The Legal Side of Real Estate

[azayco]

Better to check the Mortgage Deed to see whether it requires consent or mere notice. But knowing BPI, I am betting it will be a consent requirement.

[rocco69]

Better to check the Mortgage Deed to see whether it requires consent or mere notice. But knowing BPI, I am betting it will be a consent requirement.

 

In Litonjua v. L & R Corporation (320 SCRA 405), the Supreme Court said that a clause in a deed of mortgage requiring the consent of the mortgageee before the mortgagor can sell his property is void, being contrary to Art 2130 of the Civil Code. Clearly, even if there is a provision in the Mortgage Deed requiring consent, the same would not be binding upon the seller. rexroxas 52 would thus be correct.

 

However, the usual practice by banks in mortgages is that it requires the borrower to surrender the OCT or TCT of the property being mortgaged to the bank. Kung ikaw naman ay buyer, di ka bibili kung hindi ibibigay sa iyo ang titulo (kaliwaan baga, bigay ko sa yo ang pera, bigay mo sa akin ang titulo). Since the seller will not be able to get the title from the bank without first repaying the loan, mahihirapan siyang ibenta yung lupa without first getting the consent of BPI to the transaction (not because of Art. 2130, but because he cannot get the Torrens title).

 

Isa pa, kung ipapasa ang pagkakautang sa Pag-Ibig, baka hindi rin pumayag ang Pag-Ibig na maging 2nd mortgagee lamang dun sa lupa. You (patdura) will have to coordinate with BPI and Pag-Ibig on this. I suggest you talk to BPI whether they will be amenable to a sale of the mortgaged property, as well as talk to Pag-ibig [Pag-Ibig Hotline (02)7244244 or you may visit their website at http://www.pagibigfund.gov.ph/index.asp) whether they allow loans to purchase properties already mortgaged to another institution.

[Dr_PepPeR]

sir, with all due respect. IMHO, the seller does not have to get the "consent" of the mortgagee - BPI. A piece of land or real property if mortgaged, acts as a security for the payment of the LOAN-the principal contract in a mortgage contract. The land is still owned by the mortgagor or the debtor or the person who incurred the loan. Ergo, under the property law in the civil code, the real owner may sell or exercise his/her right of disposition without intervention from a third person. If the seller would be required to secure the consent of the mortgagee, this would amount to an undue imposition to the right of the seller to dispose of his/her property. This should not happen. The seller then, may just "notify" the mortgagee, in this case the BPI, of the sale. The sale will still be valid subject to the mortgage enetered into between the seller/mortgagor(original owner) and the mortgagee (BPI). Meaning, although the piece of land was effectively transferred to the new owner (buyer), the same will still be subjected to the mortgage agreement.

 

PLEASE CORRECT ME IF I'M WRONG.

 

No you are correct. I'm talking about REMs in favor of banks. When a bank gives a loan, the primary source of repayment is the cash flow of the borrower, who is usually the mortgagor. The REM is as you said, is just the collateral, but which is essential to the consideration of the bank in granting a loan. Normally, there are representations, warranties and covenants that are part of the REM contract, violations of which are considered an event of default. All these are considered essential in ensuring that the value of the property mortgaged does not deteriorate while the loan is outstanding. If the bank cannot enforce these provisions on the owner, such as when the property is sold to a third party, then the conditions for granting the loan have changed. Thus there is a consent requirement before the mortgaged property is sold to a third party, the violation of which may trigger an event of default, which then could cause the foreclosure of the mortgaged property. In any case, you can always try to have the mortgaged property transferred, assuming you can get hold of the Owner's Duplicate Transfer Certificate of Title. In my experience, the Register of Deeds will require the consent of the Mortgagee. Then you can tell him about the legal niceties and go through an LRA consulta/RTC case.

[moed]

Unfortunately, in real life, its not only the law and jurisprudence that matters, but standard practices as well.

[rexroxas52]

nice discussion...

i learned a lot...

[selset45]

Tulong po mga Sir:

Kabibili ko lang po ng lote, last week nagkabayaran at ok ang deed of sale, na-notaryo rin, at hawak ko rin po ang original owner's copy of TCT. Then pagpunta po sa BIR para bayaran ang capital gains tax at doc. stamp, napansin sa BIR na may tatak ng banko sa likod (sanla) way back 1972 pa yung tatak. Sabi sa BIR ay kailangan ng clearance sa banko, kaso mo yung banko eh non-existent na ngayon - after over 30 years.

Kinausap namin yung seller at sabi nila na release na yan sa mortgage kaya nga ayan na ang original na titulo. Eh kung hindi release yan eh di nailit na yan ng banko. Kaso namis-place na yung clearance. Totoo naman po na existing pa yung lote dahil malapit lang sa amin at wala naman nagke-claim na iba, ganon din po sa register of deeds, walang claim ang banko at naroon pa rin ang original title. Yun nga lang may tatak nga po sa likod.

Paano po kaya ang nararapat na solusyon dito?

Thanks in advance.

[pol22366]

Tulong po mga Sir:

Kabibili ko lang po ng lote, last week nagkabayaran at ok ang deed of sale, na-notaryo rin, at hawak ko rin po ang original owner's copy of TCT. Then pagpunta po sa BIR para bayaran ang capital gains tax at doc. stamp, napansin sa BIR na may tatak ng banko sa likod (sanla) way back 1972 pa yung tatak. Sabi sa BIR ay kailangan ng clearance sa banko, kaso mo yung banko eh non-existent na ngayon - after over 30 years.

Kinausap namin yung seller at sabi nila na release na yan sa mortgage kaya nga ayan na ang original na titulo. Eh kung hindi release yan eh di nailit na yan ng banko. Kaso namis-place na yung clearance. Totoo naman po na existing pa yung lote dahil malapit lang sa amin at wala naman nagke-claim na iba, ganon din po sa register of deeds, walang claim ang banko at naroon pa rin ang original title. Yun nga lang may tatak nga po sa likod.

Paano po kaya ang nararapat na solusyon dito?

Thanks in advance.

 

Selset:

 

My initial suggestion to you is to visit Banko Sentral ng Pilipinas and ask them where are the records of the already non-existent bank, on the (sanla) way back 1972, in relation to your title. Usually they will have such records and they will know what really happened through the documents of the said bank. If you succeed, then ask for a certification to that effect.

 

If that does not work, then you have to file a case to have the annotation removed from your title, with the Banko Sentral as one of the respondents, as well as the concerned Register of Deeds.

[Dr_PepPeR]

Selset:

 

My initial suggestion to you is to visit Banko Sentral ng Pilipinas and ask them where are the records of the already non-existent bank, on the (sanla) way back 1972, in relation to your title. Usually they will have such records and they will know what really happened through the documents of the said bank. If you succeed, then ask for a certification to that effect.

 

If that does not work, then you have to file a case to have the annotation removed from your title, with the Banko Sentral as one of the respondents, as well as the concerned Register of Deeds.

 

You will need lots of patience and time Selset. Remember you are asking for records that date way back to 1972. More than 30 years ago. Document your query with the Banko Sentral, tell everything that happened in your letter, including documenting what actions they took. Keep received copies and any letters they send back to you. Write to the Head of the Central Point of Contact so they kick it to the proper Department. You will need these when you file a case for removal of the annotation, which is where I think it will end up anyway. For the record, you should have made sure that the Cancellation of Mortgage was submitted to you as the Buyer. If I were you, I would have withheld payment until the mortgage annotation was removed. That is the responsibility of the Seller especially if he had made a warranty in the Deed of Sale that the property is free and clear from all liens and encumbrances. This should have been the Seller's problem, not yours. Put pressure on him as well.

[selset45]

^ many thanks sir Pol22366 and dr_pepper.

Following your suggestions, I just checked the website of Central Bank at found out that the old bank was a thrift bank and granted to operate as a rural bank under a new name since 2002. This new "rural bank" is still operating and we will visit tomorrow.

Sana ok naman ang maging pag-uusap sa banko at makakuha ng clearance. I will keep you posted sirs, I'm sure other members will also learn a lot thru this forum..

[wizard23]

Hi again. my client is selling his 1st property, house and lot, and i think there's already a sure buyer. reason for selling is that my client just bought a 2nd property - bigger house and lot, and they need the money to pay for the amortization. they bought the 2nd property via bank financing.

 

question 1. now that my client is selling his 1st property. is he still liable to pay the CGT? i've done some backreading in this thread and i read somewhere that the owner/seller can actually avoid paying capital gains tax if the original owner/seller purchases another property of equal or greater value within 18 months.. yun nga lang, in my client's case, he bought the 2nd property first before selling the 1st property.

 

i think this was Dr. Pepper's quotes in the early pages of this thread when the issue was how to avoid paying cgt:

 

"Or if the seller uses it for renovation of real property (building or other improvements). But the owner/seller has

to enter into an escrow agreement with the BIR and the bank of his choice."

 

as a follow up question, will this apply to my client as well? can you enlighten me on the escrow agreement? how does it work?

 

i will take care of the documentation and i realized i don't have a Deed of Sale template. but i found a template here. kindly check the Deed of Sale template.

 

question 2. i realized the Deed of Sale i'm familiar with involves vacant lots only. is there a Deed of Sale template involving house and lot or all Deed of Sale pertains to the land only? i just want to make sure that when we execute the Deed of Sale, the deed covers not only the land itself but also includes the improvement. can anyone give me a template of Deed of Sale for house and lot if there's one?

 

question 3. di ba, the CGT is usually 6% of the selling price. so when you say the cgt will be imposed on the land and the house. so based on the selling price, it already covers both the house and the lot? or is there a separate computation of cgt for the house and the lot?

 

i got a bit confused here so i would appreciate your expert advice.

 

that's all for now. thanks a lot for your help.

Edited August 21, 2008 by wizard23

[mr.bukol]

Tanong lang ho tungkol dito sa capital gains tax..

 

Nakabili kasi ako ng rights sa isang subdivision and nagkasundo kami nong seller na ako na ang magtutuloy ng pagbabayad niya sa PAG-IBIG using his name. Mayron kaming Deed of Sale of Assumption of Mortgage na notarized pero di pa namin ipinapaalam sa PAG-IBIG na iba na ang may ari nong bahay at lupa. Then, dahil nga sa di ko pa tapos bayaran ang mortgage at di ko pa nakukuha ang titulo sa PAG-IBIG, di ko pa rin mabayaran ang Capital Gains kahit na mayron na kaming Deed of Sale..

 

Ano kaya ang magiging capital gains ko niyan kung sakali. (Nagkasundo kami nong seller na ako na ang magbayad ng capital gains)

 

dude sayang ang benefits na makukuha mo sa pagibig , better consult a pag ibig officer , kasi if you are the borrower , you are entitled for a insurance in case of death or complete disability your loan will be paid up already , the title will be given to you or love ones .

[Dr_PepPeR]

Hi again. my client is selling his 1st property, house and lot, and i think there's already a sure buyer. reason for selling is that my client just bought a 2nd property - bigger house and lot, and they need the money to pay for the amortization. they bought the 2nd property via bank financing.

 

question 1. now that my client is selling his 1st property. is he still liable to pay the CGT? i've done some backreading in this thread and i read somewhere that the owner/seller can actually avoid paying capital gains tax if the original owner/seller purchases another property of equal or greater value within 18 months.. yun nga lang, in my client's case, he bought the 2nd property first before selling the 1st property.

 

i think this was Dr. Pepper's quotes in the early pages of this thread when the issue was how to avoid paying cgt:

 

"Or if the seller uses it for renovation of real property (building or other improvements). But the owner/seller has

to enter into an escrow agreement with the BIR and the bank of his choice."

 

as a follow up question, will this apply to my client as well? can you enlighten me on the escrow agreement? how does it work?

 

i will take care of the documentation and i realized i don't have a Deed of Sale template. but i found a template here. kindly check the Deed of Sale template.

 

question 2. i realized the Deed of Sale i'm familiar with involves vacant lots only. is there a Deed of Sale template involving house and lot or all Deed of Sale pertains to the land only? i just want to make sure that when we execute the Deed of Sale, the deed covers not only the land itself but also includes the improvement. can anyone give me a template of Deed of Sale for house and lot if there's one?

 

question 3. di ba, the CGT is usually 6% of the selling price. so when you say the cgt will be imposed on the land and the house. so based on the selling price, it already covers both the house and the lot? or is there a separate computation of cgt for the house and the lot?

 

i got a bit confused here so i would appreciate your expert advice.

 

that's all for now. thanks a lot for your help.

 

Off the top of my head I would say you cannot go through the escrow route because the purchase of the second property was prior to the sale of the first property. The escrow should work like this - The BIR assesses your CGT and this amount is deposited in a bank of your choice with the Trust Department, who opens an Escrow Account for you. The form of the document is a template given by the BIR which states that the amount deposited can only be withdrawn upon the written instructions of the BIR, which can instruct the Bank as escrow agent to make a check payable to the seller, the BIR or both depending on the subsequent use of the sale proceeds. As to the Deed of Sale, I'm sorry I didn't bother to do so since I'm on dial-up, but you simply add "and the improvements thereon" for a sale of a house and lot. The CGT is based on everything, lot and improvements since both are capital assets.

[wizard23]

Thanks for the advice Dr. Pepper. re: the Deed of Sale template, let me just copy and paste the body just to make sure i get it right.

 

 

***********

 

WHEREAS, the SELLER is the registered owner of a parcel of land with improvements located at (Address of property to be sold) and covered by Transfer Certificate of Title No. (TCT Number) containing a total area of (Land Area of Property in Words) (000) SQUARE METERS, more or less, and more particularly described as follows:

 

 

 

TRANSFER CERTIFICATE OF TITLE NO. 0000

 

 

 

"(Insert the technical description of the property on the title) Example: A PARCEL OF LAND..."

 

 

 

WHEREAS, the BUYER has offered to buy and the SELLER has agreed to sell the above mentioned property for the amount of (Amount in words) (P 000,000.00) Philippine Currency;

 

 

***********

please note the bold phrase, "with improvements". is that enough to say that the sale of the property includes the house? or do you have to cite the tax declaration no. of the improvement and attach a copy of the same as Annex A as part of the Deed of Sale. if no longer necessary, can i use the above template for the sale of the house and lot? thanks again!

Edited August 22, 2008 by wizard23

[Dr_PepPeR]

Thanks for the advice Dr. Pepper. re: the Deed of Sale template, let me just copy and paste the body just to make sure i get it right.

 

 

***********

 

WHEREAS, the SELLER is the registered owner of a parcel of land with improvements located at (Address of property to be sold) and covered by Transfer Certificate of Title No. (TCT Number) containing a total area of (Land Area of Property in Words) (000) SQUARE METERS, more or less, and more particularly described as follows:

 

 

 

TRANSFER CERTIFICATE OF TITLE NO. 0000

 

 

 

"(Insert the technical description of the property on the title) Example: A PARCEL OF LAND..."

 

 

 

WHEREAS, the BUYER has offered to buy and the SELLER has agreed to sell the above mentioned property for the amount of (Amount in words) (P 000,000.00) Philippine Currency;

 

 

***********

please note the bold phrase, "with improvements". is that enough to say that the sale of the property includes the house? or do you have to cite the tax declaration no. of the improvement and attach a copy of the same as Annex A as part of the Deed of Sale. if no longer necessary, can i use the above template for the sale of the house and lot? thanks again!

 

Sir wizard23, in my opinion that is enough (although those are only the WHEREAS clauses and you will also need to include that phrase in the body). Normally, the improvements, being accessory to the land, follows the ownership of the land, unless the structure is temporary in nature, or there is an annotation to the effect that the improvements are owned by another person. Some lawyers will insist on a description, like "a two storey structure of strong materials with a total floor area of xx square meters" but I don't think that is necessary. Others may have another opinion.

Edited August 23, 2008 by Dr_PepPeR

[wizard23]

well thank you for the advice Dr. Pepper. I just need to hear an expert advice to back up my opinion, and since it came from you, my doubts have been settled. thanks again.