Introduction

Property development in the Philippines often runs on layered authority arrangements. A common structure is where a landowner authorizes a developer to market, sell, and process title transfers for subdivided lots, condominium units, or house-and-lot packages. This authority is typically granted through a Special Power of Attorney (SPA).

While efficient for project execution, this structure creates recurring title-transfer problems—some minor administrative delays, others severe enough to produce double sales, void transfers, or criminal exposure. This article explains the Philippine legal framework, the typical SPA–developer–buyer setup, where transfers go wrong, the consequences, and how parties can prevent or resolve these disputes.

I. The Core Legal Framework

A. The Civil Code on Ownership and Sale

Philippine property transfers are governed primarily by the Civil Code:

Ownership is transferred by delivery, not merely by signing a deed. Delivery, in land, is usually constructive delivery through notarized deeds and registration.
No one can sell what they do not own (nemo dat quod non habet), unless protected by law (e.g., in limited cases protecting innocent purchasers for value).

B. Land Registration and Deeds

Transfers are perfected and protected through:

Deed of Absolute Sale / Deed of Conveyance
Notarization (public instrument requirement)
Registration with the Registry of Deeds
Issuance of a new Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT)

Until registration, the buyer’s right is generally personal against the seller, not a real right against the world.

C. Development Laws

Depending on the project:

PD 957 (Subdivision and Condominium Buyers’ Protective Decree) Governs subdivision and condo sales, emphasizing:
- Developer obligations to deliver titles
- Licensing to sell
- Prohibition on certain harmful practices
Condominium Act (RA 4726) Requires:
- Master deed, declaration of restrictions
- Issuance of CCTs after condominium registration
Maceda Law (RA 6552) Protects buyers in installment contracts by granting grace periods and refund rights.
DHSUD/HLURB Rules Administrative regulations on licensing, turnover, and title release.

D. The SPA Under Philippine Law

An SPA is an agency contract. Its validity and scope are regulated by the Civil Code on agency:

An agent may do only what is expressly authorized.
Some acts require an SPA, including selling real property, signing deeds of sale, and processing title transfers.
The principal (landowner) is bound only within the SPA’s authority.

II. Typical Project Structures Involving SPA

A. Landowner–Developer Joint Arrangement

Common scenarios:

Outright sale of land to developer Developer becomes owner and can sell directly.
Joint venture / profit-sharing without transferring ownership Landowner retains title; developer sells as agent via SPA.
“Trust” or nominee holding Developer controls marketing/transfer; title may remain with landowner until final conveyance.

B. Buyer’s Position

Depending on the structure:

Buyer may contract with developer as agent, but title must come from landowner.
Or buyer contracts with developer as owner, if land was earlier transferred.

Title transfer issues are far more frequent in structure #2, where legal ownership stays with the landowner.

III. Key Title Transfer Stages (and Where Problems Arise)

Stage 1: Authority to Sell

Risk Point: Defective or limited SPA Problems include:

SPA doesn’t authorize selling specific lots/units
SPA expired or revoked
SPA lacks necessary notarization or specific property description
SPA not registered/recognized by Registry of Deeds

Effect: Deeds signed by developer may be void or voidable, delaying or defeating title issuance.

Stage 2: Execution of Deeds

Risk Point: Improper deed execution Common issues:

Developer signs deed beyond SPA scope (e.g., price changes, contract novations)
Landowner’s signature missing where required
Notarial defects (wrong venue, incomplete acknowledgment, or notary commission problems)

Effect: Registry of Deeds rejects registration, or title becomes vulnerable to later attack.

Stage 3: Payment and Release Conditions

Risk Point: Misaligned payment triggers Frequent disputes:

Buyer fully pays developer, but developer fails to remit to landowner
Landowner refuses to sign or confirm conveyance due to unpaid share
Contract unclear whether title release is linked to buyer’s full payment or developer–landowner settlement

Effect: Buyer is “caught in the middle,” fully paid but no title transfer.

Stage 4: Tax Compliance

Risk Point: Unpaid or misallocated taxes Required before transfer:

Capital Gains Tax (CGT) or Creditable Withholding Tax (CWT) depending on seller classification
Documentary Stamp Tax (DST)
Transfer Tax
Real Property Tax clearance

Issues:

Developer promises tax handling but delays payment
Confusion on who pays CGT/DST (buyer vs developer vs landowner)
Late payments trigger penalties and stall title transfer

Effect: Transfer cannot proceed without tax clearances.

Stage 5: Registry of Deeds Processing

Risk Point: Title impediments Examples:

Mother title still encumbered (mortgage, lis pendens, levy)
Subdivision/condo project not yet fully registered
Technical description errors or lot not yet segregated

Effect: No individual title yet exists to transfer, causing long waits.

IV. Most Common Title Transfer Issues in SPA-Based Developments

1. Developer Lacks Real Authority

Even if the developer markets and collects payments, if the SPA is defective or narrow, the sale may be legally infirm.

2. SPA Revocation Midstream

Landowners sometimes revoke the SPA due to disputes, non-remittance, or new partners. If revocation occurs:

Acts after revocation are generally not binding.
Buyers may still be protected if they dealt in good faith without notice—but that protection is not absolute.

3. Double Sales

A notorious risk when:

Multiple marketing arms sell the same lot/unit
Developer sells without coordinating with landowner’s own agents
Title remains in landowner name, making duplication harder to detect

The Civil Code’s double-sale rules apply:

For land, the buyer who first registers in good faith generally prevails.
Absent registration, possession and date of deed matter, but are weaker protections.

4. Mother Title Not Yet Cleared or Subdivided

Buyer pays for a “lot,” but legally:

It may still be part of a single mother title
No lot technical segregation yet approved
No CCTs issued for condominium projects

Buyers hold contractual rights but no registrable title.

5. Developer Insolvency

If the developer becomes insolvent:

Buyers may have paid but no title transfer happens.
Landowner may argue they never received payment.
Buyers may need to proceed directly against landowner, developer, or both.

6. Landowner Refusal to Convey

Landowners may resist transfer because:

Developer defaulted on profit share
Price disagreement
SPA disputes
Landowner claims sale was unauthorized

This becomes a triangular conflict, often ending in litigation or administrative complaints.

7. Unauthorized “Price Cuts” or Contract Variations

Developers sometimes alter sale terms for marketing reasons. If SPA doesn’t permit this, landowner can contest the deed.

8. Encumbrances Hidden from Buyers

Common when:

Land is mortgaged to fund construction
Liens exist but were not disclosed
Titles are under litigation

Under PD 957, certain encumbrances must be disclosed, and buyers have rights, but enforcement still often requires action.

V. Liability and Consequences

A. Developer Liability

Potential exposures:

Civil liability for breach of contract, damages, specific performance
Administrative liability under DHSUD/PD 957 (license suspension, penalties)
Criminal liability (estafa, fraud) if developer collected and misappropriated funds or sold without authority

B. Landowner Liability

Risk depends on involvement:

If landowner authorized the developer and benefited, landowner may be bound.
If landowner empowered sales and later blocks title without lawful cause, buyers may sue for specific performance or damages.
If landowner knowingly allows marketing without ensuring authority and disclosures, administrative risk increases.

C. Buyer Risk

Buyers face:

Long delay in title
Uncertainty over who must transfer
Cost escalation from penalties and litigation
Possible loss if they are not the protected buyer in a double-sale

VI. Buyer Protections Under Philippine Law

1. PD 957 Rights

Buyers may file complaints with DHSUD when:

Titles are not delivered within promised periods
Developer sells without license to sell
Misrepresentation or hidden encumbrances occur

DHSUD can order:

Title delivery
Refunds
Penalties and license actions

2. Maceda Law Rights

If sale is on installment and buyer defaults, Maceda provides:

Grace periods
Refund rights depending on years paid This is not a direct title solution but affects cancellation fairness.

3. Protection as Innocent Purchaser for Value

A buyer in good faith who registers first can gain powerful protection, especially if the title appeared clean. However, good faith must be actual and provable.

VII. Practical Prevention Measures

For Buyers

Verify the title and owner
- Get a certified true copy of the TCT/CCT.
- Confirm the seller’s legal owner.
Inspect the SPA
- Ensure it is notarized.
- Check if it specifically authorizes sale of the exact property.
- Confirm it is still valid and not revoked.
Check project licensing
- Verify license to sell and registration with DHSUD.
Demand clear timelines
- Put title transfer timeframes and penalties in the contract.
Insist on escrow or direct payment routing
- Where possible, ensure landowner receives required share to avoid later blockage.

For Landowners

Draft SPAs narrowly and clearly
- Specify exact lots/units, price authority, tax obligations, and signature powers.
Require periodic accounting
- Sales reporting and remittance schedules.
Register revocations properly
- Give public notice to avoid good-faith buyer disputes.
Secure mother title status
- Clear liens or disclose them.

For Developers

Maintain updated SPAs
- Renew before expiry; ensure compliance with Registry requirements.
Remit landowner shares promptly
- Avoid buyer hostage scenarios.
Allocate tax obligations in writing
Keep project documentation current
- Subdivision plan approvals, condo registrations, CCT issuance steps.

VIII. Remedies When Issues Occur

A. Administrative Route (DHSUD)

Best for:

Delay in title transfer
Project non-compliance
PD 957 violations

Advantages:

Faster than courts in many cases
Specialized jurisdiction

B. Civil Litigation

Common actions:

Specific Performance
- Force execution/registration of deed.
Rescission with Damages
- Cancel sale and recover payments.
Quieting of Title / Annulment
- If competing claims arise.

C. Criminal Complaints

Possible when:

Fraudulent sales
Misappropriation of buyer funds
Selling without authority with deceitful intent

D. Settlement and Contract Reformation

Often practical:

Landowner confirms authority retroactively
Developer cures SPA defects
Buyers agree to adjusted timelines or direct conveyance

IX. High-Risk Scenarios to Watch

Developer selling “pre-segregation” lots without clear schedule
Projects relying on “floating authority” SPAs
Landowners with multiple agents
Aggressive discounting not reflected in SPA
Mother title used as collateral while units are sold
Developer with history of delayed titles

These conditions predict title-transfer trouble.

X. Conclusion

SPA-based property developments are lawful and common in the Philippines, but they shift title-transfer risk from the developer–landowner relationship onto buyers. The recurring legal fault line is authority: the developer can only sell and transfer within the SPA’s express scope, and the landowner remains the legal title-holder until conveyance is completed.

The best protection is proactive diligence: buyers verifying both the title and the SPA, landowners drafting precise authority and enforcing remittance controls, and developers maintaining strict compliance with tax, registration, and disclosure duties.

When disputes occur, Philippine law provides layered remedies—administrative, civil, and criminal—but outcomes depend heavily on documentation, good faith, and registration timing. In SPA-driven projects, paper is power, and clarity at the front end prevents years of litigation at the back end.