Common Problems Encountered When Transferring Property
ESTATE PLANNING AND SETTLEMENT SERIES
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PART IV - Common Problems Encountered When Transferring Property
Errors in encoding
Clerical or typographical errors committed in writing, copying, transcribing or typing of an entry in certificates of land titles are not unheard of. A common example would be spelling errors in the name of the registered owner. One cannot ask the Registrar of Deeds to simply issue a new title with the correct spelling. There is a process that should be followed. The solution to address this problem is to execute an affidavit correcting the spelling and then, have the same annotated on the Title, for typographical or clerical errors, or to file a Petition to Amend or Alter a Title under Section 108 of the Property Registration Decree, or Presidential Decree No. 1529 (PD 1529). The action to amend the Title is filed with the Regional Trial Court in the province or city where the property is located.
Missing Owner’s Duplicate Copy of Title
If, for any reason, the owner’s duplicate copy of the title is discovered to be missing, the landowners must file a petition in court called – a Petition for Reconstitution of Lost Title – under Sec. 109 of PD 1529, with the Regional Trial Court in the city or province where the property is located.
Titles that remain in the name of the deceased owner
Often overlooked is the rule under our tax laws that the estate of the deceased must be settled within one year of his or her death. Without a lawyer to advise them, heirs often neglect to cause the transfer of properties to their name – only to find out years after that penalties have accumulated and that they cannot dispose of the properties without undergoing tedious and expensive processes as it may involve untangling a web of similarly unsettled estates of concerned relatives who have died subsequently.
To give you an idea, the first step would be to identify all the heirs of the registered owners and note who among them are still alive and those who have passed away already – this is important because the living heirs would be representing themselves in the estate while those who passed away shall be represented, in turn, by their own heirs. At this point, the heirs may choose to amicably enter into an Extrajudicial Settlement of Estate if the deceased registered owners did not leave a will or has no existing debts. If there’s a will, the will must first be probated. If the heirs cannot decide amicably, a petition for administration might be proper.
Tax Declarations
When it comes to the Tax Declarations, one of the common problems is where the owner of the improvement, building, or house (collectively referred to as the “improvement”) and the land on which the improvement is constructed on, are owned by two different persons. If you are transferring the land only and you do not own the improvement, the value of the improvement should not be included in the computation of the value of what is being transferred. However, even if the improvement does not belong to you, the Tax Declaration for the improvement registered in the name of another person, will still have to be shown to the Bureau of Internal Revenue (BIR). If there is an improvement on the land but it is in the name of another person, you will have to show the BIR the Tax Declaration for the improvement and explain that you do not own the improvement and that ownership of the improvement is not being transferred.
In cases where the land has no improvement, there will only be a Tax Declaration for the land. This is not really a problem, but it requires an additional document to be obtained. Where there is no improvement, you should also secure a Certificate of No Improvement from the Provincial or City Assessor.
In cases where you have constructed an improvement on the land but you do not have a Tax Declaration for the said improvement, you need to declare the property or improvement with the City Assessor by submitting the following documents:
Completely accomplished Assessment Request Form;
Certificate of Occupancy or Building Permit;
Tax Declaration of the land;
Latest Tax Clearance on the Land (refers to real property tax clearance);
Certificate of ownership of the land from the barangay; and
Copy of your Transfer Certificate ofTitle
Before the Tax Declaration on the improvement is issued, the Assessor will likely do an ocular inspection of your property to appraise and assess your improvement for real property tax purposes.
The next topic in this series will be a discussion on what makes a property problematic.
