SALE OF UNTITLED LAND, VALIDITY, HEIRS’ PARTICIPATION, AND REDEMPTION (Philippine Legal Perspective)
1. Overview
Roughly half of the Philippines’ privately occupied real property is still “untitled”—meaning it has never been brought under the Torrens system (Land Registration Act No. 496 [1903] and now Presidential Decree No. 1529 [1978]). Although the landowner holds no Original Certificate of Title (OCT) or Transfer Certificate of Title (TCT), the land may nonetheless be lawfully alienable and disposable. Tax declarations, cadastral maps, approved surveys, and uninterrupted possession often stand in for formal title and become the factual matrix of conveyancing disputes.
This article synthesizes the governing statutes, Civil Code provisions, special agrarian and public-land rules, and Supreme Court jurisprudence on four inter-locking points:
- Validity of a sale of untitled land
- Effect of lack of title in third-party conflicts (double sale, notice, registration)
- Special rules when the land is part of an inheritance or co-owned estate
- Statutory rights of redemption or repurchase open to heirs, co-owners, homestead grantees, tenants, and pacto-de-retro sellers
2. What is “untitled land”?
| Category | Brief description | Usual documentary proofs |
|---|---|---|
| a. Privately owned but unregistered | Acquired by purchase, succession, donation, or prescription before Torrens system reached the area. Constitutionally protected private property. | Tax declarations, deeds, approved plans (Plan Psu/Pls), barangay or cadastral certificates, tax receipts, possession testimonies. |
| b. Public alienable and disposable (A & D) | Still part of the State domain but certified A & D by DENR; open to free patents, sales patents, or judicial confirmation. | DENR certifications, approved survey, Community Environment & Natural Resources Office (CENRO) records. |
| c. Ancestral domains / ancestral lands | Owned in common by ICCs/IPs under IPRA (RA 8371). Not considered public land once ancestral claim is recognized. | CADT/CALT, NCIP certification; communal ownership rules apply. |
A parcel may be “untitled” because it has never been the subject of original registration, or because the owner’s title was lost, destroyed, or cancelled, but the land itself can still be legally alienable.
3. Basic requirements for a valid sale (Civil Code arts. 1318-1319, 1458-1470)
| Requirement | Key points for untitled land |
|---|---|
| Consent of the seller and buyer | Must come from the person who actually owns the land or is authorized (e.g., attorney-in-fact, judicial administrator). If seller is not owner, the contract is valid inter partes but inexistent as to the true owner. |
| Object certain (land identified) | Adequate description: lot number, technical boundaries, area, possession. Approved Relocation Plan advisable to avoid overlaps. |
| Cause or consideration | Determinate price in money or its equivalent. |
| Form | A sale of real property need not be in a public instrument for validity between the parties (Art. 1356); however Art. 1358 and Sec. 112, PD 1529 require notarization and proper form to register or to bind third persons. For untitled land, registration is done in the Registry of Deeds for Unregistered Lands under Act No. 3344. |
Practical rule: An unnotarized private deed of sale is binding between seller and buyer but cannot affect third persons—co-heirs, creditors, or later purchasers—unless and until it is notarized and recorded under Act 3344.
4. Registration, double sale, and buyers in good faith
Article 1544 of the Civil Code on double sale applies whether or not the land is titled. For unregistered land, prior possession plus prior registration under Act 3344 prevails; if neither buyer registers, one who first takes actual possession in good faith wins. Jurisprudence highlights:
| Case | Ratio decidendi |
|---|---|
| Abines v. Heirs of Abines (G.R. 174862, 2013) | Act 3344 registration is constructive notice only for untitled lands; a Torrens registration later obtained by a second buyer does not automatically defeat earlier Act 3344 registration. |
| Brahmana v. Gusano (G.R. 146621, 2006) | When both deeds are unregistered, buyer in prior possession in good faith prevails. |
| Catindig v. Vda. de Meneses (G.R. 167363, 2009) | Possession by a tenant of the vendor inures to the benefit of the first buyer; thus “legal possession” suffices. |
Buyer’s diligence checklist for untitled land
- Inspect the property and interview adjoining owners.
- Require a trace back of tax declarations (at least 30 years).
- Obtain DENR certification that the land is indeed alienable and disposable if there is no showing of private ownership pre-Spanish sovereignty.
- Confirm with heirs or co-owners; secure their written waiver or conformity.
- Cause annotation of the deed under Act 3344 within 30 days to avoid Article 1544 conflicts.
5. Sale involving heirs and co-owners of untitled land
- Before partition of an estate the property is under a state of co-ownership (Art. 1078). No heir may sell a determinate portion without the consent of all heirs; what the buyer acquires is only the seller-heir’s ideal or undivided interest.
- After a partition or extrajudicial settlement (Rule 74, Rules of Court), each heir may freely convey the specific parcel adjudicated to him/her, subject to payment of estate taxes.
- Co-owner’s right of redemption (Art. 1620): If an undivided share is sold to a stranger, the remaining co-owners may redeem within 30 days from written notice of sale. Written notice is indispensable; for untitled land, registration under Act 3344 is not equivalent to notice (contrast with Titled land where annotation on TCT is notice under PD 1529).
- Redemption of hereditary rights (Art. 1088): If one heir sells his hereditary rights to a stranger before partition, the co-heirs may redeem within 1 month from notice. Art. 1088 is broader than Art. 1620—it covers the whole hereditary right, even personalty.
- Ten-year prescriptive period applies to annul an unauthorized co-owner’s sale (voidable, not void), reckoned from discovery; but where the seller clearly lacked ownership (e.g., forged signature of all heirs) the action is imprescriptible (void sale).
6. Statutory and special rights of redemption affecting untitled land
| Statute / Civil Code article | Who may redeem | Triggering event / period | Notes on untitled land |
|---|---|---|---|
| Arts. 1619-1623 (Legal redemption among co-owners & by adjoining owners) | Co-owners, adjoining rural landowners | Sale to a stranger; 30 days from written notice | Registration under Act 3344 does not dispense with written notice. |
| Art. 1634 (Equitable mortgage presumption) | Seller (treated as mortgagor) | Applies when the “sale” has price ≪ market value, seller retains possession, etc. Seller may redeem at any time until action for consolidation is filed. | Presumption favors land-poor debtors; common in rural sales of untitled land. |
| Arts. 1601-1618 (Pacto de retro & conventional redemption) | Seller-a-retro and his heirs | Redemption period agreed by parties; absent stipulation, 4 years; max 10 years (Art. 1606). | Period interrupts by Act 3344 registration; rescission suit must be brought within 30 days after refusal. |
| Sec. 119, Commonwealth Act 141 (Public Land Act) | Original homestead patentee or his heirs | If the homestead is sold within 5 years from issuance of patent, the patentee/heirs may repurchase within the same 5-year period. | Applies only to homestead patents; land remains untitled until OCT issued; right is statutory and imprescriptible within 5 years. |
| Sec. 12, RA 3844 & RA 6657 (Agrarian laws) | Agricultural lessee, Agrarian Reform beneficiary or cooperative | Sale or mortgage of landholding; 180 days to redeem (lessee), 2 years (CARP); special modes apply. | Beneficiary’s CLOA may not yet be titled under Torrens; annotation made in DAR provincial registry. |
| Art. 448 (Builder in good faith) | Landowner vs. builder | When untitled land is built upon in good faith; mutual right to buy or sell the improvement/land | Not true redemption but an option akin to legal redemption. |
7. Taxes and procedural steps in conveying untitled land
Capital Gains Tax (CGT) or Creditable Withholding Tax (CWT) – computed on whichever is higher: selling price, fair market value, or zonal value.
Documentary Stamp Tax (DST) – 1.5% of consideration/value.
Transfer Tax – provincial/municipal rate (0.5-0.75%).
Secure BIR Certificate Authorizing Registration (CAR) even though no TCT will be issued yet; the CAR is required for entry under Act 3344.
Register deed and supporting docs (CAR, tax clearance, Real Property Tax receipt) both:
- in the Registry of Deeds (Book of Unregistered Lands); and
- in the municipal assessor’s office to update tax declaration.
If parties intend eventually to secure a Torrens title, they may:
- file Free Patent (RA 11573, amended CA 141) for agricultural A & D land ≤12 ha., or
- file Original Registration (Sec. 14, PD 1529) based on open, continuous, exclusive, notorious (OCEN) possession since June 12 1945 or earlier.
8. Common litigation scenarios
| Scenario | Typical ruling | Key doctrine invoked |
|---|---|---|
| Unauthorized sale by one heir of entire property | Void pro tanto as to co-heirs; buyer gets only seller’s ideal share. | Heirs of Malate v. Gamboa; Art. 493, co-ownership. |
| Buyer with notarized deed but no actual possession vs. earlier possessor with unnotarized deed | Prior possessor wins; good-faith possession outranks unregistered deed. | Art. 1544; Brahmana. |
| Homestead sold 3 years after patent | Patentee’s heir may redeem; any annotation or waiver is void if signed within the 5-year ban. | Sec. 119, CA 141; De los Santos v. Roman Catholic Church of Midsayap. |
| Co-owner fails to notify co-heirs in writing of sale to stranger | 30-day redemption has not begun; redemption action filed years later is timely. | Art. 1620; Ignacio v. Heirs of Ignacio. |
| Pacto de retro deed mis-named as “absolute sale” but seller stays in possession and price is grossly low | Deed re-characterized as equitable mortgage; seller may redeem anytime before consolidation. | Art. 1602, 1603. |
9. Due-diligence and risk-mitigation checklist for practitioners
✔ Identify land status (private, A & D public, ancestral). ✔ Confirm chain of ownership with sworn statements of two disinterested persons. ✔ Obtain CENRO A & D certification if no traceable private ownership before 1898. ✔ Survey and relocate boundaries; file for Approval of Survey Plan. ✔ Require heirs’ extra-judicial settlement with publication if the registered owner is deceased. ✔ Register deed under Act 3344 immediately; possession is not enough to defeat later buyers who register. ✔ Consider escrow or holdback until registration is completed and tax declaration transferred. ✔ Advise on estate tax amnesty deadlines (if any) for backlogged estates.
10. Conclusion
The absence of a Torrens title does not strip a parcel of land of its private, alienable character, nor does it invalidate a sale that otherwise complies with the Civil Code. Untitled land remains perfectly conveyable—but conveyancing is fraught with pitfalls unique to the Philippine dual-track system of titled versus untitled property. Mastery of:
- the form-versus-effect dichotomy (Art. 1356 vs. Art. 1358),
- the notice doctrine under Act 3344,
- the special redemption rules for co-owners, heirs, homesteaders, and agrarian beneficiaries, and
- the intricacies of estate settlement
is indispensable to protect buyers, sellers, and heirs alike. Where uncertainty persists, the prudent practitioner should steer the parties toward regularization—whether by obtaining a free patent, commencing judicial confirmation, or proceeding to extrajudicial settlement and subsequent original registration. Doing so not only insulates the transaction from future challenges but also advances the State’s long-standing goal of completing the archipelago’s land registration roll.