How to Verify Real Estate Developers in the Philippines: DHSUD Registration and Red Flags

This article explains the legal and practical due-diligence steps Filipino buyers should take before paying any money for a subdivision lot or condominium unit, with a focus on Department of Human Settlements and Urban Development (DHSUD) compliance, the required permits, and common warning signs.

1) Why DHSUD compliance matters

The Department of Human Settlements and Urban Development (DHSUD) is the primary regulator of private real-estate developers and housing projects nationwide. It was created by law in 2019 and assumed policy, regulatory, and permitting functions formerly exercised by the Housing and Land Use Regulatory Board (HLURB). Dispute adjudication is handled by the Human Settlements Adjudication Commission (HSAC).

For buyers, DHSUD’s regime is your first line of protection against “ghost” projects, over-selling, and misrepresentation. A legitimate pre-selling subdivision or condominium cannot be marketed or sold without DHSUD permits. Lack of these permits is a serious red flag.

2) Core permits and documents you should look for

A. For the project (not just the developer)

Certificate of Registration (CR)
- Confirms the project itself is registered with DHSUD.
- Issued per project (and often per phase). Names, locations, and project scope must match the marketing materials.
License to Sell (LTS)
- Non-negotiable before accepting reservations, down payments, or signing a Contract to Sell for pre-selling units/lots.
- Issued per project phase and has validity/conditions.
- The license number should appear on brochures, model-unit signages, and online advertisements. Absence or refusal to show the LTS is a stop sign.
Development Permits and Clearances (typically secured before CR/LTS)
- Locational Clearance / Zoning from the LGU
- Development Permit (for subdivisions) from the LGU
- Building Permit (for vertical projects and amenities)
- Environmental Compliance where applicable (e.g., ECC or Certificate of Non-Coverage)
- Proof of Land Rights (title or long-term rights, annotated as required; absence of adverse liens/encumbrances)
Project Instruments
- Master Deed and Declaration of Restrictions (condominiums)
- Deed of Restrictions / subdivision plan (subdivisions)
- Open space and amenities plans; road lots; utilities and easements

B. For the developer and sellers

Developer’s Corporate Profile
- SEC registration, updated General Information Sheet, active status, and authority to develop the land (developer is either the landowner or has a properly annotated development agreement).
Brokerage and Sales Team Credentials
- Real Estate Broker must be licensed under the Real Estate Service Act (RESA).
- Salespersons must be duly accredited under a supervising licensed broker.
- Ask for PRC license numbers and accreditation IDs and verify them.
Advertising and Sales Materials
- Should carry the correct LTS number, project name, and developer name.
- Promises (e.g., unit sizes, finishes, amenities, turnover date) become part of the offer; keep copies/screenshots.

3) How to verify—practical, step-by-step due diligence

Step 1: Match names across all documents

Project name on the LTS and CR must match the name on the brochure, reservation agreement, and Contract to Sell.
Owner of the land on the title (TCT/CCT) should match the developer, or there must be a properly annotated authorization (e.g., Joint Venture/Development Agreement).

Step 2: Check the LTS details

Confirm validity and phase. Do not accept assurances like “for processing” or “release next month.” Selling before LTS issuance is prohibited.
Confirm the exact location, unit types, and number of salable units match what you’re being offered.

Step 3: Examine the land title (Registry of Deeds / LRA)

Get a certified true copy. Check for liens, mortgages, adverse claims, or lis pendens.
Verify right-of-way and access roads.
For condos, check the mother title and the Master Deed registration.

Step 4: Validate plans and permits

For subdivisions: subdivision plan approval, road/open-space allocation, drainage, and utility connection plans.
For condos: building permit, structural permits, fire safety compliance, and parking allocation plan.

Step 5: Review contracts carefully

Reservation Agreement: refundable/non-refundable terms, cooling-off, and what triggers forfeiture.
Contract to Sell: payment schedule, penalties, interest computation, turnover conditions, remedies for delay, and handling of force majeure.
Deed of Restrictions / House Rules: pets, leasing, alterations, and use of common areas.

Step 6: Inspect timeline and escrow/assurance mechanisms

Understand promised turnover dates, liquidated damages (if any), and rectification periods for punch-list items.
Ask about escrow/assurance arrangements and the developer’s track record of delivering previous phases.

Step 7: Independent checks on site and hazards

Visit the site more than once, at different times and weather.
Consult official geohazard and flood maps and fault-line information.
Ask neighbors or local barangay about historical flooding or access issues.

4) Red flags that should make you pause—or walk away

No LTS, or the salesperson says: “We’re accepting reservations while the LTS is being processed.”
LTS or CR project name/location does not match what is being sold to you.
Sales materials don’t show the LTS number, or the team refuses to give you a copy.
Cash-only or huge ‘limited-time’ discounts pressuring immediate payment.
Salespersons cannot show PRC IDs or the identity of their supervising broker.
Title problems: encumbrances, unannotated claims, or title still under a different entity without a registered development agreement.
Over-promising on unit area, finishes, or amenities not reflected in the plans or the LTS.
Turnover delays normalized in the contract without any buyer remedy.
Reservation fees taken inside model units or coffee shops with no official receipt or acknowledgment from the developer.
Refusal to allow you to take copies/photos of permits, plan approvals, or sample contracts.

5) Key buyer protections in Philippine law

Subdivision and Condominium Buyers’ Protective Decree (P.D. 957)
- Requires registration and License to Sell before marketing.
- Regulates advertisements and empowers authorities to issue cease-and-desist orders, suspend/revoke permits, and impose administrative/criminal liability for violations.
- Governs open spaces, roads, utilities, and common areas.
Real Estate Service Act (R.A. 9646)
- Requires licensure of brokers, appraisers, and consultants, and accreditation of salespersons.
- Selling through “colorum” agents is a red flag and may incur penalties.
Maceda Law (R.A. 6552)
- Protects buyers of real estate on installment against oppressive cancellations, granting certain grace periods and cash surrender values depending on the number of installments paid (applies primarily to residential real estate; check your fact pattern).
Civil Code and the Revised Penal Code
- Misrepresentation may give rise to rescission, damages, or even estafa in egregious cases.
HSAC Jurisdiction
- Post-HLURB, adjudication of housing-related disputes runs through the Human Settlements Adjudication Commission, which can issue orders to refund, compel delivery, or stop illegal sales.

Practice tip: Penalty amounts and procedural rules change over time. Focus on the presence/absence of the LTS, the fidelity of marketing to approved plans, and clean title—these are evergreen determinants of project legitimacy.

6) Evaluating the payment and delivery structure

Down payments and amortizations should be receipted by the developer or its authorized marketing arm, not just the agent.
Bank financing terms should come from a bank, not a salesperson’s informal computation sheet.
Price escalations: Watch for clauses allowing unilateral price increases or substitution of materials beyond recognized industry tolerances.
Turnover: Ensure there’s a written turnover protocol (inspection, punch list, defect rectification, timeline to correct).
Association dues: Ask for the projected dues, what they cover, and when they start.

7) Document checklist (copy or screenshot everything)

From the developer/marketer

Certificate of Registration (project)
License to Sell (per phase), with validity dates
Approved plans (site development plan, floor plans)
Master Deed/Declaration of Restrictions (condo) or Deed of Restrictions (subdivision)
Building/Development Permits and clearances
Sample contracts (Reservation Agreement, CTS, Deed of Absolute Sale)
PRC license of broker + salespersons’ accreditation

From public records

Certified true copy of the title (TCT/CCT), updated tax declaration, and real property tax clearance
Encumbrances page of the title (look for mortgages, adverse claims)
Relevant environmental, zoning, and easement records

From your own diligence

Site visit notes, photos, and geohazard checks
Email confirmations of key representations (amenities, turnover, finishes)

8) What to do if something feels off

Stop payments until the discrepancy is clarified in writing.
Write a demand letter to the developer invoking P.D. 957 and the project permits or ads relied upon.
Document every representation (screenshots, brochures, texts).
File a complaint with HSAC for regulatory violations and appropriate remedies (refund, delivery, damages).
For suspected fraud, consult counsel on criminal remedies (e.g., estafa).
Consider alternative dispute resolution if offered without waiving your statutory rights.

9) FAQs

Q: Can a developer accept “reservation” before the LTS is issued? A: No. Accepting reservations or selling pre-selling units before the LTS is issued is a classic violation.

Q: The agent says the LTS is for “Phase 1” but I’m buying in “Phase 2.” Is that okay? A: No. LTS is phase-specific. You need the LTS that covers the exact phase and unit you’re buying.

Q: Are online ads reliable? A: Ads must carry the LTS number and accurate project details. Treat ad claims as promises; keep copies and verify them against permits.

Q: What if turnover is delayed? A: Check your CTS for delay remedies. Depending on the circumstances, you may seek refunds, damages, or regulatory relief via HSAC.

Q: I paid many installments. Can the developer cancel easily? A: The Maceda Law provides grace periods and cash surrender value rules for residential installment buyers. Get counsel to apply the exact computation to your payments.

10) Practical scripts you can use

Asking an agent or developer (email/message):

“Before I proceed, please send (a) the DHSUD Certificate of Registration and License to Sell for my specific phase/building, (b) the Master Deed/Declaration of Restrictions or Deed of Restrictions, (c) the approved site/floor plans, and (d) the PRC license/ID of the broker and salespersons handling my purchase. I’ll also need the title details of the land/condo to obtain a certified copy for my review.”

Contract clause to request (illustrative):

“Developer warrants that the unit/lot forms part of a DHSUD-registered project covered by a valid License to Sell and that all sales representations (brochures/ads) form part of this contract. In case of turnover delay beyond the grace period, Buyer is entitled to [liquidated damages/refund options].”

11) Bottom line

No LTS, no deal.
Match everything: project names, phases, titles, plans, and ads.
Verify people: only licensed brokers and accredited salespersons should sell to you.
Paper beats promises: keep copies, insist on written confirmations, and use HSAC remedies when necessary.

This article is for general information and does not constitute legal advice. For specific situations—especially if money has already changed hands—consult a Philippine lawyer who practices real-estate and HSAC matters.