BF Citi

POINTERS ON REAL ESTATE ACQUISITION IN THE PHILIPPINES

Q: Who may acquire private lands in the Philippines? A: As a rule, only Filipino citizens and corporations sixty (60%) percent of the capital of which belong to Filipino citizens can acquire private lands.

Q: May a foreigner acquire real property in the Philippines? A: No, except by way of hereditary succession (inheritance).

However, under the Condominium Act, a foreigner may acquire a condominium unit provided that the percentage of foreign ownership of the condominium corporation does not exceed forty percent (40%) of the shares of the corporation.

Q: May a natural-born citizen who has lost his Philippine citizenship acquire real property in the Philippines? A: Under Republic Act No. 8179, amending Republic Act No. 7042, otherwise known as the “Foreign Investments Act of 1991”, a former natural-born Filipino citizen can acquire real property provided that he has the legal capacity to enter into a contract under Philippine Law and provided further that he acquires only up to a maximum area of five thousand (5,000) square meters in the case of urban land or three (3) hectares in the case of rural land. In the case of married couples, one of them may avail of the privilege but if both shall avail of the same, the total area acquired shall not exceed the maximum allowed area.

If the former natural-born Filipino already owns urban or rural land for business or other purposes, he shall be entitled to be a transferee of additional urban or rural land for business or other purposes provided that the aggregate area of the land already owned by him and that to be acquired does not exceed the maximum allowed total area.

A buyer under the Foreign Investments Act is allowed to acquire up to two (2) lots which may be situated in different cities or municipalities anywhere in the Philippines provided that the total land area thereof shall not exceed 5,000 square meters in the case of urban land or 3 hectares of rural land.

A buyer who has already acquired urban land shall be disqualified from acquiring rural land and vice versa.

For the registration of title to land acquired under the foregoing, an affidavit is required to be submitted to the Register of Deeds showing the date and place of the buyer’s birth; the names and addresses of his parents, of his spouse and children, if any; his intention to reside permanently in the Philippines; the date he lost his citizenship and the country of which he is presently a citizen.

* [“natural-born Filipino citizen”: Those who are citizens of the Philippines from birth without having to perform any act to acquire or perfect their Philippine citizenship.]

MACEDA LAW ( Republic Act No. 6552)

Q: What transactions are covered by the Maceda Law? A: All transactions or contracts involving the sale or financing of real estate on installment payments, including residential condominium apartments.

Q: What are the rights of a buyer on installment sale? A:

a) Where the buyer has paid less than two (2) years of installments:

- The right to pay the unpaid installments due within a grace period of not less than sixty (60) days from date installment became due.

b) Where the buyer has paid at least two (2) years of installments:

- The right to pay the unpaid installments within the total grace period earned by him which is fixed at one month grace period per year of installment payments made. However, the buyer can avail of this right only once in every five years of the life of the contract and its extensions.

- In the event the contract is cancelled, the right to a cash surrender value of fifty percent (50%) of payments made.

Causes for cancellation of Reservation Agreement (based on R.A. provisions)

1. Failure of the buyer to pay any amount/s due under the terms of the RA within 10 days after due date.

2. Failure of the buyer to sign and deliver the prescribed document (Deed of Absolute Sale/Contract to Sell) within the period required in the Reservation Agreement.

3. Withdrawal by the buyer from the agreement for any reason whatsoever.

Causes for cancellation of Contract to Sell (based on CTS provisions)

The SELLER shall have the right to cancel or rescind the contract to sell without need of any judicial action and the BUYER shall have the obligation to return the property together with all improvements thereon, when:

A. The BUYER fails to make any of the payments as required in condition “I.A.” hereof;

B. The BUYER fails to pay the amortization/s and or the required balloon payment as they fall due;

C. The BUYER violates any of the terms and conditions of this Contract;

D. The BUYER asks for the termination of this Contract: