Can Foreigners Acquire Properties in the Philippines?

There are plenty of reasons foreigners have become more keen in acquiring properties in the Philippines.

Those who come from frigid regions wish to enjoy an all-year tropical climate and escape from bitter winters. Those who experience the warmth and hospitality of Filipinos wish to receive more of it. The beaches, the carefree attitude and loving nature of Filipino people as well as the relative affordability of properties in the Philippines make it an attractive destinations for foreign passport holders to take a slice of the Pearl of the Orient Seas.

But the question many people ask: are non-Filipinos allowed to buy properties in the Philipines? The answer is yes. Foreigners can own homes, condo units or cars as properties in the Philippines.

However, while foreign nationals can buy and own homes built on Philippine soil, foreign ownership of properties in the Philippines is not absolute as non-Filipinos are not allowed to buy tracts of land. Further, foreigners owning homes in the Philippines is also subject to 40% restriction so that means the other 60% of the property must be owned by a Filipino citizen.

Although it is clear under Philippine laws, foreigners are not allowed to own land and their ownership of other forms of real estate properties is limited, these rules are subject to certain limitations.

So if a non-Filipino friend abroad, or former Filipino who renounced his or her citizenship asks you the question if he or she can buy property in the Philippines, the straight answer is yes. But also be it known to this person that property ownership comes with the following conditions:

1. The property was acquired under the 1935 Constitution of the Republic of the Philippines.
You may quickly ask what has an old Constitution that has been amended several times have to do with the acquisition? This is still relevant since if the property or land has been acquired under the 1935 Philippine Constitution, and passed on to a non-Filipino heir by way of hereditary succession.

2. The property was acquired with amount not more than 40% of its total value.
As stated above, the non-Filipino buyer can only own a portion of the property, with the remaining ownership belonging to a Filipino citizen.

3. The property is within the restricted limit based as mandated by law.
For former natural-born Filipino citizens, ownership of land is limited to 1,000 square meters ideally for residential or commercial purpose, or one hectare of agricultural or farmland.

4. The non-Filipino buyer marries a Filipino citizen who does not renounce his or her citizenship.
For example, an American man takes a vacation in one beach resort, meets a single Filipina and the two fell in love and decide to get married and settle in the Philippines. That’s because marrying a non-Filipino does not automatically relinquish her citizenship according to Article IV Section 4 of the Philippine Constitution.

5. Former Filipino citizens who reacquired their citizenship under the Dual Citizenship Law of 2003.
Once ex-Filipino citizens reacquire their citizenship as dual citizen of the Philippines and another country, they may acquire and own land without restrictions.

Renting properties by foreign individuals or corporations

Land
A foreign individual or corporation in the Philippines can only lease and not own any Philippine land. Leases are available on long-term contract good for 50 years and the rent is renewable every 25 years.

Condominium units

Under the Condominium Act of the Philippines, R.A. 4726, foreigners can acquire condominium units and shares in condominium corporations up to 40 % of the total and outstanding capital stock of a Filipino-owned or -controlled condominium corporation.

As condominiums are understood as residential units within medium to high-rise buildings, it implies that foreign owners actually own part of the condo units but not on the land in which condominium buildings are erected.

There have been more clamor on loosening the grip on foreign ownership in the Philippines as many see this as a trigger to further investments in the country and generate more jobs to local Filipinos. But as long as the current 1987 Constitution is intact and not amended, there’s no way to change the way foreigners buying and owning a piece of the Philippine soil.

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How to Register Land Title at LRA in 5 Steps

The Land Registration Authority has implemented an agency-wide computerization program and this has significantly shortened its land titling process in just five simple steps and can be accomplished within one visit to any Register of Deeds office anywhere in the country.

Step 1. Submit the conveyance instrument and all supporting documents to the entry clerk at the RD. The applicant will receive an electronic primary entry book number to confirm receipt of the conveyance instrument and supporting documents.

Step 2. Pay the corresponding fees.

Step 3. The documents will be turned over to the examiner who will check if all the requirements have been met, after which the information would be encoded.

Step 4. If the requirements are complete, the RD approves the applicant.

Step 5. A new land title will finally be printed and issued to the applicant.

Notes:

1. Land titles are conducted on a “first in registration, first in right” policy. This means that the person or entity who registered the land first gets the legal preferential right to own it first.

2. To avoid potential conflicts in land ownership, other claimants to the same property cannot stop the registration process on the condition that the first applicant has satisfactorily complied the requirements such as entering the instrument to the Register of Deeds, has been issued an EPEB number as proof of receipt of documentary requirements by the office, as well as payment of necessary fees. An exemption to the rule is through a temporary restraining order issued by the court, or when the applicant failed to meet the requirements, in which case the application could be denied and the submitted instruments cannot be registered.

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However, any registrant whose application for registration was denied by an RD can still file an appeal called “consulta” with the LRA head office. Consulta refers to the quasi-judicial power of the LRA to reverse or affirm the RD’s decision, as the case may be.

2 Ways to Register Unregistered Lands

1. Judicial Process. This involves filing a petition in court for original registration of title for a property with no existing title. The claimant must be able to present proof of land possession, along with all other requirements by the court.

Once the petition has been resolved, the court will order the Land Registration Authority to issue a decree of registration, and the corresponding original certificate of title that will be registered with the RD.

2. Administrative Process. This process is coursed through the Department of Environment and Natural Resources and other agencies that have authority to issue public land title. The claimant can go to the DENR and apply for a patent.

The application is thoroughly screened, and if found meritorious, a patent title which has the same function as a Torrens title, is issued and registered with the registry offices.

Land Registration Offices

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For Sale: 8 Hectare Farm Lot in Manambulan, Tugbok District, Davao City

  • Very accessible (50 meters more or less from the highway)
  • With access road for vehicle.
  • Flat terrain.
  • With farm cottage, water reservoir.
  • Planted with fruits and coconut.
  • Average coconut harvest: 20,000 nuts per 3 months
  • Contact: (082) 293 0244 or 09430001430 for inquiries

manambulan1

manambulan2manambulan3

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13 Things to Check if Land Title is Authentic or Fake

It is everybody’s knowledge that documents can easily be faked in the Philippines. From birth certificates to college diplomas, such documents can easily be passed off as true copies.

In fact, it has been well-known not just in the country, but also overseas. Workers from the Philippines lead in the number of submitted bogus documents in Saudi Arabia that POEA has been reminding job applicants to use genuine documents.

In the property sector, there are regulations in place to deter scammers who prey on legitimate property owners, there are still cases reported where property buyers are lured into buying lots but receive fake certificate of land titles. Part of the problem is that buyers are unaware of the tell-tale signs of a fake document being presented to them. As an example, a news release by Inquirer told early 2015 about the arrest of members of a syndicate engaged in sale and mortgage of fake titles.

Before you could get trapped by similar bogus sellers, Ms. Ruby Valdez, a land registration examiner from the Land Registration Authority of the Philippines advises on the following quick-check items to verify if a document is fake or genuine.

COMPOSITION

  1. Paper used for authentic certificate of land titles is of special kind and supplied by the Banko Sentral ng Pilipinas so its texture is different from those commercially available paper.
  2. Texture of genuine title is similar to that of a bank check.
  3. It has a watermark that says “LRA”.
  4. The color of an old version of the title is light yellow while that of an e-title is pale straw.
  5. When subjected to UV light, tiny fibers in the paper emit small fluorescent effect.

CONTENT

  1. “Judicial Form No. 108-D” appears on top of an Original Certificate of Title.
  2. “Judicial Form No. 109-D” appears on top of a Transfer Certificate of Title.
  3. Serial numbers are printed in red color while owner’s duplicate should display black digits.
  4. The last two digits of the page number in the upper right hand side should correspond to the last two digits of the TCT number.
  5. The red/blue border should be slightly embossed and not flatly printed.
  6. For e-Titles, all entries should be computer encoded and printed, unlike the old versions which were manually type-written
  7. The seal on the lower left hand side should be dark red and does not blot when a litle water check is done.
  8. Signatures:
  • for Judicial OCT, it should have 2 signatures present – the Administrator and the Registrar; while for TCT, only the signature of the Registrar is present.
  • for Administrative Titles: one signature from a PENRO or CENRO officer and another from the registrar.

Having these preliminary tests should give you an idea of the type of document you are receiving: original or fake. If you have verified from the above list that the document appears genuine, it does not mean it is 100% authentic until you verify it with relevant agencies such as the Land Registration Authority, the Registry of Deeds and local and municipal offices where the properties are located.

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