Disclaimer: The following discussion provides a general overview of Philippine laws and procedures concerning unregistered notarized deeds of donation. It is not intended as legal advice. For specific cases and concerns, it is always prudent to consult a qualified Philippine attorney or the appropriate government agencies.

I. Introduction

A deed of donation (sometimes called a donation or donative instrument) is a legal document by which a person, called the donor, freely transfers ownership of a property or right to another person, called the donee, who accepts the donation. In the Philippines, donations are primarily governed by the Civil Code of the Philippines (Articles 725 to 773).

When the subject matter of the donation is real property (immovable property such as land or a house and lot), the law imposes strict formal requirements for its validity. Chief among these requirements is the need for a public instrument—a notarial deed executed before a notary public. This article explores the nature of notarized deeds of donation, their validity and effects even if unregistered, and the procedural steps involved in perfecting and enforcing donations in the Philippines.

II. Legal Basis and Formal Requirements

A. Civil Code Provisions on Donations

Form Requirements
- Movable Property (Personal Property):
  - Donations of personal property with a value exceeding PHP 5,000 must be in writing.
  - Donations of personal property with a value of PHP 5,000 or less may be made orally, provided the movable is delivered at the same time.
- Immovable Property (Real Property):
  - The donation must be in a public instrument (i.e., notarized).
  - The donee’s acceptance must be made in the same deed or in a separate public instrument notified to the donor in an authentic form.
Acceptance by the Donee
- Acceptance of the donation is an essential element for the validity of a donation.
- If acceptance is made in a separate instrument, the donor must be notified thereof, and such notification must be recorded in the deed, or in another authentic document.
Effectivity
- Once the donation is validly executed and accepted, ownership is considered transferred from the donor to the donee (subject to compliance with any conditions that may be imposed, and payment of the required taxes).

B. Donor’s Tax Laws

Under the National Internal Revenue Code (NIRC) of the Philippines, donations are subject to Donor’s Tax. The donor must file a Donor’s Tax Return and pay the corresponding tax within thirty (30) days from the date the donation is made or completed (i.e., upon acceptance). The donee often assists in ensuring compliance with tax obligations, because failure to do so could affect the registration and enforcement of the deed.

III. Unregistered Notarized Deeds of Donation: Validity and Effects

A. Validity Between the Parties

Notarization as a Public Instrument
- For a donation of real property, the law requires a public instrument (notarized deed).
- Once notarized and properly executed (with the donee’s acceptance), the deed of donation is considered valid between the donor and the donee, even if it is not yet registered with the Registry of Deeds.
Binding Effect on Third Parties
- Although a notarized deed of donation is valid and binding between the parties, it does not automatically bind third parties if it remains unregistered.
- Under Philippine property law, registration in the Registry of Deeds is crucial to affect third-party rights and interests. An unregistered deed generally will not prevail against subsequent innocent purchasers for value or other third persons who may register an interest in good faith.

B. Possible Legal Risks of Non-Registration

Risk of Double Sales or Conflicting Claims
- Even if a donor has donated a property, if the deed of donation remains unregistered, the donor could theoretically transfer or sell the same property to another party who then registers it, creating conflicts or claims.
Difficulty in Transferring Title
- For the donee to eventually obtain a new Transfer Certificate of Title (TCT) or Original Certificate of Title (OCT) under his or her name, the deed of donation must be registered.
- Without registration, no new title will be issued in the donee’s name, hindering the donee’s ability to mortgage, transfer, or otherwise dispose of the property in the future.
Tax and Penalty Consequences
- Failure to pay the donor’s tax promptly can lead to penalties, surcharges, and interest.
- It can also delay the issuance of the Certificate Authorizing Registration (CAR/eCAR) by the Bureau of Internal Revenue (BIR), which is a prerequisite for registration with the Registry of Deeds.

IV. Process Flow for Executing and Registering a Deed of Donation

Below is a general outline of how to properly execute, notarize, and register a deed of donation of real property in the Philippines:

Drafting the Deed of Donation
- The deed should identify the donor and donee, describe the property in detail (including technical descriptions if it is land), and state the intention to donate.
- Include any conditions or reservations (if applicable).
- Ensure that the clause of acceptance by the donee is included or that the donee’s acceptance will be in a separate public instrument.
Execution and Notarization
- Both donor and donee (if acceptance is in the same instrument) must sign the deed in the presence of a notary public.
- The notary public will notarize the deed, converting it into a public instrument.
- If acceptance is made in a separate public instrument, ensure it is likewise notarized, and that the donor is notified in an authentic form (usually a written notification receipt).
Payment of Donor’s Tax
- Within 30 days from the completion of the donation (i.e., upon acceptance by the donee), file the necessary Donor’s Tax Return (BIR Form) with the Bureau of Internal Revenue.
- Pay the computed donor’s tax.
- The BIR will issue a Certificate Authorizing Registration (CAR/eCAR) once all taxes (including documentary stamp taxes, if applicable) are settled and supporting documents are submitted.
Submission to the Registry of Deeds
- Present the notarized deed of donation (and acceptance, if separate), together with the CAR/eCAR, to the Register of Deeds that has jurisdiction over the property’s location.
- The Register of Deeds will annotate the donation on the title, cancel the previous title (TCT or OCT) in the donor’s name, and issue a new title in the donee’s name.
- The donee or representative usually pays registration fees at this stage.
Issuance of New Transfer Certificate of Title
- After registration, the Registry of Deeds issues a new title reflecting the donee as the property’s registered owner.
- At this point, the donation is perfected and enforceable against the whole world, giving the donee full rights (subject to any conditions set forth in the deed).

V. Frequently Asked Questions

Is an unregistered notarized deed of donation automatically void?
- No. An unregistered deed of donation that is validly notarized (and accepted by the donee) is not void. It remains valid and enforceable between the parties, but it does not bind third parties who do not have notice of the donation.
Can the donee sell the property if the deed of donation is unregistered?
- Practically, no. Without registration, the donee’s name will not appear on the title, making it very difficult (and legally precarious) to convey a property that is still titled under the donor’s name. Buyers and financial institutions typically require proof of registration before recognizing the donee’s ownership.
What happens if the donor fails to pay donor’s tax within 30 days?
- Late payment of donor’s tax incurs penalties and interests. Non-payment also prevents issuance of the CAR/eCAR, which is needed for registration. The deed of donation can remain unregistered for as long as the taxes remain unpaid.
Do I need a lawyer’s assistance in processing a deed of donation?
- While not strictly required by law, obtaining legal counsel is strongly recommended to ensure compliance with legal formalities, correct calculation and payment of taxes, and proper registration with the Registry of Deeds.
Can the donation be revoked after notarization but before registration?
- Donations are generally irrevocable once accepted, except for causes allowed by law (e.g., ingratitude, non-fulfillment of conditions, or birth of a donor’s child, as specified under the Civil Code). Non-registration alone does not automatically allow revocation.

VI. Practical Tips and Considerations

Complete the Transaction Promptly
- To minimize the risk of legal disputes and additional fees, finalize the donation by paying donor’s tax and registering the deed as soon as possible.
Ensure Accuracy in Property Description
- Double-check the property’s technical description, tax declarations, and existing Transfer Certificate of Title (TCT) or Original Certificate of Title (OCT) to avoid registration issues.
Keep Copies of All Documents
- Retain certified true copies of the notarized deed of donation, acceptance instrument (if separate), proof of tax payment, and the registered new title (once released) for future reference.
Coordinate with Local Government and BIR
- In some cases, local government clearances (e.g., Real Property Tax clearance) might be needed. Ensure that all back taxes or municipal dues are settled to avoid delays.

VII. Conclusion

In Philippine law, a notarized deed of donation is a powerful instrument for transferring ownership of property from donor to donee. Even if unregistered, it is valid between the parties once properly executed and accepted. However, registration with the Registry of Deeds is crucial to (1) fully protect the donee’s rights against third parties, (2) secure a new certificate of title, and (3) avoid future disputes and complications. Paying the donor’s tax and obtaining the Certificate Authorizing Registration are key procedural steps that must be accomplished.

Given the formalities and tax implications, donations of real property in the Philippines can be intricate. Parties are strongly advised to seek professional legal guidance to navigate the process efficiently and ensure compliance with all legal requirements.

References and Legal Citations

Civil Code of the Philippines (Republic Act No. 386), Articles 725–773.
National Internal Revenue Code (NIRC), as amended, provisions on Donor’s Tax.
BIR Revenue Regulations for updated schedules of donor’s tax rates and procedures.
Relevant Philippine Supreme Court decisions on property registration and effect of unregistered deeds.

Disclaimer Reiteration: This article is purely informational and does not substitute for professional legal advice. For detailed guidance specific to your situation, consult a licensed attorney in the Philippines or contact the appropriate government agency (e.g., BIR, Registry of Deeds).