REAL ESTATE TRANSACTION

DOCUMENTATION AND
REGISTRATION

Atty. Cyd Charisse P. Non-Dizon, REA, REB

I. CONTRACTS

It is a meeting of minds between

two persons (parties) whereby
one binds himself, with respect to
the other, to give something or to
render some service.
(Art. 1305, Civil code of the Philippines)

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ESSENTIAL ELEMENTS OF
CONVEYANCE / CONTRACT
There is no contract unless the
following requisites occur:

1.Consent of the contracting parties

2. Object certain which is the subject
matter of the contract
3. Cause or Consideration of the
obligation which is established.

Art.1318,Civil Code
3
A. CONSENT

DEFINITION:
It is the meeting of minds between the parties on the subject
matter and the cause of the contract, even if NEITHER ONE HAS
BEEN DELIVERED.

EFFECT OF NO CONSENT:
If there is absolutely no consent there is no contract and may be
considered VOID or NON-existent.

EFFECT OF VITIATED CONSENT:

If there is consent but is vitiated such as error, fraud, or undue
influence, the contract is not VOID, but is merely VOIDABLE
(VALID until ANNULLED)

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CONSENT

APPLICABLE LAW ON CONSENT- Art.1319, civil code

provides:

Art. 1319. Consent is manifested by the meeting of the OFFER

and the ACCEPTANCE upon the thing and the cause which
are to constitute the contract, the OFFER must be certain and
the ACCEPTANCE absolute. A qualified acceptance
constitutes a counter-offer.

Acceptance made by letter or telegram does not bind the

offeror except from the time it came to his knowledge. The
contract, in such a case, is presumed to have entered into in
the place where the offer was made.

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CONSENT
REQUISITES:
a. There must be two or more parties
b. The parties must be capable or capacitated
c. There must be no vitiation of consent
d. There must be no conflict between what was expressly
declared and what was intended
e. The intent must be declared properly (legal formalities
must be complied with)

The contracts entered into by parties incapable of giving

consent to a contract such as minors are VOIDABLE AND
ANNULLABLE.
Since minors are incapable of giving consent, there could
be no concurrence of consent of the parties as an essential
requisite of a contract.

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CONSENT

Article 1391. The action for annulment shall be brought within

four years.
“This period shall begin:

“In cases of intimidation, violence or undue influence, from the

time the defect of the consent ceases.

“In case of mistake or fraud, from the time of the discovery of

the same.

“And when the action refers to contracts entered into by

minors or other incapacitated persons, from the time the
guardianship ceases. “

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PARTIES to the transaction

1. Individual
 
a. Full name – the full names of the parties is required in the document
for the proper identification of the parties to the agreement

b. Legal capacity - to be able to enter into a contract, parties must be of

legal age or at least 18 Years old and is stated n the document. (if a
minor or is incapacitated to contract, then the person must be
represented by the legal or authorized guardian)

c. Marital status- is also required that the status of the parties be

indicated, i.e, whether single, married, the name of the spouse,
widow, widower or legally separated. Importance of this is when the
parties are married, the consent of the other spouse is required by
the transaction (Marital Consent)

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d. Citizenship- the citizenship of the parties must
likewise be indicated. As the general rule is that
only Filipinos may acquire land, unless
authorized by special laws. In case of Dual
Citizenship Law, the parties may just indicate
their Filipino Citizenship.

e. Residence- Although not essential as the others,

the residence must also be indicated in the
deed or the address of the party to the
transaction. This will also serve as useful case of
notices that will be required to be given to the
parties.

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2. JURIDICAL PERSONS

In case o juridical persons, such corporation or

partnership, the document must contain the
following:

a. Capacity to buy land – the corporation or

partnership must have the capacity to own land in
the Philippines in case it is transferee (60% capital
must be Filipino – owned, or as allowed by law)

b. Authority to Buy/ sell - The sale or purchases is

duly authorized by a board resolution of the Board
of Directors of the corporation or all or the
partners in the partnership.

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c. Authority to sign - The person who shall be
authorized to sign in behalf of the corporation or
partnership must be duly stated. Note: It does not
follow that the president of the corporation is
automatically duly Authorized to sign in behalf of the
corporation and any other person may be duly
authorized by the Board of Directors.

d. Principal Office - The principal office of the

corporation or partnership or its address must
likewise be indicated in the instrument.

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 REQUISITE FOR A PERSON TO
CONTRACT IN THE NAME OF ANOTHER

A PERSON MAY GIVE HIS CONSENT BY

CONSTITUTING AN AGENT,
ATTORNEY-IN-FACT
If the person wants to contract in the name of
another:
A. He must be duly authorized (expressly or
impliedly) NOT REQUIRED TO BE IN WRITING
B. Or he must have by law a right to represent
him (e.g guardian, appointed administrator)
C. Or the contract must be subsequently ratified
(expressly, impliedly, by word or deed)
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 REQUISITE FOR A PERSON TO
CONTRACT IN THE NAME OF ANOTHER
AGENT, ATTORNEY-IN-FACT
Under Art 1317 of the Civil Code, it is provided that:

 Art. 1317. No one may contract in the name of another

WITHOUT being authorized by the latter, or unless he has
by law a right to represent him.

A contract entered into in the name of another by one who

has no authority or legal representation, or who has acted
beyond his powers, shall be UNENFORCEABLE, unless it is
ratified, expressly or impliedly, by the person on whose
behalf it has been executed, before it is revoked by the other
contracting party.

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 REQUISITE FOR A PERSON TO
CONTRACT IN THE NAME OF ANOTHER

NOTE: IN CASE OF SALE OFA PIECE OF LAND OR ANY

INTEREST THEREIN THROUGH A AGENT, the following
must be followed:

Art. 1874 of the Civil Code: When a sale of a piece 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. 

AUTHORITY TO SELL A PIECE OF LAND BELONGING TO

ANOTHER PERSON, MUST BE IN WRITING; OR ELSE, THE
SALE IS VOID. 

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OPTIONS - a party is given a certain period within
which to give his CONSENT.

Definition:
It is a contract granting a person the privilege to buy
or not to buy a certain objects at anytime within the
agreed Period at a fixed price.

The contract of option is a separate and distinct

contract from the contract which the parties may
enter into upon the consummation of the contract.

Therefore, an option must have its own cause or

consideration, a cause distinct from the selling price
itself. (But the cause or consideration may be
liberality or not in money terms)
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General Rule

 If the offeror has allowed the offeree a certain

period to accept, the offer may be withdrawn at any
time before acceptance (of the thing being offered)
by communicating such withdrawal. (Art. 1324, Civil
Code). The commonly applicable in agreements
which are options to buy a particular property. (e.g.
Option to buy)
 
Exception
When the option is founded upon a consideration as
something paid or promised. (e.g. Option Money)

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B. OBJECT

 The OBJECT of real estate contract of sale

is the property being sold and
purchased. It is required that a definite
description must be indicated to properly
identify the object of the contract or
agreement.

It is not really necessary to include the

whole description in the original transfer
certificate of title so long as the properly
identified though it is better to indicate the
certificate of title no. and the corresponding
Registry of Deeds, when it comes to sale of
titled properties 4/18/2021 17
Sample Technical Description in Deed of Sale

TRANSFER CERTIFICATE OF TITLE

NO.12345
“ A parcel of land (lot 2,of the cons.-subd,
Plan Pcs- 12-34567, being a portion of the
cons of Lots 1 & 2, Pasig Cadastre,
Psc-14,L.R.C. Rec.No.984), situated in the
Bragy. Alabang, Mun of Muntinlupa, Metro
Manila, Island of Luzonxxxx containing an
area of SIX HUNDRED
(600)SQ.METERS.xxxxx/

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C. CONSIDERATION

The consideration in the real estate transaction

is the purchase price of of the property
agreed upon (unless payment is made in
another form or there is an exchange of
property).

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11. DOCUMENTATION
STATUE OF FRAUDS
law that provides that certain contracts must be in
writing in order to be enforceable.

PURPOSE OF REGISTRATION 
⚫ To make the instrument evidencing the transaction valid
as against 3rd person;
⚫ To make them bind on the land itself;
⚫ To make them valid between the immediate parties
thereto;
⚫ To give preferential rights to registered owners;
⚫ To prevent fraud;
⚫ To make it public as to the owner of a particular land.

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II. DOCUMENTATION
 
Is putting down in writing the terms and conditions and
agreement of the parties to the transaction, in the Appropriate
legal form
 
As type of real estate transaction
Sale - Deed of absolute sale
Lease - Contract of lease
Mortgage - Deed of Mortgage
Loan - Loan Agreement/Promissory note
Exchange - Deed of Exchange/Deed of Assignment
Payment in Kind - Dation in Payment/Dacion en Pago
Reconveyance - Deed of Reconveyance

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EXAMPLES OF CONTRACTS
THAT MUST BE IN WRITING

1. Deed of Sale, Donation,

Assignment
2. Contract to Sell, Contract of
Lease, Loans and Mortgages
3. Agreements – Authority to Sell,
Reservation, Joint Venture,
Marketing
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GENERAL CONTENTS OF A CONTRACT

 TITLE
Parties
Object
Consideration
Other Provisions
Notarial Page

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II. DOCUMENTATION
 
As to type of instrument

1. Private of Instrument - an agreement which is executed by

the parties is binding and valid even though not duly
notarized, except in cases prescribed by law.

2. Public instrument- an agreement which has been notarized

is considered a public instrument

As to type based on parties executing the documents

 
1. UNILATERAL Deed of Sale – an agreement where only the
SELLER shall execute the deed of absolute Sale and will not
be signed by the BUYER.
2. BILATERAL Deed of Sale -an agreement where both SELLER
and BUYER signed the document.

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BASIC REQUIREMENTS OF VOLUNTARY
DEEDS

Voluntary Deeds must conform to the

requirements of a formal public instruments, for
only public instruments are registrable.
 
1. Parties – The document shall state the name,
age, status, name of spouse if applicable,
nationality, place of residence and postal
address, legal age is 18 years of age.
 

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 BASIC REQUIREMENTS OF
VOLUNTARY DEEDS
2. Subject Matter – If land is titled, the document
should describe the certified of title number,
boundaries and area and if the land is untitled, the
deed should state the following :
❖ Kind of land
❖ Location
❖ Boundaries/ limits
❖ Improvements, if any
❖ Tax declaration number
❖ Area
❖ Assessed value
❖ That it is not registered under Act 496 and the
parties agree to register Act 3344 4/18/2021 26
BASIC REQUIREMENTS OF VOLUNTARY DEEDS

4. Consideration – It should state the kind of

currency, amount in words and in figures

5. Words of Grant – It should state the nature of

interest being conveyed.
 
In sale – hereby sells, transfers and conveys in a manner
absolute and irrevocable;
In Mortgage – hereby conveys by way of mortgage;
In Lease – hereby leases;
In Exchange – hereby conveys by way of exchange.

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6. Other Certification by the Grantor
or Seller
• A warranty from the vendor that the
property being sold is not included in the
area of priority of development ( APD)
and is not covered by Land Reform Law.
 
7. Other Conditions – Seller shall pay for
say, Capital Gains Tax, Documentary
Stamp Tax and notarial fees while buyer
shall pay for the transfer tax and
registration expenses.

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8. Signature – The parties to the transactions and
their witnesses.
• In unilateral contract, the signature of the seller
even without the buyer, is enough.
 
9. Notarial Acknowledgment – The Notary
Public certify that the signatures in the deed are
acknowledged by the contracting parties as theirs
and their witnesses, signed freely and voluntarily.

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III. NOTARIZATION
It is required under PD1529, That the instrument be in the
form of a public instrument, or must be duly notarized to be
REGISTERED.

For acknowledging documents, it is required that the parties

present what is called, competent identity for notarization, as
follows’’
 
Compound Evidence of Identity. The phrase "competent
evidence of identity" refers to the identification an individual
based on:
passport
driver's license,
Professional regulations commission ID,
National Bureau of investigation clearance,
Police clearance,
Postal ID,
Voter's ID,

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Government Service and Insurance System
(GSIS) e-card Others, such as, Social Security
System (SSS) card, Philheatlh card, senior citizen
card, Overseas Workers Welfare administration
(OWWA) ID, OFW ID, seaman's book, alien
certificate of registration/immigrant certificate of
registration, government office ld, certification
from the national Council for the Welfare of
disable persons (CWDP), Department of Social
Welfare and Development ( DSWD) certification

Others

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III. NOTARIZATION

ACKNOWLEDGMENT
❖ The purpose of an acknowledgment is for a
signer, whose identity has been verified, to
declare to a Notary or notarial officer that he or
she has willingly signed a document. The signer
may either sign the document before appearing
a Notarial officer , or in his presence.

JURAT
❖ Latin for "been sworn," the portion of an affidavit
in which a person has sworn that the contents
of his/her written statement are true), filled in by
the Notary Public with the date, name of the
person swearing, sometimes the place where
sworn, and the name of the person before
whom the oath was made

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ACKNOWLEDGMENT JURAT
Acknowledgement. – Jurat – “Jurat” refers to an act in
“acknowledgment refers to Act in which an Individual on a single
which an individual on a single occasion:
occasion:
 
a. Appears in person before the a.  Appears in person before the
notary public and presents an notary public and presents an
integrally complete instrument instrument or document;
or document;

b. Is attested to be personally b. Is personally known to the

known to the notary public or notary public or identified by
identified by the notary public the notary public through
through competent evidence or competent evidence of identity
identify as defined by these as defined by these rules;
Rules; and

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ACKNOWLEDGMENT JURAT
c. Represents to the notary c. signs the instrument or
public that the signature of the document in the
instrument or document was presence of the notary;
voluntary affixed by the
purposes stated in the
instrument or document,
declares that he has executed
the instrument or document
as his free and voluntary act
and deed, and, if he acts in a
particular representative
capacity, that he has the
authority to sign in that
Capacity.

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KNOW ALL MEN BY THESE PRESENTS:
I, __________________________ of legal age, Filipino, single/married, and a
resident of xxxxx, after having been sworn in accordance with law, hereby deposes
and states the following:

1. I am holder/owner/ or possessor of the following identification card /

document:
2. I have recently discovered the said item/s is/are irretrievably lost and can no
longer be found despite diligent efforts to locate the same;
I execute this affidavit to attest to the truth of the foregoing Affiant

(Signature over Printed Name)

Competent Evidence of Identity ID: issued
on: at:
(JURAT)
SUBSCRIBED and SWORN TO before me on the date and at the place indicated
below. The affiant exhibited to me his competent evidence of identity as indicated
above. Signed this ______________at ________________,
______________________, Philippines.
WITNESS MY HAND AND SEAL.

Notary Public
Doc. No.
Page No.
Book No.
Series of 4/18/2021 35
ACKNOWLEDGMENT

Republic of the Philippines)

City/Mun. of __________ ) S.S.

BEFORE ME, a Notary Public, for and in ________________, this _______ day of
_________________________ personally appeared:

Name Identification Card Issued On/At

all known to me to be the same persons who executed the foregoing instrument and
hereby acknowledged to me that the same is their free and voluntary act and deed.

This instrument consisting of two (2) pages, including this page on which this
acknowledgment is written refers to a DEED OF SALE and has been signed by the parties
and their witnesses and sealed with my notarial seal.

WITNESS MY HAND AND NOTARIAL SEAL.

Doc. No. ____ NOTARY PUBLIC

Page No. ____
Book No. ____
Series of 2021.
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IV. REGISTRATION

Flow of papers in transferring a Deed of Sale

1. Preparation and notarization of the deed

2. Gathering of the documents, clearances and
certificates for the BIR
3. Payment of Capital Gains Tax and Documentary
Stamp Tax
4. Payment of Transfer Tax at assessor’s office
5. Payment of Registration fees at Registry of
Deeds
6. Assessor’s Office – for new tax declarations

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Documentary requirements in securing
Certificate Authorizing Registration (CAR)

1. Signed and notarized Deed of Sale

2. Photocopies of certified copies of title and latest tax
declarations
3. Certificate of no improvement Assessor’s Office
(if lot only)
4. Affidavit of no improvement from the buyer
(if lot only)
5. Realty Tax Clearance from the Treasurer’s Office
6. Filing of Capital Gains Tax return and Documentary
Stamp Tax

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Form 1904 – Tax Record update (TRU) – 1
copy
Form 1706 – Capital Gains Tax Return – 4
copies
Form 2000 – Documentary Stamp Tax – 4
copies
 
All documents must be photocopied as one
copy will be kept by BIR and for comparison
with Original Documents which you will also
present to them.

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Documentary Requirements – payment
of Transfer Tax (Treasurer’s Office)
1. Deed of Sale
2. Tax Declaration
3. Title 4. CAR/TCL
5. BIR Official Receipts
6. Tax Clearance (Treasurer’s Office)

All documents must be photocopied as one

copy will be kept by Treasurer’s Office for
their file with Original Documents in hand
for comparison.

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Documentary requirements –
Registry of Deeds
1. Original title (owner’s copy)
2. Original Deed of Sale (3 copies)
3. CTC of Tax Declaration
4. Original CAR and TCL
5. Original OR – Transfer Tax
6. Original OR – CGT & DST
7. Tax Clearance – Treasurer’s
Office

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Documentary requirements –
Assessor’s Office (for new Tax
Declaration)

1. Certified copy of new TCT

2. Photocopy of Deed of Sale with BIR
3. Photocopy – OR Transfer Tax
4. Photocopy – CAR & TCL
5. Photocopy–previous Tax Declaration
6. Photocopy – Tax Clearance from
Treasurer’s Office
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ADDITONAL REQUIREMENTS:
1. Corporation or Partnership – Secretary’s
Certificate that there is a Board
Resolution authorizing a company to sign
in behalf of the Corporation.
2. Unemancipated minor – to be
represented by legal guardian appointed
by the court
3. If Buyer is a Juridical Person – Copy of
Articles of Incorporation
4. In Case of Sale of Agricultural Land –
clearance from DAR and buyers affidavit
of his aggregate landholding
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5. Sale of Condominium Unit to a
Foreigner-certification from management
body that the sale is still within the 60-40
ratio
6. Sale to a Filipina married to a Foreigner–
affidavit of waiver of foreign spouse that
the property is paraphernal property of
the Filipina
7. Sale to a former natural born Filipino
citizen - sworn statement of buyer
required under BP 185

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 Note : This business tax is, generally, applicable to
all corporations selling real estate properties
classified as ordinary assets or properties subject to
the creditable withholding tax.

Ordinary Assets include:

❖ stock-in-trade of real estate developers and
dealers
❖ properties being used in pursuit of business or
profession
❖ acquired assets of banks or financial institutions

Basis of tax is always the selling price or value

appearing in the deed of sale.

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