How to avoid scam when buying lots in Panglao Island?
Is the property is clean? This is the very question our new clients never miss to raise, probably because of their personal unpleasant experience in the past or because of some negative information relayed to them by their friends. If you are a prospect buyer (and you are reading this), then you should also ask the same question.
Let us first define “clean”. By clean, we mean that the property is free from any lien or encumbrance – that is, the property has not been mortgaged to any bank or made as collateral to any loan. By clean, we also mean that that the seller is the rightful owner of the property – that is, the seller’s ownership is not subject to any dispute. Lastly, by clean, we mean that the seller has absolute right to sell the property – that is, the seller guarantees you undisturbed possession after purchase.
Now, how do you check if the property is clean? To answer this question, we will separate the properties covered by a Certificate of Title and those covered only by Tax Declaration.
Titled properties are those covered by an Original Certificate of Title or a Transfer Certificate of Title. Now, what are the things to do?
- Inspect the site. This is to check if there are occupants in the area other than the owner-seller. It is also recommended that you bring a copy of the lot plan so you could check the boundaries of the property on site. When in doubt of the boundaries, you may hire a surveyor (cost is around P3,000 to P5,000).
- Secure a certified true copy of the title from the Register of Deeds (ROD). If the document appears in government records, then it is least likely to be fake. You should also check the memorandum of encumbrances, usually the 3rd or 4th pages, to verify that the property is not subject to any bank loan, lease, adverse claim, dispute etc.
Note: If the Title is an ORIGINAL Certificate of Title (Katibayan ng Orihinal na Titulo), you should also check the date of issuance because these kinds of title has a prohibitive period of 5-years – this means that these cannot be sold or transferred to a new buyer until after 5 years from date of issuance.
- Proceed to the Assessor’s Office of the Municipal Government. You may secure a copy of the Tax Declaration to confirm that the owner appearing in such document is the same owner appearing in the certificate of title. You may also check if the realty taxes, although very minimal, is paid up-to-date.
- Check the owner’s original copy. When you have decided to buy the property, you may request to compare your ROD copy of title with that of the owner’s original copy – any difference should be a cause of concern. If the owner does not have the original copy, all the more you should worry because securing a new original title takes a long process (not to mention the possibility that the owner has already sold the property and the title is already with the earlier buyer).
Of course, engaging a reliable licensed broker will help get these things done fast, considering his experience and expertise.
*Tax Declaration properties will be discussed in a separate article.