Property Purchase and Joint Ownership in the Philippines: Legal Checklist and Contract Essentials

This article is for general information only and is not legal advice. Philippine laws change and local government rules vary; consult a Philippine lawyer, broker, or tax professional for specific transactions.

1) Snapshot: How real property is owned and transferred

Torrens System. Land and condominium units are registered and evidenced by a Transfer Certificate of Title (TCT) for land (or Original Certificate of Title, OCT if first issuance) and Condominium Certificate of Title (CCT) for condo units. Registration—not just notarization—is the operative act that binds third persons.
Unregistered land. Ownership can exist without title (e.g., tax-declared properties), but transfer and protection are weaker. Expect heightened due diligence (chain of possession, surveys, DENR classification, etc.).
Statute of Frauds. Any sale or encumbrance of real property must be in writing; notarization converts a private document into a public one and enables registration.

2) Who may own—and in what form

2.1 Citizens, dual citizens, and corporations

Filipino citizens (including dual citizens) may own land and condo units.
Corporations may own land if at least 60% Filipino-owned. Observe the Anti-Dummy Law: beneficial ownership and control must be genuine (no “dummies” to skirt nationality limits).

2.2 Foreign nationals

May own condominium units (so long as the project’s aggregate foreign ownership does not exceed 40%).
May not own land (with narrow exceptions: hereditary succession as an heir; certain long-term leases).
Leasing: land may be leased long-term (e.g., up to several decades under special laws/visas); always confirm specific tenure, renewal rights, and registration.

2.3 Special land categories

Agrarian reform lands (e.g., CLOA/EP) have strict transfer restrictions and DAR clearances.
Ancestral domains (IPRA) require NCIP processes and consents.
Forest lands, foreshore, protected areas are generally non-alienable; verify DENR classification.
Agricultural to non-agricultural conversion requires DAR conversion before development.

3) Ways to hold title together (co-ownership options)

Philippine law does not follow common-law “joint tenancy with right of survivorship (JTWROS)” for real property. The default for multiple names on title is co-ownership; upon a co-owner’s death, their hereditary heirs succeed to that share (unless transferred by will/donation consistent with law).

Simple Co-Ownership (Civil Code).
- Title states “A, B, and C, co-owners,” optionally with stated percentages.
- Each has a proportionate, undivided share of the whole.
- Acts of administration require a majority of shares; alterations/alienation require consent of all (or court authority).
Spouses and Property Regimes (Family Code).
- Absolute Community of Property (ACP) is the default regime (absent a marriage settlement). Both spouses must consent to sell or encumber community property.
- Conjugal Partnership of Gains (CPG) applies if chosen (or to some earlier marriages). Alienation also requires spousal consent.
- Separation of property is valid via marriage settlement (or by court order); the spouse on title may sell, but confirm the regime.
- Family Home: cannot be sold or encumbered without consent of both spouses (and certain formalities).
Unions without valid marriage (Articles 147/148, Civil Code).
- Where parties are both capacitated to marry, property acquired by their joint efforts is presumed co-owned equally unless proven otherwise.
- If one or both are incapacitated to marry, only properties jointly contributed are co-owned in proportion to proven contributions.
Condominium ownership.
- Each unit has a CCT and an undivided interest in common areas.
- Joint owners may be individuals and/or a qualified corporation; foreign ownership cap must be observed at the project level.

4) End-to-end checklist: from scouting to registration

4.1 Pre-offer due diligence (minimum set)

Identity & capacity of seller
- Government ID, TIN; marital status (and spousal consent if required).
- If corporation: SEC documents, By-Laws, Board Resolution/Secretary’s Certificate authorizing the sale, signatory’s authority.
- If selling on behalf of another: Special Power of Attorney (SPA), consularized/apostilled if executed abroad.
Title check
- Get a recent certified true copy of the TCT/CCT from the Registry of Deeds (ROD).
- Scrutinize annotations: mortgages, adverse claims, lis pendens, easements, rights of way, restrictions, court orders.
- Confirm technical description and lot plan; arrange a relocation survey if boundaries are unclear.
Land/Unit verification
- Zoning and allowable use (city/municipal planning office).
- Occupancy: tenants or agricultural lessees (agrarian rights are highly protected).
- Geohazards: floods, earthquakes/faults, landslides; coastal setbacks.
Taxes & assessments
- Real property tax receipts and tax clearance; check arrears/penalties.
- Assessor’s tax declaration matches title?
Special categories
- Condo: Master Deed & Declaration of Restrictions, project turn-over status, association rules/dues, parking as separate CCT?
- Subdivision: developer’s License to Sell/Certificate of Registration (for pre-selling), permits, surety/completion bonds.
- Agricultural: DAR clearances, tenancy/leasehold.

4.2 Offer and contract formation

Letter of Intent/Offer to Purchase: describes property, price, target timeline, contingencies.
Reservation/Earnest Money vs Option Money
- Earnest money forms part of price and usually implies a perfected sale if conditions are met.
- Option requires a distinct consideration to keep the offer open for a period.
Condition precedents: clear title, delivery of documents, issuance of tax clearances, bank loan approval, eCAR release, cancellation of existing mortgage.

4.3 Closing & registration sequence (typical flow)

Notarize the principal instrument (Deed of Absolute Sale / Contract to Sell).
Pay national taxes (e.g., capital gains / creditable withholding; documentary stamp) and secure BIR eCAR.
Pay local transfer taxes at the city/municipality and obtain tax clearances.
File for registration with the Registry of Deeds:
- Present Owner’s Duplicate Title, notarized Deed, eCAR, tax clearances, IDs/TINs, official receipts, and other required clearances.
- ROD cancels seller’s title and issues new TCT/CCT in buyer’s name (including all co-owners as applicable).
Update Assessor’s records: new Tax Declaration in buyer’s name(s).
Post-closing: association membership (condo/subdivision), utilities, insurance, possession turnover, keys/IDs.

5) Taxes, fees, and who usually pays

(Rates and deadlines change; verify current figures and local practices.)

Capital Gains Tax (CGT) or Creditable Withholding Tax (CWT)
- CGT commonly applies to sales of capital assets by individuals/corporations; CWT applies in other cases (e.g., ordinary assets/developer sales).
- Usual practice: CGT (or CWT) for seller, but negotiable.
Documentary Stamp Tax (DST)
- Calculated on gross selling price or fair market value (whichever is higher).
- Usual practice: buyer pays, but negotiable.
Transfer Tax (LGU)
- City/municipality-imposed; rate varies by LGU.
- Usual practice: buyer.
Registration Fee (ROD)
- Based on a schedule relative to the property value.
- Usual practice: buyer.
Notarial fees, broker’s commission, surveys, certifications
- By agreement; broker’s commission typically seller in resale, developer in primary sales.

Deadlines. National taxes generally have strict payment windows from notarization; late filing triggers surcharges, interest, and compromise penalties. Plan closing calendars backward from these deadlines.

VAT and business taxes. If the seller is a developer or the property is an ordinary asset, sales may be subject to VAT and different withholding rules. Confirm classification (capital vs ordinary asset) early.

Estate tax. If buying from an estate (deceased registered owner), ensure estate tax is settled and eCAR (estate) is issued before the heirs can transfer.

6) Contract essentials (what good documents must say)

6.1 Deed of Absolute Sale (or Contract to Sell)

Parties: full legal names, TINs, civil status, citizenship; authority instruments (SPA, Board Resolution).
Property description: title number, lot/unit number, area, technical description, boundaries; fixtures and appurtenances included/excluded; parking/storage identifiers for condos.
Purchase price & payment terms: breakdown (earnest money, bank loan, cash at closing); escrow arrangements.
Conditions precedent: delivery of originals, release of mortgage and cancellation, issuance of eCAR, tax clearances, absence of new encumbrances, tenant surrenders (if any).
Warranties & representations (seller):
- Legal and beneficial ownership; authority to sell; property is free from liens/encumbrances except those disclosed.
- No boundary/encroachment disputes; no pending suits, expropriation, or notices of demolition.
- Taxes and association dues paid up to a stated date.
Warranties (buyer): capacity, funding source legitimacy (AML/KYC compliance).
Risk & insurance: who bears risk before/after closing; assignment of benefit of any existing insurance.
Possession & turnover: date, keys, IDs, utility reading, inventory of improvements.
Proration: real property tax, association dues, rents (if leased) as of closing.
Allocation of taxes/fees: CGT/CWT, DST, transfer tax, ROD fees, notarial, broker’s commission.
Default & remedies: cure periods, rescission, liquidated damages, retention of earnest money, specific performance.
Dispute resolution: venue and jurisdiction; arbitration clause (optional).
Data privacy/AML: consent to process data; compliance with KYC and AMLA.
Integration & amendment: entire agreement; written amendments only.
Notarization (Philippine notary public; consularization/apostille if signed abroad).
Registration covenant: cooperation in securing eCAR and registration; who handles filings.

6.2 Co-Ownership Agreement (highly recommended)

(Executed alongside the sale, or by existing co-owners; annotated on title when appropriate.)

Shares/percentages: explicit fractional interests.
Contributions: who paid what (down payment, taxes, closing, improvements).
Use & occupancy: exclusive use schedules or shared use; rules for guests/short-term rentals; prohibition on hazardous use.
Management & voting:
- Day-to-day decisions (majority of shares); major decisions (unanimity): sale/encumbrance, structural changes, leasing beyond X months.
- Appointment of a managing co-owner or professional administrator.
Money:
- Common fund for taxes, insurance, association dues, repairs; required monthly contributions.
- Auditable records; right to inspect.
Improvements: consent thresholds; ownership attribution (accessions become common property unless agreed otherwise).
Insurance: required coverages; beneficiary designations.
Transfers & exits:
- Right of first refusal among co-owners; permitted transfers to affiliates/spouses; conditions for sale to third parties.
- Partition: process for voluntary partition or court-supervised partition if deadlock.
- Buy-sell mechanisms: shotgun, Dutch auction, appraised value triggers, default call/put rights.
Events of default: nonpayment, unauthorized encumbrance, illegal use; notice and cure.
Death or incapacity of a co-owner: notice to others; coordination with heirs/estate; interim management.
Dispute resolution: mediation → arbitration (venue; number of arbitrators; governing rules).
Term & termination: until sale or partition.

6.3 Special instruments you may need

Special Power of Attorney (SPA): for signings in absentia; must be specific to the property and act.
Deed of Donation / Assignment: for gratuitous transfers or internal rearrangements among co-owners.
Escrow Agreement: holds funds and documents pending conditions.
Deed of Restriction / Easement Agreement: if access/utility lines cross other land.
Lease Agreement: if property is sold with tenants or for land-lease structures.
Undertakings: mortgage release, lien cancellation, hold-harmless for discovered arrears.

7) Title wording: getting the names right

State exact names and shares as you want them on the title, e.g., “Juan D. Cruz, Filipino, of legal age, married to Maria S. Cruz, and Ana R. Reyes, Filipino, single, as co-owners in the following undivided shares: Cruz—60%, Reyes—40%.”
For married persons, include the name of spouse and confirm property regime in the deed. If the property is exclusive (e.g., acquired by donation/inheritance), say so and attach proof.
Avoid shorthand like “JTWROS” for real property; it does not override succession rules.

8) Bank financing and liens

If buying with a bank loan, the deed may be registered together with the real estate mortgage. The bank typically withholds release until title is in buyer’s name and the mortgage is annotated.
If the property is currently mortgaged, closing must ensure full payoff and cancellation of mortgage annotation (with the lender’s release and ROD cancellation entry).

9) Condo-specific guardrails

Project approvals: verify developer’s authority to sell (for pre-selling), building permits, and target completion.
Master Deed/Restrictions: pet policies, leasing limits, short-term rental rules, alteration prohibitions, architectural controls.
Common area turnover & warranties: developer’s obligations; defect liability periods; reserve fund for major repairs.
Dues & special assessments: check historical increases and arrears on the unit.

10) Agricultural & agrarian sensitivities

Agricultural lessees have statutory security of tenure; ejectment is restricted.
DAR clearances are often required even for transfers of agricultural land; confirm retention limits, conversion, and tenancy status before paying.
Boundaries & irrigation: verify canals, easements, and rights of way.

11) Risk management (what can go wrong)

Title defects: forged deeds, double sales, wrong technical descriptions, un-cancelled liens.
Boundary/encroachment disputes: fix with relocation surveys and neighbor consents.
Tenants/occupants who won’t vacate: negotiate vacant possession clauses and holdbacks.
Tax non-compliance: missed deadlines cause heavy penalties and stalled registration.
Nationality issues: foreign ownership caps in condos, invalid land acquisitions by foreigners.
Agrarian/ancestral claims surfacing post-closing: insist on clearances and representations.

12) Practical timelines & logistics (plan backward)

Document collection (CTC of title, tax clearances, IDs, corporate papers).
Signing & notarization (coordinate consularization/apostille if executed abroad).
Tax filings (national and local) and eCAR issuance.
ROD registration (queue and verification times vary).
Assessor update and possession turnover.

Use an integrated closing checklist and a single document folder with labeled originals and certified copies.

13) Model clause ideas (for your lawyer to tailor)

Right of First Refusal (ROFR). “No Co-Owner may sell, assign, or encumber all or any part of their Share without first offering it to the other Co-Owners on the same terms. The offerees shall have 30 days from receipt to accept. Failure to accept within the period constitutes a waiver.”

Management & Voting. “Matters of ordinary administration shall be decided by majority of Shares. The following require unanimous approval: sale or mortgage of the Property; alterations affecting structure; leases exceeding 12 months; partition.”

Cost Sharing. “Each Co-Owner shall contribute monthly to a Common Fund for real property tax, insurance, association dues, and routine maintenance in proportion to Shares. Failure to contribute within 15 days after notice constitutes default; unpaid amounts accrue interest and may be offset against sale proceeds.”

Default & Buy-Out. “In case of default persisting beyond 30 days after written notice, the non-defaulting Co-Owners may exercise a Call Option to purchase the defaulting Co-Owner’s Share at Appraised Value less documented damages.”

Dispute Resolution. “Any dispute shall first undergo mediation; if unresolved within 30 days, it shall be settled by arbitration seated in [City], under the rules of [arbitral institution]. The award shall be final and binding.”

14) Documentation bundle (what the file should contain)

Government-issued IDs, TINs, marital/citizenship proofs
SPA / Board Resolution / Secretary’s Certificate (if applicable)
Certified true copy of TCT/CCT, updated Tax Declaration, tax clearances
Recent real property tax receipts; association dues clearance
Deed of Absolute Sale (or Contract to Sell), Co-Ownership Agreement
BIR eCAR, DST proof, Transfer Tax receipt, ROD official receipts
Relocation survey and approved plans (if relevant)
Condo: Master Deed, house rules, dues schedule, parking CCT (if separate)
Agricultural: DAR clearances/tenancy certifications
Insurance and turnover inventory/photographs

15) Strategy tips for joint buyers

Write down percentages and money in—ambiguity later becomes litigation.
Annotate critical agreements on the title when helpful (e.g., ROFR or easements) so they bind successors.
Plan exits on day one (ROFR + buy-sell). Most co-ownerships end; good ones plan their ending.
Keep a calendar of tax deadlines and registration steps; assign one manager.
Insure adequately (fire, earthquake, liability); keep valuation current.

16) Red flags—walk away or restructure

Seller resists giving certified true copies or denies title annotations exist.
Mismatch between actual possession and title (e.g., occupants claim ownership).
Unclear marital status or spouse refuses to sign when consent is required.
Agrarian or ancestral markers without proper clearances.
Developer cannot show License to Sell/Registration for pre-selling units.

Final word

Buying and co-owning real property in the Philippines is perfectly manageable with a disciplined checklist, clear contracts, and early attention to taxes and registration. Put authority documents in order, state co-ownership rules explicitly, guard your timelines, and register promptly—those four habits prevent most expensive mistakes.