Buying Property in the Philippines: 4 Non-Negotiable Checks Before Releasing Your Downpayment
Once your downpayment leaves your hands, getting it back from the wrong seller can take years of litigation. In the Philippines, most failed property purchases trace back to a handful of problems that a buyer could have caught on paper: a seller with no authority to sell, a fake or outdated title, a hidden lien, or unpaid taxes and boundary disputes.
Before you release a single peso, insist on these four checks. None of them is optional, and none of them should be skipped because a seller, broker or agent says the property is "clean."
Check 1: Verify the seller's identity and authority to sell
The person you are dealing with must be either the registered owner or an agent with written authority to sell. Ask for at least two valid government-issued IDs and compare the name, signature and details against the name on the title.
If the seller is acting as an agent, they must present a Special Power of Attorney (SPA). Under Article 1874 of the Civil Code, a sale of land through an agent is void unless the agent's authority is in writing. When reviewing the SPA, check that:
It specifically authorizes the sale of this particular property, identified by its title number and description. A general authority to "manage" or "administer" is not enough.
It was signed by the registered owner (and by the spouse, if the property is conjugal or community property).
It has not been revoked, and the owner is still living. An agent's authority ends upon the owner's death.
Its notarization is legitimate. Confirm the notary's commission with the Office of the Executive Judge of the Regional Trial Court where the notary is commissioned, and check that the document is entered in the notarial register.
If it was signed abroad, it is apostilled or authenticated by a Philippine embassy or consulate.
Whenever possible, contact the registered owner directly to confirm that the sale and the agent's authority are genuine.
Check 2: Get a verified title from the Registry of Deeds
Never rely on a photocopy of the title, however clear it looks. Photocopies are easy to alter, and they show nothing that was annotated after the copy was made.
Instead, obtain a Certified True Copy (CTC) of the Transfer Certificate of Title (TCT), or the Condominium Certificate of Title (CCT) for a condo unit, directly from the Registry of Deeds where the property is located. Then compare it line by line with the owner's duplicate copy the seller holds:
The title number, registered owner's name and technical description should match exactly.
The CTC should be recent. Request a fresh one close to the date you plan to pay.
Watch for signs of a cancelled or reconstituted title, or any mismatch between the two copies. Any discrepancy is a reason to stop and investigate before paying.
Check 3: Inspect the title for encumbrances
The front page of a title tells you who owns the property. The back page, the Memorandum of Encumbrances, tells you what claims sit on it. A buyer generally takes the property subject to what is annotated there, so read every entry. Look especially for:
Lis pendens: notice that a court case involving the property is pending. If you buy, you are bound by the outcome of that case.
Mortgages: the property secures a loan. Unless the mortgage is paid and cancelled, the bank can foreclose even after you buy.
Rule 74 two-year lien: when heirs divide an estate through an extrajudicial settlement, Section 4, Rule 74 of the Rules of Court allows excluded heirs and creditors to go after the property within two years. Property acquired from an estate within that period carries this risk.
Also watch for adverse claims, notices of levy or attachment, and annotated restrictions on sale. If an encumbrance exists, it should be properly cancelled and the cancellation annotated before full payment, or the deal should be structured so it is cleared out of your payment.
Check 4: Confirm tax clearance and survey the ground
The last check moves from documents to the property itself.
Real property tax (Amilyar). Unpaid real property tax is a lien on the property and follows it to the new owner. Ask the seller for the latest official receipts and a Real Property Tax Clearance from the city or municipal treasurer. Check that the Tax Declaration matches the title in owner, lot number and area.
Ground survey. The technical description on the title must match what is actually on the ground. Hire a licensed geodetic engineer to conduct a relocation survey and confirm that:
The boundaries and monuments match the title's technical description.
The lot area is what you are paying for.
There are no encroachments by neighbors, and no part of the house or fence sits on a neighboring lot.
No informal settlers, tenants or other occupants have claims on the property.
Visit the property in person and talk to neighbors and the barangay. They often know about disputes that never appear on paper.
Before you pay: a quick checklist
Seller's identity confirmed against the title, with valid IDs
If an agent: SPA specific to this sale, with verified notarization
Certified True Copy of the title obtained from the Registry of Deeds
Memorandum of Encumbrances clear of lis pendens, mortgages and Rule 74 liens
Real property tax paid and tax clearance in hand
Relocation survey matches the title's technical description
If any item is unchecked, hold your downpayment.