Acquisition by Former Natural-Born Filipino Citizen
Foreign Ownership as a Philippine Corporation
Foreign Leasing of Philippines Real Estate Property
Boracay Supreme Court Article
New real estate law to benefit practitioners
The rights of a foreigner who acquired land vs. Filipina girlfriend in whose name the TCT was placed under
RIGHT TO OWNERSHIP
A. General Rule - Only Filipino Citizens and corporations or partnerships at least 60% of the capital of which is owned by Filipinos are entitled to acquire land in the Philippines.
B. As exception to the general rule, alien acquisition of real estate in the Philippines is allowed in the following cases:
- Acquisition before the 1935 Constitution;
- Acquisition thru hereditary succession. If foreign acquirer is a legal heir;
- Purchase of not more than 40% interest in a condominium project;
- Purchase by a former natural-born Filipino citizen subject to the limitations prescribed by Law (Batas Pambamsa 185 and R.A. 8179)
This simply means that when the non-Filipino is married to a Filipino citizen and the spouse dies, the non-Filipino as the natural heir will become the legal owner of the property. The same is true for the children. Every natural child (legitimate or illegitimate) can inherit the property of his/her Filipino father/mother even if he/she does not have any Filipino citizenship.
C. A Filipino who married an alien retains her Philippine citizenship (unless by her act or omission, she is deed to have renounced her Philippine citizenship) and may therefore acquire real estate in the Philippines.
ACQUISITION BY FORMER NATURAL BORN FILIPINO CITIZEN
A. Mode of acquiring is not limited to voluntary deeds (such as sale or donation) but includes involuntary deeds (such as tax sale, foreclosure sale, or execution sale).
B. Maximum area that may be allowed is as follows:
- For residential purpose - 1,000 square meters of urban land or one (1) hectare of rural land (BP 185)
- For business or other purpose - 5,000 square meters of urban land or three (3) hectares of rural land.
"Business or other purpose" refers to the use of the land primarily, directly and actually in the conduct of business or commercial activities in the broad areas of agriculture, industry and services, including the lease of land, but excluding the buying or selling thereof."
C. In case of married couple, one or both of them may avail of the privilege, provided that the total acquisition shall not exceed the maximum area allowed.
D. A transferee of residential land under BP 185 may still avail of the privilege granted under RA 8179.
E. A transferee who already owns urban or rural land for residential purpose, may acquire additional urban or rural land for residential purpose which, when added to that already owned by him shall not exceed the maximum area allowed by law. The same privilege applies to a transferee who already owns urban or rural land for business purposes.
F. A transferee may not acquire more than two urban or two rural lands which should be located in different cities or municipalities.
G. A transferee who has already acquired urban land for residential purpose shall be disqualified to acquire rural land for residential purpose and vice versa The same rule applies to a transferee of land for business purpose.
- Dual citizenship means having two citizenships and passports from two different countries. Dual citizenship allows the citizenship holder full rights of possession of Philippines real property. This is a new law and it is still unclear as to the procedures involved to implement it. Dual citizenship is now available for the following:
- Former Filipino citizen born in the Philippines, who have immigrated to another country and obtained citizenship of that country.
Foreign Ownership as a Philippine Corporation
- Foreign nationals or corporations may completely own a condominium or townhouse. To take ownership of a private land, residential house and lot, and commercial building and lot, foreign nationals or corporations should form a Philippine corporation. The corporation is to be 40% foreign-owned (maximum) and 60% Filipino-owned (minimum), and with at least five (5) incorporators. Upon incorporation, a main bank account should be tied to it. A foreign national may be the sole person in the bank account, allowing him/her total control over the funds derived from the corporation and the income or sale of the asset or property.
- A foreign national and or corporation may enter into a lease agreement with Filipino landowners for an initial period of up to 25 years, and renewable for another 25 years.
President Arroyo signed Real Estate Service Act of the Philippines(RESA) into law last June 29. The law (Republic Act 9646), which is designed to develop the real estate industry through proper and effective regulation and supervision, took effect on July 30, 2009
SECTION 1. Title. - This Act shall be known as the. "Real Estate Service Act of the Philippines".
SECTION 2. Declaration of Policy. - The State recognizes the vital role of real estate service practitioners in the social political, economic development and progress of the country by promoting the real estate market, stimulating economic activity and enhancing government income from real property-based transactions. Hence, it shall develop and nurture through proper and effective regulation and supervision a corps of technically competent, responsible and respected professional real estate service practitioners whose standards of practice and service shall be globally competitive and will promote the growth of the real estate industry.
PENAL AND FINAL PROVISIONS
SEC. 39. Penal Provisions, - Any violation of this Act, including violations of implementing rules and regulations, shall be meted the penalty of a fine of not less than One hundred thousand pesos (P100,000.00) or imprisonment of not less than two (2) years, or both such fine and imprisonment upon the discretion of the court. In case the violation is committed by an unlicensed real estate service practitioner, the penalty shall be double the aforesaid fine and imprisonment. In case the violation is committed, by a partnership, corporation, association or any other juridical person, the partner, president, director or manager who has committed or consented to or knowingly tolerated such violation shall be held directly liable and responsible for the acts as principal or as a co-principal with the other participants, if any.
SEC. 20. Registration Without Examination, - Upon application and payment of the required fees, the following shall be registered, and shall be issued by the Board and the Commission a certificate of registration and a professional identification card without taking the prescribed examination:
(a) Those who, on the date of the effectivity of this Act, are already licensed as real estate brokers, real estate appraisers or real estate consultants by the Department of Trade and Industry (DTI) by virtue of Ministry Order No. 39, as amended: Provided, That they are in active practice as real estate brokers, real estate appraisers and real estate consultants, and have undertaken relevant CPE to the satisfaction of the Board;
PRACTICE OF REAL ESTATE SERVICE
SEC. 25. Oath. - All successful examinees qualified for registration and all qualified applicants for registration without examination as well as accredited salespersons shall be required to take an oath before any member of the Board or any officer of the Commission duly authorized by the Commission to administer oaths prior to entering into the practice of real estate service in the Philippines.
SEC. 26. Professional Indemnity Insurance/Cash or Surety Bond. - All real estate brokers and private real estate appraisers shall, in addition to the oath referred to in the preceding section, be required to post a professional indemnity insurance/cash or surety bond, renewable every three (3) years, in an amount to be determined bjr the Board, which in no case shall be less than Twenty thousand pesos (P20,000.00), without prejudice to the additional requirement of the client.
SEC. 27. Acts Constituting the Practice of Real Estate Service. - Any single act or transaction embraced within the provisions of Section 3(g) hereof, as performed by real estate service practitioners, shall constitute an act of engaging in the practice of real estate service.
SEC. 28. Exemptions from the Acts Constituting the Practice of Real Estate Service. - The provisions of this Act and its rules and regulations shall not apply to the following":
(a) Any person, natural or juridical, who shall directly perform by himself/herself the acts mentioned in Section 3 hereof with reference to his/her or its own property, except real estate developers;
(b) Any receiver, trustee or assignee in bankruptcy or insolvency proceedings;
(c) Any person acting pursuant to the order of any court of justice;
(d) Any person who is a duly constituted attorney-in-fact for purposes of sale, mortgage, lease or exchange, or other similar contracts of real estate, without requiring any form of compensation or remuneration; and
(e) Public officers in the performance of their official duties and functions, except government assessors and appraisers.
SEC. 29. Prohibition Against the Unauthorized Practice of Real Estate Service. - No person shall practice or offer to practice real estate service in the Philippines or offer himself/herself as real estate service practitioner, or use the title, word, letter, figure or any sign tending to convey the impression that one is a real estate service practitioner, or advertise or indicate in any manner whatsoever that one is qualified to practice the profession, or be appointed as real property appraiser or assessor in any national government entity or local government unit, unless he/she has satisfactorily passed the licensure examination given by the Board, except as otherwise provided in this Act, a holder of a valid certificate of registration, and professional identification card or a valid special/temporary permit duly issued to him/her by the Board and the Commission, and in the case of real estate brokers and private appraisers, they have paid the required bond as hereto provided.
Boracay Supreme Court Article
The Supreme Court (SC) declared yesterday that the island resort of Boracay belongs to the state and the current residents cannot claim ownership of parcels of land based on years of occupation.
However, the SC said Congress may enact a law to entitle private claimants to acquire title to the lots they occupy or to exempt them from certain legal requirements. “This Court is constitutionally bound to decide cases based on the evidence presented and the laws applicable,” read the decision.
“As the law and jurisprudence stand, private claimants are ineligible to apply for a judicial confirmation of title over their occupied portions in Boracay even with their continued possession and considerable investment in the land.”
The SC said private claimants cannot apply for judicial confirmation of imperfect title under Commonwealth Act 141, the Public Land Act and neither do they have vested rights over the lands they occupy.
“The continued possession and considerable investment of private claimants do not automatically give them a vested right in Boracay,” read the decision.
“Nor do these give them a right to apply for a title to the land they are presently occupying.”
The SC said under CA No. 141, the two requisites for judicial confirmation of imperfect or incomplete title are:
- Open, continuous, exclusive, and notorious possession and occupation of the subject land by himself or through his predecessors-in-interest under a bona fide claim of ownership since time immemorial; and
- Classification of the land as alienable and disposable land of the public domain.
“Private claimants failed to prove the first element of open, continuous, exclusive, and notorious possession of their lands in Boracay since June 12, 1945.”
However, the SC said it does not mean private claimants can be evicted from the residential, commercial and other areas they now occupy.
“Neither will this mean the loss of their substantial investments on their occupied alienable lands,” read the decision. “Lack of title does not necessarily mean lack of right to possess.”
The SC said those with lawful possessions may claim good faith as builders of improvements.
“They can take steps to preserve or protect their possession,] read the decision.
“They may look into other modes of applying for original registration of title, such as by homestead or sales patent, subject to the conditions imposed by law. ”
The SC reversed and set aside the decision of the Court of Appeals affirming the ruling of Kalibo, Aklan Regional Trial Court granting the petition for declaratory relief filed by Mayor Jose Yap, Libertad Talapian, Mila Sumndad, and Aniceto Yap, for the survey of Boracay for titling purposes.
New real estate law to benefit practitioners
The new Real Estate Service Act of the Philippines, Republic Act No. 9646 (RESA), is expected to further strengthen the expertise of 30,000 practitioners in the country, develop a corps of competent consultants, appraisers, brokers and assessors, both private and public, and maximize the potentials of the industry.
This was the pronouncement of Dr. Eduardo G. Ong, Chairman of the Professional Regulatory Board of Real Estate Service (PRB-RES) of the Professional Regulation Commission (PRC), during the recently-held Chamber of Real Estate and Builders Association (CREBA) General Membership Meeting.
Also during the meeting, CREBA national president Jun Dulalia led the launch of its first International Convention to be held in Macau on October 26 & 27, 2010 and signed two memorandum of agreements with Pag-Ibig on Social Housing Program and with MMDA on a Cable Television Tie-up regarding real estate.
RESA created the PRB-RES, composed of a chairperson and four members appointed by the President of the Philippines, under the administration of the PRC, to supervise and regulate the registration, licensure and practice of real estate service in the country.
Hence, the board will conduct the licensure examinations for practitioners and issue, suspend, revoke or reinstate certificates of registration or professional identification cards. It will likewise maintain a registry of licensed professionals, monitor their practices and adopt a national Code of Ethics and Responsibilities for the sector.
Except for real estate sales people, Filipinos who want to be registered and licensed as real estate service practitioners must take an examination to be given at least once a year.
In addition, all real estate brokers and private real estate appraisers shall be required to post a professional indemnity insurance, cash or surety bond, renewable every three years, for at least P20,000.00.
The board, in cooperation with the Commission on Higher Education (CHED) and concerned state universities and colleges, will prescribe the curricula for academic courses in real estate service.
The Bachelor of Science in Real Estate will be offered starting school year 2011-2012.
Violators of the law will be slapped with a P100,000 fine or two years imprisonment, or both, according to Dr. Ong.
"The RESA will provide opportunities for real estate practitioners to be called professionals and practice in other countries," he said adding, "The law is not as perfect as it should be."
At present, the PRB-RES is conducting consultations and public hearings about the Implementing Rules and Regulations (IRR) of the new law. A public hearing is scheduled in Manila next month, June 22, 2010. (BCM)
What are the rights of a foreigner who acquired land vs. Filipina girlfriend in whose name the TCT was placed under
This is the issue discussed by the Supreme Court in the case of Borromeo vs. Descallar, G.R. No. 159310, February 24, 2009.
The facts as stated in the decision are:
Jambrich, an Austrian arrived in the Philippines in 1983 being assigned in the country and was transferred to Cebu and met and fell in love with a separated Filipina [ herein referred to as respondent ], with two kids and who had no means of livelihood. Thereafter they bought their house and lots but the Register of Deeds refused registration of the Deed of Absolute Sale on the ground that Jambrich was an alien and could not acquire alienable lands of the public domain and therefore his name was erased and the titles issued in the name of the Filipina.
In 1986, Jambrich sold his rights and interests in the said property to a Filipino buyer, Borromeo, [ the petitioner in this case ] to pay for his debt but when Borromeo sought to register the deed of assignment, he discovered that the titles to the lots have been transferred in the name of the Filipina and that the same had been mortgaged.
The buyer, Borromeo then filed a complaint for recovery of the properties. The Filipina girlfiriend claimed that she bought it with her own funds and that Jambrich being a foreigner, was not entitled to own land in the Philippines. The Regional Trial Court rendered a decision in favour of the buyer and declared him to be the owner of the properties since the facts show that the Filipina had no means of livelihood or funds to have bought the property.
The Filipina appealed and the decision was reversed by the Court of Appeals stating that the foreigner, Jambrich, could not have acquired land being a foreigner.
The buyer, Borromeo, appealed by way of petition to the Supreme Court which stated the issues:
1. Who purchased the subject properties?
2. What is the effect of registration of the properties in the name of the Filipina?
In upholding the decision of the lower court, the Supreme Court stated:
The evidence presented showed that Jambrich had all the authority to transfer all his rights, interests and participation in the subject properties by virtue of the Deed of Assignment to the buyer, Borromeo, as it was shown that the funds to purchase the properties came from Jambrich, who was therefore the true buyer of the property, and,
" Further, the fact that the disputed properties were acquired during the couple's cohabitation does not help respondent. The rule that co-ownership applies to a man and a woman living exclusively with each other as husband and wife without the benefit of marriage, but are otherwise capacitated to marry each other does not apply. In the instant case, the respondent was still legally married to another when she and Jambrich lived together. In such adulterous relationship, no co-ownership exists between the parties. It is necessary for each of the partners to prove his or her actual contribution in the acquisition of property in order to be able to lay claim to any portion of it. Presumptions of co-ownership and equal contribution does not apply."
As to the registration of the properties in the name of the Filipina, the Supreme Court said,
"It is settled that registration is not a mode of acquiring ownership.
It is only a means of confirming the fact of its existence with notice to the world at large.
Certificates of title are not a source of right. The mere possession of a title does not make one the true owner of the property.
This is the situation in the instant case. Respondent did not contribute a single centavo in the acquisition of the properties. She had no income of her own at that time, nor did she have any savings. She and her two sons were then fully supported by Jambrich."
As to the capacity of Jambrich, being an alien, to acquire land, the Supreme Court said,
' xxxx the transfer of land xxx to Jambrich, who is an Austrian, would have been declared invalid if challenged, had not Jambrich conveyed the properties to petitioner who is a Filipino citizen. xxxxxx
The rationale behind the Court's ruling in United Church Board for World Ministries, as reiterated in subsequent cases, is this - since the ban on aliens is intended to preserve the nation's land for future generations of Filipinos, that aim is achieved by making lawful the acquisition of real estate by aliens who became Filipino citizens by naturalization or those transfers made by aliens to Filipino citizens. As the property in dispute is already in the hands of a qualified person, a Filipino citizen, there would be no more public policy to be protected. The objective of the constitutional provision to keep our lands in Filipino hands has been achieved."
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