How to Prevent Real Estate Scam in the Philippines
Real Estate Scam is present all over the world and the Philippines is not free from unscrupulous scammers who prey on foreigners and Overseas Contract Workers (OCW) to gain a sum of money. Many scammers believe that foreigners and OCW are easy targets of real estate scam because they know that they are not available to oversee the entire process and will trust the “seller” to do everything for them.
Key points to prevent real estate scam in the Philippines
Registered land owners in the Philippines have Transfer Certificate of Title (TCT) issued by the Register of Deeds as proof of ownership. The description of the property and the owner are written in the Transfer Certificate of Title. Every buyer must, before agreeing to buy a listing online, inquire if the sellers have title over the property. The sellers must be able to show you the title or their authority to sell the property.
Not all properties listed in online are legitimate, potential buyer must ensure that all documents are authentic and existing. The taxes must be paid and the property should match the description written in the title. To avoid fraud, our lawyers personally visit the government agencies in charge to make sure that the papers are authentic.
Unlike other Western Countries where buying and selling real property is fast, the process of buying a real estate in the Philippines takes at least six (6) months to complete. This period includes the cancellation of the new title and issuance of a new one to the name of the buyer. Many “sellers” will attract buyers by informing them that the property will be transferred to them immediately or within a month. Under the guidelines of the government agencies, the process of cancelling and issuing a new title should be made within a month. This is not the reality in the Philippines, your paper will be placed in long queue before the government officers.
Based on our experience handling real property sales of our clients, we noticed that there are a lot of documents piled before the government offices but there are few officers in charge. Issuance of Certificate of Registration with BIR takes at least 15 days in Baguio City and paying taxes is just the first stage of issuance of a new title. It is a red flag if a “seller” told you that you can get the new title right away.
Identity of Seller
One of the most common mistakes of buyers is their failure to check the identity of the seller. One may pretend to be the land owner and even present you with a fake identification card. The best way to avoid this is to visit the place and conduct an ocular inspection. Asking around the neighborhood may also help you ascertain the identity of the seller.
One can be certain that all documents are complete and the seller is the real owner, however buyers must be vigilant in checking whether or not the property was already sold or was mortgaged to third person. Real estate mortgages, if registered, are annotated in the title. Some encumbrances are recorded with the assessor’s office. If your property was subjected to multiple sale, the assistance of a lawyer is a must.
“Ready For Titling”
One common scam that our law office often see are buyers who bought properties because the seller promised them that the property is “ready for titling”. A Tax Declaration is not a title. You should be more vigilant if a seller presents you with a tax declaration and other documents telling you that the property is not titled but is ready for titling. Except for some residential and ancestral lands, titling of an unregistered land in the Philippines requires filing a Petition in court. The court proceeding take at least three (3) months to complete with no guarantee of success.
“Recommended by a Relative”
Often times, buyers buy properties recommended by someone they know or by someone their spouses know. Buyers do not check the property because of “trust” and “relationship”. These relatives may have the best intention for you, however they can be fooled by strangers too. They may genuinely believe that the property and seller are legitimate but it might turn out that they were scammed. The buyer, however, will be the one who will bear the loss and not the relative that was scammed by the stranger.
Buying a property in the Philippines is tricky and not easy. Always consult a lawyer when purchasing real properties. One may think that it is cheaper to forego with a lawyer but their importance will come once the transaction is done and the scammer is gone. It is faster and easier to prevent a scam than to chase after the scammer. Our law office is always open for inquiry and you may reach us through our emails at [email protected]; [email protected]; [email protected]
Author: Atty. Richelle Josephine B. Juanbe