#StayingSafe in buying real property

Published in Daily Tribune on August 07, 2020
by: Miko Jim Paulo V. Panganiban

The onslaught of COVID-19 continuously paralyzes various business sectors. In response, the Philippine government imposed community quarantine guidelines to address the economic slowdown without compromising public health. The effectiveness of such guidelines is a different story.

Real estate, in particular, suffered a decline. According to Colliers International, the softening of demand for residential properties is evident in Metro Manila, Cebu and Davao City, making prices attractive to home buyers and investors. Moreover, the pandemic caused people to be more conscious of their cash flow and liquidity in case of health and economic emergencies. Some people may resort to selling idle lands, vacation houses, or even their family homes and move to cheaper real estate.

The question is, “is now the best time to purchase a house or invest in real property?” If cash flow and liquidity are not issues, and a prospective buyer has been planning to buy his/her dream home or invest in real property pre-COVID-19, the answer is yes. Otherwise, assess your financial health first and then make a decision wisely.

With the emergence of social media marketing, one can effortlessly look for a house, lot, or condominium to buy. But as easy as looking into advertisements on Facebook or anywhere in the internet, it is also easy to be tricked by bogus sellers.

This is why due diligence matters. Due diligence is basically a background check on the seller and the real property for sale. With the amount of money involved, this should never be skipped by any buyer.

For titled properties, it is important to check the Transfer or Condominium Certificate of Title and compare it with the Owner’s Duplicate Copy, which must be in the possession of the seller. This can be requested from the Registry of Deeds of the locality where the property is located. This allows the buyer to check any encumbrances or issues involving the said property. All the encumbrances or issues will be carried over to the new title that will be issued to the buyer and will be his/her responsibility. For untitled properties, ownership may be evidenced by the tax declaration from the local government unit. Moreover, a prospective buyer should also check if real property tax payments are updated.

In case of an individual seller, he/she must be the registered owner of the property. If not, make sure that he/she is duly authorized by the registered owner to sell the property through a Special Power of Attorney.

For properties owned by a corporation, there must be a Board Resolution appointing the designated representative to enter into the sale. Conduct a background check on the corporation. Its General Information Sheet and Audited Financial Statements may be requested from the Securities and Exchange Commission.

In dealing with real estate brokers, it is best to inquire into their Real Estate Broker license or accreditation as a Real Estate Salesperson with the Professional Regulations Commission and the Housing and Land Use Regulatory Board. A background check on the reputation and track record of the developer is also essential.

When your interest in real estate is captured by an advertisement, it is important to actually inspect the property advertised. This is to determine that what appears in the advertisement is the same property up for sale. It is also crucial to know if the property is occupied by someone other than the seller. Third party occupants may pose problems especially if they claim rights over the property. In case of a condominium, it is vital to refer to the Master Deed for the specification of the unit and whether it conforms with the actual unit to be bought.

In doing all these, observe the health protocols imposed on the area.

It is best to consult a lawyer at the earliest time when purchasing real property. A lawyer can guide the prospective buyer on every step of the due diligence process and eventually during the actual sale. The terms and conditions, including the fine print, of the sales documents may be complicated, but with a lawyer’s help, the prospective buyer will adequately understand every detail of the sale.

In the end, the ultimate goal is for the prospective buyer to get his money’s worth.

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Atty. Miko Jim Paulo V. Panganiban is an Associate of Parker Faustino Pagayatan Law Offices.

Miko obtained his Bachelor of Laws degree from San Beda College of Law in 2017. Apart from being a lawyer, Miko is likewise a registered Nutritionist and Dietician. His practice areas include corporate law and compliance, civil, criminal and administrative litigation, taxation, agrarian reform, labor, immigration, property law, family law and health care.