Is Notarization Enough? When Contracts Must Be Registered in the Philippines

Short answer: No. Notarization and registration do very different things. Notarization turns a private document into a public one and strengthens its evidentiary value; registration, by contrast, is what makes a right effective against the world (third persons) in registries the law designates. Many contracts are perfectly valid between the parties even if unregistered, but they won’t bind third parties—or won’t create/prioritize real rights—unless registered in the proper registry.

Below is a practical, Philippine-focused guide.

1) Notarization vs. Registration—what each actually does

Notarization

Converts a private document into a public document. It enjoys the presumption of due execution and authenticity and is admissible in evidence without further proof.
Does not cure a void or illegal agreement. A notarized void contract remains void.
Does not replace statutory formalities (e.g., contracts that must be in a public instrument, or require acceptance/notice).
Can now be done in traditional form or (subject to Supreme Court rules) through remote/e-notarization for qualified instruments.
Often a prerequisite to registration: registries typically require notarized instruments.

Registration

Is the act of filing or recording an instrument in the proper registry (e.g., Registry of Deeds, the Personal Property Security Registry, IPOPHL, LTO, MARINA, CAAP, SEC).
Purpose: give notice to and bind third persons; create or perfect a real right; establish priority among competing claimants.
For Torrens-titled land, registration is the operative act that conveys or affects the land as to third persons. Without registration, a deed binds the parties but generally not an innocent purchaser or creditor.

2) General rules on validity, enforceability, and effect on third persons

Between the parties: Contracts are binding by consent, regardless of form, unless the law requires a particular form for validity (e.g., donation of land), for enforceability (Statute of Frauds), or to affect third persons (registration).
Statute of Frauds (enforceability only): Certain agreements (e.g., sale of real property; leases longer than one year; certain sales of goods) must be in writing to be enforceable in court. Notarization is not required for enforceability—but it helps evidentiary-wise and is often needed to register later.
Third persons: To bind subsequent buyers, mortgagees, or creditors in good faith, you generally need registration in the correct registry, not just notarization.

3) When registration is required or outcome-determinative

A. Transfers & encumbrances of real property

Deeds of sale, donation, exchange, dación, partition: Valid between the parties when duly executed, but to bind third persons and update the title (TCT/CCT), you must register with the Registry of Deeds (LRA/Torrens system).
- Double sale rule (Civil Code): For immovables, ownership goes to the buyer who in good faith first registers. If no one registers, to the one in good faith first in possession; otherwise, to the one with the oldest title in good faith. This is why prompt registration matters.
Real estate mortgages & other real rights (easements, usufructs, restrictions): Must be annotated/registered to bind third persons. An unregistered mortgage can be defeated by a later registered encumbrance taken in good faith.
Leases of real property: A lease is binding between lessor and lessee, but a lease exceeding one year should be registered/annotated to bind subsequent buyers or mortgagees of the property. Without registration, a buyer in good faith of registered land typically takes it free of the unnoted lease.
Unregistered land (no Torrens title): Instruments are recorded under Act No. 3344. Recording gives notice but does not confer or guarantee title the way Torrens registration does.

Practical add-on: Registration of real-property instruments requires tax clearances (e.g., capital gains/creditable withholding, DST), local transfer tax, and fees; registries will not process without proof these are settled.

B. Donations

Immovables: Donation and acceptance must be in public instruments; to bind third persons and reflect the transfer on the title, register the deed/acceptance.
Movables: If the value exceeds ₱5,000, the donation must be in writing; registration is generally not required, but delivery (actual or constructive) is key.

C. Prenuptial agreements (marriage settlements)

Must be in a public instrument and, to bind third persons, must be registered in the Local Civil Registry where the marriage is recorded and in the Registry of Deeds where any affected real property is located. Notarization alone doesn’t protect you against third-party claims.

D. Security interests in personal property (movables)

Two regimes you’ll encounter in practice:
1. Personal Property Security Act (PPSA, RA 11057). Today’s default for securing loans with movables (equipment, receivables, inventory, deposit accounts, intellectual property, etc.). To be effective against third persons and to obtain priority, the security interest must be perfected, commonly by filing a notice in the electronic PPSA Registry (or by possession/control, where applicable).
  - A simple notarized loan agreement is not enough to beat other creditors; without proper perfection (often by registration), you risk losing priority in bankruptcy or execution.
2. Chattel Mortgage Law (Act No. 1508). Still encountered (e.g., for vehicles), historically required a notarized chattel mortgage plus registration with the Chattel Mortgage Registry (and annotation in the LTO for motor vehicles). The PPSA modernizes perfection/priority rules; practice today often centers on the PPSA notice registry, but motor vehicle interest is still typically annotated with LTO to be safe and give notice in that regulatory registry.

Pledge vs. mortgage (movables): A pledge is generally perfected by delivery of the movable to the creditor—no registry—but it’s commercially less flexible. If the debtor keeps possession, you usually need a registered security interest (e.g., PPSA filing; chattel mortgage with LTO annotation for vehicles).

E. Company formation & partnership matters

Corporations: Notarized Articles/By-laws are insufficient. Juridical personality and the right to transact as a corporation arise only upon SEC registration and issuance of the Certificate of Incorporation. Many follow-on filings (shares, increases in capital, etc.) also require SEC filings/approvals.
Partnerships:
- If real property or real rights are contributed, the partnership contract must be in a public instrument, and the property contributions should be recorded in the appropriate registries.
- Partnerships with capital of ₱3,000 or more should be in a public instrument and recorded with the SEC. Non-compliance does not automatically void the partnership between partners, but it may affect enforceability versus third persons and expose partners to general liability. Registration removes doubts and provides public notice of juridical personality.

F. Vessels & aircraft

Ship mortgages and transfers typically must be recorded (e.g., under the Ship Mortgage Decree) to be effective against third persons and to obtain “preferred” status.
Aircraft sales/mortgages are subject to recording with the Civil Aviation Authority of the Philippines (CAAP) to affect title and priority.

G. Intellectual property (IP)

Assignments and licenses of patents, trademarks, and copyrights should be recorded with the IPOPHL to be effective against third persons and to support enforcement, royalties, and some tax treatments. Unrecorded transfers risk being ineffective against subsequent transferees or licensees in good faith.
Technology Transfer Arrangements (TTAs): Certain license/know-how agreements are subject to the IP Code’s rules; registration with the IPOPHL is generally required for full enforceability of restrictive clauses and often for tax deductibility of royalties.

H. Condominiums

The Master Deed and Declaration of Restrictions are recorded; sales of units are registered like any other conveyance of real property (resulting in a CCT). Restrictions and by-laws bind third persons through annotation/registration.

I. Estate transactions among heirs

Extrajudicial settlement (EJS) of estate is an agreement, but the law requires a public instrument, publication, and, for real property, registration to transfer/reflect ownership on titles and protect creditors/other heirs. Notarization alone is insufficient to change the title.

J. Regulatory registries that matter even if not “property registries”

Motor vehicles: Sale or mortgage should be reflected in LTO records to protect the buyer/creditor and avoid liability issues.
Business names/permits: DTI/SEC registration for names and LGU permits don’t “register” your contract, but they give third-party notice of business identity and authority—important for reliance and risk allocation.
Special statutes: Some deals trigger special filings or notices (e.g., bulk sale of business inventory, certain finance leases). Always check the specific sectoral law.

4) When notarization is typically enough (no registration required)

Ordinary commercial contracts that do not create/transfer registrable real rights: e.g., service agreements, NDAs, unsecured loan agreements, employment contracts, software/IT services, distribution agreements (absent IP assignments), MOAs without property transfer.
Sale of ordinary movables (furniture, equipment) where no regulatory registry exists and no security interest is claimed—delivery transfers ownership; a written (notarized) bill of sale is prudent for evidence.
Assignments of credit (without real property or registrable collateral): To bind the debtor, notice to the debtor, not registration, is key.
Pledge with delivery: No registry; possession itself perfects the real right.

Caution: Even where registration isn’t mandatory for validity between the parties, you may still want recordation to protect against third persons, prove priority, or comply with tax and audit requirements.

5) Real-world checklists

A. Real property: registering a deed of sale/donation/mortgage

Have a registrable instrument (usually notarized), with complete description of property and parties.
Settle national taxes (e.g., capital gains/creditable withholding, documentary stamp tax) at the BIR; secure the eCAR.
Pay local transfer tax at the LGU where the property is located.
File with the Registry of Deeds: present owner’s duplicate title, tax clearances/receipts, IDs, notarized instrument, eCAR, and other supporting documents.
Obtain the new title/annotations once processed.

B. PPSA security interest (movables) – high-level

Security agreement describing the collateral and obligations; authenticated by the debtor.
Perfect the interest (most commonly by registering a notice in the PPSA Registry; use possession or control if that’s the correct method for the asset).
Keep track of expiries & amendments; priority can be lost if a registration lapses or contains material errors.

C. Lease over 1 year – to bind third persons

Execute written, notarized lease with clear term and property description.
Annotate the lease on the owner’s title at the Registry of Deeds (and at the condominium CCT, if applicable).
Update or cancel the annotation upon renewal or termination.

D. Prenuptial agreement (marriage settlement)

Execute in a public instrument before the marriage.
Register with the Local Civil Registry where the marriage is recorded and with the Registry of Deeds where affected real property lies.
Keep certified copies; third-party creditors will check these registries.

6) Common pitfalls & myths

“It’s notarized, so it’s final.” Not true. Notarization helps in court but doesn’t make the contract valid if the law’s substantive/formal requirements aren’t met, and doesn’t bind third persons without proper registration/annotation where required.
Sitting on unregistered deeds. Years later, someone else registers in good faith and defeats your earlier (but unregistered) deed. The earliest good-faith registrant wins for registered land.
Unregistered leases. A buyer of registered land in good faith is typically not bound by an unannotated lease over one year—even if it’s notarized.
Security interests without filing. A notarized loan with “collateral” is not enough to beat a creditor who properly perfected a competing security interest (e.g., PPSA filing or prior annotation).
Wrong registry. Filing in the wrong place is as bad as not filing. Real property → Registry of Deeds; movables → PPSA Registry (or chattel registry/LTO annotation, as applicable); IP → IPOPHL; ships → MARINA/ship registry; aircraft → CAAP.
Thinking tax stamps equal registration. Paying DST or getting BIR stamps does not register your instrument in property or security registries.

7) Quick decision tool: Do we need registration?

Ask yes/no:

Does the contract transfer or encumber real property or create a real right (e.g., mortgage, easement, usufruct, lease >1 year)? → Register/annotate at the Registry of Deeds.
Does it create a security interest in movables (equipment, receivables, inventory, IP, vehicles)? → Perfect (usually by PPSA filing; and LTO annotation for vehicles).
Is it a prenuptial agreement or a modification of property relations? → Register at the Civil Registry and Registry of Deeds.
Is it an IP assignment/license? → Record with IPOPHL.
Is it a corporate/partnership formation or change that the law says must be filed? → Register with SEC (and, where land is contributed, also annotate at the Registry of Deeds).

If all answers are no, notarization is usually sufficient for evidentiary strength—though sectoral or tax rules might still require specific filings.

8) FAQs

Q: Is notarization enough to transfer land? A: Between the seller and buyer, a notarized deed is generally valid. But as against third persons and to have the title updated, you must register the deed with the Registry of Deeds. For registered land, registration is the operative act that binds the world.

Q: We have a notarized lease for three years; the property was sold. Are we safe? A: Only if the lease was annotated (or the buyer otherwise took with notice). Without annotation, a buyer in good faith of registered land typically isn’t bound by the lease.

Q: We lent money and took equipment as “collateral” in a notarized agreement. Do we beat other creditors? A: Not unless you perfect your security interest (often by a PPSA filing). Notarization alone won’t give you priority.

Q: Our prenup is notarized. Is that enough? A: No. To bind third persons, it must be registered in the Civil Registry and in the Registry of Deeds where affected real property is located.

Q: Do we have to register every assignment of receivables? A: No, but to bind the debtor, you must notify the debtor. If receivables are taken as collateral, you perfect (often by PPSA filing) to secure priority.

9) Final notes

The essence: Notarization ≠ registration. Notarization strengthens proof; registration creates or perfects real-world effects on title and priority.
Always identify the proper registry and the type of right (real vs. personal).
Taxes and sectoral regulations frequently act as gatekeepers for registration—plan for them early in the deal.
When in doubt—especially for property, secured transactions, prenups, ships/aircraft, and IP—assume registration (or perfection) will be needed to protect against third persons.

This article is for general information only and is not legal advice. For a specific transaction, consult counsel to map the exact filings, taxes, and timelines that apply to your facts.