Property Transactions and Tax Declarations in the Philippines

In the Philippines, property transactions can be conducted on behalf of another person, provided that the proper legal mechanisms are in place. Here is an overview of the key legal aspects involved:

1. Authority to Act on Behalf of Another Person

To legally represent another person in a property transaction, a Special Power of Attorney (SPA) must be executed. This document authorizes an individual, known as the agent or attorney-in-fact, to act on behalf of the principal (the person who grants the authority). The SPA must be notarized to be legally binding. Key points include:

• Specific Authority: The SPA must clearly specify the authority granted, including the power to buy or sell the property, sign documents, and handle related transactions.
• Notarization: The SPA must be notarized to ensure its legal validity.
• Registration: If the property is titled, the SPA should be registered with the Registry of Deeds.

2. Tax Declarations vs. Property Titles

A tax declaration is not equivalent to a property title. Here’s the distinction:

• Tax Declaration: This document is issued by the local government unit (LGU) and reflects the property’s assessed value for tax purposes. It indicates that the property is recognized for taxation, but it does not prove ownership.
• Title (Torrens Title): This is the definitive proof of ownership under the Torrens system, administered by the Registry of Deeds. A titled property ensures security and clarity of ownership, providing legal evidence of ownership and rights over the property.

3. Legal Implications of Buying a Property with Only a Tax Declaration

Purchasing property with only a tax declaration involves significant risks:

• Ownership Disputes: Without a title, the legal ownership of the property may be disputed. The tax declaration only shows that property taxes are paid, not the legal owner.
• Difficulty in Registration: Converting a property from tax declaration to a titled property can be complex and time-consuming. This process involves several steps, including tracing the property's history, resolving any existing claims, and obtaining the necessary clearances.
• Limited Protection: The lack of a title means that the buyer has less legal protection in case of disputes.

4. Steps to Secure a Property Title

If you are considering purchasing a property with only a tax declaration, the following steps are crucial:

• Conduct a Due Diligence: Verify the property’s history and ensure there are no existing disputes or claims.
• Consult a Lawyer: Seek legal advice to understand the complexities involved and to assist in the conversion process.
• Secure Proper Documentation: Ensure all necessary documents are complete and authenticated, including the original tax declaration, proof of payment of real property taxes, and any other relevant documents.

5. Conversion Process

The process to convert a tax declaration property to a titled property involves:

• Survey and Mapping: Hire a licensed geodetic engineer to conduct a survey and create a plan of the property.
• Application for Title: File an application for titling with the Department of Environment and Natural Resources (DENR) or the appropriate government agency.
• Adjudication: The application will be reviewed, and the DENR may issue an Order of Award if the property is deemed eligible.
• Registration: Finally, register the awarded title with the Registry of Deeds to obtain the official Torrens Title.

In summary, while it is legally permissible to conduct property transactions on behalf of another person in the Philippines through a notarized Special Power of Attorney, purchasing a property with only a tax declaration requires careful consideration and legal guidance to mitigate risks and ensure a clear and secure transfer of ownership.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.