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Outstanding debts on a property - how do you know?


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If you are buying a preowned house and lot, how can you check whether there are any outstanding debts secured against the property. Also can unsecured debts stay with a property under the new owner?

Looking at buying a small cheap property which I will rent out, it is being sold by a neighbour of family, but I really don't want to end up with a liability.

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ILoveCyrus

Good question.  Where are the lawyers and realtors of this board??

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shadow

If you are buying a preowned house and lot, how can you check whether there are any outstanding debts secured against the property. Also can unsecured debts stay with a property under the new owner?

Looking at buying a small cheap property which I will rent out, it is being sold by a neighbour of family, but I really don't want to end up with a liability.

First, make sure you are shown an Original Certificate of Title (OCT) or Transfer Certificate of Title (TCT) (usually on yellowish thick paper with a red or green printed ribbon around the outside, TCT is best). Second, go to the registrar of deeds and ask to see the title on file. Look on the back of it for liens, encumbrances, etc. Keep in mind that nothing is conclusive, it's buyer beware!

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ILoveCyrus

Wow....Buyer Beware = Buyer's Remorse (sometimes)

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SkyMan

I would first go to the Municipal Hall and obtain a copy of the Tax Declaration, you'll need to know the barangay and lot #.  You should be able to get that from the engineer's office if you can locate it on their barangay plot plans.  Take the Tax Dec to the property tax office and see if there are any problems there.  They should be able to give you the name(s) of whoever has been paying the prop taxes if they have been paid.  Hopefully the payer is the same as the person trying to sell you the property. Next take the Tax Dec to the Registry of Deeds (RoD) and get a photocopy of the title.  (A certified true copy costs more and you'll likely have to come back to pick that up whereas a basic photocopy can sometimes be gotten without wait.)  You'll need the title number which should be on the tax dec.  Any true liens should be on the title.  If there are any that have been signed off I would go to those liens and verify the debt is clear.

 

And after that, pray a lot.

Edited by SkyMan
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You should also check for back taxes.  A lot of property owners never pay the property tax.

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Headshot

If you don't have a good (and honest) real estate lawyer assisting you when you buy property, you will likely miss something that will cost you a lot more than the lawyer's fee.

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spooks

Utility bills are often set against the address not the owner etc.  Check with power and water co etc before purchasing. they will not want to tell u anythng much just let them know your interest and if payments are up to date

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shadow

I would first go to the Municipal Hall and obtain a copy of the Tax Declaration, you'll need to know the barangay and lot #.  You should be able to get that from the engineer's office if you can locate it on their barangay plot plans.  Take the Tax Dec to the property tax office and see if there are any problems there.  They should be able to give you the name(s) of whoever has been paying the prop taxes if they have been paid.  Hopefully the payer is the same as the person trying to sell you the property. Next take the Tax Dec to the Registry of Deeds (RoD) and get a photocopy of the title.  (A certified true copy costs more and you'll likely have to come back to pick that up whereas a basic photocopy can sometimes be gotten without wait.)  You'll need the title number which should be on the tax dec.  Any true liens should be on the title.  If there are any that have been signed off I would go to those liens and verify the debt is clear.

 

And after that, pray a lot.

Not all municipalities will release a tax declaration without a notarized deed of sale and/or a notarized release from the registered owner. Not all registrars of deeds will allow a certified true copy of, a photocopy of, or even a picture of, the title on file, except to the registered owner. The most they will let you do in many cases is let you look at it.

 

My wife has researched land titles in two dozen or more municipalities.

 

Refer to Tim's thread;

 

http://www.livingincebuforums.com/topic/62887-when-seeking-advice-know-this/

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Headshot

Not all municipalities will release a tax declaration without a notarized deed of sale and/or a notarized release from the registered owner. Not all registrars of deeds will allow a certified true copy of, a photocopy of, or even a picture of, the title on file, except to the registered owner. The most they will let you do in many cases is let you look at it.

 

My wife has researched land titles in two dozen or more municipalities.

 

Refer to Tim's thread;

 

http://www.livingincebuforums.com/topic/62887-when-seeking-advice-know-this/

 

The answer to that is fairly simple. If you can't get the documents you need for a proper due diligence, DON'T buy the property!

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Davaoeno

 

(usually on yellowish thick paper

 

correct - but for the last 2 years or so  the new ones now are  blue 

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always i here you guys talking don't buy lots, this and that and bla bla bla..

 

how many actually have property? 

how many of you had problems with the lot after buying?

 

my wife owns 4 lots, there where some problems, but with patience, due diligence and a little determination all ''problems'' was really non existed..

 

most problems acure when the buyer don't have a clew and ask the wrong questions to the sellers, family members etc, they in turn are clueless and make up ''heresy answers'' (as they all do here) and the wild goose chase starts ..

 

honestly, the comment above are usually enough to get the answers wanted... and yes there will be a small part of lots of problems...

but don't be afraid to quickly ...

 

also have a little common sense..if its in the boonies, and no title and your girlfriend/wife don't know how to deal with all this stuff you are having a huge disadvantage...

 

and don't forget..by paying probably a couple hundred/thousand dollars most leans can be paid off, BUT for the philipino thats huge money and they will delay and beg and bulshit for months not to pay that, the huge headache u get from that makes it seem much is wrong and give you the feeling that it is all fecked up... while its persons from your own camp making it hard.....

 

just somethings to consider...

Edited by toshi
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Check Assessors office. Registry of Deeds. How about unpaid inheritance tax? Check with B.I. R too.

 

Toshi, some guys have wives that immediately profess to be experts in everything. Then one suddenly finds out that they have been screwed. You might be ok. Me too but I know a few that have been really messed up because their partner didn't know the ropes.

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The suggestions and advice are helpful. If the OP has read these, then it should be apparent it is not an easy or straightforward process to confirm land is free of liens or contested ownership. But it CAN BE DONE. have learned a lot from this forum about land purchase. Those who had been through the process (with both good and bad results reported) have assisted me as I go through my land ownership issues.

 

I own five different properties, but have "clean title" on none. I have been offered land to buy on many occasions, and few ever reveal "clean title". In fact, some of the offers were for property on government land which is likely to be alienable and disposable ( if I have the term correct....A&D land). These are houses, essentially squatters, who "own" the land, paid taxes for years. Not land I want any part of.

 

I have a house with relatives in it which is not titled in our name because we cannot get the title holder to "let go" of the title. Lots of strength in the old rule, "possession is nine tenths of the law".

 

Presently I am processing a subdivision plan which is the third or fourth step out of around ten steps to get "clean title" to a small lot. If successful, it will be our first.

 

The red tape here is the most elaborate I've ever encountered. It makes sense that it would be if you know the history of land ownership in the Philippines. The house I live in is on land that will likely never be with "clean title". This is in spite of the fact it has been owned by one family for decades. To this day there are disputes still pending in court from a disgruntled heir claiming the original land(s) in the family were not fairly distributed.

 

I once tried to buy a small piece of land which is vacant and will not ever be used. I wanted to use it for a roadway to a lot off the highway. The family that owned the land was honest and told me, sure, they could sell it to me. However, there was alwasy a possibility an heir, currently living overseas would return and demand compensation or simply cut me off......legally.

 

I am rambling a bit just to point out that when you get advice about how to process the purchase, pay attention to these forum members.

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Clean title is not transferable unless it was titled 5 to 10 years

before. Five for DAR. Ten for DENR.

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