FUNDAMENTALS OF PROPERTY OWNERSHIP

CONCEPT OF OWNERSHIP

• Ownership is the independent right of a person such as:

o Exclusive enjoyment and control of a property
o Disposition and recovery
o Subject only to the restrictions (limitation on uses)
▪ established by law and
▪ rights of others.

A property may mean:

• a physical tangible or corporeal object (car, parcel of land),
• or an intangible object (patent, contract, franchise, shares of stock).

RIGHTS INCLUDED IN OWNERSHIP

• Fee simple – the highest form of ownership - consists of the so-called “bundle of rights,” which is
inherent in or appurtenant to ownership, without any limitations or restrictions other than those
imposed by law or contract.

The bundle of rights includes the following:

1. Right to possess (possession may not mean actual physical possession like in lease)
2. Right to use and enjoy
3. Right to the fruits
i. Natural fruits - trees that grows
ii. Civil fruits – rental income
iii. Industrial fruits - mango and coconut plantation
4. Right to dispose (sell, donate, assign, exchange)
5. Right to vindicate or recover (titled property with squatters)
6. Right to exclude others (say putting up a fence or concrete wall)

LIMITATIONS ON RIGHT OF OWNERSHIP

1. Those imposed in general by the State in the exercise of the:

O Power of taxation, police power, and power of eminent domain.
O They are also called inherent rights of the State

2. Those imposed by law such as:

O Legal easement – setback requirements
O Requirement of legitime in succession
▪ Limitation on inheritance by will; in case there is a will, probate of will by the
court is required and the determination of the legitime, as well.
▪ Legitime is the property reserved by law to compulsory heirs; an illegitimate child
is also a legitimate heir

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 O Zoning, building code, rent control, urban and agrarian reform, subdivision regulations,
escheat.

3. Those imposed by the grantor of the property on the grantee by contract:

O Such as donation, last will, usufruct (use and the fruits)
O USUFRUCT
▪ Usufruct gives a right to enjoy the property of another with the obligation of
preserving its form and substance, unless the title constituting it or the law
otherwise provides.
▪ The usufructuary shall be entitled to all the natural, industrial and civil fruits of
the property in usufruct. With respect to hidden treasure, which maybe found on
the land or tenement, he shall be considered a stranger.

4. Those imposed by the owner himself:

O Such as voluntary easement, lease, mortgage.

O EASEMENTS AND SERVITUDES

▪ Easement or servitude is an encumbrance imposed upon an immovable for the
benefit of another immovable belonging to a different owner.
▪ Servient estate – the one giving easement
▪ Dominant estate – the one asking for an easement

O Easements are established either by:

▪ Law or legal
▪ Will of the owners (voluntary easements)

o Continuous and apparent easements are acquired either by virtue of a:

▪ Title or
▪ By prescription of 10 years. Non-use also for 10 years is a cause for
extinguishment of easement

• The banks of rivers and streams, even in case they are of private ownership, are subject
throughout their entire length and within a zone of three (3) meters along their margins, to the
easement of public use in the general interest of navigation, floatage, fishing or salvage.

• A landlocked owner is entitled to demand a right of way through the neighboring estates after
payment of proper indemnity. (Art. 649 CC). Right of way should be established at the point that
is least prejudicial to the servient estate. Width should be sufficient for the needs of the
dominant estate.

• A distance of at least 2 meters from the dividing line of the estates (boundary line) if tall trees are
planted or at least 50 centimeters if shrubs or small trees are planted. (Art. 679 CC)

• Fruits naturally falling upon adjacent land belong to the owner of said land. (Art. 681 CC)

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KINDS OF OWNERSHIP

1. Sole ownership – benefits and property interest are undivided; “whole property interest”

2. Co-ownership – benefits are presented in proportion to the co-owners; primary property interest
is undivided; undivided primary property interest is a whole interest

Article 484 of Civil Code states:

o There is co-ownership whenever the ownership of an undivided thing or right belongs to
different persons.
o There is no co-ownership when the different portions owned by different people are
already concretely determined and separately identifiable, even if not yet technically
described.

Article 493 of the Civil Code:

o A co-owner may sell his right over an undivided portion to the extent owned by him. If
the co-owner sells the whole property as his, the sale will affect only his share but not
those of the co-owners who did not consent to the sale. No co-owner is obliged to
remain in the co-ownership and co-owner may demand at anytime partition of the thing
owned in common.

Article 1612, 1889, 1514 of the New Civil Code:

o The right to repurchase may be exercised by a co-owner to the extent of his share alone.
o Right of pre-emption or redemption

Article 1623 of the Civil Code:

o The right of legal pre-emption or redemption shall not be exercised except within 30 days
from the notice in writing by the prospective vendor. The Deed of Sale shall not be
recorded in the Registry of Property, unless accompanied by an affidavit of the vendor
that he has given written notice thereof to all possible redemptioners.

3. Diverse ownership – benefits are assorted into different kinds.

O Example: Different owners or shareholders in a corporation.

4. Condominium ownership – combination of sole and co-ownership

O Sole ownership – refers to condominium unit susceptible to independent use
O Co-ownership – in condominium project, unit owners are co-owners on land and common
areas of the building – these are non-alienable areas of the condominium project

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SURFACE, SUBSURFACE AND AIR RIGHT

Land, in its legal signification, extends from the surface downwards to the center of the earth and
extends upwards indefinitely to the skies.

The surface and subsurface of rights of an owner entitle him to construct thereon any works or
make any plantations and excavations without detriment to servitudes and special laws.

Air right is the right of an owner to use and control the air space over his land subject to the
requirements of aerial navigation, laws, or contract.

RIGHT TO HIDDEN TREASURE

1. Hidden treasure belongs to the owner of the land, building, and other property on which it is
found.
2. When the discovery is made on the property of another, or of the State or any of its subdivisions,
and by chance, one-half of the treasure shall be allowed to the finder. If the finder is a trespasser,
he shall not be entitled to any share of the treasure.

3. If the things found be of interest to science or arts, the State may acquire them at their just price,
which shall be divided in conformity with the rule above.

4. Hidden treasure, for legal purpose is understood to be any hidden and unknown deposit of
money, jewelry, or the precious objects, the lawful ownership of which does not appear.

RIGHT OF ACCESSION

1. In General – The ownership of property gives the right by accession to everything which is
produced thereby, or which is incorporated or attached thereto, whether naturally or artificially.

2. With Respect to Produce of Property- to the owner belongs the:

a) Natural Fruits – the spontaneous product of the soil.
b) Industrial Fruits – those produce by land cultivation or labor.
c) Civil Fruits – the rental income of building and/or lands.

3. With Respect of Immovable Properties

a) To the owners of land adjoining the banks of riversbelong the accretionthat they gradually
receive from the effects of the current of the water.

b) The owners of estates adjoining ponds or lagoons do not acquire the land left dry by the
natural decrease of the waters, or lose that inundated by them in extraordinary floods.

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 c) Riverbeds that are abandoned through the natural change in the course of the waters belong
to the owners whose lands are occupied by the new bed in proportionto the area lost.
However, the owners of the land adjoining the old bed shall have the right to acquire the
same by paying the value thereof, which value shall not exceed the value of the area
occupied by the new bed.

d) Whenever a river, changing its course by natural causes, opens a new bed through a private
estate, the bed shall become a public dominion.

MEANING OF TITLE

“Title” is not synonymous with Torrens Certificate of Title. Rather, it is a generic word which
means proof, evidence, ormuniment of ownership, such as tax declaration, realty tax receipts, deed of
sale, and Torrens certificate of title. But, of course, the best title or best evidence of ownership is the
Torrens title because it is indefeasible, imprescriptible, and binding against the whole world.

Land title
o Refers to that upon which ownership is based;
o It is the evidence of the right of the owner or the extent of his interest where he can
maintain control;
o Assert right to exclusive possession and enjoyment of property

Possession and ownership

o Possession may signify outward evidence of title, but it is not necessarily the title itself
o Ownership refers to evidence of right over the property.
o One may possess a property but not own it like in lease or in the case of informal settlers.

Article 524 of the Civil Code: Ownership by possession

o Possession is meant exercised either by the same person who holds and enjoys the
property or; (material possession) or
o By another in his name (symbolic possession, which is acquired by the execution of a
public instrument).

Muniments of title
o Instruments or written evidences that the applicant holds or possesses to enable him to
substantiate and prove title to his estate.

Quieting of title
• Whenever there is a cloud on title to real property or any interest therein, by reason of any
instrument, record, claim, encumbrance, or proceeding which is apparently valid or effective
but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be
prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.
The plaintiff must have legal or equitable title to, or interest in the real property, which is the
subject matter of the action. He need not be in possession of the property.

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MODES OF ACQUIRING TITLE

1. Public grant
A. Transfer of government land to private individual
B. Applicable only to agricultural land
C. No public land can be acquired by private persons without any grant from the
government
D. Examples are free patent and homestead patent given by DENR

2. Adverse possession or prescription

A. 30-year continues possession (prescriptive period / bad faith)
B. Applicable to agricultural land owned by the government
C. Not applicable to properties titled under the Torrens system
D. Acquisitive prescription
I. Ordinary prescription – 10 years possession in good faith, with just title
II. Extraordinary prescription – 30-year continues possession (bad faith)

3. Accretion

Article 457 of the New Civil Code:

I. To the owners of the lands adjoining banks of rivers belongs the accretion that
they gradually receive from the effects of the current of the waters.
II. This is not applicable to cases where accretion is caused by the action of the bay
that is part of the sea. Such alluvial formation along the seashore is part of the
public domain. Moreover, the alluvial deposits inLaguna Lake are public domain.

III. Article 461 of the New Civil Code:

1. Riverbedsthat are abandoned through the natural change in the course of
the waters belong to the owners whose lands are occupied by the new
course in proportion to the area lost. The new bed becomes public
domain.

IV. Accretion, alluvium, accession and riparian owner

1. Accretion – the process of adding land
2. Alluvium – added land by the process of accretion
3. Accession – right of the owner to things added to the land whether
naturally (say trees and plants) and artificially (say building or fixtures)
4. Riparian owner – owner of land adjoining rivers; belongs the alluvial
deposits caused by accretion

4. Reclamation
▪ Filling of submerged land by deliberate act;
▪ It is only the government that can assert title to reclaimed land (Article 5 of the
Law of Waters of 1866)

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 5. Private grants or voluntary transfer
▪ Sale, assignment, donation, exchange

6. Involuntary alienation
▪ Does not require consent or cooperation of the owner
▪ Examples:
1. In expropriation cases (eminent domain)
2. Execution sale by the sheriff to satisfy a money judgment
3. Foreclosure sale of mortgaged property

7. Descent or devise
▪ Descent – hereditary succession without will of the deceased
▪ Devise – even a stranger may acquire if disposition has been made by the testator
through a will subject to the probate of the court.
▪ Legitime – the property set aside by the court or by law to compulsory heirs. The
deceased may have free portion if there is a will; without a will, there is no free portion.
▪ Illegitimate child is a compulsory heir and gets ½ of the share of the legitimate heir, as a
general rule, in case there is no will.

▪ Succession is a mode of acquisition or transferring property through:

• the death of the owner of the property
o By will (testamentary succession – with a will)
o By operation of law (legal) or intestate succession (without a will)

• Decedent is the general term applied to the person whose property is transmitted
through succession.
• Devises and legatees (legacy is given) are persons to whom gifts of real and personal
property are respectively given by virtue of a will.
• Will is an act whereby a person is permitted to control to a certain degree the
disposition of his estate to take effect after his death (free portion).
• Codicil – a supplement or addition to a will, made after the execution of the will
• Testator – the person living a will.

• Died testate - died with a will

• Died intestate – died without leaving a will

• Legitime– testator’s property that he cannot dispose of because the law has reserved it
for certain heirs who are, therefore, called compulsory heir. (Art 886 CC)
• An illegitimate child is a compulsory heir.
• A compulsory heir may, in consequence of disinheritance, be deprived of his legitime,
for causes expressly stated by law. It can only beeffectedthrough a will wherein the
legal cause shall be specified. (Art. 919 CC)

• A legally adopted child has the same right and share in the same manner as a legitimate
child.
• In default (sakawalanng) of legitimate children and descendants of the deceased, his
/her parents and ascendants shall inherit from him/her.

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 • In the absence of legitimate descendants or ascendants, the illegitimate children shall
succeed to the entire estate of the deceased.
8. Emancipation Patent, or now Certificate of Land Ownership Award (CLOA)
▪ PD 27 - tenant farmers are deemed owners of the land they till
▪ While the tenant-farmer is given the CLOA, this does not make him the full owner until
after he shall have complied with certain obligations, namely:
• He should be member of cooperative created for that purpose;
• Pay the landowner the full value within 15 years by amortization
• To pay real estate tax of the land
• Note: the land patent shall be automatically placed by the Register of Deeds
without the need of publication or hearing for untitled property under the
operation of Torrens system.
• PD 27 had been superseded by RA 6657
• RA 6657 – The Comprehensive Agrarian Reform Program of 1988.
• Land acquired under RA6657 is not transferrable except by:
o Hereditary succession or
o In favor of the government
o In practice, several tracts of land acquired under RA6657 are being sold to
real estate developers after the lapse of 10 years from date of award or
registration. It is not mentioned under CARP that an emancipation patent
or CLOA may not be alienated after 10 years to other parties not
mentioned above.

HOMESTEAD and FREE PATENT

1. Examples of properties owned by the State (Article XII, 1987 Constitution)

a. All lands of public domain
i. Agricultural (the only alienable and disposable government land)
ii. Forests, timber,
iii. National parks, mineral lands
b. Waters, minerals, mineral oils, coal, petroleum,
c. All sources of potential energy
d. Fisheries, wildlife, flora, fauna

2. PATRIMONIAL VS. PUBLIC DOMINION

• Government property is either of public dominion or of private ownership.
• Public dominion properties:
o Those intended for public use like roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and other similar
character;
o Those that belong to the State, without being for public use, and are intended
for some public service or for the development of the national wealth.
o Public dominion land should be declared first by the government as
patrimonial property so as to be alienable and disposable.

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 • Patrimonial property
O All other properties not mentioned as public dominion
O Property of public dominion, when no longer intended for public use or for
public service, shall form part of the patrimonial property of the State.
O Patrimonial property is property owned by the government in its private
capacity.

3. Article XII 1987 Constitution (on alienable land of public domain)

• Citizens of the Philippines may acquire by purchase not more than 12 hectares;
• Citizens of the Philippines may lease not more than 500 hectares.
• Private corporations are not allowed to acquire but they may only lease not
exceeding 1,000 hectares

4. Classification of public domain lands according to uses:

1. Agricultural, residential, commercial, industrial
2. Reservations for town sites and for public and quasi-public uses
3. Educational, charitable, or other similar purposes

5. Agricultural lands maybe disposed in the following manner:

1. Government grant
• Free patent (judicial or administrative process)
• Homestead settlement
• Sale
• Lease

6. Qualification to own homestead

• Citizen of the Philippines, 18 years old and above;
• Does not own more than 24 hectares of agricultural land;
• Maximum area for homestead is 24 hectares.

7. Steps to enter a homestead (CA 141)

• Filing of an application with the Director of Land
• Payment of entry fee
• Applicant begins work on the homestead within 6 months from and after the date of
approval of the application; otherwise, he shall lose his prior right to the land.
• A homestead Certificate of Title is issued upon compliance of the ff:
1. At least 1/5 of the land has been improved or cultivated
2. Proof that he has resided continuously for at least 1 year in the
municipality in which the land is located or in adjacent municipality
3. Affidavit that no part of the land has been alienated or encumbered
4. Payment of final fee (minimal)
• A non-Christian Filipino is allowed to own homestead land not exceeding four(4)
hectares
• Alienation of homestead is allowed only:
1. To the government

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 2. Or after 5 years from issuance of patent

8. Under Commonwealth Act No. 141:

• Free patent or homestead patent, in general, shall not be subject to alienation or
encumbrance within 5 years from the date of the approval of the application,
however, improvements or crops on the land maybe mortgaged to qualified persons,
associations or corporations.

9. Sale of agricultural public lands under CA 141:

• Not to exceed 144 hectares in the case of individual;
• Not to exceed 1,024 hectares in the case of corporation, association or partnership
but not to exceed 144 hectares for each partner.

10. To whom agricultural lands may be sold?

• To actual occupants who do not own any parcel of land
• Or those whose total holdings does not exceed 5 hectares
• Occupants must have resided on the land for at least 2 years to the date of
application.
• Public agricultural lands are sold by public bidding wherein the bid should not be less
than the appraised value of the land
• Purchaser of government agricultural land may not within 10 years from grant,
convey or encumber or dispose of said lands to any person, corporation or association
except to the government
• In case of abandonment of the land for more than one (1) year – effect:
o The land shall be reverted to the State
o The government shall forfeit payments and improvements on the land.

11. Lease of public agricultural land under CA 141:

• To any citizen of the Philippines of lawful age
• Not exceeding 1,024 hectares
• For grazing purposes, not exceeding 2,000 hectares
• It is being done through auction.
• Minimum bid should be at least 3% of the appraised value of the land
• Minimum bid for reclaimed area of the government should not be less than 4% of the
appraised value of the land
• Lease period is 25 years, but may be renewed for another 25 years
• All improvements including buildings shall become the property of the government
after 50 years

12. Free Patent under CA 141 (Public Land Act of 1936)

• Qualification for free patents:
o Any natural born citizen ( at least one parent is Filipino citizen)

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 o Not an owner of more than 24 hectares of land since July 4, 1926
o Continuous occupation and cultivation ( for at least 30 years)
o Religiously paying realty tax of the subject property
o Not to exceed 24 hectares is allowed under CA 141 (now 12 hectares under
1987 Constitution)

• For national cultural minorities:

o Continues occupation and cultivation of the land since July 4, 1955 whether
disposable or not (for at least 30 years)
o Not an owner of any real property
o Maximum area is also 24 hectares

CORPORATION ACQUIRING OR LEASING LAND:

1. Private lands: Under our 1987 Constitution, no private land may be owned by a corporation or
association by transfer or assignment, unless at least 60% of its capital belongs to Filipinos.
Neither may a corporation be permitted to hold or own real estate except such as may be
reasonably necessary to enable it to carry out the purposes for which it is created; and, if
authorized to engage in agriculture, such corporation is restricted to the ownership and control of
not more than 1,024 hectares of land.

2. Public Domain: Article 12 Section 3 of 1987 Constitution prohibits private corporation to hold
alienable lands of public domain except by lease for a period not exceeding 25 years, renewable
for another 25 years, the area of which should not exceed 1,000 hectares.

RIGHT TO OWN

1. General Rule -Only Filipino citizens and corporations at leastsixty percent of the capital of which
is owned by Filipinos are entitled to acquire and own land in the Philippines.

2. Exceptions to General Rule – Alien acquisition of real estate in the Philippines is allowed in the
following cases:

• Acquisition before the 1935 Constitution.

• Acquisition thru hereditary succession if the acquire is a legal heir.
• Purchase of not more than forty percent (40%) interest in a condominium project.
• Purchase by former natural born Filipino citizens subject to limitations prescribed by B.P.
185 and R.A. 8179.

3. A Filipina who marries an alienretains her Philippine citizenship (unless the law of her husband’s
country makes her assume the citizenship of her husband because of such marriage) and can
therefore acquire real estate in the Philippines.

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BP 185 AND RA 8179
(Right to own by natural born Filipino citizens)

Who are natural citizens of the Philippines?

1. Citizens of the Philippines at the time of the adoption of the 1987 Constitution
2. Those whose fathers or mothers are citizens of the Philippines
3. Those born before January 17, 1973, of Filipino mothers, who elect Philippine citizenship upon
reaching the age of majority

Natural born citizens:

1. Born in the Philippines

2. Those born of Filipino mothers and non-Filipino father who elect Philippine citizenship upon
reaching the age of majority
3. Naturalized under Naturalization Law
4. Citizens of the Philippines who marry aliens but have not renounced their Phil. Citizenship
5. Those who acquired dual citizenship
6. Those who acquired derivative (origin or descent) citizenship
7. The unmarried child, legitimate or not or adopted, below 18 years of age, of those who re-acquire
Philippine citizenship upon effectivity of this Act shall be deemed citizens of the Philippines.
8. Section 7 of Art. XII of 1987 Constitution:
a. A natural born citizen of the Philippines who has lost his Phil. citizenship may be a
transferee of private lands subject to limitations provided by law (RA 8179 and BP 185)

MODE OF ACQUISITION
• not limited to voluntary deeds (such as sale or donation)
• but includes involuntary deeds (such as foreclosure, execution or tax delinquency sale).

1. Maximum area that may be acquired:

a) For residential purpose

• 1,000 square meters of urban land or
• onehectare of rural land
b) For business purpose
• 5,000 square meters of urban land or
• three hectares or rural land.

“Business purpose” refers to the use of land primarily, directly, and actually in the conduct of
business or commercial activities in the broad areas of agriculture, industry and services, including the
lease of land but excluding the buying and selling thereof.

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 2. In case of married couple where both spouses are former natural born Filipino citizens, both of
them may avail of the right provided that the total acquisition shall not exceed the maximum
area allowed.

3. A transferee who acquired urban or rural land for residential purpose while still a Filipino citizen
may acquire additional urban or rural land for residential purpose which, when added to that
already owned by him, shall not exceed the maximum area allowed by law.

The same right applies to a transferee who already owns urban or rural land for business purpose
while still a Filipino citizen.

4. A transferee who has already acquired urban land for residential purpose shall be disqualified to
acquire rural land for residential purpose and vice versa.

However, a transferee of residential land under B.P. 185 may still avail of the right to acquire land
for business purpose under R.A. 8179.

LAND OF THE PUBLIC DOMAIN

1. Under the 1987 Constitution, lands of the public domain are classified into agricultural, forest or
timber, mineral and national parks.

2. Alienable lands of the public domain shall belimited to agricultural lands.

3. Filipino citizens may acquire alienable lands of the public domain not more than 12hectares by
purchase, homestead, or patent, or lease not more than500 hectares.

4. Private corporations cannot acquire, but may only lease alienable lands of the public domain for a
period not exceeding twenty-five years, renewable for the same term, and not to exceed 1,000
hectares.

LAND REGISTRATION and RELATED LAWS

• Before the Treaty of Paris on April 11, 1899, our lands are the exclusive patrimony of the Spanish
crown; hence, private ownership of land could only be acquired through royal concessions.

• See Regalian Doctrine and Stewardship Concept of Ownership

• History of Land Registration in the Philippines:

o Laws of the Indies – A system established in the Philippines as early as 1596. It was the
law governing the registration of Land Grantsissued by the Crown of Spain to the Spanish
settlers – both civilian and military, that were sent to the country to serve the crown.
Grants were in the form of Royal Decrees, the same system used in Spain and all its
dominion.

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 o Spanish Mortgage Law – amended and improved the Laws of the Indies with the
imposition of several laws on land registration and the Spanish Mortgage Law. All titles
recorded under this system maybe brought under the Torrens system and be recorded
only within 6 months from February 16, 1976 by virtue of PD 892. Non-compliance within
the 6-month period, all titles can no longer be countenanced as indubitable (not to be
doubted) evidence of land ownership; hence, they are to be treated as unregistered
lands.

o Torrens System -After the Americans found out that the Spanish Mortgage Laws was too
complicated; they introduced their own land registration system on February 1, 1903. It
was governed by Act 496, or the Land Registration Law.

TORRENS SYSTEM OF LAND REGISTRATION

o The registration of transactions with interest in the land, the object of which is to
establish and certify to the ownership of an absolute and indefeasible title to land and to
simplify its transfer.
o Developed and introduced in South Australia in 1857 by Sir Robert Torrens. The system
was established in the Philippines on February 1, 1903 upon the effectivity of the Land
Registration Act (Act 496).
o Its real purpose is toquiet title to land; to put a stop forever to any question on the
legality of the title, except claims that were noted in the certificate or which may arise
subsequent thereto; that once a certificate registered, the owner my rest secure, without
the necessity of waiting for the portals of the courts or sitting in the “mirador de su casa,”
to avoid the possibility of losing his land.
o Introduced in the Philippines when the Americans came and found out that most of the
lands are old possessions or privately owned, and some were already recorded in the
established land registers. They also found out that the existing system of land
registration based on the Spanish Mortgage Registration was complicated.
o Under Philippine laws, is considered as thebest evidence of ownership over a registered
land. The Torrens certificate of title is presumed to have been regularly issued, valid and
without defects. The related presumption is that the mortgage lender, the buyer or
transferee of a titled land is not aware of any defect in the title of the property he
purchased or acquired. He is not supposed to look beyond the title. He has the right to
rely upon the face of the Torrens title and to dispense with the trouble of inquiring
further, except when he has actual knowledge of facts and circumstances that would
impel a reasonably cautious man to make inquiry.

• Subsequent laws enacted to strengthen the land registration system after ACT 496:

1. Act 2259 - Cadastral Act (February 11, 1913)

o Took effect on February 11, 1913
o Government initiates the cadastral survey
o Compulsory with respect to landowners whose holdings maybe affected as the survey
progresses

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 o Here, the government files the petition, while the private claimants file their answers to
assert their claims or lose them if they should fail.

2. Commonwealth Act 141 of 1936

o Also known as Public Land Act
o Took effect on December 1, 1936
o The proceeding for titling maybe judicial or administrative
o Titles to public land maybe disposed through administrative proceedings by:
o Homestead settlement (homestead patent)
o Free patent – confirmation of imperfect and incomplete titles
o Sale or lease
o It must also be brought under the operation of Torrens system.

3. PD 1529
o Known as Property Registration Decree of June 11, 1978
o This law consolidates, in effect, all pre-existing laws on property registration, which also
covers chattel mortgages.

• Purpose of recording or registration:

1. Afford right of priority to the purchaser
2.Prevent fraudulent conveyances
3. To be deemed sufficient in law
4. To bind third person
5. Land registration is the operative act to convey the land and affect title thereto.

• Registration does not vest or confer title. It merely confirms ownership. It is merely a species of
constructive notice. However, a conveyance registered ahead may defeat or has priority over prior
unregistered conveyance.

• Articles 1544 of the Civil Code:

Who has better right if property was sold to 2 or more buyers?
1. Registration: Buyer in good faith who first registered the sale;
2. Possession: No registration, good faith plus possession;
3. Oldest title: No registration, no possession, buyer in good faith who can show oldest
title (any proof of ownership)
4. Rule of notice – it is presumed that the purchaser has examined every instrument of
record affecting the title. It is a rule of law. Caveat Emptor – let the buyer beware.
5. Before buying: Conduct due diligence on property to be bought.

• Registration of title vs. recording of evidence of title

1. Registration of title
• The State provides a public record of the title itself upon which a prospective
purchaser or someone else interested may rely;
2. Recording acts
• Provide for the recording of deeds of conveyances without guaranteeing the title,
leaving the one interested to examine the instruments in the records and formulate
their own conclusions as to their effect on the title

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 51

• Type of Torrens Certificate of Title

1. Original Certificate of Title (OCT) - the first title issued in the name of the registered owner by the
Register of Deeds (ROD) covering a parcel of land which had been registered by virtue of a judicial
or administrative proceeding.

2. Transfer Certificate of Title (TCT) - the title issued by the ROD in favor of the transferee to whom
the ownership of the already registered land had been transferred by virtue of a sale or other
modes of conveyance.

3. Reconstituted Certificate of Title (RT/ RO) – the title issued by the ROD through administrative or
judicial procedures, in replacement of those lost, missing or destroyed

• Forms of Original Certificate of Title (OCT)

• Judicial Form 11 - Sales Patent (original copy)

• Judicial Form 11-D - Sales Patent (owner’s duplicate copy)

• Judicial Form 54 - Free Patent (original copy)

• Judicial Form 54-D - Free Patent (owner’s duplicate copy)

• Judicial Form 67 - Homestead Patent (original copy)

• Judicial Form 67-D - Homestead Patent (owner’s duplicate copy)

• Judicial Form 167 - MS Patent (original copy)

• Judicial Form 167-D - MS Patent (owner’s duplicate copy)

• Judicial Form 107 - Original Judicial (original copy)

• Judicial Form 107-D - Original Judicial (owner’s duplicate copy)

• Judicial Form 108 - Cadastral Judicial (original copy)

• Judicial Form 108-D - Cadastral Judicial (owner’s duplicate copy)

• Judicial Form 45 - General Form for Special Patent or Reclaimed area

(original copy)
• Judicial Form 45-D - Special Patent or Reclaimed area (owner’s duplicate copy)

• Judicial Form 109 - Ordinary and Cadastral Title (original copy)

• Judicial Form 109-D - Ordinary and Cadastral Title (owner’s duplicate copy)

• Judicial Form 140 - Patent Title (original copy)

• Judicial Form 140-D - Patent Title (owner’s duplicate copy)

• Judicial Form 150 - Additional Sheet (annotation of encumbrance)

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 52

• Other Forms of Certificate of Title

• LRC Form 1 - Condominium Certificate of Title (original copy)

• LRC Form 1-A - Condominium Certificate of Title (owner’s duplicate copy)

• LRC Form 1 - Reconstituted CCT (original copy)

• LRC Form 1-A - Reconstituted CCT (owner’s duplicate copy)

• Judicial Form 11 - Sales Patent- Reconstituted (original copy)

• Judicial Form 11-D - Sales Patent- Reconstituted (owner’s duplicate, co-owner’s copy
and new owner’s duplicate copy pursuant to the Court Order)

• Judicial Form 54 - Free Patent- Reconstituted (original copy)

• Judicial Form 54-D - Free Patent- Reconstituted (owner’s duplicate, co-owner’s copy
and new owner’s duplicate copy pursuant to the Court Order)

• Judicial Form 67 - Homestead- Reconstituted (original copy)

• Judicial Form 67-D - Homestead- Reconstituted (owner’s duplicate, co-owner’s copy
and new owner’s duplicate copy pursuant to the Court Order)

• Judicial Form 107 - Ordinary Judicial – Reconstituted (original copy)

• Judicial Form 107-D - Ordinary Judicial – Reconstituted (owner’s duplicate, co-
owner’s copy and new owner’s duplicate copy pursuant to the
Court Order)

• Judicial Form 108 - Cadastral Judicial – Reconstituted (original copy)

• Judicial Form 108-D - Cadastral Judicial – Reconstituted (owner’s duplicate, co-
owner’s copy and new owner’s duplicate copy pursuant to the
Court Order)

• Judicial Form 140 - Patent – Reconstituted (original copy)

• Judicial Form 140-D - Patent – Reconstituted (owner’s duplicate, co- owner’s copy and
new owner’s duplicate copy pursuant to the Court Order)

• Judicial Form 45 - Special Patent or Reclaimed Area (original copy)

• Judicial Form 45-D - Special Patent or Reclaimed Area (owner’s duplicate, co-
owner’s copy and new owner’s duplicate copy pursuant to the
Court Order)

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 53

• Judicial Procedure
- Titling of land through court proceeding

• Cadastral Proceedings to Decree of Registration to OCT

• Ordinary Proceedings to Decree of Registration to OCT

• Administrative Procedure
- Titling of land through out-of-court proceeding; extrajudicial

• Miscellaneous Sales Application to Patent (DENR) to OCT

• Free Patent Application to Patent (DENR) to OCT
• Homestead Application to Patent (DENR) to OCT
• Reclamation (Special Patent) to Patent (DENR) to OCT

PARTS AND INFORMATION ON THE TITLE

• Title Form Information

o type of form
o date of revision
o serial number

• Survey Information
o parcel identity (lot, block, survey plan number)
o location
o adjoining parcels
o tie point, tie line
o bearings and distances from corner to corner
o area and date of survey

• Registration Information
o name of the Register of Deeds
o title number, book number, page number
o place/time/date of registration, name and signature of registrar
o historical information (date and place of original registration, OCT No., Volume No., Page
No., Decree No., record/name of original owner, number of cancelled title for TCT)

• Ownership Information
o Name/s of all persons whose interest make up the full ownership, citizenship, civil status,
postal address

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 54

LIENS AND ENCUMBRANCES

ENCUMBRANCE

• An encumbrance is a charge, claim or liability on real estate. It may reduce a property’s value or
place restrictions on how it can be used; however, it does not necessarily prevent title to the
property from transferring to someone else. There are two types of encumbrance:

Non-physical Physical
affects only the title affects both the title and property conditions

Deed of Restrictions Encroachments

Liens Easements
- Real Estate Taxes - Appurtenant
- Mechanic’s Liens - By Necessity
- Mortgage Liens - By Prescription
- Judgment

a. ENCROACHMENT
• Unauthorized physical intrusions of a building or other form of real property onto an adjoining
property. It can mean a trespass, and the owner of the property being encroached on can take
court action either to force the removal of the encroachment or to recover damages. An
encroachment of long-standing use may result in an easement right by prescription or adverse
possession.

b. EASEMENT
• The right to use someone’s land. The right may be to use the land’s surface or the air space above
it. It is also called a non-possessory interest in real estate because they give the easement holder
the right to use the property but not to possess it.

• Appurtenant easement
o allows the owner of a parcel of land to use the land next to it :
▪ Servient estate - the one giving the right-of-way or easement;
▪ Dominant estate – the parcel of land that benefits from the easement

• Easement by Necessity
o Owners of land have the right to enter (ingress) and leave (egress) their property, to
prevent them from becoming land-locking, making the property useless.

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 • Easement by Prescription/ Prescriptive Easement
o A claimant uses another’s land for a period of time as defined by state of law.
o Usual requirements to acquire prescriptive easement:
▪ Uninterrupted use of the property
▪ Use must be continuous
▪ Use must be adverse, without the owner’s consent
▪ Use must be visible, open and notorious, so that the owner can easily learn from it.

c. DEED OF RESTRICTIONS
• These are conditions or limitations placed in a deed by the owner when property is transferred
to another party. It is usually created by individual parties and affects a particular property.

• Those conditions placed in the deeds by developers and usually affect an entire subdivision is
called restrictive covenants.

• If restrictions placed are unreasonable or unlawful restraints on an owner’s use of the land,
they will be unenforceable.

d. LIENS (MONEY CLAIM)

• These are claims or charges against the property to provide security for a debt or obligation. A
lien allows the creditor to have the property sold to satisfy the debt in case of default. To
enforce it, the creditor must take legal action and obtain a court order to have the property sold.

• Liens against real estate may reduce the value of the property; however, the owner can still
convey title to another party.

• General (Ad Valorem) Real Estate Tax Lien

- The right of the government to sell a property at a tax sale to satisfy outstanding tax
delinquencies, plus interest and penalties.
- The delinquent property owner has a right of redemption, considering that he/she
pays all obligations before (equitable redemption right) or after (statutory
redemption right) the tax sale.

• Mortgage Lien
- A specific, voluntary lien created after a lender makes a loan using real estate as
security. The property owner signs a mortgage document that creates a lien
against the property.
- The lien automatically ends after payment of loan. If loan is unpaid, the lender
may foreclose and sell the property.

• Mechanic’s Lien
- A protection on the part of a supplier/contractor who provides materials or
services for the real estate. (e.g., lumber companies, building materials suppliers,
carpenters, plumbers, builders, etc.)

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 - A specific and involuntary lien, it is used when a property owner does not pay for
the work or materials provided.
• Judgment Lien
- A lien imposed on both the real and personal property of a defendant/debtor,
after a judgment that concludes a lawsuit is issued and recorded by the court.

- It is a general, involuntary lien that is cleared out after a satisfaction of judgment

is recorded and issued to a debtor, say, a property is sold to satisfy a debt.

*At the back of the certificate of title (OCT, TCT or CCT) is blank portion with heading “memorandum of
encumbrances “. Examples of annotations or entries normally found here are:

1. Lien
a. Mortgage lien, tax lien, judgment lien - money claim
2. Judicial foreclosure
a. Writ of attachment, writ of execution
3. Section 4 Rule 74 of the Rules of Court
a. Refers to a 2-year prescriptive period for any claim in inheritance on the estate of the
deceased ; from extrajudicial or judicial settlement of estate)
4. RA 26 – law on inheritance or estate settlement
5. Right-of-way or easement
a. Servient estate – the one giving right-of- way
b. Dominant estate – the one asking or given the right of way
c. Right-of-way annotation is at the title of the servient estate
6. Lease
7. Adverse claim –
a. ownership claim; no court case yet; if elevated to court becomes “lispendens”
8. Lispendens -
a. ownership claim under court litigation
9. Cancellation of annotations
10. Conveyance of portion of the property
11. Deed of assignment
a. Say to a corporation in exchange for shares of stocks
12. Master deed in a condominium
13. Subdivision and condominium restrictions
14. Special power of attorney
15. Joint venture agreement
16. Donation
17. Socialized housing annotation
18. Affidavit of loss, and many more

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 57

RECONSTITUTION OF LOST, MISSING OR DESTROYED TITLES

When the original copy of the title on file in the Register of Deeds is lost, missing or destroyed,
the proper procedure is to cause the reconstitution of the title either by administrative or judicial
procedure, as prescribed under RA 26 (Old Reconstitution Law) or RA 6732 (New Reconstitution Law).

In order for titles to be reconstituted through administrative proceeding, the total number of lost,
missing or destroyed titles must be at least 10% of all titles in that branch of Register of Deeds, or total
number is not less than 500 titles.

Reconstitution through Judicial Procedure

1. Appropriate petition is filled in the proper court (Regional Trial Court-RTC)

2. Court issues an order setting the date of the initial hearing
3. Copy of the petition together with the annexes are transmitted to the LRA for verification and
submission of the report to court
4. Notice of hearing is published in the Official Gazette, transmitted to relevant agencies, and
posted in conspicuous places – in the barangay, city or municipality
5. Land Registration Authority (LRA) submits the report to the court
6. Initial hearing; hearing on merits
7. Order of the court is released.

Reconstitution through Administrative Procedure

1. Appropriate petition/application is filled with the Register of Deeds (RD) concerned

2. Petition/Application together with complete annexes are transmitted to the LRA
Reconstitution Division
3. Reconstitution Division conducts verification
4. Reconstituting Officer/ Chief of Reconstitution Division issue Order of Reconstitution
5. Notice is sent to registered owners informing them that their application/ petition has been
approved
6. Titles are sent to the RD concerned
7. RD signs the reconstituted title upon surrender of the owner’s duplicate copy of title

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 58

LAND REGISTRATION AUTHORITY (LRA)

LRA is a government agency under the Department of Justice, whose primary mandate is to
efficiently manage and strengthen the Torrens System of titling in the Philippines. Through its field city
and provincial offices, it serves as the public repository of all registered and unregistered titles, and even
chattel mortgages. In accordance to the law, LRA continues to create and implement policies that will
protect the transfer of titles, prevent anomalies, and hasten the administrative and judicial procedures.

Brief History
o Act 496: Land Registration Act of 1902
▪ Enacted on November 6, 1902,
▪ Approved by the Philippine Commission
▪ Actually took effect on February 1, 1903
▪ Created the Court of Land Registration (CLR) and Register of Deeds (RD)
o Act 2374:
▪ CLR was given over the Court of First Instance
▪ Creation of the General Land Registration Office (GLRO)
o RA 1151: June 17, 1954
▪ GLRO was abolished and replaced with Land Registration Commission (LRC)
▪ LRC worked under the Department of Justice
▪ LRC had direct control of the Register of Deeds
▪ Establishment of RDs in every city and province
o Executive Order No. 649: February 9, 1981
▪ LRC was reorganized and became NLTDRA – National Land Titles and Deeds
Registration Administration
o Executive Order No. 292: July 25 1987
▪ NLTDRA was changed to Land Registration Authority (LRA)

Mandate of LRA
• To implement and protect the Torrens System of land titling and registration
• To be the central repository of all land records, registered or titled
• To issue degrees of registration proceedings and cause the issuance by a registrar of deeds
the corresponding certificate of titles
• To issue all subsequent or Transfer Certificate of Titles (TCT) which may either be issued
judicially or administratively
• To keep the title history or records of transaction (chain of title) involving titled or registered
lands
• To exercise control over the disposition or alienation of registered land in accordance with
existing government rules and regulations
• To provide legal and technical assistance to the courts on land registration cases
• To extend assistance to other agencies of the government in the implementation of the
agrarian reform program
• To collect revenue for the government

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 59

Land Titling Computerization Project (LTCP)
For some years now, the LRA has been applying modern techniques to improve its land
records management system. Recently, a combination of microfilm and computerized database
systems has greatly improved the security, reliability and accessibility of land title information of
those registries where this technology has been applied. However, the steady introduction of new
land title documents continues to challenge LRA's ability to keep up with the microfilm
operations, and the corresponding development of computerized databases. Moreover, the need
for a more secure, accurate, efficient and modern land titling system cannot be over emphasized,
for an effective land titling and registration system is a major force in the economic stability and
progress of any country.

The advent of Republic Act 7718 (the "BOT Law") and its enhancement to include
information technology (IT) projects has provided LRA with a timely avenue by which it will be
able to realize its mission and vision to improve its ability to secure its land titles and other
documents and to deliver its services more efficiently and effectively. By focusing on IT as a key
strategy, the LRA will strengthen the implementation of the land titling system in the country
not only as a significant revenue source for the government, but more importantly, to enhance
the integrity of the Torrens System. With the Land Titling Computerization Project (LTCP), it is
envisioned that a query on the status of a land title can be made anywhere, anytime from any of
the various Registries of Deeds nationwide; that there will be a shift from largely paper-based to
a largely paperless system thereby securing tighter control over land titles; that it will hasten the
turn-around time in the generation and issuance of land title, among others.

What are the requirements to get a Certified True Copy/Certification/Verification?

1. Letter of Request or Transaction Application Form (TAF)
2. Photocopy of Title
3. Identification Card

What are the basic steps to registration?

1. Approach the Registration Information Officer (RIO) to check if you have the complete
documents required for your transaction. Complete the TAF.
2. Submit complete documents and the TAF to the Entry Clerk and wait for the Claim Assessment
Slip (CAS).
3. Proceed to the Cashier and pay the Registration fee and IT Fees indicated in the CAS. Receive
receipt and claim stub.
4. Claim document from the Releasing Clerk on the date indicated on your claim stub.
5. The same process applies on how to get the Certified True Copy/Certification.

What are the Basic Requirements for Registration?

1. Original deed/instrument (If the original document cannot be presented, the duplicate
original or certified true copy shall be presented together with a sworn affidavit executed by
the interested party stating why the original document cannot be submitted.)
2. Certified copy of the latest Tax Declaration of the property
3. If titled property, owner’s copy of the certificate of title, and all issued co-owner’s copy if
there is any
Note:

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 60

 a. If a document was executed abroad, a Certificate of Authentication by the nearest
Philippine Consulate is required.
b. If either party is a corporation, the following are also required:
i. Secretary’s Certificate/Board Resolution indicating the authorized signatory/ies
and the scope of authority
ii. Articles of Incorporation
iii. Certificate of SEC that the articles of incorporation have been registered

Additional Requirements for the Issuance of Title Transactions

1. BIR Certificate Authorizing Registration (CAR) re: payment of capital gains tax or donor’s tax,
as the case may be
2. Real property tax clearance re: up-to-date payment of taxes
3. Proof of payment of transfer tax
4. If the land is covered by CARP, DAR clearance and Affidavit of Landholding of transferee

Additional requirements for specific types of issuance transactions:

1. Extra-Judicial Settlement / Adjudication
o Affidavit of Publication stating that the notice of settlement has been published once
a week for (3) consecutive weeks
o If minors are involved, Court Order approving the settlement
2. Judicial Settlement of Estate
o Court Order approving the partition
o Certificate of Finality of the court order
o If the property is being sold or encumbered during the settlement proceedings,
Letters of Administration
3. Extra-Judicial Foreclosure of Mortgage
o Certificate of Sale by the sheriff/notary public
o Approval of the Executive Judge, RTC
4. Consolidation of Ownership
o Affidavit of Consolidation of the purchase or Final Bill of Sale executed by the highest
bidder
5. Judicial Foreclosure of Mortgage
o Court Order directing the sale by public auction
o Deed of Sale issued by the sheriff
6. Execution Sale
o Notice of levy or attachment must first be annotated accompanied with a writ of
execution
o Certificate of Sale
o Final Deed of Sale
7. Registration/Sale of Subdivision Project
o License to Sell
i. Development Permit
ii. Certificate of Registration

Additional Requirements For Annotation Transactions

1. Real property tax clearance re: up-to-date payment of taxes

Additional requirements for specific types of annotation transactions:

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 61

 1. Mortgage / Lease
i. Documentary stamp tax

Additional Requirements For Subdivision and/or Consolidation Transactions

1. Letter request for subdivision/consolidation
2. Sepia or polyethylene film of the plan duly approved by Land Registration Authority or the
Land Management Bureau
3. Blue copy of the plan
4. Original technical description (duly approved)

If with change of ownership, the following additional documents are required:

1. Agreement of partition
2. Real estate tax clearance

Additional Requirements For Condominium Transactions

If CCTs are to be issued for the first time in the name of the registered owner, the following are
required:

1. Master Deed
2. Declaration of Restriction
3. Diagrammatic Floor Plan
4. Letter request for issuance of individual Condominium Certificate of Title
5. Certificate of Registration with HLURB
6. Development permit
7. License to sell
8. Owner’s duplicate of the title of the land and all issued co-owner’s duplicate, if any

For subsequent transfer of CCTs:

1. Certificate of Management

REGISTER OF DEEDS (RD)

The Register of Deeds is a satellite office of the LRA that constitutes a public repository of records
of instruments affecting registered or unregistered lands and chattel mortgages in the province or city,
wherein such office is situated.

Its functions are:

1. Immediately register an instrument presented for registration dealing with real or personal
property which complies with the requisites for registration
2. Shall see to it that said instrument bears the proper documentary and science stamps and
that the same are properly cancelled
3. If the instrument is not registerable, he shall deny the registration thereof and inform the
presentor of such denial in writing, stating the ground or reason therefore, and advising him
of his right to appeal by consultain accordance with Sec.117 of PD 1529
4. Prepare and keep an index system which contains the names of all registered owners and
lands registered

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 62

ESTATE

• Estateis the nature, extent, degree and quantity of a person’s interest in land.
o Types of Estates:
a. Freehold estate – indicates title of ownership. Most common types:
▪ Fee simple
• Fee simple – meant an absolute title; absolute estate in perpetuity; the highest
form of ownership
• Simple – signifies that it is without qualification or restriction

▪ Fee tail – designed to pass title from the grantee to his heirs, the intention is to keep
the property in the grantee’s line of issue; it is a source of family pride.
▪ Life estate – held for the duration of the life of the grantee. In the Philippines, it is
like the usufruct of a widow which she may enjoy as long as he lives but which
merges with the naked ownership of the children upon her death
b. Less than freehold estate – signifies some sort of a right short of title. Common types:
▪ Estate for years – 99 years is the maximum lease period to Filipino citizen as allowed
by the Civil Code.
▪ Tenancy from period to period – say month to month or year to year rent
▪ Tenancy at will – no stipulation in lease agreement as to period where either party
reserves the right to terminate the occupation at will or any time.

• Deed refers to a written instrument executed in accordance with law, wherein a person grants or
conveys to another certain land, tenements or hereditaments
o Usual contents of a deed:
a. Must have a grantor and a grantee
b. Must have words of grant (hereby sell, hereby mortgage, hereby lease)
c. Description of property (legal and technical description, location, boundaries)
d. Signature of the grantor
e. Signatures of at least 2 witnesses
f. Notarial acknowledgment

PATENTS

DEPT. OF AGRARIAN REFORM (DAR)

• DAR issues :
o Emancipation patent (EP) or
o Certificate of land ownership award (CLOA)
o Payable at Land Bank in 30 yearly amortizations at 6% interest

DEPT. OF ENVIRONMENT AND NATURAL RESOURCES (DENR)

• DENR / LMB issues patents under administrative proceedings:

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 63

KINDS OF PATENTS
1. Homestead Patent
2. Free Patent
3. Sales Patent
4. Special Patent
5. Miscellaneous Sales Patent
6. Emancipation Patent

1. HOMESTEAD PATENT (under CA141)

• Grant of public land to person seeking to establish and maintain agricultural homes on condition
of actual, continuous and personal occupancy of the area as a home including cultivation and
improvement of the land.

• If patent or homestead was conveyed, it is subject to repurchase

o By the widow or heirs for a period of 5 years from date of conveyance

• Qualification to own homestead (under CA141)

1. Filipino citizen
2. Eighteen years old and above or head of the family
3. Does not own more than 24 hectares of agricultural land in the Philippines

• Homestead certificate of title

• issued by the Director of Lands upon compliance of the following conditions:
1. At least 1/5 of the land has been improved or cultivated
2. The land shall be cultivated in not less than one year or more than 5 years from the
date of approval of the application
3. Proof of continuous residency for at least 1 year in the municipality in which the land
is located

• Area to be awarded to homesteader (ceiling):

1. To Filipino citizen - 24 hectares
2. To non-Christian Filipinos - 4 hectares

• SALE of agricultural land under CA141, qualifications:

1. Filipino citizen of lawful age or head of the family
2. To actual occupants who do not own any parcel of land or whose total holdings do
not exceed 5 hectares
3. Occupants must be residing in the land applied for at least 2 years to the date of
application.
4. Any corporation or association at least 60% interest belongs to Filipinos
Area :
1. Not to exceed 144 hectares in case of an individual

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 64

 2. Not to exceed 1,024 hectares in case of corporation or association or
partnership but to exceed 144 hectares for each partner

• How public lands are sold? Sales Patent

1. Through sealed bidding address to the Director of Lands with 10% initial payment for
the amount bid
2. Bid shall not be less than the appraised value of the land

• Conditions of the sale (sales patent)

1. The land shall have been cultivated within 5 years after the date of the award
2. Before the patent is issued , the purchaser must show proof of occupancy, cultivation
and improvement of at least 1/5 of the land applied

• Title subject to conditions (sales patent)

1. The grantee of homestead patent may not within 10 years from the date of grant,
convey or encumber or dispose of said land or rights to any person (natural or
juridical) except to the government
2. Any sale made before the 10-year period ends is void and the effects are:
a. Reversion of the property to the government
b. Forfeiture of all payments made

• Lease under Commonwealth Act 141

1. Not exceeding 1,024 hectares
2. Land leased for grazing purposes should not exceed 2,000 hectares
3. Lessee:
a. Filipino citizen of lawful age or
b. Corporation, association of which at least 60% of the capital stock belongs to
Filipinos
4. Awarding of lease should be through public bidding
5. Minimum bid should be at least 3% of the appraised value of the land
6. Lease period
▪ 25 years renewable for another 25 years
▪ After the lease period, all improvements made by the lessee shall become the
property of the government

2. FREE PATENT under Commonwealth Act 141:

• Issued by Bureau of Lands now DENR under Public Land Act (CA141)
• Basis is continues occupation ( 30 year prescriptive period)
• The last implementing law in the issuance of Free Patent was RA 6940 which expired on
December 31, 2000
• RA 6940 was followed by RA 10023 of 2010 which limits the area ceiling:
o 200 sqm. and 500 sqm. in cities (highly urbanized and other cities)
o 750 sqm. and 1,000 sqm. to municipalities (1st and 2nd class and 3rd up)

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 65

QUALIFICATION FOR FREE PATENT (under ACT 141)
1. Any natural born citizen
2. Not an owner of more than 24 hectares of land since July 4, 1926 or prior thereto
3. Continuous occupancy; 4. Has paid real estate tax continuously
5. Not to exceed 24 hectares

• RA 10023 - Residential Land Free Patent Act

• Signed into law by GMA on March 9, 2010
• Reduces eligibility from 30-year prescriptive period to 10 years
• Beneficiaries:
• Those who have paid at least 10 years of realty tax are entitled to free patent
• Application is to the DENR
• Area that maybe applied (ceiling):
i. 200 sqm. in highly urbanized cities
ii. 500 sqm. in other cities
iii. 750 sqm. in 1st class and 2nd class municipalities
iv. 1,000 sqm. in third class municipalities
• Local Government Units (LGU) may also apply for free patent intended for:
i. Public school
ii. Municipal halls
iii. Public plaza
iv. Other government institutions for public use

3. SALES PATENT
• For agricultural purposes

4. SPECIAL PATENT
• Issued by the President of the Philippines for a particular purpose. Examples are reclaimed
area along Roxas Blvd. and in Cebu, untitled patrimonial property of the Phil. Government in
the vast area of Fort Bonifacio

5. MISCELLANEOUS SALES PATENT

• For residential, commercial, industrial, educational, charitable and other similar purposes,
governed by Public Land Act (CA141)

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 66

AGRARIAN REFORM
• Was misinterpreted at the last vestige (mark or trace) of the Marcos dictatorship;
• Associated with the term “confiscation”;A revolutionary kind of expropriation;
• An exercise of the State’s power of eminent domain
• Well-settled principle: Just compensation must be paid before private property is taken for public
use. This is enshrined in all our constitutions.

COMMONLY USED INITIALS

o DA - Department of Agriculture
o DAR - Department of Agrarian Reform
o DENR - Department of Environment and Natural Resources
o DOTC - Department of Transportation and Communication
o DOJ - Department of Justice
o DILG - Department of Interior and Local Government
o DOF - Department of Finance
o BIR - Bureau of Internal Revenue ( under DOF)
o LRA - Land Registration Authority (under DOJ)
o ROD - Register of Deeds ( field office of LRA)
o LMB - Land Management Bureau (under DENR)
o UDHA - Urban Development and Housing Act (RA7279 or Lina Law)
o CARP - Comprehensive Agrarian Reform Program (RA6657)
o CMP - Community Mortgage Program
o LGU - Local Government Unit (under DILG)

• ARB - Agrarian Reform Benificiary

• BARC - Barangay Agrarian Reform Council
• CA - Compulsory Acquisition
• CARP - Comprehensive Agrarian Reform Program
• CARL - Comprehensive Agrarian Reform Law
• CLT - Certificate of Land Transfer
• CLOA - Certificate of Land Ownership Award
• DA - Department of Agriculture
• DAR - Department of Agrarian Reform
• DARAB - Dept. of Agrarian Reform Adjudication Board
• DENR - Dept. of Environment and Natural Resources
• EP - Emancipation Patent
• NGO - Non Governmental Organization
• MARO - Municipal Agrarian Reform Officer
• OLT - Operation Land Transfer
• PARC - Presidential Agrarian Reform Council
• PARAD - Provincial Agrarian Reform Adjudicators
• PARO - Provincial Agrarian Reform Officer
• SDO - Stock Distribution Option
• TCT-EP - Transfer Certificate of Title-Emancipation Patent

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 67

 • VLT - Voluntary Land Transfer
• VOS - Voluntary Offer to Sell

Constitutional rights of landowner (enshrined in the Bill of Rights –most sacred rights):
• Right to property
• Right to due process
• Right to equal protection of the laws
• Right to just compensation
• Prohibition against undue delegation of legislative powers
• Right to information

What is the meaning of the “right to property” under our Constitution?

• In the hierarchy of civil liberties, the rights to life and liberty occupy a preferred position. This is
not to say, however, that the right to property is not a basic right. Property has an intimate
relation with life and liberty.

• Shylock was right: “ You take my life, when you do take the means whereby I live.” To deny
protection to property is to invite anarchy and tyranny.

• Anarchy - absence of a system of government and law.

• Tyranny – cruel and unjust use of power.

• Due process - law which hears before itcondemns. It is generally, a judicial proceeding.

• In agrarian reform, particularly in the determination of priorities and retention limits, the
Constitution explicitly states that these must be fixed by Congressneither by the State nor by law.

Two elements of eminent domain:

• The taking must be for public use.
• Just compensation must be paid.

What is the main factor or determinant for the existence of a tenancy relationship?
• It is intent or meeting of minds by the parties.

What are the essential requisites of tenancy relationship?

• The subject matter is agricultural land;
• The parties are the landowner and the tenant;
• There is consent;
• The purpose is agricultural production;
• There is personal cultivation by the tenant;
• There is sharing of harvests between the parties.

What if the land was sold to a third person without the knowledge of the agricultural lesseedoes the
tenancy relationship ends?
• Answer: No, if the tenancy is legitimate because the right to tenancy attaches to the land itself
by operation of law.

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 68

Is there right of redemption for the legitimate tenant?
• Answer: Yes, for a period of 2 years from the registration of the sale at a reasonable price and
consideration. (RA 3844 Sec. 12). Agricultural leasehold relation is not extinguished by death or
incapacity of the parties.

Ejectment of agricultural lessee, causes:

• The general rule is, an agricultural lessee shall continue in the enjoyment and possession of his
landholding except:

1. When dispossession has been authorized by the Court in a judgment that is final and
executory if after due hearing it is shown that:
1. Personal cultivation of the lessor-owner within 3 years or
2. Conversion within one year;
3. Conversion of landholding

provided that the lessee shall be paid a disturbance compensation,

• if the area is more than 5 hectares, equivalent to five years rental
• if less than 5 hectares, the lessee is entitled to an advanced notice of at least
one agricultural year before ejectment

2. Violation of the contract of lease

TERMINOLOGIES:
• Idle or abandoned land – agricultural land not cultivated, tilled or developed to produce any crop
continuously for a period of 3 years immediately prior to the receipt of notice of acquisition by
the government.
• Farmer – natural person whose primary livelihood is cultivation of land with the assistance of his
immediate farm household whether the land is owned by him or by another person.
• Farmworker – a natural person who renders service for value as an employee or laborer in an
agricultural enterprise.
• Regular farmworker – a natural person who is employed on a permanent basis by an agricultural
enterprise.
• Seasonal farmworker – natural person who is employed on a recurrent, periodic or intermittent
basis by an agricultural enterprise.
• Cooperatives – organization composed of primarily of small agricultural producers, farmers,
farmworkers, or other agrarian reform beneficiaries who voluntarily organize themselves for the
purpose of pooling land, human, technological, financial or other economic resources and
operated on the principle of one member, one vote. A juridical person may be a member of a
cooperative.

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 69

PHILIPPINE CONSTITTUTION
• The 1899 Malolos Constitution
• The 1935 Constitution
• The 1943 Constitution
• The 1973 Constitution
• The 1986 Provisional Freedom Constitution
• The 1987 Constitution

AGRARIAN REFORM LAWS:

1. PD 27 - October 21, 1972 ( Pres. Marcos ) - 1972 to 1988
2. RA 6657 (CARP) - June 15, 1988 ( Pres. Cory Aquino) – 1988 to 1998
3. RA 8532 - 1998 to 2008 ( Gloria Macapagal)
4. RA 9700 (Carper) - 2009 to 2013 ( Benigno Aquino)

VOLUNTARY OFFER TO SELL (VOS)

• Private landowners scheme of offering their lands to DENR in their sincere desire to cooperate
with the government land reform program.

COMPULSORY ACQUISITION (CA)

• The government method of acquiring agricultural land if landowners would not cooperate in
selling their lands to the government.

PD 27
• Law on agrarian reform which covers only rice and corn lands own by private individuals

OPERATION LAND TRANSFER (OLT)

• Product of PD27 (private rice and corn lands)

What is the difference between PD 27 of Pres. Marcos and RA6657 of Pres. Cory Aquino?

• PD27 (October 21, 1972)

1. Landowners were usually booted out of their productive ricelands and encouraged to retain
the unproductive areas;
2. Law that subjects and limits rice and corn private lands to land reform
3. This law does not apply to lands owned by the government.
4. In all cases, retention of landowner under PD 27 is 7 hectares
5. The tenant farmer under this law is deemed owner of a portion of the lot they are
cultivating constituting:
a. 5 hectares if not irrigated
b. 3 hectares if irrigated
6. Operation Land Transfer (OLT) is the product of PD 27
7. The lands will revert back to the government if the tenant-farmer-beneficiaryabandons the
land or refuses to take advantage of his rights under the law.

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 70

 8. Land value to be paid to the landowner is 2.5 times the average harvest of 3 normal crop
years immediately preceding the promulgation of PD27
9. Interest rate is 6% per annum compounded annually on unpaid balance (DAR AO No. 13
Series of 1994)
10. The transfer of ownership to the farmer beneficiary is not automatic until he becomes a
full-fledged member of recognized farmers’ cooperative.
11. PD 27 never placed lands covered by homestead patents under the coverage of agrarian
reform. The right of homesteaders to the land awarded to them (by DENR) is superior to
the rights of the tenants. Homestead Act was enacted for the welfare and protection of the
poor. The Constitution respects the superiority of the homesteader’s rights over the rights
of the tenants.
12. Land acquired by beneficiary under PD27 can only be transferred to beneficiary’s heirs
through succession or to the government through SamahangNayon.
13. If land acquired by DAR was financed and mortgaged to Land Bank
• Payable in 30 years in 30 equal installments with 6% interest;
• Failure to pay 3 annual amortizations is a ground for foreclosure
• Redemption period is within 2 years starting from the date of registration
• Landowner is exempted to pay capital gains tax

• CARP of 1988
1. Enacted on June 10, 1988; effectivity is June 15, 1988
2. The law explicitly provides that the choice belongs to the landowner and the landowner has
the right to retain his most productive landholdings
3. The law covering all other agricultural lands under land reform whether public or private
4. All agricultural lands, which were not completed under RA27, are covered by RA6657.
5. Land distribution under this law is to be implemented in 10 years
6. Retention under CARP is 5 hectares plus 3 hectares may be awarded to each child subject
to the following qualifications:
a. At least 15 years of age;
b. Actually tilling the land or managing the farm
7. Award ceiling for the beneficiary is 3 hectares under CARP.
8. Under CARP a landless beneficiary is one who owns less than 3 hectares of agricultural
land.

• EXEMPTED FROM CARP

1. Landowners whose lands have been covered by PD 27 are allowed to keep the area
originally retained by them;
2. Original homestead grantees or their direct compulsory heirs who still own the original
homestead at the time of the approval of RA6657

• The agrarian reform program is founded on the right of farmers and regular
farmworkers, who are landless, to own directly or collectively the lands they till or, in
the case of farm workers, to receive a just share of the fruits thereof.

• An agricultural land are considered idle or abandoned if the owner upon receipt of
notice of acquisition from the government, did not cultivate, till or develop the land for
3 years.

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 71

• CARPER (RA 9700)
• Congress - House Bill No. 4077
• Senate - Senate Bill No. 2666
• Signed into law by Gloria Macapagal Arroyo on August 7, 2009
• Extends land acquisition and distribution for another 5 years starting July 1, 2009
• PD 27 was extended by CARP of 1988 (1988 to 1998)
• CARP was extended by RA 8532 for another 10 years (1998 – 2008)
• Carper extended CARP for another 5 years
• Purpose is to further implement the CARP
• Provides funding needed
• Recognizes the rights of rural women
• Budget: P150 billion
• Sources of budget
1. Agrarian Reform Fund
2. General Appropriation Act
3. Privatization of government assets, foreign donors
• Under CARPER, no more voluntary land transfer (VLT) after July 1, 2009 for it is often abused
by landowners.
• Only Compulsory Acquisition (CA) or Voluntary Offer to Sell (to the government)
• Retention:
• LGU can own agricultural lands beyond the 5-hectare limit set by CARP (1988) if
to be used for public purpose.
• Award ceiling to beneficiary: 3 hectares
• Cancellation of CLOA is the exclusive and original jurisdiction of the DAR Secretary.
• Penalties for illegal conversion:
• 6 to 12 years imprisonment and/or
• Penalty of P200K to P1M

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 72

HOW TO DETECT FAKE TITLES

1. Compare the original copy in the custody of the Register of Deeds concerned and with the owner's
duplicate copy in the custody of the title holder, to find out if the latter is an exact replica of the former. A
genuine owner's duplicate of a certificate of title should be a carbon original copy of the title. If both are
carbon originals, as in the case of the Original Certificate of title (OCT), they should have been together,
hence coincide in every way. In case of Transfer Certificate of Title (TCT), the originals and the owner's
duplicate therefore, should in all respect be similar.

2. Check the initials and signatures appearing on the original and owner's duplicate copies as well as the
manner in which the entries, and the technical descriptions were typewritten. All the foregoing details
must be the same on both the original and owner's duplicate thereof. Any variance therefore is a ground
for suspicion.

3. Find out if the serial number of the judicial form used in accomplishing the title conforms with the
serial number of the judicial form forwarded by the DAR, LMB or by the DENR, PENRO, respectively, that
appear to have issued the title to the particular Registry of Deeds.

4. Check if the Registry of Deeds/the DENR Secretary/RED/PENRO/DAR Official who purportedly signed
the title is the real Registry of Deeds, DENR Secretary, RED/PENRO or DAR Official of the province or city
where the land is situated at the time of the purported signing.

In cases of titles based on patents, verification should be made with the LMB, DENR-
Secretary/RED/PENRO and DAR Office concerned.

In cases of titles based on patents, check if the date when the patent was signed by the DENR,
PENRO/RED, Secretary or DAR Official corresponds with his term of office.

5. Find out whether or not the document that supports the transfer or conveyance of the property is
authentic or whether the title is supported with a Deed.

6. Check the date of revision of the Judicial Form used and see whether the certificate of title was issued
after the revision date.

7. Trace if the title purportedly transferred from one Registry to another actually came from and was
actually issued by the registry of origin.

8. Test by wetting, whether the red seal on the owner's duplicate and the red printed words "OWNER'S
DUPLICATE" blot and stain when wet.

9. In cases of titles based on patents, check if the areas covered thereby do not exceed the maximum
areas provided by law and existing regulation.

10. Check if the land covered by the patent falls within the territorial jurisdiction of the DENR and DAR
Field Office issuing the same. If the municipality where the land covered by the patent is situated not
under the jurisdiction of the issuing DENR or DAR Field Office, the patent is null and void.

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 73

11. Check whether the area covered by the patent is within the limit prescribed for different modes of
disposition under the Constitution and other existing laws.

12. A tracing-back of the title in the Office of the Register of Deeds (ROD) is the best recourse.

13. Ascertain if it is a reconstituted title (indicated with the prefix "RT", or with a set of figures enclosed
in parenthesis, and a set outside thereof).

14. Ascertain if there are blanks not filled-up or are indicated with the initials N.A. meaning NOT
AVAILABLE on the historical data of the title.

15. Check whether the title duly certified true and correct by the Chief, Surveys Division, or any
authorized official.

16. Check whether the Judicial Form used is the correct Judicial Form.
Example:
• For Homestead Patent, the Judicial Form is Form No. 67,
• Free Patent Application (FPA) - Form No. 54,
• Misc. Sales Application (MSA) - Form No. 167,
• Sales Application (SA) - Form No. 11

17. In cases of special Patents, check whether the form issued is in accordance with the prescribed form
and containing all the material facts especially the enabling law.

18. Check the last two digits of title number and page number. They should be the same.

ABC's OF EVICTION AND DEMOLITION

1. What is eviction?
Eviction refers to the removal of a person and/or his belongings from a subject building/structure or area,
in accordance with law (Section 3(g) of the Implementing Guidelines of Executive Order No. 152, Series of
2002).

2. What is demolition?
Demolition refers to the dismantling by the LGU (Local Government Unit), or any legally authorized
agency of the government of all structures within the premises subject for clearing (Section 3(f) of the
Implementing Guidelines of Executive Order No. 152, Series of 2002).

3. What is the Philippine policy on eviction and demolition?

Section 10, Article XIII of the 1987 Constitution dealing with Social Justice and Human Rights states that:
Urban and rural poor dwellers shall not be evicted nor their dwellings demolished, except in accordance
with law and in just and humane manner.

4. What law governs eviction and demolition?

The Urban Development and Housing Act or UDHA (RA 7279), particularly Section 28, primarily sets the

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 74

rules on eviction and demolition. In addition, various Executive Orders (e.g. E.O. 152, series of 2002),
along with their Implementing Guidelines, Rules or Regulations, and Circulars (e.g. OCA Circular No. 72-
2003) have been issued to further meet the objectives of the UDHA (RA 7279).

5. Are EO 152 and its proposed IRR valid issuances in relation to UDHA, LGC and devolution?
Yes. Their validity springs from the President’s supervisory power over LGUs to ensure that laws are
faithfully executed, as well as from the doctrine of qualified political agency. Under EO 152, the
Presidential Commission for the Urban Poor (PCUP) is designated as the “sole clearing house” for
evictions and demolitions. Given that LGUs are the primary implementers of the UDHA (RA 7279), when
EO 152 designates the PCUP as the “sole clearing house” for the conduct of eviction and demolition, it
merely bolsters the PCUP’s task as a supervisor or of making sure that the rules are followed.

6. What is the rule of the UDHA (RA 7279) on eviction and demolition?
Section 28 of the UDHA (RA 7279) states that: Eviction or demolition as a practice shall be discouraged.

7. Are there exceptions?

Yes. Eviction and demolition may be allowed in the following instances:
1. When the eviction or demolition is to be implemented in danger areas;
2. When the eviction or demolition is to be implemented in public places;
3. When the eviction or demolition has to be undertaken for the implementation of government
infrastructure projects;
4. When there is court order (Section 28, UDHA);
5. When what is sought to be evicted or demolished are illegal structures constructed after
March 28, 1992 (Section 30, UDHA); and
6. When what is sought to be evicted or demolished are structures owned by a professional
squatter and squatting syndicate (Section 27, UDHA)

8. What are the types of eviction and demolition?

Under the Implementing Guidelines of Executive Order No. 152, Series of 2002, the following are the
types of eviction and demolition:

a) Court-ordered Eviction and Demolition

It is eviction and demolition by virtue of a writ issued by a court of competent jurisdiction.

b) Extra-judicial Eviction and Demolition.

It is eviction and demolition without the need of a court order and pertains to the underprivileged
and homeless citizens and their dwellings occupying:
1) danger areas;
2) public places; and
3) government infrastructure projects with available funding (Section 3(a)).

c) Summary Eviction and Demolition

It is the immediate removal and the dismantling by the LGUs or authorized government agency of
structures of:

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 75

 1) professional squatters;
2) members of squatting syndicate; and
3) new illegal structures (Section 3(p)).

d) Voluntary Eviction and Dismantling / Demolition.

It is the act of willingly vacating subject premises and the dismantling / demolishing or allowing
the dismantling or demolition of one’s structure.

9. What are the requisites in order that there would be a valid eviction and demolition?
Section 28 of the UDHA (RA 7279) lays down the mandatory requirements for the valid execution of
eviction and demolition orders involving underprivileged and homeless citizens. These are:
a) NOTICE should be given thirty (30) days prior to demolition;
b) Adequate CONSULTATION with the settlers of the affected area;
c) Adequate RELOCATION; whether temporary or permanent;
d) Members of the Philippine National POLICE must be properly uniformed;
e) Proper IDENTIFICATION of all persons taking part in the demolition;
f) Heavy EQUIPMENT should not be used except for permanent structures;
g) Local government officials or their REPRESENTATIVES must be present; and
h) Execution must be done only during regular OFFICE hours from Mondays to Fridays.

10. Is there an instance where the requisites for demolition need not be complied with?
Yes. In the case of structures built by professional squatters, there may be summary demolition.

11. Who are considered as underprivileged and homeless citizens?

Underprivileged and homeless citizens refer to the beneficiaries of the UDHA (RA 7279) and to individuals
or families residing in urban and urbanized areas:
(a) whose income or combined household income falls within the poverty threshold as defined by
National Economic Development Authority (NEDA); and
(b) who do not own housing facilities.

12. Who are considered professional squatters?

Professional squatters are those individuals or groups who:
a) occupy lands without the express consent of the landowner and who have sufficient income
for legitimate housing;
b) have previously been awarded homelots or housing units by the Government but who sold,
leased or transferred the same to settle illegally in the same place or in another urban area; and
c) non-bonafide occupants and intruders of lands reserved for socialized housing (Section 3(n),
Implementing Guidelines of E.O. 152 – 2002).

13. What is a squatting syndicate?

A squatting syndicate is a group of persons engaged in the business of squatter housing for profit or gain
(Section 3[q], Implementing Guidelines of E.O. 152 – 2002). The purpose of this group is contrary to law
and said group is declared illegal.

14. Are court-ordered demolitions covered by UDHA?

Yes. Section 28 of the UDHA (RA 7279) expressly refers to court ordered demolitions as one of the four
instances that are exempted from the enunciated “no demolition and eviction policy”.

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 76

Moreover, since all evictions of the underprivileged and homeless beneficiaries of the law and the
demolitions of their homes pursuant to other laws must apply the procedure outlined by Section 28, the
execution of court orders for eviction and demolition issued after the successful litigation of forcible
entry, unlawful detainer, accionpubliciana, and accionreivindicatoriacases must comply with the UDHA
(RA 7279) when such cases particularly involve the urban poor.

15. What, then, is the ideal flow of court-ordered eviction or demolition?

A court-ordered eviction or demolition must comply with the following:

First, once the case has already reached finality, the court is duty bound to send notice to the:
(a) Local Government Unit (LGU) and / or National Housing Authority (NHA) of the finality of the
decision for eviction and demolition to enable the LGU and / or NHA to provide relocation within
forty-five (45) days from receipt of notice or financial assistance in the event that no relocation is
provided (Section 28, UDHA); and

(b) Presidential Commission for the Urban Poor (PCUP) five (5) days prior to its intended
implementation (OCA Circular No. 72-2003).

Second, immediately after the receipt of the notice, and within the forty-five (45) day period, the LGU and
/ or NHA are duty-bound to conduct the following:
(a) Provide a thirty (30) day notice to the evictees;
(b) Conduct adequate consultation; and
(c) Provide for relocation or financial assistance.

Third, with the provision of relocation or the financial assistance at the lapse of the forty-five (45) day
period, the court upon motion or motuproprio will issue the writ of execution and demolition. Said writ
should contain specific instructions addressed to the sheriff to comply with the other remaining
requirements of Section 28 of UDHA (RA7279) which constitute the just and humane manner of eviction
and demolition (police presence, LGU representative, identification for demolition crew, no use of heavy
equipment, and demolition during 8am-3pm during weekdays and in good weather).

16. What are the powers and functions of the PCUP being designated as the sole clearing house for the
conduct of demolition and eviction activities involving the homeless and underprivileged citizens?
In pursuit of its mandate under E.O. 152, the PCUP shall exercise, among others, the following powers and
functions:
a) Monitor all evictions and demolitions, whether extrajudicial or court-ordered;
b) Prior to actual eviction or demolition, require the concerned departments and agencies,
including the LGUs, to secure the checklist, guidelines and compliance certificates from the PCUP;
c) After the eviction or demolition, the concerned departments and agencies shall submit to the
PCUP the completed checklist, attested to under oath by the proponent and indicating that:
1) adequate consultations with the affected families had already been undertaken;
2) adequate resettlement sites and relocation facilities are available; and
3) pre-relocation requirements under the Implementing Rules and Regulations (IRR) of
the UDHA (RA 7279) have been complied with.

d) Issue demolition and eviction compliance certificates based on completed checklist;

e) Investigate motuproprioor upon complaint by any party, any violation of the provisions of
Section 28 of the UDHA (RA 7279) or its IRR;

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 77

 f) File motuproprio, or by way of assistance to any aggrieved party, the appropriate criminal, civil
or administrative case against any person or persons found to have violated Section 28 of UDHA
(RA 7279) or its IRR;
g) Recommend to the President any appropriate measures for the implementation and
enforcement of Section 28 of UDHA (RA 7279) or its IRR;
h) Request any government agency for assistance and necessary information in the discharge of
their functions;
i) Publicize matters covered by its investigation of violations of the provisions of Section 28 of
UDHA (RA 7279) and its IRR;
j) Administer oaths, issue subpoena and subpoena ducestecum, and take the testimonies of
witnesses in the course of its investigation;
k) Adopt its own operational guidelines and rules of procedures (Section 1).

17. What is a certificate of compliance?

A certificate of compliance is issued by the PCUP prior to the conduct of the eviction or demolition
showing that the necessary requirements needed by the proponent have been complied with.

18. Are LGUs and government agencies exempted from complying with EO 152 and its Implementing
Guidelines?
No. LGUs and Government Agencies are not exempted. EO 152 is a valid exercise of President’s
supervisory power over LGUs, as well as over government agencies, to ensure that laws are faithfully
executed. Therefore, even if some LGUs have their own clearing houses, the PCUP via EO 152 acts as a
safety valve to ensure uniformity in enforcement so that LGUs with local clearing houses follow the strict
standards set by sec.28 of UDHA (RA 7279). Such uniform enforcement of sec. 28 of the UDHA (RA 7279)
is ensured by the compliance certificate requirement.

19. Are summary demolitions subject to compliance certificates under EO 152 and its Implementing
Guidelines?
Yes. Whether the demolition is summary or court-ordered, it is nonetheless covered by EO 152’s
monitoring provisions. EO 152 and its Implementing Guidelines seek to include summary demolitions in
the coverage as far as procuring compliance certificates is concerned. The obvious intention is to provide
protection to the occupants of New Illegal Structures for they are potential beneficiaries of the UDHA,
being underprivileged and homeless. Furthermore, this inclusion of summary demolitions can be viewed
as still under PCUP’s “broad monitoring coverage” when it comes to the conduct of evictions and
demolitions.

20. Are court-ordered demolitions subject to compliance certificates under EO 152 and its Implementing
Guidelines?
No. EO 152 and its Implementing Guidelines expressly exclude court-ordered demolitions from the
requirement of procuring a compliance certificate. However, the actual conduct of demolition is still
under PCUP’s broad monitoring coverage.

21. What is the role of the LGU in cases of evictions or demolitions?

The LGU concerned and the NHA, with the assistance of other government agencies shall:
a) Within forty-five (45) days from the service of notice of final judgment by the court, undertake the
relocation of the affected families;
b) Provide financial assistance, should relocation not be possible, in the amount equivalent to the

Cesar E. Santos Real Estate Academy: Fundamentals of Property Ownership 78

prevailing minimum daily wage multiplied by sixty (60) days to the affected families (Section 28, UDHA (RA
7279)).

22. Can the LGU or NHA dispense with the mandate of providing adequate relocation by extending
financial assistance to affected families?
No. Adequate relocation is mandatory in all cases as this is a constitutional directive. The dispensability of
adequate relocation, in cases where financial assistance is provided to affected families when relocation is
not possible after the lapse of forty-five (45) days, is merely temporary. The acceptance of the financial
assistance will not constitute as a waiver on the part of affected families to demand their right to have
socialized housing.

23. Can the LGUs summarily demolish structures and evict structure owners on private lands under the
UDHA (RA7279) ?
No. The power of the LGUs to effect summary demolition is confined to public places and danger areas as
specifically provided by law. Such power cannot extend to private properties. Evictions and demolitions
on private properties must be done by virtue of a court order.

24. Can the LGUs do the same under different laws?

No. Although the Civil Code provisions on Nuisance, the Building Code (PD 1096), the Local Government
Code of 1991 (Sections 444 and 455, RA 7160) and other demolition statutes or directives (LOI 19, PD 292,
etc.) all pertain to demolition of certain illegal structures, these laws have been repealed or modified by
Section 28 of the UDHA (RA 7279), a later law specifically referring to demolition of underprivileged and
homeless citizens.

25. Can the LGUs or other government proponents summarily demolish new settlers (after 1992) on
public land/areas who settled therein after being evicted from private property by court order while are
nonetheless UDHA (RA 7279) beneficiaries prior to their eviction?
No. The power to demolish does not extend to UDHA (RA 7279) beneficiaries evicted from private lands
by court order. While the LGUs or other government proponents can demolish new settlers on public
areas after the effectivity of UDHA under Section 30, they cannot exercise this power when the persons to
be evicted or whose structures are to be demolished are new settlers (after 1992) on public land /areas
who settled therein after being evicted by court order from private property but are nonetheless UDHA
beneficiaries and who have occupied said private lands prior to March 28, 1992.

26. When is police assistance allowed in cases of eviction or demolition?

The concerned departments and agencies of the government, the LGUs, or other proponents of eviction
and demolition activities shall be provided authorized police assistance only upon their prior compliance
with the requirements under the UDHA (RA 7279) and its IRR as well as the checklist and compliance
certificate requirements under E.O. 152.

Police assistance shall be allowed only under the following circumstances:

a) In pursuance of any court order specifying police action or assistance;
b) In any case or event where voluntary eviction and dismantling of structures has been agreed
upon in writing by the parties concerned and approved by the PCUP;
c) In cases of local infrastructure projects approved by the PCUP;
d) In cases of national infrastructure projects approved by the PCUP;

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 e) In any other case of eviction or demolition where police assistance shall be necessary to
preserve peace and order, provided it is approved by the PCUP.

27. Does the court order need to specify police assistance in its order?
No. A written request by the sheriff for police assistance in the execution of the order or writ shall suffice.
The authorized police officer shall, however, notify the PCUP in writing of the grant of police assistance
and the date of eviction and demolition at least three (3) days prior to the actual conduct of the same.

28. What is the extent of police assistance in the event of eviction and demolition?
Police assistance shall be limited to peace-keeping and law enforcement and shall, in no way, mean
participation in actual eviction or demolition. The members of the PNP tapped to provide assistance
should be in proper uniform and, in appropriate cases, should carry with them the necessary documents
supporting the provision of police action or assistance.
29. What are the remedies available to the urban poor families subject of demolition in cases where the
person seeking eviction and demolition does not comply with the requisites?
There are several remedies, to wit:
a) If the demolition is only about to be implemented, the urban poor families can file an
Injunction or Prohibition before the courts;
b) If the demolition has already been implemented, they can file a case for damages, in which
case, they can pray the courts to award them actual, moral and exemplary damages;
c) They can also file a criminal case against those persons responsible for the unlawful demolition
under Section 45 of the UDHA (RA 7279).

30. What are the liabilities, if any, of person or persons who violate the laws on eviction and
demolition?
Section 45 of the UDHA (RA 7279) states that any person who violates any provision of the UDHA (RA
7279) shall be imposed the penalty of not more than six (6) years of imprisonment or a fine of not less
than five thousand (5,000) pesos but not more than ten thousand (10,000) pesos or both.

Also, under Section 7 of E.O. 152, any official of the PCUP who shall cause the endorsement of a
demolition or eviction activity without a completed checklist, or if such checklist is submitted but the
veracity of which has not been certified, or any of the officers of members of the PNP who shall take part
in or provide assistance to demolition or eviction activities without prior authorization from the PCUP,
such shall likewise be meted proper disciplinary action, without prejudice to other criminal and civil
actions.

COMMUNITY MORTGAGE PROGRAM (CMP)

The Community Mortgage Program (CMP) is a mortgage-financingprogram of the National Home
Mortgage Finance Corporation (NHMFC), which assists legally organized associations of underprivileged
andhomeless citizens to purchase and develop a tract of land under theconcept of community ownership.
The primary objective of the programis to assist residents of blighted areas to own the lots they occupy,
orwhere they choose to relocate to and eventually improve theirneighborhood and homes to the extent
of their affordability.

Republic Act (RA) No. 7279, known as the Urban Development andHousing Act of 1992, exempts
from the Capital Gains Tax or ordinaryIncome Tax and its corresponding creditable withholding tax,

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theproperties sold under the CMP. Documentary Stamp Tax (DST) on thetransaction must be paid,
however.

In general, the certification to be issued by the NHMFC shall be sufficientbasis for the issuance of
the Tax Clearance and Certificate AuthorizingRegistration by the appropriate Revenue District Officer
(RDO).Significantly, there is no longer a need for the taxpayer to submit withthe Legal Division of the
regional offices a request for a ruling on its/histax exemption.

Procedures and Compliance Requirements:

In general, the NHMFC shall execute a certification that the subjectproperty is a C MP project. On
this basis, the RDO shall issue the TaxClearance and Certificate Authorizing Registration (CAR/TCL) within
5days from fulfillment of compliance requirements under RevenueRegulations No. 17-2001. The payment
of the DST is a necessaryrequirement.

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