right?
What happens if the project fails?
Who holds the funds?
Is there audited financial information?

A real estate company may also need securities compliance if it is soliciting investments from the public with promised profits.

XVI. Due Diligence Checklist Before Paying

Before paying reservation fees, down payments, equity, or purchase price, verify:

Company

SEC or DTI registration
Business permit
Tax registration
Office address
Corporate officers
Authorized signatories

Sales Personnel

PRC broker license
Salesperson accreditation
Developer or owner authority
Official company ID

Project

DHSUD certificate of registration
DHSUD license to sell
Development permit
Approved plans
Building permit
Occupancy permit, if completed

Property

Certified true copy of title
Tax declaration
Real property tax clearance
Encumbrances
Possession and occupancy
Zoning and classification
Road access and utilities

Contract

Reservation agreement
Contract to sell
Deed of sale
Payment schedule
Refund terms
Cancellation terms
Turnover date
Taxes and fees
Maceda Law rights
Signatory authority

Payment

Correct payee
Official receipts
Traceable payment method
No personal accounts unless legally justified
Written acknowledgment
Clear allocation of charges

XVII. Questions to Ask the Real Estate Company

A legitimate company should be able to answer basic due diligence questions.

Ask:

What is the company’s registered legal name?
Is the company registered with the SEC or DTI?
Who is the authorized signatory?
Does the company own the property?
If not, where is the authority to sell?
Is the project registered with the DHSUD?
Does the project have a license to sell?
What is the license number and coverage?
Who is the licensed broker?
Is the salesperson accredited?
Can I see a certified true copy of the title?
Are there mortgages or encumbrances?
Are real property taxes updated?
What is the exact payment schedule?
To whom should payments be made?
Will official receipts be issued?
What happens if I cancel?
What happens if turnover is delayed?
When will title transfer occur?
What documents will I receive after payment?

Refusal to answer these questions is itself a warning sign.

XVIII. How to Verify Online Real Estate Sellers

Online selling is common, but it creates additional risks.

A. Check Identity

Do not rely on profile names. Ask for:

Full legal name
Company name
PRC license or accreditation
Official email address
Office landline or official contact number
Company ID
Authority to sell

B. Check Official Channels

Confirm with the developer or property owner through official contact information, not merely the number provided by the agent.

C. Beware of Fake Pages

Scammers often copy photos, logos, videos, and project materials from legitimate developers.

Check for:

Recently created pages
No official website link
Poor grammar or inconsistent branding
Payment to personal accounts
Unrealistic pricing
Urgent reservation deadlines
No office visit allowed
No verifiable license

D. Do Not Pay Based on Screenshots

Screenshots of titles, permits, and IDs can be edited. Ask for documents that can be independently verified.

XIX. Payment Safety Rules

Pay only to the official seller or developer account.
Avoid personal bank accounts of agents.
Demand official receipts.
Use traceable payment methods.
Do not pay full price before title and authority are verified.
Do not sign blank documents.
Do not rely on verbal promises.
Put all discounts and incentives in writing.
Check refund terms before paying reservation fees.
Do not be pressured by “last unit” tactics.

XX. What If the Company Is Registered but the Project Is Not?

This is a common trap. A company may be real, but the project may be unlicensed or unauthorized.

In such a case, the buyer should not assume safety. The issue is not only corporate existence but authority to sell the specific project.

Possible risks include:

Illegal pre-selling
No approved plans
No development permit
No license to sell
Land not yet acquired
Land still mortgaged or disputed
Project may never be completed
Buyer may face refund difficulties

The safest course is to withhold payment until the project documents are verified.

XXI. What If the Agent Is Licensed but the Seller Is Not the Owner?

A licensed broker or salesperson does not cure defects in ownership.

Even if the agent is legitimate, the buyer must still verify:

Registered owner
Authority to sell
Title status
Encumbrances
Spousal or co-owner consent
Corporate authority
Project permits

A legitimate agent can still market a legally problematic property if due diligence is not done.

XXII. What If the Title Is Clean but the Company Is Suspicious?

A clean title is important, but it is not the only issue.

The buyer should still verify:

Whether the seller is the registered owner
Whether the signatory is authorized
Whether taxes are paid
Whether the property is actually available for possession
Whether the land use is lawful
Whether the company can issue valid receipts
Whether the transaction documents are proper

A clean title does not automatically validate an unauthorized seller.

XXIII. What If the Price Is Too Good to Be True?

Real estate fraud often uses urgency and unusually low prices.

Common explanations include:

“Owner is leaving the country.”
“Developer has secret inventory.”
“Foreclosed rush sale.”
“Only insiders know this price.”
“Need reservation today.”
“No need to verify; many buyers are waiting.”
“Cash discount if paid directly to agent.”

A legitimate bargain may exist, but the lower the price, the greater the need for verification.

XXIV. Legal Remedies for Buyers

If a buyer has already paid and later discovers illegitimacy, unauthorized sale, or misrepresentation, remedies may include administrative, civil, and criminal action.

A. Demand Letter

A buyer may send a formal demand letter requesting:

Refund
Cancellation
Delivery of documents
Explanation
Compliance with contract
Issuance of official receipts
Turnover
Title transfer

The demand letter should state facts, amounts paid, dates, documents, and requested remedy.

B. Complaint With DHSUD

For subdivision and condominium projects, complaints may be filed with the DHSUD for violations involving licenses to sell, project registration, developer obligations, refund disputes, and buyer protection rules.

C. Complaint With PRC

If a broker or salesperson acted without license, exceeded authority, misrepresented facts, or engaged in unethical conduct, a complaint may be filed with the PRC or appropriate professional regulatory body.

D. Complaint With SEC

If the company is a corporation engaged in fraudulent solicitation, misleading corporate activity, or investment-taking, the SEC may be relevant.

E. Complaint With DTI

For consumer-related complaints involving business names, misleading practices, or certain consumer transactions, DTI may be relevant depending on the transaction.

F. Complaint With NBI or PNP

If the transaction involves fraud, falsification, identity theft, fake documents, estafa, or cyber-related scams, law enforcement may be involved.

G. Civil Case

A buyer may consider a civil case for:

Rescission
Annulment of contract
Specific performance
Damages
Refund
Cancellation of documents
Recovery of property
Injunction

H. Criminal Complaint

A criminal complaint may be considered where there is deceit, fraudulent inducement, falsified documents, unauthorized selling, or misappropriation of funds.

XXV. Evidence to Preserve if You Suspect Fraud

Preserve:

Advertisements
Screenshots of posts and messages
Names and contact details of agents
Payment receipts
Bank transfer confirmations
Reservation agreements
Contracts
Official receipts or lack thereof
IDs provided by seller or agent
Copies of permits or titles shown
Call logs
Emails
Project brochures
Site visit photos
Witness names
Complaint reference numbers

Do not delete chats even if the seller asks you to “clear” or “move” the conversation.

XXVI. Practical Due Diligence Workflow

Step 1: Identify the transaction type

Determine whether you are buying:

Condominium unit
Subdivision lot
House and lot
Raw land
Farm lot
Memorial lot
Foreclosed property
Leasehold right
Investment product
Timeshare or fractional ownership
Assignment of rights

Different transactions require different documents.

Step 2: Identify the exact seller

Know whether the seller is:

Developer
Landowner
Broker
Salesperson
Attorney-in-fact
Corporation
Heir
Co-owner
Bank
Assignee

Step 3: Verify business registration

Check SEC or DTI records and business permit.

Step 4: Verify licensing

Check broker license, salesperson accreditation, and authority to sell.

Step 5: Verify project permits

For subdivision and condominium projects, check registration and license to sell.

Step 6: Verify title and ownership

Secure certified true copy of title from the Registry of Deeds.

Step 7: Verify taxes and possession

Check real property taxes, occupancy, and physical condition.

Step 8: Review contracts

Do not sign until the contract matches the verified facts.

Step 9: Pay safely

Pay only to the proper party and demand official receipts.

Step 10: Keep records

Maintain a complete file of all documents and communications.

XXVII. Special Warning on “Rights Only” Sales

Some sellers offer “rights” to land instead of titled property. This may involve possession rights, tax declarations, awards, informal settlements, ancestral land claims, or government housing rights.

Buying “rights” is legally risky because the buyer may not acquire ownership of titled property.

Before buying rights, verify:

Nature of the right
Transferability
Government restrictions
Land classification
Actual owner
Possession status
Risk of ejectment
Pending claims
Whether title can ever be issued

A “rights only” sale should be reviewed carefully before payment.

XXVIII. Special Warning on Farm Lots and Raw Land Projects

Farm lots are often marketed online as affordable investments. Some are legitimate, but many involve legal issues.

Check:

Whether the land is agricultural
Whether conversion is required
Whether subdivision is approved
Whether roads and utilities are lawful
Whether individual titles can be issued
Whether the seller owns the land
Whether the project has required approvals
Whether buyers are receiving title or merely internal documents

Do not assume that a beautiful site plan means the land can legally be sold as residential lots.

XXIX. Special Warning on Pre-Selling Condominiums

Pre-selling condominium purchases involve future delivery. The buyer should verify the developer’s authority and ability to complete the project.

Check:

License to sell
Project registration
Construction status
Building permit
Financing
Escrow or payment handling, if applicable
Turnover history
Delay clauses
Refund terms
Association dues
Title issuance timeline

Do not rely solely on showroom presentations.

XXX. Frequently Asked Questions

1. Is SEC registration enough to prove a real estate company is legitimate?

No. SEC registration proves corporate existence, not authority to sell a specific property or project.

2. Is a DTI certificate enough?

No. A DTI certificate only registers a business name for a sole proprietorship. It does not prove ownership, licensing, or project authority.

3. What is the most important document for a condominium or subdivision project?

The license to sell is one of the most important documents, together with the certificate of registration and approved project documents.

4. Should I pay a reservation fee before seeing the license to sell?

It is risky. A buyer should verify the project’s authority to sell before paying.

5. Can I trust a licensed broker?

A licensed broker is important, but the buyer must still verify the seller’s ownership, title, permits, and authority.

6. What if the agent says the documents are confidential?

Basic documents such as authority to sell, license to sell, title information, and payment instructions should be verifiable. Refusal to provide them is a red flag.

7. Is notarization enough to protect me?

No. Notarization does not guarantee that the seller owns the property or that the project is lawful.

8. What if the company uses the name of a famous developer?

Confirm directly through the developer’s official channels. Scammers can imitate logos, brochures, and social media pages.

9. Can I recover my money if the company is fake?

Recovery depends on the facts, evidence, financial capacity of the wrongdoer, and legal action taken. Prompt documentation and complaints improve the chances of recovery.

10. Should I hire a lawyer before buying property?

For major transactions, complex titles, corporate sellers, inherited property, pre-selling projects, raw land, or unusually cheap deals, legal review is strongly advisable.

XXXI. Sample Verification Checklist

Before signing or paying, require the following where applicable:

Area	Documents or Information to Verify
Company	SEC or DTI registration, business permit, TIN, office address
Representative	Valid ID, authority to sign, board resolution, SPA
Broker	PRC license, accreditation, supervising broker
Project	DHSUD certificate of registration, license to sell, approved plans
Property	Certified true copy of title, tax declaration, tax clearance
Contract	Reservation agreement, contract to sell, deed of sale
Payment	Official payee, official receipts, written payment schedule
Taxes	Capital gains tax, documentary stamp tax, transfer tax, registration fees
Possession	Occupancy status, tenants, informal settlers, turnover date
Risk	Encumbrances, litigation, adverse claims, mortgages

XXXII. Conclusion

Verifying whether a real estate company is legitimate in the Philippines requires more than checking a website, office, or social media page. A buyer must verify the company’s legal existence, the professional license of the broker or salesperson, the authority to sell, the project’s regulatory permits, the property title, the payment arrangements, and the contract terms.

The most common mistake is assuming that one document proves everything. SEC registration does not prove project authority. A broker’s license does not prove ownership. A title copy does not prove the agent may sell. A notarized contract does not cure fraud. A receipt does not guarantee legality. Each layer must be checked separately.

The safest rule is simple: verify before paying. Real estate transactions are too valuable to rely on trust, urgency, or marketing promises. Buyers should demand official documents, confirm them with the proper agencies, pay only to authorized parties, obtain receipts, and seek legal advice when the transaction involves large amounts, pre-selling projects, inherited property, raw land, corporate sellers, or any sign of irregularity.