Buying Land to start a business... Business protection

[bastonjock]

Ive had to get a guy from the agricultural dept up to classify my one hectare plot , this is before i even put a rabbit hutch up 

I am allowed to build a dwelling and other agricultural buildings ,for it ti become development land ,its another load of paperwork and stuff like that 

Of course you can just go ahead and build on your rice field but it might end uo getting bulldozed later

It all sounds like a bit of a gamble to me ,dont gamble with what you cannot afford to loose

[Snowy79]

Although local departments have the power to re-classify land there's still a few processes they have to comply with to prevent excess conversion of land.  The local government can only convert a set percentage of land in their area and as usual plenty have exceeded this limit either knowingly or not.   There's currently a bill going through senate at the moment to put a 2 year hold on land conversion and reviewing of already converted land.

Like Boracay there may be a few people getting a knock at the door to inform them they have been given an illegal classification.

Here's the basic rules from the Government: https://www.doe.gov.ph/sites/default/files/pdf/e_ipo/2016_leif_04_dar_conversion-agricultural_land.pdf

I think in my travels around the Philippines looking for properties I've only ever seen one bill board declaring a wish for land reclassification.

[Snowy79]

Another Government guideline: http://www.officialgazette.gov.ph/downloads/1993/06jun/19930608-MC-0054-FVR.pdf

 

[Tiger32]

Baston, Dave and Snowy... Thank you very, very much for sharing your hard earned knowledge. Due, duer, duest diligence to be done, and a sale contract with loads of dependencies to minimize losses should things not swing the way we'd like.

This is gonna be time consuming or costly, obviously. I'll take the time consuming, lower risk option. Your help is invaluable, protecting people. Can't thank you enough.

[Tiger32]

Guys, have any of you encountered a situation whereby a foreigner loans the money to buy the land to a Filipino, and the Filipino then makes payments against the loan (ostensibly form their share of the encummbant business that's put on the land)?

Can an individual be Mortgagor and then force the sale of the property should payments not be made, or the Filipino prevents the business being done on the property for some reason?

[Gary D]

I would be wary of anything that can be seen as give control over land.

[Dave Hounddriver]

10 hours ago, Chris32 said:

Guys, have any of you encountered a situation whereby a foreigner loans the money to buy the land to a Filipino, and the Filipino then makes payments against the loan (ostensibly form their share of the encummbant business that's put on the land)?

Can an individual be Mortgagor and then force the sale of the property should payments not be made, or the Filipino prevents the business being done on the property for some reason?

Yes, and no, and there are ways.

Yes you can make a private loan to a Filipino.  No you cannot easily force the sale if the terms are not met.  There are ways to force the sale but it takes a long time and still may not work.

On the other hand.  You can own a share of a lending business which loans out mortgages on land and that lending business can foreclose in the same way as a bank can foreclose.  As Gary D said, watch out for anything that seems designed to circumvent the law and give you control of the land.  That in itself is illegal and this very thread would be proof enough (to a Philippine judge) that this is what you are trying to do.

It is better to start with the rules on what you can do and then work out what you would enjoy doing within those laws, than to decide in advance what you want to do and then "beat the system" to do it your own way.  Such is my opinion.

[StayAtHomeDad]

FWIW, I would think long and hard about this before investing a single dime. For me, there are just too many red flags, not the least of which is the fact that your would-be expat partner in the business is not even married to the Filipina. If they split or start having trouble, your risk and exposure increase tenfold almost immediately.

Potential problems probably won't come from litigation in a civil suit; they'll come from allegations of abuse whether it be verbal, mental or physical. Keep in mind that a lot of times those types of allegations don't need to proven - just made. After the business is up and running, someone will whisper to her something along those lines (especially if it starts to look like it might be successful.) Of that, you can be sure. I am not saying the Filipina would ever do something like that, but you should consider how you're going to protect yourself and your investment if things do in fact start to go sideways.

The stories of such things happening to expats in the Philippines are becoming all too familiar these days. Just be careful.

 

[Snowy79]

Advice worth heading from Jessdaddy.  The anti dummy laws are very strict and just to add to the fun there's rewards for those that give information to the Government about infringements. 

I've been down the route of trying to set a business up also and unless you have money that you don't mind losing there's just too many pitfalls.  

Filipinos can be lovely people with better values than most in the West however jealousy, moods and revenge takes on a whole new meaning here.  You don't have to p them off,  just one of your associates and if it means taking you down to get to them they will. 

[StayAtHomeDad]

18 minutes ago, Snowy79 said:

Filipinos can be lovely people with better values than most in the West however jealousy, moods and revenge takes on a whole new meaning here.  You don't have to p them off,  just one of your associates and if it means taking you down to get to them they will.

Exactly.