Buying land

[jpbago]

35 minutes ago, AlwaysRt said:

100% golden advice to expats heading to ANY "3rd world" country.

Back in 89, I almost bought a place in Ajijic, the Lake Chapala area of Mexico, the largest expat area of the country back then when Mexico was quite safe. Beautiful place near to Guadalajara. But, I met a rich 'Merican who advised me to rent, not buy. He had an expensive motor home that he drove down from California every year. He would build a patio in the front while parked in a gated park. If something happened that he did not like, he would unplug the electric and the water then move on. Looking back now, 30 years later, I am glad that I did not buy.

[Snowy79]

I've finally heard back from my lawyer reference the land purchase and hopefully it will be of use to someone if they are thinking of going down this route. My lawyer is very high up the food chain and used to work for a few Government departments and helped set policy. He is a partner in a law firm with over 60yrs experience and different partners in the firm with their own specialist areas. His main area of expertise is Commercial and Corporate Law with a background in Torres law which Land Registry is based on.

I'm looking at going into this purchase with a fellow Scotsman who has lived here for a good 30 odd years and has a few businesses and properties already in the Philippines. He's married to a Filipino so for him it's straight forward. I'm single and allergic to wedding cake so will be staying that way and as such I'm the spanner in the works.

 .       Your wife as Owner of Land

•        PRO: This is a legal way of “avoiding” the foreign investment laws

•        CON: In case of you “predecease” your friend, the land will become the sole property of your wife and this may be detrimental to the “ownership” of your friend.

 

2.       Disinterested Filipino third party who will then execute a blank Deed of Sale (to secure the “return” of the property to you) and who will also execute a Usufructory Agreement to give you and your fiend a “Usufruct” over the property for 20 years, renewable for another 20 (unfortunately if it is more than 20 [actually even 10], the Register of Deeds may refuse to annotate the same on the title since it will in essence be a “sale” or a “total disposition” of the property in favor of a foreigner).

•        PROS: More simple, cost-efficient, and beneficial to both owners as none of them will be prejudiced by this set-up by the death of the other party.

•        CONS:  After both “Usufructories” (you and your friend) pass away, the land will become the property of the third party.

 

3.       Incorporation

•        PROS: Separate juridical entity, so the incorporators, directors, shareholders will not be liable for the acts of the Corporation (i.e., limited liability), continuity, shares of ownership may be transferable, the corporation pays its own tax.

•        CONS: Incorporation is costly, corporations are highly regulated, too many permits and registrations with Government offices so it will take longer before any corporate acts may be done, and it is not easy to dissolve.

[Snowy79]

Some more information that may help potential land buyers which could help them in the long run. The Government passed a Free Patent act in 2010 to simplify ownership of land. https://philippinesruleoflaw.wordpress.com/2013/08/12/the-new-residential-free-patent-act-r-a-no-10023-institutionalizing-land-titling-of-residential-lands/ Basically if you could prove you lived on a parcel of land for over ten years and you'd paid up to date taxes you could get a title for the land issued without the trouble of going through the courts. It was designed to free the courts up and to make it easier to own land. The usual rules apply, Filipino citizen etc. It also prevents someone coming out of the jungle and trying to make a claim on the land without it costing them a fortune. In short they should have done it themselves and if not they obviously didn't care.

The title issued would be stamped Free Patent. It's then up to you as the owner to go through the usual processes prior to building. This brings up the issue of other departments of the Government being involved which could screw the Free Patent up.

I was looking at one lot which came back as a clean title with no restrictions etc. It was classed as Free Patent. The Lawyer even said it was good to go but as I never knew what Free Patent was I went on the Government site and read up on it. The Free Patent has a clause in it that it must comply with a Presidential Decree (PD) No 705 http://www.lawphil.net/statutes/presdecs/pd1975/pd_705_1975.html  which sets certain criteria to be Free Patent in the first place. In my case I had the option to buy a lot of 2774 sqm with a Free Patent. It turns out that Free Patents should only be awarded to public land up to a maximum of 1,000 sqm and a slope of 18%. The land I looked at was over 18% and 2744 sqm. If I had bought the land then applied for planning permission to build and it was picked up that the land never complied with PD705 they have full power to cancel the title and return the land to public land. Goodbye investment if I had bought it.

Another good reason to do Due Diligence even if using a reputable lawyer. They might be pretty up to date but the Philippine law system is pretty disjointed. 

Edited March 16, 2017 by Snowy79

[robert k]

I never seem to get a good result from hiring a single lawyer, I always need to hire at least two, one to look for the flaw in the first lawyers counsel, and that is in the US. I recently was involved in a case that was settled in my favor that I had thousands of hours of research in and I had one lawyer and by the end he hated my guts. Who was I, a person who had never been to law school to disagree with a LAWYER? But I won and that is what matters and the lawyer wound up thousands of dollars poorer because he insisted on taking the case on contingency and there was no money award, but my brother recovered the rights to 1.2 million dollars worth of property and the value of oil production back to 2008. Which is why I had thousands of hours of research into the subject. Don't trust lawyers to know what they are doing. Some just want to drag everyone involved into court, muddy the waters and when the murk clears hope they are on top. Not a good plan.

[Dave Hounddriver]

9 hours ago, robert k said:

Don't trust lawyers to know what they are doing.

Lawyers and doctors.  Both think they are God and any 5 will give 5 different opinions.  Law and medicine are not exact sciences but I will give you that both of those professionals are very smart individuals so I don't discount what any of them say.  I just agree that one should not put some kind of divine faith in the council of any lawyer.  So once again I am on the same page as robert K.  Dang Robert, we should open a law practice.  

[Snowy79]

9 hours ago, robert k said:

I never seem to get a good result from hiring a single lawyer, I always need to hire at least two, one to look for the flaw in the first lawyers counsel, and that is in the US. I recently was involved in a case that was settled in my favor that I had thousands of hours of research in and I had one lawyer and by the end he hated my guts. Who was I, a person who had never been to law school to disagree with a LAWYER? But I won and that is what matters and the lawyer wound up thousands of dollars poorer because he insisted on taking the case on contingency and there was no money award, but my brother recovered the rights to 1.2 million dollars worth of property and the value of oil production back to 2008. Which is why I had thousands of hours of research into the subject. Don't trust lawyers to know what they are doing. Some just want to drag everyone involved into court, muddy the waters and when the murk clears hope they are on top. Not a good plan.

I 100% agree with you Robert. I've had two court cases where I represented myself and in both I tied the opposing lawyer up in knots. I think they finish law school then sit back on their laurels and let the 17yr old legal secretary type up all their letters. The first court case the judge pretty much told the lawyer to shut up as I was making a fool of him and in the second one the judge let out a laugh when I showed the lawyer up.

Lawyers deal with so many clients they don't have the time to do real research and as I've seen here so many laws contradict each other and one thing in the Philippines is the courts don't follow precedence. I could argue a case and win then someone else with the same issue could use the same legal arguments but the judge can still find againt them.

[i am bob]

14 minutes ago, Dave Hounddriver said:

Lawyers and doctors.  Both think they are God and any 5 will give 5 different opinions.  Law and medicine are not exact sciences but I will give you that both of those professionals are very smart individuals so I don't discount what any of them say.  I just agree that one should not put some kind of divine faith in the council of any lawyer.  So once again I am on the same page as robert K.  Dang Robert, we should open a law practice.  

And you expect us to trust you after this?

[Dave Hounddriver]

9 minutes ago, i am bob said:

I just agree that one should not put some kind of divine faith in the council of any lawyer.

And I don't say that about ONLY filipino lawyers and doctors.  In Canada I held the same opinion.  Unless someone has led a sheltered life I cannot imagine that any member here has lived this long without getting bad advice from at least one doctor and one lawyer.  Heck, my old man saw his doctor regularly for 20 years and swore up and down this guy was great.  After getting diagnosed with prostate cancer and finding out it had been there for 10 years he asked his doc why he never diagnosed it.  Reply:  We are doctors, not Gods.  So why do these two professionals act as they are.  Its part of the training.  They are taught to always be right.  The public depends on them to always be right so they have to believe in themselves.  The mantra is:  "Even when I am wrong, I am right." (some of my best friends were doctors and lawyers and I have yet to have one of them deny that.)

[Gerald Glatt]

56 minutes ago, Dave Hounddriver said:

Lawyers and doctors.  Both think they are God and any 5 will give 5 different opinions.  Law and medicine are not exact sciences but I will give you that both of those professionals are very smart individuals so I don't discount what any of them say.  I just agree that one should not put some kind of divine faith in the council of any lawyer.  So once again I am on the same page as robert K.  Dang Robert, we should open a law practice.  

Dewy, Screwem, and How

[PaulB]

I have followed this thread and great information contained within. I have one query though and some of you may think I am being naive here. if you are married why not let your wife buy the land?If you are married then you must have trust in your relationship so cut out all the legal loophole methods and let her buy it.

My wife has bought all of our land and the land our house sits on and now I am a resident she has added my name to papers. I am not sure what protection this offers me and frankly I am not bothered as I trust her and Love her and feel very happy and secure with what we have.

Just a thought.

Paul