Land Titles and Deeds

From Phinvestopedia

Land Titles and Deeds are the legal instruments that prove ownership of real estate in the Philippines. While often used interchangeably in casual conversation, they are distinct legal concepts.

  • A Deed (e.g., Deed of Absolute Sale) is the contract between buyer and seller. It proves a transaction happened.
  • A Title (TCT or CCT) is the proof of ownership issued by the government. It proves who legally owns the land to the rest of the world.

The Philippines uses the Torrens System of land registration, which means the government-issued certificate is the ultimate authority. If a person claims to own land but their name is not on the Torrens Title, their claim is weak.

Types of Titles

  • Original Certificate of Title (OCT): The very first title issued for a piece of land (usually from a patent).
  • Transfer Certificate of Title (TCT): Issued when land is sold or transferred to a new owner. This is what most homebuyers will encounter.
  • Condominium Certificate of Title (CCT): Proof of ownership for a condo unit. It includes a percentage share of the common areas.

Common Scams

The "Wild West" nature of Philippine real estate has birthed several notorious scams.

1. The "Recto" Title (Fake Title)
Named after C.M. Recto Avenue in Manila (famous for document forgers), this involves a seller presenting a TCT that looks 100% authentic but is a complete fabrication.
* Red Flag: The paper feels too thin or lacks the "LRA" watermark when held against the light.
2. Double Sale
A scammer sells the same property to Buyer A, collects the cash, and then sells it again to Buyer B the next day.
* The Law: Under the Civil Code, ownership usually goes to the buyer who registers the sale in good faith first, not necessarily the one who paid first.
3. The "Mother Title" Trap
A seller offers a subdivided lot (e.g., "100 sqm out of 1 hectare") but only presents one big "Mother Title" for the whole hectare.
* The Risk: You cannot get a title for your specific 100 sqm until the *entire* hectare is formally subdivided, approved by the Bureau of Lands, and registered. This process can take 2-10 years. You are essentially paying for a promise, not a title.
4. "Tax Dec Only" Properties
A seller claims they own the land but only has a Tax Declaration.
* Reality Check: A Tax Declaration is NOT proof of ownership; it is only proof that you pay taxes. While "Tax Dec" lots are cheaper, they are vulnerable to land grabbers and are difficult to sell later.

How to Protect Yourself (Due Diligence)

Before handing over a single peso, follow this "Traceback" protocol.

Step 1: The "Certified True Copy"

Do not rely on the photocopy (or even the "Original") the seller hands you.

  • Go to the Registry of Deeds (RD) that covers the city where the property is located.
  • Request a Certified True Copy (CTC) of the title.
  • Compare the seller's copy with the RD's copy. They must match exactly, including the "Serial Number" on the upper left.

Step 2: Check for "Encumbrances" (The Back Page)

Flip the title to the back. Look for "Annotations." A clean title should be empty. Watch out for:

  • Mortgage: The land is used as collateral for a loan. If the seller doesn't pay, the bank takes the land.
  • Lis Pendens: Latin for "Suit Pending." It means the land is currently being fought over in court.
  • Adverse Claim: Someone else has filed a sworn statement claiming they have a right to the land.
  • Section 4, Rule 74: Common in inherited land. It means heirs can still claim the property for 2 years after the death of the original owner.

Step 3: Verify the "Owner's Duplicate"

Even if the title in the RD is clean, you must check if the seller holds the genuine Owner's Duplicate Certificate.

  • The Registry of Deeds keeps the "Original."
  • The Owner keeps the "Owner's Duplicate."
  • The Test: A genuine Owner's Duplicate has a red seal that does not blot when you put a drop of water on it. Fake seals often smear.

Things to Watch Out For

  • "Special Power of Attorney" (SPA): If the seller is not the owner (e.g., "I'm selling this for my aunt in Canada"), demand an Apostilled SPA. A regular notarized SPA is easily faked.
  • The "Simulated Sale": Parents often "sell" land to their children to avoid inheritance taxes. While common, this can be legally challenged by other siblings as a void contract.
  • Land Grabbers / Squatters: A title proves legal ownership, but it doesn't remove illegal occupants. Always do an Ocular Inspection. If there are squatters, do not buy the problem unless you have the resources to evict them.

Sources

See also

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