Rules, practice, and contract allocation in the Philippine context

1) Why notarial fees matter in a deed of sale

In Philippine conveyancing, a deed of absolute sale (or other deed of conveyance) is generally executed as a public instrument so it can be used for registration and for many official purposes. Notarization is the step that converts a signed private document into a public instrument by having it acknowledged before a notary public. That act carries both legal and practical consequences:

Evidentiary weight and registrability. Notarized deeds are easier to present to registries and government offices and carry stronger presumptions as to due execution.
Trigger for downstream costs. Notarial fees are usually paid at signing, and the notarized deed is then used for (i) tax compliance and (ii) registration, which come with their own fees and taxes. Parties often negotiate the whole “closing costs package,” and notarial fees are one part of that package.

Notarial fees are typically small compared with taxes and registration fees, but disputes arise because (a) parties assume customary allocations, (b) there is no universal statutory rule mandating a single payer in every private sale, and (c) notarial fees sometimes get bundled with other “processing” charges.

2) The core legal principle: party autonomy, absent a mandatory rule

For a private sale between private parties, the starting point is simple:

If the contract specifies who pays the notarial fees, that allocation controls (as long as it is not unlawful or contrary to public policy).
If the contract is silent, payment is governed by agreement inferred from conduct or by customary practice in the relevant market and circumstances, subject to general civil-law principles on obligations and expenses.

There is no single across-the-board rule that “seller always pays” or “buyer always pays” as a matter of universal Philippine law for private deeds of sale. The allocation is principally a matter of stipulation.

3) What notarial fees cover (and what they do not)

Understanding the scope avoids misallocation.

Notarial fees commonly include:

Notarial act fee for acknowledgment
Notarial register entry and documentary formalities
Sometimes: basic clerical costs (printing, scanning, minor photocopying), though these are negotiable and not always proper to bundle

Notarial fees do not include:

Documentary Stamp Tax (DST)
Capital Gains Tax (CGT) or withholding taxes
Transfer tax (local)
Registration fees (Registry of Deeds)
Issuance fees for new titles / tax declarations
Attorney’s fees for drafting or legal advice (unless separately agreed)

In practice, some offices quote a single “processing” amount that includes multiple items. Contract clauses should separate notarial fee from taxes and registration to prevent later conflict.

4) The default practical allocation in Philippine transactions (customs and patterns)

Although not legally mandatory, several patterns are common:

A. Private resale of real property (individual seller to individual buyer)

A frequent market custom is:

Buyer pays the notarial fees, because the buyer needs the public instrument to register the transfer and secure title. But this is not universal. In some areas and deals—especially where sellers control the documentation process—the seller pays, or the fee is split.

B. Developer sales (sale by subdivision/condominium developer)

Developers often impose their own schedule of charges and may:

Require the buyer to shoulder notarization as part of closing/processing fees, sometimes bundled. The enforceability depends on disclosure, contract terms, and consumer-protection constraints; but as a basic allocation issue, it is usually contract-driven.

C. Bank-financed purchases

If the buyer is financing the purchase, the bank may require:

Notarization of the deed of sale and loan/mortgage documents, and these are typically charged to the borrower/buyer (again, by contract and bank policy). Notarial fees can include multiple instruments (sale, mortgage, affidavits), so the “who pays” question can become document-specific.

D. Corporate or institutional sellers

When the seller is a corporation, it may have internal compliance preferences (board resolutions, secretary’s certificates, special powers, etc.). Sometimes:

The seller pays its own corporate documentation, while the buyer pays notarization of the deed and the registration pipeline. But in negotiated transactions, sellers may pay to expedite closing.

E. “Split cost” approach

In negotiated deals, parties sometimes:

Split notarial fees 50–50, especially when both parties benefit from immediate notarization or when the seller insists on using a particular notary.

5) Contract allocation: how to write enforceable, low-dispute clauses

A clause on notarial fees should do three things:

Identify the instrument(s) covered Example: “Deed of Absolute Sale and all related affidavits/annexes.”
Allocate payment clearly Example: “The Buyer shall pay the notarial fees…”
Address choice of notary and fee reasonableness Because disputes often arise when one party picks a notary with unusually high charges.

Recommended clause structures

Option 1: Buyer pays notarization (common in resales)

“The Buyer shall bear the notarial fees for the notarization of this Deed of Absolute Sale and its annexes. The parties shall mutually agree on the notary public. Notarial fees shall be reasonable and consistent with customary rates in the locality.”

Option 2: Seller pays notarization (seller-driven closing)

“The Seller shall bear the notarial fees for the notarization of this Deed of Absolute Sale. The Seller may select the notary public, provided that the notarial fees shall be reasonable.”

Option 3: Split

“The parties shall share equally the notarial fees for the notarization of this Deed of Absolute Sale and its annexes, payable at signing.”

Option 4: Cap / pre-approved quote (best for avoiding surprises)

“Notarial fees shall not exceed ₱____. Any excess shall require prior written consent of both parties.”

Why include “reasonable” language? Notarial practice is regulated, but quoted fees still vary by location and complexity. A “reasonableness” qualifier reduces leverage for a party who tries to impose inflated charges as a condition to release documents.

6) If the contract is silent: how payment is commonly resolved

When the deed is already scheduled and the contract (or prior documents like reservation agreements) says nothing:

The party who requested notarization or controls the notary often pays, especially if they insisted on a particular notary or timing.
The party who benefits most from notarization for the next step (commonly the buyer for transfer/registration) often ends up paying in practice.
Parties may treat notarial fees as part of “closing costs” and allocate them consistent with how taxes and registration fees are allocated in their deal.

If a dispute occurs at signing, the immediate practical fix is to:

Split the fee to avoid delaying the transaction, then settle final allocation through reimbursement per a written side agreement.

7) Relationship to other conveyancing costs (to avoid mislabeling)

Parties often conflate notarial fees with other items. It helps to distinguish typical allocations (which remain negotiable):

Capital Gains Tax (CGT) (for sale of real property treated as capital asset): often shouldered by seller by common practice, but can be shifted by agreement.
Documentary Stamp Tax (DST): commonly buyer, but negotiable.
Transfer tax: commonly buyer, but negotiable.
Registration fees: commonly buyer, but negotiable.
Notarial fees: often buyer, but negotiable.

Because parties commonly negotiate these as a package, the notarial fee clause should be aligned with the broader “taxes and expenses” clause. A common drafting error is to say “buyer pays all expenses” in one section, then later say “seller pays documentation,” creating ambiguity.

8) Notary selection, appearance, and compliance issues that affect cost

Notarial fees are not just about money; compliance affects validity and registrability.

A. Personal appearance and competent evidence of identity All signatories must generally appear before the notary with proper identification. If a party cannot appear, arrangements may require additional documents (special power of attorney, apostille/consularization for abroad documents), which can increase the overall documentation cost (though not necessarily the notarial fee for the deed itself).

B. Authority documents For corporations or represented parties, additional documents may be needed (board resolutions, secretary’s certificates, SPAs). Notarization of those documents—if required—has separate fees and should be allocated expressly.

C. Annexes and page count Notarial fees sometimes scale with:

number of pages,
number of signatories,
number of copies to be notarized,
inclusion of technical descriptions, tax declarations, IDs as annexes. Contract clauses can clarify whether the payer covers multiple notarized copies and annex notarization.

9) Remedies and risk management when a party refuses to pay at signing

If payment responsibility is disputed:

Check the written agreement (including any offer to sell, reservation agreement, term sheet, or emails) for expense allocation language.
Avoid delay costs by using a temporary split and memorialize reimbursement obligations in writing.
Refuse to “sign first, pay later” without documentation if you are the party expected to advance costs. Notarial fees are usually payable upon notarization; a notary may also refuse service without payment.
Document the negotiation: a short “Agreement on Closing Expenses” signed by both sides is often enough.

10) Special situations

A. Donation vs sale

For deeds of donation, the donor often shoulders documentation costs by practice, but allocation remains subject to stipulation.

B. Installment sales / contracts to sell

In contracts to sell, parties may notarize the contract to sell, then later execute and notarize the deed of absolute sale upon full payment. The contract should allocate notarial fees at each stage.

C. Pasalo / assignment of rights

Assignments of rights sometimes involve multiple instruments (assignment, deed of sale, developer consent, etc.). Each notarization should be allocated instrument-by-instrument.

D. Sale with SPA signing

If one party signs via attorney-in-fact, there may be:

notarization of the SPA, and
notarization of the deed of sale. Who pays can differ; common drafting allocates each party to pay for its own authority documents, while the main deed’s notarization is allocated per the deal.

11) Best-practice checklist for parties and counsel

Put notarial fees in a dedicated clause or in a clean “Taxes and Expenses” section with a clear bullet list.
Specify who chooses the notary and how fees are controlled (reasonableness, cap, or pre-approved quote).
Separate notarial fees from taxes/registration.
Clarify whether the payer covers:
- multiple notarized copies,
- annexes,
- additional instruments (affidavits, SPAs, corporate certificates).
Ensure signatories and IDs are ready to avoid repeat notarization attempts (which can double costs).

12) Practical conclusion: the answer in one line, properly qualified

In the Philippines, who pays the notarial fees for a deed of sale is primarily determined by the parties’ agreement; in practice, many private real property sales have the buyer shoulder notarization as part of closing costs, but seller-paid or split arrangements are equally valid when stipulated and clearly documented.