What’s the current score about our family’s journey in buying a house?
Here I am waiting. We are waiting for third parties to do their part. Before we ended up in a zen state of waiting, our family did different tasks including me because no one else can do it. I felt as if I’m part of the process, as if I’m in the Philippines.
It was the third time that we applied for a bank housing loan in the Philippines; and we felt as though we were taken seriously because of great customer service. Is this a good sign or what?
While waiting, I’ll share the details of what we did in the past few weeks.
Update with PNB Housing Loan Application
To date, our family have applied for three housing loans for three different properties. It turns out that problems reveal themselves along the process. Another good sign?
1. Submission of PNB Housing Loan Application. My siblings submitted the requirements. I filled up the application form and sent it through email including the special power of attorney.
2. Communication is clear and fast. This is what I’m fascinated of. The staff of PNB keep us updated. They called my attorney-in-fact (representative) about additional documents we have to submit.
3. Writing in the name of love. It’s not a love letter though. But I wrote a letter/email as part of the requirement because they want to know more about the nature of my work and status in Canada. It is the highlight of my writing career. (The pinnacle . . . the pressure.) With sincerity and persuasion, I tried to convince them how qualified I am as a single borrower. I am suppose to have a co-borrower but he backout in the last minute. I guess it’s for the best.
Along with the email, I attached my previous payslip as an employee and self-employed. Since then, I didn’t get any response but my family did.
4. Obstacles rise like waves. The PNB staff discovered that there are two different names in the tax declaration and land title of the property. I was confused because it’s hard for me to grasp the idea if I can’t see the documents. My super siblings got me covered when they immediately talk to the owner. They deserve an early Christmas gift from a shoe sale in Calgary. (Of course, I also got one for myself.)
I would like to talk more about gifts and shoes but there’s a stumbling block I have to deal with. If you are buying a pre-owned house in the Philippines, take note from my experience.
Tax Declaration and Land Title have Different Names on It
I’ll cut to the chase of what problem we have gotten ourselves into.
The Tax Declaration is under the name of the previous owner. But the Land Title is under the name of the current owner as seen also in the Deed of Sale.
Deed of Absolute Sale is signed by the seller relinquishes or transfers ownership of the property to the buyer. When signed by both parties, the buyer is considered to be the absolute owner of the property. (Resource: Hoppler)
How was that even possible? The owner of the property submitted the Deed of Sale to the PNB and was still required to submit a new Tax Declaration under his name.
We are waiting for the owner to do so. After that, appraisal will follow.
The PNB staff has been great in communicating with us. But as my sibling said, submitting all the requirements doesn’t guarantee the approval of the housing loan.
With all the work, it feels like we are moving in the right direction. I hope. Ika nga, kung para sa iyo, para sa iyo talaga.
Those were the details but let’s have a look at the bigger picture which means problems for buyers to look out for in buying a house in the Philippines.
How to Deal with It
I’m a Redditor and loving the community of Reddit already. It’s amazing how people take the time to share their knowledge, nonsense, and straightforward opinions. Everyone seems sincere and concerned especially with all the bull$%*#.
Here’s an example. This is what Filipino Redditor has to say about property ownership in the Philippines.
Question:
What’s the difference between the two (Tax Declaration and Land Title/Certificate of Title)? Is it safe to buy land that only has a tax declaration? What do buyers need to do when performing due diligence?
Answer:
Buying land from a seller who has a mere tax declaration to vouch for his title is a no-no. Always remember anyone can pay real property tax. The Government does not care whether the taxpayer is the owner or not. It’s pretty easy to obtain a copy of a tax dec. Although usually, those who use tax declarations are selling government lands which are yet to be declared alienable (government property na puwedeng ibenta sa private individuals). Sila yung mga tinatawag na “professional squatters”. Marami sila dito sa probinsya. I have dealt with their kind before.
As pointed out by /u/Retsud0, Certificates of Title (OCT/TCT) are conclusive proof of title over real property. It’s a constructive notice to the whole world that the name indicated in the certificate is the owner of the property.
It is indefeasible except in a direct action before courts. Also, the advantage of buying a land with an OCT/TCT is that in the event that someone claims to be the legit owner of the land and it turns out that he is, you as the buyer has no obligation to return the possession of the land to him nor compensate him for the loss. This provided you are in good faith or was not aware of any defect in the ownership or title of the seller from whom you bought the property. You may simply claim that you based your good faith on what the OCT/TCT says (the so-called “Mirror Principle”). Si legit owner ang maghahabol kay fake seller.
What have I told you. I’m so proud of my Redditor kababayan. For more details, you can follow the conversation on Reddit. Masyadong mahaba pero may kabuluhan naman. Join us on Reddit if you haven’t sign up. Makigulo ka na rin kasi it’s more fun on Reddit.
For simplicity and more information about land possession, here’s a video from UNTV.
Naliwanagan ka na ba? Ako nakakarelate na sa pinagsasabi ng aking kapatid. Ganun pala iyon; masyadong komplikado.
I’ll take care of blogging and would morally and financially support my siblings with the processing. Palusot.
Update: My family moved in to our new home paid in cash. I decided not to apply for a housing loan from a bank or Pag-IBIG.
Final Thoughts
Takeaway: For future home buyers, DO NOT buy a land with only Tax Declaration as a proof of ownership. Check the Deed of Sale and Land Title.
As of this writing the owner of the property hasn’t applied for a new Tax Declaration because he’s busy at work, but promised to work on it this week. I hope we can submit all the requirements this month; that way, we can find out if the PNB housing loan application is approved or not.
An approval would be the greatest Christmas gift ever. (I cannot believe how excited I am for a debt commitment. Well, it’s a good debt anyway.) Bahala na si Lord.
Have you encountered the same situation? What other challenges have you experienced in applying for a housing loan?
Hi! We are planning to buy a lot in Indang Cavite however it is not titled. But the seller has the tax declaration, deed of sale and certicate from the court that certifies that it is under her name already. She also the docs from LTR. She paid the tax for 10 years with her name on it. Is it okay and safe to buy the said property?
Binili nyo po ba yong property na tax declaration lang? Okay po ba processeso? Meron kase inooffer rin sa akin na tax declaration lang din tapos ready for title raw.
It seems sketchy so I stayed away from it. I was able to buy a property with no document problems. Keep looking for other properties. Something will come up. Patience keeps hassle away.
The system is for your own protection.
If the title is in the name of Mr. A, but the Tax Declaration is in the name of Mr.B, then it is entirely possible that there is another claimant to the said property – even if Mr. A has the title to it. Remember, nobody can say who has the better claim (not PNB, or the Assessors office, etc) between them but only the Court. That situation maybe is what is commonly called as a Multiple claimant in the Assessors Office lingo. So probably,the PNB being wise in these ways of loan applications and in order to protect their own interest, was IMHO right to be wary – and it should have raise some red flags on you and your family’s part!
If the previous owner failed to cancel his old tax declaration upon selling the real estate or if your seller failed to get another tax declaration in his name for whatever reason (which is his legal obligation under Philippine laws) – then another red flag! That is why in buying a real property, the title title must be “clean”, and all the necessary documents – including the Tax Decs are in order, before you part with your hard earned cash. And also do not forget to check the Zoning Laws of the place with the City Planning Office.
I hope everything goes well for you and your family. Buying a house entails a lot of stress, how much more for a long distance transaction ( Disclosure: I am from the Assessors Office, and also is a licensed Real Estate Consultant). Good luck.
Hi Pwede Padala Gal. Enjoying your blog. We see a lot of properties for sale na tax declaration lang and it’s very tempting given the much cheaper price but as you mentioned, it comes with Legal risks which can give us headaches along the way. Keep on writing! 🙂
Hi,
Is there any update on this? Were you approved by the bank? We’re somehow in the same situation as this.
Thanks.
Hi Luis. Thanks for the question which remind me to update the post. I decided not to buy the property which could lead to so much hassle. In the end, I was able to purchase a house and lot with clean record and in a better location. It does pay to listen to intuition or gut instinct. Good luck to your journey of house hunting.