Buying land

[Snowy79]

Having kicked the idea of buying a Condo into the long grass I've embarked on the idea of getting a lot and building my own home. I'll keep off of the legality side of it for now but for those in the know as a foreigner you can only own land via your wife or a corporation. I'll leave those for another post.

It's been a great learning curve not just over the legalities but also the Filipino agents interpretation of laws and requirements so to save others wasting time I'll try to list some downfalls. This is from the perspective of buying a beach lot.

If looking for a lot there are plenty of local Facebook sites advertising lots in various areas and each lot can be advertised by a few agents. If you opt to buy the agent that puts you onto the lot gets a payment from the owner. This is the first fun part. Agents should be licensed and if not there's large penalties for the individual. In Filipino terms this means any man and his dog becomes an agent and they ignore any threats of punishment.  As such some so called agents haven't got a clue about selling and will lie through their teeth to get a sale.

Rough examples of issues I had was when I gave them all a list of requirements with strict criteria that if they never had I wouldn't entertain them. I specifically stated only clean titled land, no sitting tenants, West facing, water and access. Solar was going to be a back up if required and finally a set cost for the land.

They mainly assure you they have all of the above and arrange viewings with you. On arrival they'll tell you the title paperwork has been left at home and you'll find the site faces East and is 5 times the cost with sitting tenants. It's in a protected area or is being sold as Tax declared not clean titled. One lot that they took me to after a 30 minute stand off over my requirements before I set off as it was over an hour away was a complete joke. Advertised at 4m php for 400 sqm. The photos looked great, right on the beach and looked a decent size. Titled, water, electricity etc. When I arrived the lot faced East and was right on the beach, a long thin strip of land that only had a depth of about 10m with the Barangay road running along the rear of it. You could see the tide came into the lot and in a high tide the whole lot would be submerged. Added to this there was sitting tenants with a sari sari store on stilts and a warning sign about protected areas. Basically most areas the Government own all land up to 30m from the beach and in some locations up to 50m.

Some lots they tried to sell me had siting tenants that they assured once I'd bought the land the owner would ,move the tenants. Don't trust them on this one little bit as the seller will head to the hills once paid. Others had Mother titles which is one step down from a clean title and again don't touch as once you've bought the land and applied for a clean title relatives will suddenly appear telling you they own the land and a whole can of worms gets opened up.

In short ONLY entertain clean titles and at a minimum only look at lots where they can provide a Xerox of both sides of the true title. Some provide the front page which looks OK with the lot size and owners name but on the rear it could be held against a loan by the bank or have restrictions placed on the site. Once you've seen both sides and before buying the land visit the local Land Registry to view the real title, it's not unknown for a few different Xerox titles to be floating around. Also check to see if up to-date taxes have been paid on the land as you will be liable if you purchase the land.

In the short time I've been researching buying lots you'd be surprised the horror stories I've heard about foreigners chasing the fast buck and buying without doing proper homework. Tax declared land and those without clean titles are a lot cheaper than Titled Land for a reason. If it's not clean titled you can bet others will have a claim on the land or even the Government can claim the land back. Having driven around Palawan looking at lots I noticed quite a few signs stating land was under civil action. Someone had cleared land and put a house up. Paid taxes and lived there for years and they've fallen out with a local who has reported them to DENR who have turned up and thrown them off of the land. Another con is selling land that's tax declared or on a Mother title to a foreigner. They wait until the foreigner builds a nice house with a wall then a relative appears with the local police and a claim on the land. The foreigner is kicked off of the land.

 

 

 

[expatuk2014]

Luckily for me when we moved here we lived in the wifes modest small home ( 1 bedroom-1 kitchen/diner living room )

all legal and titled. the problems started when we decided to knock down the home and rebuild a 2 level home !!

went to the City hall and they wanted this and papers for that ! 

we had to get architect plans drawn up for everything-building-electrical-plumbing. had to have  a city guy come and inspect and measure the land ! and we had to pay 35,000php for the building permit before we could begin construction ! one thing we learnt was ask the builder for a list of the Materials he needs for the week and go to the builders merchant and buy it yourself ! and keep an eye on the number of tins of paint and paint brushes you buy and Nails and rivets etc etc as they tend to fly to Cebu !! mind you our builder and crew were good.

the thing that surprised me most was the number of men at the front gate asking for work !!

where we live on the edge of Laguna De Bay we have built a sea wall at the back and around the compound as the water level can get very high.  we spent just over 1.4 million Pesos on the rebuild which is equiv to approx 25,000 pounds UK !!we have 2 floors-2 bedrooms a balcony

2 CRs-a large living room upstairs-a kitchen/diner downstairs. we are very happy here

[Dave Hounddriver]

7 hours ago, Snowy79 said:

I've been researching buying lots you'd be surprised the horror stories I've heard about foreigners chasing the fast buck and buying without doing proper homework.

Even the ones who have been here a decade or more and think they have 'done it right' get screwed over many times when thinking they can purchase land here through their wife or a corporation or some other means.  Would you like me to introduce you to a dozen or so expats who have been here at least a decade and got screwed over?  I am one of the very lucky ones who (so far) has a good relationship with my ex and she signed the papers on "our" house.  Most of the time its not so pleasant.

One friend of mine, (who shall remain nameless because some here know him), actually makes his living advising foreigners how to 'buy' houses and lots and keep control of them.  He lost his lot to his wife in a separation as she knows the same stuff he knows.

[Reboot]

I guess the idea is to not risk more than you can afford to lose when it comes to property in the Ph.

Just assume you are going to set the cash on fire...and have backup plans back home.

From what I understand, you can build a pretty decent house in the provinces for about $50k, so it's not necessarily a whole lot of money to risk.

 

Edited February 21, 2017 by Reboot

[Snowy79]

4 hours ago, Dave Hounddriver said:

Even the ones who have been here a decade or more and think they have 'done it right' get screwed over many times when thinking they can purchase land here through their wife or a corporation or some other means.  Would you like me to introduce you to a dozen or so expats who have been here at least a decade and got screwed over?  I am one of the very lucky ones who (so far) has a good relationship with my ex and she signed the papers on "our" house.  Most of the time its not so pleasant.

One friend of mine, (who shall remain nameless because some here know him), actually makes his living advising foreigners how to 'buy' houses and lots and keep control of them.  He lost his lot to his wife in a separation as she knows the same stuff he knows.

I'm with you on the length of time you have been here not being a safety net but sadly most people fail on their due diligence. There's only two ways for a foreigner to get his land to build on and one is safer than the other.

The first is by marrying and having the land in your wife's name. Fantastic as long as the relationship lasts and you're not traded in for a younger model or school boy sweet heart. I take my hat off to those that have found the love of their life and have great relationships but I've heard too many horror stories when the love dies to go down that route.

The second is the corporation route which again has pitfalls. I've known foreigners set up a business with their money and using Filipinos to get around the 60/40 rule. The last one was a German who set up a dive school. He went home to sort personal issues and on his return the company was gone. Sold lock stock and barrel by the other share holders. With land the rule is to set up a company with your money. Lend the business money to buy land which you lease and attach a power of attorney to the land for 50yrs. Chances are you'll be dead by then. The company are then in debt to you and as such has no re-sale value. The power of attorney prevents the majority share holders from cancelling the lease. You will have to pay corporation tax which is higher that regular tax but still reasonable and worth it if your savings are at stake.

The final pitfall which is hard to avoid is the dodgy lawyer. There's one in Puerto Princesa who has bought land that foreigners have approached him to do the legal purchase on their behalf. He's saw a huge profit to made and assured the foreigners he will complete the purchase and transfer the title into their name but buys the lot instead. I was advised if using any lawyer never leave paperwork with them without getting copies of every document signed before leaving their office. This way if the lawyer tries to screw you over you have legal proof that he is bringing the law into disrepute. (isn't it already?)

[Dave Hounddriver]

1 hour ago, Snowy79 said:

The final pitfall which is hard to avoid is the dodgy lawyer.

Yep, forgot to mention that.  One foreigner who thought he had his arse covered in Biliran province had to leave the country for a bit.  When he came back his property was sold, gone, not to be gotten back.  He raised a big stink and it seemed one of the most respected lawyers in the whole province had been the one to do the paperwork to sell the house.  Foreigner was MAD and went seeking justice.  End result:  Atty Sabitsana was disbarred for a whole year (yep thats all), which simply meant he had to find something else to do for a year and then back to business as usual.  Foreigner involved got nothing but aggravation out of the whole thing.

Here's another one, Foreigner has house in wife's name and goes back to Australia for a visit.  Wife has debts that she does not want to admit to her husband.  While she is gone another Aussie tells her he will give her cash money for her house (about half what its worth) if she will just sign on the dotted line to sell the place to HIS wife.  She signs, other Aussie comes back.  He's mad but there is SFA he can do about it.

If you try to go the corporation route there are ways that work better than others but the first person with influence who screams anti-dummy rule will have your property taken from you.  http://www.lawphil.net/statutes/comacts/ca_108_1936.html

Still, none of that stopped any of us from buying property here  as we are ALL smarter than those other guys and we ALL do our due diligence and learn from other's mistakes.  If we didn't, we might end up having to sell our most prized possessions to bail ourselves out of the financial mess we got ourselves into by not learning from the mistakes of others  

[Snowy79]

Yip the Anti Dummy laws are a mine field and one best left to a lawyer with lots to lose. I'm sure the courts would be tied up for the next 50 years just looking at Boracay properties but you never know your luck anyone can get investigated at any time. I've been advised there are lawyers that deal with this issue but you pay well for the advice and service. No doubt they lubricate someone down the line then there's always the possibility that laws change and become more detrimental to your wealth. 

[Dave Hounddriver]

2 hours ago, Dave Hounddriver said:

 End result:  Atty Sabitsana was disbarred for a whole year

It just occured to me there would be a written record of this somewhere, and thanks to Mr Google, it can be found here:

http://sc.judiciary.gov.ph/jurisprudence/2012/april2012/5098.htm

[Snowy79]

The only way to do it legally is under the Lease Investment Act 7652 which covers you and your investment for 50yrs in increments of 25yrs. If the company or individual you lease off of try to cancel the lease they have to compensate you for any building or business you have erected on the land. I'm busy going through the act but have booked an appointment with a lawyer that my friend has used for the best part of 30yrs. Once I get more information I'll post it here.

[Gary D]

30 minutes ago, Snowy79 said:

The only way to do it legally is under the Lease Investment Act 7652 which covers you and your investment for 50yrs in increments of 25yrs. If the company or individual you lease off of try to cancel the lease they have to compensate you for any building or business you have erected on the land. I'm busy going through the act but have booked an appointment with a lawyer that my friend has used for the best part of 30yrs. Once I get more information I'll post it here.

Something to be aware of is if you lease the land it can not be from your spouse as the Philippine family code treat husband and wife as a single entity, you can't lease from yourself.