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Introducing your friends in the Philippines -The Management of Asian Homes Realty Service a British-Filipino Company.
Principals - Jonathan and Elenita Mallinson
Asian Homes Realty Services
Understanding the Escalation Clause in Philippines Real Estate Contracts of Sale
The Escalation clause is sometimes based on the cost of living index, its main use is in commercial contracts, and it seeks to maintain fiscal stability and asign real dollar value
to the long term contract. However it is deemed to be abused by unscrupulous developers, and when the developer is stronger than the buyer, and the buyer is deemed to be
vulnerable, this practice is seen as an unfair contract term, and the buyer should seek to either negotiate the clause out of any contract of sale, or not enter into such a contract
if the seller refuses.
The basis of this clause is the buying power of the peso, others base it also on the buying power of the U.S.Dollar, the escalation clause can come into effect when the buying power of the peso or dollar reduces by 25% however, even if this were true, there is no justification for any increase for the following reasons:-
- The project was supposed to start as soon as possible without waiting for the complete or major sell-out. Buyers should not be penalized for their short-selling.
- The procrastination is not the fault of the buyer.
- The periodic payments made under the instalment plan could have been used to purchase materials and threfore arrest the price increase.
- The Buyers are not given any choice as to how monies they pay are to be used.
- For the sale of equity, the buyers should benefit from any decreases in costs of materials.
- What happens during the period when the escalation clause has not taken effect ?
- Who and how is the percentage of the remaining work affected by the escalation clause to be determined?
- Like all business ventures, developers should also take the risk of loosing and earning less profit, instead of passing off all losses to the buyers.
- The advances made by buyers should be put to good use and should offset any appreciation in the prices of raw materials.
- How is the mechanics for implementing the escalation clause to be applied ? There are just too many factors that are sure to delay the project to the detriment
of the buyers.
- Developers in business must also take the risk of losing instead of forcing the small homeowner to shoulder their losses due to their ineptness, balloon salaries, and bonuses
luxurious lifestyle at the expense of the buyer.
- Last but not least, there is already an artificial margin of profit made by devleopers that easily compensates for the price increases.
There are other factors that also can affect an unsuspecting buyer, some buyers are waiting for homes to be built and can be in for a suprise,
Economic and political crises can effect their investment. When the Asian currency crisis hit the Philippines, many banks shut down their lending to the developers
who wanted to get out of the exposure to the real estate market, many developers also were unable to finish their projects, and their properties forclosed, and the instalment
buyers were forced to wait, hoping that the developer whill still be able to finish their project, many resigned themselves to their misfortune and misery.
 Closing Costs in Philippine Real Estate deals
Closing costs are final payments to complete a contract of sale, They are a part of home buying and making use of a mortgage, sometimes in buying a home
these costs will be mentioned in passing as if they were an insignificant amount, but nothing could be further from the truth, they could amount to as much as 10% of the
total purchase price. This depends on where the house is located, as each city and municipality has different taxes and charges, most of the costs are always passed on to the
buyer and included in the contract of sale.
Getting a loan from a lender also has its own set of charges, buyers are often at the mercy of lenders, because of the charges they seek to impose to maximize their profits
with fees such as processing fees, credit report fees, appraisal fees, margins, points etc etc.
It is with some advance knowledge possible to reduce some or all of these charges, many of these charges that should be shouldered by the seller, are passed on
to the unsuspecting buyer, Negotiation should bring down your expenses, even mortgage interest rates, which are double and the rest compared to UK rates, should be
studied carefully to see what is the best rate for the buyer.
Except for large projects such as condominiums and townhouses, most of the costs are shouldered by the buyer, however, there is no hard and fast law about costs,
there is no law in Philippine civil code about who pays what charges, this is where your negotiating skills come in, you should try to convince the seller to shoulder some of the
costs normally passed on to the buyer as though its always their responsibility, Filipino developers always seem to do this like its the norm, when they know full well, its not !
you have the right to negotiate on costs, if the seller wont accept your proposal, try to come to an agreement, if its only favourable to them, dont do the deal, there are plenty
of others you can approach, they will soon get the message, and watch them come running when you tell them "Here is my mobile number, give me a call when you have thought
about it, but don't leave it too long, I am only here in country for another couple of days" remember, they need your foreign earnings more than you need their lot or house.
Tip No 5.
Never take what a developer offers you as the law ! question everything !
The Land Grabbing Scam
Land is an indispensable unit of the housing industry, it is also here that the unscrupulous and the criminal elements in the Philippines get to work, and prey on innocent buyers,
never be sweet talked into buying something without proper investigation. All government agencies concerned are open to help you with your enquiries, know your rights as a
buyer in a country that is the 11th most corrupt in the world, know how to complain if you feel your rights are not being respected.
Land grabbing is a common problem in the Philippines, both public and private lands are a target of the land-grabber, the two ways they go about it are as follows:-
- Syndicated squatting.
- Faking of land titles.
Once a syndicated squatting group gets on a peice of land, expect them to have fake titles to it, ejecting them from it, is not easy, especially as you are confronted
with a host of laws protecting the rights of squatters, welcome to the laws of the Philippines, especially the Lina Law, which insists that you the person who wants to eject
them from your own land, must find them another peice of land to go to, otherwise you cannot eject them, ( smile its the Philippines).
In the Philippines, even squatters with fake titles, have the right to be heard in a court of law, and it can take a lifetime waiting for a decision, even the sidwalks in certain
cities and the roads, have been taken over by squatters, and the law seems powerless to remove them
Syndicated squatters, also work with unscrupulous officals and judges, to have the land registry microfilm changed for one showing different titles to the land
than was originally placed there, don't underestimate the power of the corrupt culture than exists in the Phiippines, the Government works hard to try and stop this, but
sometimes no matter what they do, they cannot stop all forms of corruption, in a well documented case of fake titles, some bright spark managed to get into the department
of land titles, and replace the main microfilm showing just about every peice of land in a certain province, only to replace it as above, with a completely fake one, thus making
every landowner effectively, landless, as so many buyers had parted with money, the supreme court in the end had to uphold the new microfilm as so much money had changed
hands.in the end the supreme court washed its hands of the whole matter.
Tip No 6
Do your research - only enter into contracts with a reputable developer
Common sense dictates to avoid the above scams, you really need to deal only with a reputable developer, really there is no substitute for recommendation, just like in UK when you buy anything here, you can enquire of people who live on the projects completed by a certain developer, ask about their repair policy, how fast they attend to complaints,
you will soon learn quite alot by talking to people, if buying a parcel of land, known as a lot, go and see the lot for yourself, take a trip over there, have a look at all facilities
but more importanly, ask for a copy of the title of the land, and check it against the registered title to land, at the Land Registry, then you can really see who owns title to the
land, and sometimes, they will be suprised you would do this, but at least you then know who has official ownership of the lot being offered for sale.
With regard to the purchase of Lot and House, ask to see the title, copy of ! then take the title to your Filipino attorney at once, have your attorney search the title to see if
any restrictions are in place, but much more importantly, is the lot and house under a mortgage, remember, your Filipino attorney who you are paying, is much better qualified
to intepret any legalistic terms in any contract of sale, ask the agent or seller to provide you with a specimen contract of sale, then have that scrutinized by your attorney, it will save
you much heartache later.
Developers are very good salespeople, they are experts at making bad news look good, they are also very good at hiding things they dont want you to know about, the brochures
look great, and make you feel its the paradise club..however, be careful, how do you know where you are buying in to, wasnt a toxic waste dump.
Be careful of parcels of land in sub divisions, they always have some form of restriction on it, its usually hidden in the deed of sale, that is incorporated in the at the back of the title, one restriction is that the lot cannot be sold, transferred or conveyed, until after the construction of a house thereon was completed. The deed of sale could not be registered
and the title would not be released to the buyer until the house has been completely constructed. Always make it a point to check this, with your Filipino Attorney.
Be careful about developers who have not finished a project, they are duty bound to provide access roads to a sub division, it is incumbent on the developer to not leave
a lack of access or rights of way to a property, it is not the job of the buyer to develop the site.
Bring along your own tape measure when inspecting lot sizes, errors could be made on calculations of lot sizes, be careful the neighbouring house is not encroaching on
your lot, sometimes Filipinos have a habit of illegally moving on to your lot, this could effect any future valuation if there is a significant reduction in size. watchout for neighbours
who have pinched a few metres of the lot you are going to buy, if its not to the size being offered, its time to call in a Filipino land surveyor, before any deal is done, it might be a good
idea for you to get a land surveyor in, for what it costs, just to check the amount of land being offered for sale, some surveyors just look at a preceeding land report before giving their verdict, without checking anything, this is due to their lazy...nature, make them work for the fees you are paying them, do not rely on the sellers survey report, without
checking the authenticity of the survey report, check it against any records kept at city hall, any discrepancies, normally ends up with you being the looser, get professional
help in the form of a professional Land surveyor, for what it costs you, its well worth it.
Developers who use sub standard materials
The use of sub-standard materials is one of the easiest ways a developer will cheat the home buyer, those who buy a house and lot before construction are at the mercy
of the developer, buyers often find out years later, that sub-standard materials have been used, litigation by then is too late.
Those who buy finished houses and lots, are not spared from this, if builders think they can get away with it, they will, you can of course always go to visit
the construction site, however you also have to face up to the fact you are going to be probably 6000 miles away, this is where your WAG comes in, she has to
be trusted to deal only with reputable builders and developers, by reputation only, her local knowledge is the key to you not being cheated, you simply have to
rely on this, its your only way of securing a finished job that is strong and secure and can be lived in.
The Fake Land Title
The Torrens certificate of title is supposed to protect buyers of land in good faith against adverse claimants. Once registered, it is a notice to the world
that a certain buyer is the legal owner of a parcel of land known as a lot short for alotment, however, where monetary values are at stake, there are those in the
Philippines who are out to sabotage the system for their own gain.
As a general rule, where the cert of title is in the name of the vendor when the land is sold, the vendee for value has the right to rely on what appears on the face of the title. He is under no obligation to investigate the title of the vendor appearing on the face of such a certificate, by way of exception, the vendee ( the buyer) is required to ensure that if they suspect any wrong doing on the part of the vendor, or he may become the victim of a forgery, if there is a wilful neglect on
the part of the vendee to establish that the vendor is not the legal owner of such a title prior to any sale, it will not make him an innocent purchaser, for the value of such a lot, if it is later discovered that the vendee had prior knowledge of such a defect in the title, he may find he is not the true and legal owner of a lot, which
he has paid good money for.
It is always possible for a holder of a torrens certificate of title to loose the land he has purchased through forgery, this only happens when the title has been
forged and the title changed to the name of the forger, the only remedy is for the former owner to go after the impostor or forger. In certain cases the owner has
recourse to the assurance fund.
Fake titles abound just about anywhere in the Philippines, it is especially a problem in main cities, and government owned properties, even squatters are
famed for their immediate production of immaculate titles to the properties they are squatting on, with the fake title on hand, the law requires that they are heard
in a court of law, this is the main reason why a careful check is required prior to sale.
It is also common to buy a property that turns out to be somewhere other than the land stipulated on the Torrens Certificate, One property along the South Superhighway, near Manila, was found actually to be in Norzagaray in Bulacan, if you are in any doubt as to where your property lies, you may wish to consult a Filipino land surveyor to establish where your purchase actually is.
This is so much of a problem that the HLURB has now passed section 31 of the Revised Rules implementing PD957 which reads as follows:
"The owner of a sub division project shall attach to and shall form part of the sales document of any lot, a sketch
plan clearly showing the area, boundaries and dimensions of the lot in relation with the block and the whole project , as well as the location of the project
in relation to public roads, and other land marks to be certified by a licensed geodetic engineer and signed by the seller and the buyer." **
Tip No 7
Always insist that you are provided with a certified sketchplan of the Lot (house) you are looking to buy, showing all dimensions, all boundaries, and relationship to public roads, before signing a contract of sale.
Common Complaints
Despite all best efforts by government agencies to protect the interests of buyer's there are still unscrupulous developers and dealers who are ready to
take advantage of the ignorance of prospective buyers, under the able hand of the HLURB it has been constantly monitoring and updating the rules and regulations
under its jurisdiction to protect buyers, still there are 40-60 complaints received every month, unscrupulous developers can always find loopholes in the
legislation.
Almost all developers are guilty in some form or other of short-changing the buyer, some big-time developers make a killing by overpricing their projects
many projects cost only half the real value and they are being financed even by the buyers through pre-selling, they even have the total and utter audacity to
force the escalation clause on buyers as though it were the fault of buyers that prices and materials go up.
Sometimes land or units have been mortgaged to the bank, without getting clearance from the HLURB. This has been a common complaint from buyers
who could not get full title to their lot or property, even after paying in full, this is because the bank will not release the title, as the property is subject to a
mortgage taken by the developer.
Another common complaint is unfinished or missing facilities, they may include missing permiter fencing, asphalt instead of concrete, or a lack of drainage
and guttering, and also unfinished amenities, some developers insist that the homebuyers should pay for use of the facilities.
Non-delivery of the title, or failure to promptly deliver is a common complaint, while the law allows more than six months where the lot or unit is mortgaged, this is a long waiting period for any buyer, a three month deadline for the delivery of a clean title is reasonable, when a buyer fails to promptly pay his monthly due his downpayment could be forfeited, it is only fair that the developer is then penalized for each day of delay beyound the deadline, not only to the government agency but to the buyer.
How to deal with the Filipino Real Estate Broker
A Philippines real estate broker is one who is generally defined as one who is engaged on a commission negotiating contracts for property over which he has no custody ! he is a negotiator between parties never acting in his or her own name but only in the name of those
who employed him or her to do so. A broker is one who brings parties together for the purposes of bargaining, they can also act for both
parties and often do so.
Laws governing agents or brokers are actually well documented in the civil code of the Philippines under articles 1868 to 1932, very
often the ordinary house buyer finds it difficult to navigate these articles, if problems arise, its worthwhile checking out the status of
any broker involved in your own house or lot purchase, as some of the articles of the civil code are so difficult to interpret the supreme
court has had to make their own interpretations in certain cases.
Here are some of the common articles that may affect you in your real estate purchase:-
- Article 1868:- By a contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter.
- Article 1869:- Agency may be express, or implied from the acts o the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that the another person is acting on his behalf without authority, Agency may be oral, unless the law requires a specific form.
- Article 1874:- When a sale of a peice of land or any interest therein is through an agent, the authority of the latter shall be in writing,
otherwise, the sale shall be void.
- Article 1883:- If an agent acts in his own name, the principal has no right of action against the persons with whom the agent has contracted, neither have such persons against the principal.
- Article 1887:- In the execution of the agency, the agent shall act in accordance with the instructions of the principal.
Unless there is an agreement for understanding between the broker and the buyer, the commission fee for the brokers services
is always paid for by the seller, ( so if you are told that you have to pay the broker's fee, which sometimes happens in the Philippines because they think you are a gullible money bags joe - especially when the co-buyer is a foreign husband) this is a clear breach of the brokers code
in terms of the civil code, the fee is always paid for by the seller, this is even true when the buyer has found the broker themselves, the broker is acting on behalf of the principal in the any transaction to sell a lot of house and lot, the fee is the responsibility of the
seller.
A word of caution for buyers, who use the services of a broker when looking for a home to buy, or a lot of land, it is common practice
for the agency or broker to have a carry over clause, this means that at any time of termination of the brokers services, even if the
broker is terminated by either principal or buyer, the broker may still be entitled to any commission that would have been paid, this is
a provision made to prevent a collusion between principal and buyer to avoid paying the broker a commission, be careful, ensure that if
a broker is used, do not be persuaded by the seller, to dispense with the services of the broker, in other words as happens in UK, trying to
close a deal without paying the agents fees, if this is the case, you the buyer may find yourself the subject of a law suit.
The Real Estate Broker
For a Filipino to engage as a real estate broker, it is neccessary for him or her to be properly licensed, a licensure examination is necessary for him or her to be properly authorized to conduct business as a broker, in other words, no Tom Dick or Maria can just say one morning " I will be a real estate broker" most people that you deal with, are really salespersons, they are not licensed real estate brokers, so be wary, they could be operating under the umbrella of a real estate broker, you need to check the background of such a person,
check with neighbours, or business professionals in the city you are looking to buy, your WAG is your best help in this, every one knows someone in the Philippines, remember you can always ask a broker for their resume, find out about homes they have sold before, go to the
owners if you have time, and check with them about the service they got, remember the broker unless you are paying his fee, is a sellers broker, whose interests do you think he will have, certainly not yours, unless or course you offer to pay him an additional fee.
A good broker is often difficult to find, an ideal broker, who is experienced in property sales, will be able to find you a house which is close to your requirements very quickly, he or she will probably know more houses that are available in any paticular location, they will know all the important features of a house, they are aware of any problems in a paticular area, like flooding, property taxes, schools, recreational facilities and so on. He should know immedeatly the lot size, the floor area, and know the sizes of each room in a house, in short you will
soon be able to get the idea that he is good or bad at his job
The Role of the Real Estate Broker
Real Estate Brokers in the Philippines can be very useful to you the foreigner investor who wants to buy a lot or a house and lot, make use of them, and by the way, there services are at no cost to you the buyer, if you want to cut down on your time especially if you are in country on a 2 to 3 week holiday, they can often spend a considerable amount of time with you, and they can advise you of houses or lots
that are for sale, you did not know were available, this could also cut down on your time as you are also wanting a holiday at the same time right !
A Licensed broker should have available to him or her, all listings in the area you are searching, they attend meetings held by the Philippine Association of realtors board, and the chamber of real estate builders, these organizations have listings of all properties available
for sale evey week, your broker is your link to this information.
Sometimes an experienced buyer can buy a property and save about 5 per cent of the total price, however, a seller often has a broker
who is on contract to the seller to sell a paticular property, so this cannot be avoided, as they may have "Exclusive rights" to sell such a property, sometimes you can ask the broker what his commission level is, they may be persuaded to cut their commission to close the sale,
and this is also negotiable, if they consent to do so, you can often save a little on the total cost
A broker may act for the seller, but his job is to mediate between the buyer and the seller, its in his interest to make the sale happen
his experience will be invaluable in getting the seller to reduce the price if a firm offer is being made, although the broker might be spending
time in your company, they are working for the seller, but you can use this to your advantage, don't forget they get nothing if the sale
does not go through, the agent wants the sale to prosper, if it does not, he is not going to make a living, you can use this to your advantage
and get him or her to negotiate on your behalf also, by going back to the seller, and using his or her skills to make it happen, also in your
favour as much as theirs.
The broker is not duty bound to pass on any information given to him by the seller, on an inside basis, in other words, if the seller has given the broker some parameters to work to, on price, i.e. say the property is up for P3.5 Million, and he will accept P3.2 Million if he has to,
that information is not passed on to you the buyer, and the broker is under no obligation to pass this on, however on the reverse, any
information you give the broker, can and is duty bound to be passed on to the seller, in other words, if you tip your hand to the broker
that you might be willing to pay a higher price, this information can be passed on by the broker, so it is better never to tip your hand
and show all your cards to a broker.
A sellers broker is ethically required to pass on to the seller, any offer that a buyer makes, no matter how low the broker thinks the offer to be, however, just be warned that if the offer is ridiculously below the asking price, the seller may consider that you are not serious about the property, and instruct the broker not to waste any more time with you, this is a risk you run if you are not too serious about a paticular
property.
There are brokers and there are salespersons, a good broker will act totally different to a sales person, make the distinction between the two, a salesperson acting on behalf of a developer will want to close a deal with you in the shortest possible time, thats because they get paid
before title is issued, a good broker is not paid until the deal is closed, and the title is issued, as his fee is much more than that of a sales person, a good broker will want to show you a number of properties, they will want to show you a number of features in each property, never allow yourself to be pressurized into buying, its a big investment, and same as in UK, why would you allow that, if you dont allow it in UK,
sometimes because of your time constraints, you may feel time is not on your side, its always best to leave it to another visit if you are not 100 per cent convinced that you have found your dream house.
Dont allow a broker to convince you that other parties are bidding on a house or lot, tell him...thats good for them, dont be pressurized into making a rash decision because he or she is creating an artificial supply and demand market on a certain property or lot, this is generally with houses, and if they do this, its often for a developer, a broker who shows you only a few homes, in one location is often working for a developer and is under pressure to push the developers offerings, he or she is not your ideal broker, because you loose the chance of finding the home you want, be wary of being taken to houses that are way way out of your budget, you are wasting your time, the broker is probably trying to find out how much you will go to, this is a complete waste of your time, you set your budget first with the broker, before you go out looking, very often a broker will arrange transport for you, like a van, to take you around, whilst that might seem nice, he is not doing it for a favour to you, he is hoping to close a deal with you, so make him work, and take you to the properties he has on his listing that fits your budget and not his aspirations of what he thinks you might pay.
Never give out your private thoughts to a broker, and never let them know what you are thinking, never give out inside information about what you are willing to pay, its ok to give them a loose parameter, say from P2 Mil to P3 Mil, but thats all, or P4.5 Mil to P7 Mil, why should they know any more, keep the parameters wide, so they cannot guage what you are looking for, they are experts at asking what you might think are innocent questions, never but never give out the impression you are under pressure to sort something out on this trip, its makes it easier for them to pressure you into something you dont want.
The Buyers Broker Service
To avoid conflict of interest, a buyer may if they wish hire their own broker, this is paticularly useful if the buyer is a foreigner,
for what it costs, say a couple of thousand pesos initially £25.00 you may wish to hire a trusted broker, this way the broker uses his inside
knowledge to work for you the buyer, this is where the broker gets a good wack out of the deal since if you purchase a lot or property
he also gets a fee from the seller, his or her duty will then be to negotiate all facets of the deal, they could also recommend the services of a reputable Filipino attorney, and also if you require financing the services of a good bank who will lend you the majority of the principal, this
is where it is advisable to hire the broker yourself.
When choosing a buyers broker, make sure you pay him or her a good fee, this will then prevent them for trying to push you into
a purchase when you know they only get paid once a sale is completed, if you ask them how much they will work for you without worrying
about their commission on a purchase, this would ensure that you get the services that you need.
Try and be loyal to your broker, give her or him a chance to help you out, often licensed brokers share information about properties, it is also traditional practice in the Philippines for brokers to split the commission this helps where they pool their resources to serve you better
although this may not be apparent, you might have unwittingly got several brokers working on your behalf, most of them on the end of
a cellphone, or word of mouth, so give your broker a chance to perform, in the Philippines people who are earning money from a foreighner
tend to get up at obscene hours of the day to get started, if you treat them well, and look after them, you will be suprised at what they do for you
If a broker ever attempts to get you to sign documents without an attorney present, dispense with that broker immedeatly, a good broker will always put in the right safeguards to protect your interests, such as a Home inspector, a geodetic surveyor, subject to an attorney's review, mortgage contingency etc etc, they will know all the things that can protect your interest.
Finally, make use of the broker service, brokers are a mind of local and useful information, a broker can be agood source of information
and inside knowledge is power to you the buyer, just be aware that brokers are acting in the best interests of the seller, but you are entitled
to be furnished with information about a paticular lot or house, such as why was the house on the market, how long as it been up for sale, was the house built for sale or to live in, there is lots of information you can gleam from a broker, so use them, that ends this section on the Filipino real estate broker.
The Filipino Real Estate Attorney
For your own peace of mind, an attorney can take the most of the worry about any deal you are likely to do in the Philippines, even by just talking to a lawyer, you can learn so much about real estate transactions, real estate deals in the Philippines involve lots of money, but your attorney's fee is neglible compared to the overall cost, so investing in a good attorney is well worth your while. The role of your attorney
is to ensure your interests are protected and that you are not cheated or short changed in any proposed purchase.
Real estate transactions are a specialized field, not just for the foreigner investor, but for the local kababayan, even Filipinos in their
own language of Tagalog, Cebuano, Ilongo, or other dialect still need the services of an experienced real estate attorney, do not use the
referral of a seller, or a broker, find your own lawyer, some lawyers are out to work for a developer or another buyer, always seek to find your
own lawyer, seek the advice of a local professional such as a Doctor, or an incumbent member of the judiciary, or someone in a high professional position, most filipinos within a given city, know each other in a proffesional capacity, sometimes talking to a Doctor
or other local professional can secure you the services of a trusted and respected attorney.
It is always best to make a first call on an attorney for advice, this should generally be done before making a reservation, or paying
a reservation fee, very often the buyer unwittingly signs a purchase agreement in what appears to be disguised as a reservation, too many
foreigners and kababayans sign a purchase agreement, thinking its only a reservation document, only to find its too late, your attorney
should have been involved in this before you signed anything
Tip No 8
Always make your first port of call a qualified real estate attorney before signing any documentation with a developer or broker.
The attorney is responsible for checking all documents necessary for a smooth transfer of property, he should look over any obligation encumbrances or liens against the property, and make sure its clean for transfer, always read through all documents yourself regardless of your attorney doing so, seek your attorneys, explanation for anything you do not understand, remember, if you inform your seller that your attorney is handling all your documentation, that normally does the trick to ensure you are not going to be cheated, developers will take advantage of your ignorance, if you are ill prepared.
How to choose the attorney
Not all Filipino attorneys are real estate qualified, this is a specialized business, different from anulments, commercial, attorneys specialize in the Philppines, when you choose a qualified attorney it is necessary first for you to interview him or her at his place of business, you need to ask questions, such as "how long as this attorney been practicing in Real Estate law" how many deals have they done ? and such questions as you think are necessary to put your mind at rest that you have a good back up with your attorney.
When it comes to the fees charged, do not be persuaded to pay an attorney buy the hour, you should negotiate a flat rate fee for his or her service from start to finish, also insist that the attorney has it put in writing for you, what he or she is going to do on your behalf, make sure that there services are from start to finish of a deal, so that you are covered, if you allow them to charge by the hour, the cost mounts up
more than flat rate fee, if you dont like what they offer, thank them politely and move on, there are plenty of others to choose from
All contracts for sale are written and produced by the sellers attorney's i.e. developers ! be wary, the point of having a good real estate
lawyer is that they can add in to the contract and have it varied in the form of a 'Rider" a Rider is where your attorney has alterations made
to wording to protect your interest, because there are so much technicalities in legal documentation in the Philippines,should you be forced into signing any document it would be wise therefore to make a contingency in the document that says, " Your attorney may make any changes to the contract and if no agreement on these changes can be made, then you reserve the right to withdraw with a total refund of your initital payments if any" because all contracts of sale are prepared by the sellers attorney's the buyers attorney should always be able to add the riders to protect his or her client.
Many provisions in a contract are always in favour of the seller, and give the buyer fewer rights, the ideal situation is that your attorney should draw up a rebuttle contract protecting your rights, then the buyer should be in a better position as long as he or she has not parted with any money
Sometimes the title to the deal is not clean, either it has a lien on it, or it is mortgaged, it is always advisable to deal with a clean
title, but sometimes a mortgaged forclosure property can be a real bargain. That concludes the section on the Real Estate attorney.
You may now link to the next section entitled The Home Inspection a home inspection is very valuable in
finding out whether you are being cheated by unscrupulous developers, and or unscrupulous cheating Filipino building contractors.
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