1 Get a certified true copy from Registry of Deeds
Registry of Deeds requirements for transfer of title
The first thing you should do is obtain a certified true copy of the TCT directly from the Registry of Deeds (RD). This ensures that the title is genuine and reflects the latest records. Do not rely solely on the copy provided by the owner. While it may be legitimate, you cannot be certain whether it is the latest version or whether it has been altered. It is always better to be safe than sorry.
Once you have the title, the first thing you need to check is whether the person you are negotiating with is the registered owner of the property. If not, ask for a copy of their Special Power of Attorney (SPA) and make sure it is notarized. You should also verify that the lot area being advertised matches the lot area stated on the TCT. Request a valid government-issued ID and make sure the name matches the name on the title or SPA. If the seller is represented by a broker, these details are usually verified as part of the broker’s due diligence process.
2 Check the Encumbrance Section
Encumbrance and Lis Pendens meaning in property
Next, check the encumbrance section of the title to see what claims, liens, or restrictions are attached to the property and whether they can be resolved or accommodated. An encumbrance is a claim or interest attached to a property. Examples include unpaid mortgages, ownership disputes, pending court cases, easements, and rights of way. Having an encumbrance does not automatically mean you should not buy the property, but it does mean you should investigate further to determine whether the issue can be cleared or properly addressed before proceeding.
If you are doing this on your own and have no prior experience, it is important to be thorough because any missed step can lead to buying a property with legal or financial problems later on. If you have a broker, they usually have experience and professional contacts that can help verify the property’s status and investigate encumbrances properly.
So what are the possible encumbrances on a property? These include, but are not limited to:
Mortgage – This means the property is being used as collateral for a loan. If the owner says the loan has already been paid, verify whether the mortgage has already been cancelled or if the cancellation is still being processed. If part of the purchase price will be used to pay off the loan, there should be a clear agreement on how this will be done. Otherwise, if you release the money and the seller fails to pay the loan, you may encounter problems later on.
Adverse Claim – This means another person is claiming an interest in the property. Ask who filed the claim, why it was filed, and what documents support the claim. Depending on the circumstances, it may be wise to consult a lawyer regarding the risks involved. It is also important to check when the adverse claim was annotated because legal remedies may be available to cancel certain claims that are no longer valid.
Lis Pendens – This means there is an ongoing court case involving the property. Ask for details about the case and determine whether the outcome could affect ownership or possession of the property before proceeding.
Notice of Levy on Execution – This means the property may be subject to enforcement of a court judgment. Ask the owner whether the judgment has been satisfied and whether the levy can be cancelled. Situations like this are generally considered high-risk and should be carefully evaluated before proceeding.
Tax Lien – This usually means there are unpaid taxes associated with the property. Verify the amount due and require the owner to settle all outstanding obligations before completing the transaction.
Easement – An easement gives another party certain rights over the property, such as access for drainage, utilities, or passage. Determine whether the easement will affect your intended use of the property.
Right of Way – Right of way rules in a property may mean that other people have a legal right to pass through the property, or that the property relies on access through another property. Verify the location, dimensions, and legal documentation relating to the right of way.
Restrictions – If the property is located within a subdivision or development, there may be restrictions on how the property can be used. Review these restrictions carefully and determine whether they are compatible with your intended use of the property.
3 Ask for the Tax Declaration of the Property or Request for Tax Clearance
What is tax declaration of property?
Next, ask for a tax clearance and verify that it is under the name of the same person indicated on the TCT and the person you are dealing with. A tax clearance is also a good indication that there are no outstanding real property tax obligations. If there are unpaid taxes, require the owner to settle them before proceeding with the transaction. To be extra cautious, ask for copies of the official receipts for the current year’s property taxes as well as previous years’ payments.
4 Verify the Size of the Property and Hire a Geodetic Engineer
If you have the budget, or if the property is particularly large, it is also recommended to hire a geodetic engineer and request a relocation survey. This will help verify that the property’s boundaries are consistent with the technical description in the title and that there are no encroachments or overlaps with neighboring properties.
5 Inspect the Property in Person
Lastly, conduct a physical inspection of the property. Visit the property personally or have your broker inspect it on your behalf. You may also speak with neighbors or barangay officials to determine whether there are any known issues affecting the property. This can help uncover problems that may not appear in the documents, such as occupancy issues, boundary disputes, or the presence of informal settlers.
These are some of the most important investigations that should be conducted to help ensure that the property you are buying has a clean title and no major issues. While it is possible to do these checks yourself, many buyers prefer to work with a licensed real estate broker.
Need help? You Can Always Get the Services of a Licensed Real Estate Broker to Assist You
Brokers regularly perform due diligence, know what documents to check, and have experience dealing with government offices and property transactions. Considering that real estate purchases often involve a substantial amount of money, proper due diligence is well worth the effort. One thing many buyers do not realize is that hiring a broker does not usually require an upfront fee. Brokers are generally compensated through a commission arrangement, making their services a valuable resource when purchasing one of the most expensive assets most people will ever own.
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