Legality of Selling Inherited Property by One Heir in the Philippines

Introduction

In the Philippines, inheritance laws are primarily governed by the Civil Code of the Philippines (Republic Act No. 386), particularly under Book III on Succession. When a person dies, their estate, including real and personal property, passes to their heirs either through testate succession (with a will) or intestate succession (without a will). In cases involving multiple heirs, inherited property often becomes subject to co-ownership until it is formally partitioned. A common question arises: Can one heir legally sell the inherited property without the consent of the other heirs? This article explores the legality of such actions in detail, focusing on the principles of co-ownership, partition, redemption rights, and related legal consequences. It is important to note that while this provides a comprehensive overview based on established Philippine jurisprudence and statutory law, specific cases may require consultation with a licensed attorney for tailored advice.

Legal Framework Governing Inheritance and Property

Succession and Heirship

Succession in the Philippines is defined under Article 774 of the Civil Code as the transmission of the rights and obligations of the deceased to their heirs. Heirs may include compulsory heirs (e.g., legitimate children, spouse, parents) and voluntary heirs (designated in a will). Upon the death of the decedent, the heirs acquire ownership of the estate by operation of law, but this ownership is initially in the form of an undivided interest if there are multiple heirs.

Testate Succession: If there is a valid will, the property is distributed according to the testator's wishes, subject to legitime (the portion reserved for compulsory heirs under Articles 886-914).
Intestate Succession: In the absence of a will, distribution follows the rules in Articles 978-1014, prioritizing descendants, ascendants, and collaterals.

Inherited property, especially immovable assets like land, is typically held in common until partitioned. This co-ownership is automatic and does not require a formal agreement among heirs.

Co-Ownership in Inherited Property

Under Article 484 of the Civil Code, co-ownership exists when the ownership of an undivided thing or right belongs to different persons. In inheritance scenarios:

Each heir owns an ideal or abstract share (aliquot part) of the entire property, not a specific portion.
No heir can claim exclusive ownership over any part of the property without partition.
Management of the co-owned property requires the consent of the majority of co-owners (Article 489), but acts of administration (e.g., leasing) can be decided by majority vote, while acts of dominion (e.g., selling the entire property) need unanimous consent.

This principle is crucial: One heir cannot dispose of the entire inherited property unilaterally, as it would infringe on the rights of other co-owners.

Sale of Inherited Property by One Heir

Sale of the Entire Property

It is illegal for one heir to sell the entire inherited property without the express consent of all other co-heirs. Such a sale would be considered void or annullable with respect to the shares of the non-consenting heirs.

Rationale: The seller only owns an undivided share, so they cannot convey title to more than what they own. Attempting to sell the whole property violates Article 493, which states that each co-owner may use the thing owned in common, provided they do not injure the interest of the co-ownership or prevent other co-owners from using it.
Consequences: If a sale is attempted, the buyer acquires title only to the seller's undivided share. The portions belonging to other heirs remain unaffected. Non-consenting heirs can challenge the sale in court, potentially leading to rescission, damages, or criminal liability for estafa (fraud) under the Revised Penal Code if deceit is involved.
Exceptions: If all heirs have executed an extrajudicial settlement of estate (under Rule 74 of the Rules of Court) agreeing to the sale, or if a court-ordered partition has allocated specific portions, then individual sales become possible.

Sale of Undivided Share

Conversely, it is legal for one heir to sell their undivided interest or share in the inherited property without the consent of other heirs. This is explicitly allowed under Article 493 of the Civil Code: "Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved."

Process: The sale must be documented via a deed of sale, and if the property is registered land (under the Torrens system via Presidential Decree No. 1529), the transfer requires annotation on the certificate of title.
Buyer's Rights: The buyer steps into the shoes of the selling heir, becoming a co-owner with the remaining heirs. They acquire an undivided interest proportional to the sold share (e.g., if the seller owned 1/4, the buyer gets 1/4 undivided interest).
Tax Implications: The sale of an inherited share is subject to capital gains tax (6% on the gross selling price or fair market value, whichever is higher, under the Tax Code as amended by the TRAIN Law) and documentary stamp tax (1.5%). Estate taxes must have been settled prior to transfer to avoid liens.

Right of Legal Redemption

A key safeguard in co-ownership is the right of legal redemption under Article 1620 of the Civil Code. If one co-owner (heir) sells their undivided share to a third person (not another co-owner), the other co-owners have the right to redeem that share.

Conditions for Redemption:
- The sale must be to a third party, not to another co-owner.
- Redemption must be exercised within 30 days from written notice of the sale (Article 1623).
- The redeemer pays the price of the sale, plus expenses and taxes.
Purpose: This prevents outsiders from disrupting the co-ownership and preserves family harmony in inherited properties.
Application in Inheritance: This right is frequently invoked in heirship disputes. If notice is not given, the 30-day period does not start, potentially allowing redemption even years later, as ruled in cases like Francisco v. Boiser (G.R. No. 137677, 2002).
Waiver: The right can be waived, but it must be explicit.

If the property is movable (e.g., personal property), similar rules apply under Article 1622, with a shorter redemption period of 9 days.

Partition of Inherited Property

To enable individual sales of specific portions, heirs must partition the property. Partition dissolves co-ownership and allocates definite shares.

Extrajudicial Partition: If all heirs are of legal age, capacitated, and agree, they can execute a Deed of Extrajudicial Settlement (published once a week for three weeks in a newspaper, per Rule 74). This allows for voluntary division and subsequent individual sales.
Judicial Partition: If there's disagreement, any heir can file an action for partition under Rule 69 of the Rules of Court or as part of a special proceeding for settlement of estate (Rule 73-90). The court may order physical division, assignment by lot, or sale of the property with proceeds divided.
Effect on Sales: Post-partition, each heir owns their allocated portion absolutely and can sell it freely without consent from others.

Note: During partition proceedings, a co-owner cannot sell their share if it would prejudice the partition, as per jurisprudence like Vda. de Ape v. Court of Appeals (G.R. No. 133638, 2005).

Special Considerations

Registered vs. Unregistered Land

Torrens Title: For registered land, any sale (even of undivided shares) must be registered with the Register of Deeds. Unauthorized sales may not bind innocent third-party buyers relying on the clean title, invoking the mirror principle (but fraud can void this).
Unregistered Land: Governed by general civil law; sales require public instruments for validity against third parties (Article 1358).

Minors and Incapacitated Heirs

If heirs include minors or incapacitated persons, court approval via guardianship proceedings (Rule 92-97) is required for any sale or partition.

Debts and Liens

Inherited property may be subject to the decedent's debts. Heirs cannot sell until estate taxes and debts are paid (Article 777). The Bureau of Internal Revenue issues a Certificate Authorizing Registration (CAR) only after settlement.

Criminal and Civil Liabilities

Unauthorized Sale: Could lead to civil actions for annulment, reconveyance, or damages. Criminal charges for falsification or estafa if documents are forged.
Fraudulent Concealment: Hiding the existence of other heirs during sale can result in liability.

Relevant Jurisprudence

Philippine Supreme Court decisions reinforce these principles:

Heirs of Dela Cruz v. Lindo (G.R. No. 210307, 2016): Affirmed that one co-heir cannot sell the entire property.
Acap v. Court of Appeals (G.R. No. 118667, 1996): Upheld the right of redemption in co-owned inherited land.
Mariano v. Court of Appeals (G.R. No. 94419, 1993): Clarified that sales of undivided shares are valid but subject to redemption.

Conclusion

In summary, while one heir in the Philippines can legally sell their undivided share in inherited property, selling the entire property without unanimous consent is unlawful and exposes the seller to legal challenges. The framework emphasizes co-ownership rights, redemption, and partition to balance individual autonomy with collective interests. Heirs are advised to pursue amicable settlements or judicial remedies to avoid disputes. Understanding these rules is essential for protecting inheritance rights, and professional legal counsel is recommended for complex scenarios involving taxes, debts, or conflicts. This ensures compliance with the Civil Code and relevant procedural rules, promoting fair distribution of family legacies.

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