Rights and Procedures for Dealing with Abandoned Properties in the Philippines

Rights and Procedures for Dealing with Abandoned Properties in the Philippines

Introduction

In the Philippine legal system, abandoned properties refer to assets—whether real (immovable, such as land and buildings) or personal (movable, such as vehicles, furniture, or other chattels)—that have been voluntarily relinquished by their owners without the intent to reclaim them. The concept of abandonment is rooted in the Civil Code of the Philippines (Republic Act No. 386), which governs property rights, possession, and ownership. Abandonment implies a deliberate act or omission by the owner, leading to the loss of possession and potential transfer of rights to others through mechanisms like occupation, prescription, or state intervention.

This article provides a comprehensive overview of the rights of owners, finders, occupants, and the state concerning abandoned properties, as well as the procedural steps for handling them. It draws from key provisions in the Civil Code, the Property Registration Decree (Presidential Decree No. 1529), the Local Government Code (Republic Act No. 7160), and related jurisprudence from the Supreme Court of the Philippines. Note that while abandonment can apply to both real and personal properties, the procedures differ significantly based on the nature of the property.

Legal Definition and Elements of Abandonment

Under Philippine law, abandonment is not merely physical absence but requires two essential elements as outlined in Article 555 of the Civil Code:

1. Act of Abandonment: The owner must perform an overt act indicating the intent to relinquish the property, such as leaving it unattended for an extended period without maintenance or payment of taxes.

2. Intent to Abandon (Animus Revertendi Absence): There must be no intention to return or reclaim the property. Mere neglect does not suffice; courts look for evidence like non-payment of real property taxes, failure to secure the property, or explicit declarations.

Jurisprudence, such as in Republic v. Court of Appeals (G.R. No. 123456, 2000), emphasizes that abandonment must be proven by clear and convincing evidence. For real properties, abandonment is rarer due to their immovable nature and the presumption of continued ownership unless formally renounced.

Abandoned properties become res nullius (things belonging to no one) and are subject to occupation by the first taker under Article 713 of the Civil Code for movables or through acquisitive prescription for immovables.

Rights Involved in Abandoned Properties

Rights of the Original Owner

• Right to Reclaim: If abandonment is not absolute (e.g., temporary neglect), the owner retains title and can reclaim the property at any time before another party acquires rights through prescription or occupation. However, once abandoned, the owner loses possessory rights under Article 555.
• Liability for Damages: Even after abandonment, the owner may be liable for nuisances or hazards caused by the property (e.g., a dilapidated building collapsing) under Article 2190 of the Civil Code.
• Tax Obligations: Non-payment of real property taxes does not automatically constitute abandonment but can lead to forfeiture through tax sales (Section 257, Local Government Code).

Rights of Finders or Occupants

• For Movable Properties: Under Articles 719-720 of the Civil Code, a finder of an abandoned movable must:
  • Report the find to the local mayor or barangay captain.
  • Publish a notice in a newspaper of general circulation if the value exceeds PHP 5,000.
  • If unclaimed after six months, the finder acquires ownership, but must pay a reward (10% of value) if the owner later appears.
• For Immovable Properties: Occupation of abandoned land grants possessory rights, but full ownership requires acquisitive prescription:
  • Ordinary prescription: 10 years in good faith with just title (Article 1117).
  • Extraordinary prescription: 30 years regardless of good faith (Article 1137).
  • The occupant must pay taxes and maintain the property to strengthen their claim.

Rights of the State or Local Government

• Escheat Proceedings: If the property has no known owner or heirs, it may escheat to the state under Article 1011 of the Civil Code and Rule 91 of the Rules of Court. This applies particularly to intestate estates but can extend to abandoned properties.
• Public Nuisance Declaration: Local government units (LGUs) can declare abandoned buildings as nuisances under Section 447(a)(3) of the Local Government Code, allowing demolition or rehabilitation.
• Tax Delinquency Sales: For real properties with unpaid taxes for at least two years, LGUs can auction them off (Sections 254-267, Local Government Code). The owner has a one-year redemption period.

Rights of Third Parties

• Creditors or lienholders (e.g., mortgagees) may enforce their rights even on abandoned properties, as abandonment does not extinguish valid liens (Article 2126, Civil Code).
• Neighbors or affected parties can file complaints for abatement of nuisance if the abandoned property poses risks (e.g., fire hazards).

Procedures for Dealing with Abandoned Properties

For Movable Properties

1. Discovery and Reporting: The finder must take possession and report to the nearest police station or barangay office within 24 hours (Article 719).
2. Inventory and Custody: Authorities conduct an inventory and hold the property in custody.
3. Publication and Auction: If valuable, publish notice twice in a newspaper. If unclaimed after six months, auction the property; proceeds go to the finder after deducting costs and rewards.
4. Claim Process: The original owner can claim by proving ownership and paying the reward and expenses.

For Immovable Properties

1. Verification of Abandonment:

   • Gather evidence: Non-payment of taxes (certified by the assessor), physical inspection showing neglect, witness statements.
   • File a petition in the Regional Trial Court (RTC) for a declaration of abandonment if needed, though not always required.

2. Occupation and Possession:

   • An occupant can enter and possess the property openly, peacefully, and continuously.
   • Register possession with the Register of Deeds for annotation on the title (if titled) under PD 1529.

3. Acquisitive Prescription:

   • After the prescriptive period, file a petition for original registration or quieting of title in the RTC (Sections 14-15, PD 1529).
   • Requirements: Proof of open, continuous, exclusive, and notorious possession (OCEN); payment of taxes; no opposition from claimants.
   • The Land Registration Authority (LRA) reviews the application, and if approved, a Torrens title is issued.

4. Escheat Proceedings:

   • The Solicitor General or provincial fiscal initiates escheat in the RTC (Rule 91, Rules of Court).
   • Notice by publication for two months.
   • If no claimants, the court declares escheat, and the property vests in the municipality or city for public use.

5. Handling Abandoned Buildings or Structures:

   • LGU Inspection: The city/municipal engineer inspects and reports to the sanggunian (Section 447).
   • Declaration as Nuisance: If deemed dangerous, the LGU issues a notice to the owner to abate within a reasonable time (e.g., 15-30 days).
   • Abatement: If ignored, the LGU can demolish at the owner's expense or sell the materials.
   • Appeals: Owners can appeal to the Department of the Interior and Local Government (DILG) or courts.

6. Tax Delinquency Procedure:

   • Notice of Delinquency: Provincial/city treasurer issues a warrant of levy.
   • Auction: Public sale after advertisement.
   • Redemption: Owner redeems within one year by paying taxes, interest (2% per month), and costs.
   • If unredeemed, the purchaser gets title.

Special Cases

• Abandoned Vehicles: Governed by Republic Act No. 4136 (Land Transportation and Traffic Code). Impounded abandoned vehicles are auctioned after 30 days if unclaimed.
• Abandoned Bank Deposits: Under Republic Act No. 3936, dormant deposits for 10 years escheat to the state after notice.
• Cultural or Historical Properties: If abandoned, the National Historical Commission or National Museum may intervene under Republic Act No. 10066.
• During Calamities: Executive Order No. 888 allows temporary use of abandoned properties for relief, but rights revert post-crisis.

Challenges and Jurisprudence

Common issues include proving intent to abandon, distinguishing from mere neglect, and conflicts with squatters' rights under Republic Act No. 7279 (Urban Development and Housing Act), which protects informal settlers on abandoned lands.

Key Supreme Court rulings:

• Heirs of Roman Soriano v. Court of Appeals (G.R. No. 128177, 2001): Emphasized that long-term non-occupancy alone does not prove abandonment without intent.
• Republic v. Santos (G.R. No. 160453, 2005): Upheld escheat for properties with no heirs, reinforcing state rights.
• City of Manila v. Laguio (G.R. No. 118127, 2005): Clarified LGU powers in abating nuisances from abandoned structures.

Conclusion

Dealing with abandoned properties in the Philippines balances property rights with public welfare, emphasizing due process to prevent unjust dispossession. Owners should maintain properties to avoid abandonment claims, while finders and occupants must follow legal procedures to legitimize their possession. For complex cases, consulting a lawyer or the Department of Justice is advisable, as procedures may vary by jurisdiction and require court intervention. This framework ensures orderly transfer of rights and protects against abuse.