“To learn is to change. Education is a process that changes the learner.”
– George B. Leonard, American writer, editor and educator
HJM wrote to me asking for assistance on what to do with his land title which has not been transferred in his name by the developer. The developer promised him that the land title of his fully paid real property will be transferred in his name last May 2013.
However, that promise has remained as such. He asks what he can do about it.
Numerous property owners share the problem of HJM. They are property owners who have fully paid the price in the contract with the developer but have not received their land titles registered in their names.
Litigation against the property developer should be the last resort. Here are the 5 critical documents to ask for when your title has still not been issued by the developer.
First, ask for a copy of the Deed of Absolute Sale (DOAS). Kindly review your Contract to Sell with the developer. Search for the provision that states when the developer will execute in your favor the DOAS over the particular real property you purchased.
Some developers will commit to issue the DOAS fifteen (15) days after receipt of the final payment. Others obligate themselves to issue the DOAS thirty (30) days thereafter. Whatever the number of days are, make sure to demand for a copy of the DOAS.
Why is this the first and most important step? No transfer of the land title or condominium title will occur in your name without the DOAS. In legal parlance, the DOAS is the transferring document. It shows what particular real property you purchased and for how much.
If no DOAS has been executed by the developer in your favor, then all the promises of your developer are empty, doubtful and unreliable. You should demand from the developer a copy of the DOAS signed by you and the authorized signatory of the real estate developer.
Second, if you are furnished a copy of the DOAS, ask for proofs of payment of taxes covering the sale of the property. The developer is liable to pay withholding tax of up to 6%, documentary stamp tax and Value-Added Tax (VAT) on every unit it sells to its buyer.
If the developer cannot furnish you a copy of the appropriate BIR Forms and bank payment forms then it is a sign that the developer is not doing its part to cause the transfer of the land title in your name.
Third, if you are given copies of the proofs of tax payments, ask for a copy of the Certificate Authorizing Registration (CAR). The CAR is issued the Bureau of Internal Revenue (BIR).
According to the BIR website the CAR “is a certification issued by the Commissioner or his duly authorized representative attesting that the transfer and conveyance of land, buildings/improvements or shares of stock arising from sale, barter or exchange have been reported and the taxes due inclusive of the documentary stamp tax, have been fully paid.”
If a copy of the CAR has not been furnished to you then you can assume, with a great degree of certainty that the corresponding taxes due on the transaction have not been paid by the developer.
Fourth, if a copy of the CAR has been given you, ask for a copy of the Transfer Tax Receipt. Depending on the local government unit (LGU), the transfer tax is ½ of 1% of the total contract price indicated in the DOAS. In Quezon City, the rate of the Transfer Tax is ¾ of 1%.
According to Section 135 of the Local Government Code (LGC), a transfer tax is a tax imposed “on the sale, donation, barter or on any other mode of transferring ownership or title of real property at the rate of not more than fifty percent (50%) of the one percent (1%) of the total consideration involved in the acquisition of the property or of the fair market value in case the monetary consideration involved in the transfer is not substantial, whichever is higher.”
Proof of payment of the transfer tax to the LGU concerned is proof positive that the land title in your name is reaching the final stage of processing.
Fifth, if you are given a copy of the transfer tax receipt, ask for the official receipt for the payment of registration fees in the Registry of Deeds. The payment of the registration fees at the RD is the final step in the process of having the land title issued with your name on it.
If you are given a copy of the official receipt rest assured that in 2 or 3 weeks the land title registered in your name will be released to you by the developer. The presentation of the above-mentioned documents by the developer is proof positive that the developer will make good on its promise to release the owner’s duplicate copy of the land title registered in your name.
The entire process – from the execution of the DOAS to the release of the land title in the buyer’s name – normally takes 45 to 60 days. Therefore, if the developer promises to release your land title after 6 months you now have reason to question the assertion of the developer.
It is extremely frustrating for property owners to be given a run-around by developers with regard the issuance of the title upon full payment. Knowing what kind of documents that are issued every step of the process will greatly assist you in asserting your rights against the “over-promising” real estate developers.
If you have any query that you wish to be answered concerning HOA living, just email them and we will discuss it during our “education week” for the benefit of all. Happy living!
(This is the main content of our 4th Newsletter. If you want to receive our weekly newsletter kindly subscribe by clicking the link above.)