MANILA, Philippines – Buying property, most often a house and lot, is a lifetime investment. But unless you have a licensed broker to apprise you of which to bid for, you might later find yourself facing a lawsuit or futilely chasing after the seller of the property. Worse, the lifetime savings you poured into the house and lot could simply go up in smoke.

Yes, buying a house and lot could be risky. So before you put your money on any property, it pays to know first what the law says.

Generally, there are two kinds of real estate sale transactions:

(a) Sale of property by a private entity, which could be a natural (an individual human being) or a juridical (association, corporation, partnership or group) person. This is covered by the general provisions of the New Civil Code because this kind is treated as an ordinary sale.

(b) Sale of property that is part of a condominium building or subdivision. This kind is covered by Presidential Decree No. 957 (Regulating the Sale of Subdivision Lots and Condominiums), Republic Act No. 4726 (The Condominium Act), Batas Pambansa Bilang 220 (Technical Requirements for Economic and Socialized Housing Projects in Urban and Rural Areas) and Executive Order No.648 (Regulations for Other Subdivision Projects).

The Housing and Land Use Regulatory Board (HLURB) enforces all laws and regulations involving the sale of subdivisions and condominiums.

A subdivision project refers to a tract or parcel of land partitioned primarily for residential purposes into individual lots (with or without improvements) and offered to the public for sale (in cash or installment).

A condominium project, on the other hand, involves an entire parcel of real property divided or to be divided primarily for residential purposes into condominium units.

There are no special laws that cover a townhouse, retirement village, vacation home, clubhouse and time-sharing on residential or vacation unit. But as long as these are up for sale, the transactions must pass HLURB requirements.

Here are tips a buyer must always keep in mind when purchasing property:

1. Ask the seller for an owner’s copy of the Transfer Certificate of Title (TCT). If what is provided is a photocopy, proceed to the Register of Deeds to determine if it is authentic. Ask for a “certified true copy.” Don’t rely on declarations of real property, more known as “tax declarations.” They are not proof of ownership.

2. Make sure the seller is the real owner. You could ask for identification papers, like a community tax certificate, driver’s license, passport or bank account. Or ask those who know him. If the seller is a third party or an agent, ask him to present his written authority. He must have a notarized special power of attorney (SPA) signed by the principal or lot owner. But read the SPA. There must be a clear statement that the agent, as seller, can indeed negotiate to sell the property.

3. Check the land title to make sure it is free from encumbrances. Encumbrances refer to liens or entries annotated at the back of the title. They could be a notice of lis pendens (the lot is the subject of a court case), mortgage, lease contract, pacto de retroventa (subject to a right of repurchase by the previous owner), road right of way, easement, property bond, notice of levy, or certificate of sale. It is your own lookout if you would still opt to buy the property despite the presence of these entries.

4. Visit the property. For two reasons: (a) To see that the lot you are buying is the one described in the title, and (b) To see that the lot is not within a river, a communal forest or along a precipice. Hire a geodetic engineer or a private land surveyor to “relocate” the property. Relocation means identifying the metes and bounds of the property on the ground based on the technical description provided in the land title. Here, the “tie line” would show if the property is indeed the one described in the title.

5. Check if the land’s taxes were paid. Ask for tax receipts. If the seller cannot produce any, then bring a copy of the title and the tax declaration to the assessor’s office. There, you can get information on whether the taxes of the property have been paid.

6. Ask for the approved survey plan of the property. The survey plan could give you a picture on the property’s layout and provide information about the adjacent properties. Take note also of the bold letters indicated in the survey plan. This would refer to PSU (private survey), PSD (private title subdivision plan) or PCS (private condominium subdivision plan).

7. Ask for the papers required by law to determine if the property you are buying is considered under a subdivision or condominium project. For a subdivision: (a) Sangguniang Bayan or Sangguniang Panlungsod resolution or ordinance approving the subdivision project, (b) Development permit from the mayor, (c) Certificate of registration from the HLURB, and (d) License to sell from the HLURB. For a condominium: (a) Development permit, (b) License to sell, and (c) Certificate of registration. All are issued by the HLURB.

8. Ask for the real estate agent’s registration and license. The sale of a subdivision lot or condominium unit is often made through a broker, salesman or dealer. When you deal with any of them, ask for their license and certificate of registration.

9. Check if the published notice or advertisement to sell the subdivision or condominium has been approved by the HLURB. This is to avoid fraudulent sale of unapproved subdivision projects.

10. Always consult a lawyer. The lawyer would be in a position to evaluate the validity of the property’s papers provided by the seller. However, these tips are applicable to Filipino buyers only or corporations of which Filipinos own 60 percent of the capital. Foreigners are not allowed to own land in the Philippines unless they inherit it.

The author thanks Rebecca Torres, HLURB Cordillera director, for providing additional information on this topic.