PAREB–QCRB : Real Estate Manual 2013

1.2 FUNDAMENTALS OF PROPERTY OWNERSHIP: Land Registration

LAND REGISTRATION and RELATED LAWS

• Philippine lands before the Treaty of Paris on April 11, 2899, are the exclusive
patrimony of the Spanish crown; hence, private ownership of land could only
be acquired through royal concessions.

• See Regalian Doctrine and Stewardship Concept of Ownership

• History of Land Registration in the Philippines:

1. Laws of the Indies –
• The law governing the registration of Land Grants issued by the
Crown of Spain to the Spanish settlers ( civilians and military) who
were sent to the country to serve the crown.
• Grants were in the form of Royal Decrees, the same system used in
Spain and all its dominion.
• A system established in the Philippines as early as 1596.

2. Spanish Mortgage Law –

• amended and improved the Laws of the Indies with the imposition of
several laws on land registration and the Spanish Mortgage Law.
• All titles recorded under this system maybe brought under the Torrens
system and be recorded within the period of 6 months from February
16, 1976 by virtue of PD892.
• Non-compliance within the 6-month period, titles can no longer be
countenanced as indubitable (not to be doubted) evidence of land
ownership; hence, they are to be treated as unregistered lands.

3. Torrens System –
• The Americans find that the Spanish Mortgage Laws was too
complicated; they introduced their own land registration system on
February 1, 1903. It was governed by Act 496, or the Land Registration
Law.

TORRENS SYSTEM OF LAND REGISTRATION

• The registration of transactions with interest in the land, object of which is to
establish and certify the ownership of an absolute and indefeasible title to
land and to simplify its transfer.
• Developed and introduced in South Australia in 1857 by Sir Robert Torrens.
The system was established in the Philippines on February 1, 1903 upon the
effectivity of the Land Registration Act (Act 496).
• Purpose is to quiet title to land; to put a stop forever to any question on the
legality of the title, except claims that were noted in the certificate or which
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may arise subsequent thereto. Once a certificate is registered, the owner is

secured, without the necessity of waiting for the courts, to avoid the
possibility of losing his land.
• Introduced in the Philippines during the American regime. Torrens system
replaced the existing system of land registration based on the Spanish
Mortgage Registration which was complicated.
• Under Philippine Laws, is considered as the best evidence of ownership over a
registered land. The Torrens certificate of title is presumed to have been
regularly issued, valid and without defects. The related presumption is that
the mortgage lender, the buyer or transferee of a titled land is not aware of
any defect in the title of the property he purchased or acquired. He is not
supposed to look beyond the title. He has the right to rely upon the face of
the Torrens title and to dispense with the trouble of inquiring further, except
when he has actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make inquiry.

Subsequent laws enacted to strengthen the land registration system after ACT
496:

1. Act 2259 – Cadastral Act (February 11, 1913)

• Took effect on February 11, 1913
• Government initiated the cadastral survey
• Compulsory with respect to landowners whose holdings maybe affected
as the survey progresses
• The government files the petition, while the private claimants file their
answers to assert their claims or lose them if they should fail.

2. Commonwealth Act 141 of 1936

• Also known as Public Land Act
• Took effect on December 1, 1936
• The proceeding for titling maybe judicial or administrative
• Titles to public land maybe disposed through administrative proceedings
by:(a) Homestead settlement (homestead patent)
(b) Free patent – confirmation of imperfect and incomplete titles
• Sale or lease
• It must also be bought under the operation of Torrens system.

3. PD 1529
o Known as Property Registration Decree of June 11, 1978
o This law consolidates, in effect, all pre-existing laws on property
registration, which also covers chattel mortgages.
Purpose of recording or registration:
• Afford right of priority to the purchaser;
• Prevent fraudulent conveyances;
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• To be deemed sufficient in law;

• To bind third person;
• Land registration is the operative act to convey the land and affect title
thereto.

Registration does not vest or confer title. It merely confirms ownership. It is

merely a species of constructive notice. However, a conveyance registered ahead
may defeat or has PRIORITY over prior unregistered conveyance.

Articles 1544 of the Civil Code:

Who has better right if property was sold to 2 or more buyers?
1 Registration: Buyer in good faith who first registered the sale;
2. Possession: No registration, good faith plus possession;
3. Oldest title: No registration, no possession, buyer in good faith who can show
oldest title (any proof of ownership);
4. Rule of notice – it is presumed that the purchaser has examined every
instrument of record affecting the title. It is a rule of law. Caveat Emptor – let
the buyer beware;
5. Before buying: Conduct due diligence on property to be bought.

Registration of title vs. recording of evidence of title

1. Registration of title
• The State provides a public record of the title upon which a prospective
purchaser may rely;
2. Recording acts
• Provide for the recording of deeds of conveyances without guaranteeing the
title, leaving the one interested to examine the instruments in the records and
formulate their own conclusions as to their effect on the title.

Type of Torrens Certificate of Title

1. Original Certificate of Title (OCT) –

The first title issued in the name of the registered owner by the Register of
Deeds (RD) covering a parcel of land which had been registered by virtue of
a judicial or administrative proceeding.

2. Transfer Certificate of Title (TCT) –

The title issued by the RD in favor of the transferee to whom the ownership of
the already registered land had been transferred by virtue of a sale or other
modes of conveyance.

3. Reconstituted Certificate of Title (RT/ RO) –

The title issued by the RD through administrative or judicial procedures, in
replacement of those lost, missing or destroyed.
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PARTS AND INFORMATION ON THE TITLE

1. Title Form Information

• Type of form
• Date of revision
• Serial number

2. Survey Information
• Parcel identity (lot, block, survey plan number)
• Location
• Adjoining parcels
• Tie point, tie line
• Bearings and distances from corner to corner
• Area and date of survey

3. Registration Information
• Name of the Register of Deeds
• Title number, book number, page number
• Place/time/date of registration, name and signature of registrar
• Historical information (date and place of original registration, OCT No.,
Volume No., Page No., Decree No., record/name of original owner,
number of cancelled title for TCT)

4. Ownership Information
• Name/s of all persons whose interest make up the full ownership,
citizenship, civil status, postal address

LIENS AND ENCUMBRANCES

ENCUMBRANCE

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• Is a charge, claim or liability on real estate. It may reduce a property’s

value or restrictions on how it can be used. It does not prevent conveyance

Non-physical Physical
Affects only the title Affects both the title and property conditions

of title ownership. Types of encumbrance:

Deed of Restrictions Encroachments

Easements

Liens

- Appurtenant
- Real Estate Taxes - By Necessity
- Mechanic’s Liens - By Prescription
- Mortgage Liens
- Judgment

ENCROACHMENT
• Unauthorized physical intrusions of a building or other form of real
property onto an adjoining property.
• Can mean a trespass, the owner of the property being encroached on can
take court action :
(1) to force the removal of the encroachment or
(2) to recover damages.

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• An encroachment of long-standing use may result in an easement right by

prescription or adverse possession.

EASEMENT
• The right to use someone’s land. The right may be to use the land’s
surface or the air space above.
• Also called a non-possessory interest in real estate because they give the
easement holder the right to use the property but not to possess it.

1. Appurtenant easement
• Allows the owner of a parcel of land to use the land next to it:
a) Servient estate – the one giving the right–of-way
b) Dominant estate – the one asking or given the right of way,
the parcel of land that benefits from the easement

2. Easement by Necessity
• Owners of land have the right to enter (ingress) and leave (egress) their
property, to prevent them from becoming land-locking, making the
property useless.

3. Easement by Prescription/ Prescriptive Easement

• A claimant uses another’s land for a period of time as defined by state
of law.
• Usual requirements to acquire prescriptive easement:
a) Uninterrupted use of the property
b) Use must be continuous
c) Use must be adverse, without the owner’s consent
d) Use must be visible, open and notorious, so that the owner can
easily learn from it.

DEED OF RESTRICTIONS
• Conditions or limitations placed in a deed by the owner when property is
transferred to another party. It is usually created by individual parties
and affects a particular property.

• Restrictive covenants : Conditions placed in the deeds by developers and

usually affect an entire subdivision

• Unenforceable, if restrictions placed are unreasonable or unlawful

restraints on an owner’s use of land

LIENS (MONEY CLAIM)

• Claims or charges against the property to provide security for a debt or
obligation.
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• Allows the creditor to have the property sold to satisfy the debt in case of
default.
• To enforce it, creditor must take legal action and obtain a court order to
have the property sold.,

1. General Ad Valorem) Real Estate Tax Lien

- The right of the government to sell a property at a tax sale to satisfy
outstanding tax delinquencies, plus interest and penalties.
- The delinquent property owner has a right of redemption,
considering that he/she pays all obligations before (equitable
redemption right) or after (statutory redemption right) the tax sale.

2. Mortgage Lien
- A specific, voluntary lien created after a lender makes a loan using
real estate as security. The property owner signs a mortgage
document that creates a lien against the property.
- The lien automatically ends after payment of loan. If loan is
unpaid, the lender may foreclose and sell the property.

3. Mechanic’s Lien
A protection on the part of a supplier/contractor who provides
materials or services for the real estate. (e.g., lumber companies,
building materials suppliers, carpenters, plumbers, builders, etc.

A specific and involuntary lien, it is used when a property owner

does not pay for the work or materials provided.

4. Judgment Lien
A lien imposed on both the real and personal property of a
defendant/debtor, after a judgment that concludes a lawsuit is issued
and recorded by the court.

It is a general, involuntary lien that is cleared out after a satisfaction of

judgment is recorded and issued to a debtor, say, a property is sold to
satisfy a debt.

The back portion of the certificate of title (OCT, TCT or CCT) is blank portion
with heading “memorandum of encumbrances”. Examples of annotations or
entries:

1. Lien
• Mortgage lien, tax lien, judgment lien – money claim
2. Judicial foreclosure
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• Writ of attachment, writ of execution

3. Section 4 Rule 74 of the Rules of Court
• Refers to a 2-year prescriptive period for any claim in inheritance on
the estate of the deceased; from extrajudicial or judicial settlement of
estate
4. RA 26 – law on inheritance or estate settlement
5. Right-of-way or easement
a. Servient estate : Right-of-way annotation is at the title of the
servient estate
b. Dominant estate
6. Lease
7. Adverse claim
• Ownership claim; no court case yet; if elevated to court becomes “lis
pendens”
8. Lispendens
• Ownership claim under court litigation
9. Cancellation of annotations
10.Conveyance of portion of the property
11.Deed of assignment
• to a corporation in exchange for shares of stocks
12.Master deed in a condominium
13.Subdivision and condominium restrictions
14.Special power of attorney
15.Joint venture agreement
16.Donation
17.Socialized housing annotation
18.Affidavit of loss and many more. .

RECONSTITUTION OF LOST, MISSING OR DESTROYED TITLES

Under RA 26 ( Old Reconstitution law) or RA 6732 ( New Reconstitution Law),

➢ cause the reconstitution of title either by
a) administrative procedure: total number of lost, missing or destroyed
titles must be at least 10% of titles in the Registry of Deeds, or total
of not less than 500 titles
b) judicial procedure
When the original copy of the title on file in the Register of Deeds is lost,
missing or destroyed.

➢ Reconstitution through Judicial Procedure

1. Appropriate petition is filled in the proper court (Regional Trial Court-
RTC)

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2. Court issues an order setting the date of the initial hearing

3. Copy of the petition together with the annexes are transmitted to the
LRA for verification and submission of the report to court
4. Notice of hearing is published in the Official Gazette, transmitted to
relevant agencies, and posted in conspicuous places – in the barangay,
city or municipality.
5. Land Registration Authority (LRA) submits the report to the court
6. Initial hearing; hearing on merits
7. Order of the court is released.

➢ Reconstitution through Administrative Procedure

1. Appropriate petition/application is filled with the Register of Deeds
(RD) concerned
2. Petition/Application together with complete annexes are transmitted
to the LRA Reconstitution Division
3. Reconstitution Division conducts verification
4. Reconstituting Officer/ Chief of Reconstitution Division issue Order of
Reconstitution
5. Notice is sent to registered owners informing them that their
application/ petition has been approved
6. Titles are sent to the RD concerned
7. RD signs the reconstituted title upon surrender of the owner’s
duplicate copy of title

LAND REGISTRATION AUTHORITY (LRA)

LRA is a government agency under the Department of Justice, whose primary

mandate is to efficiently manage and strengthen the Torrens System of titling in
the Philippines. Through its field city and provincial offices, it serves as the
public repository of all registered and unregistered titles, and chattel mortgages.
In accordance to the law, LRA continues to create and implement policies that
will protect the transfer of titles, prevent anomalies, and hasten the
administrative and judicial procedures.

History:

1. Act 496: Land Registration Act of 1902

• Enacted on November 6, 2902,
▪ Approved by the Philippine Commission
▪ Took effect on February 1, 1903
▪ Created the Court of Land Registration (CLR) and Register of Deeds
(RD)

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2. Act 2374:
▪ CLR was given over the Court of First Instance
▪ Creation of the General Land Registration Office (GLRO)
▪
3. RA 1151: June 17, 1954
▪ GLRO was abolished and replaced with Land Registration
Commission (LRC)
▪ LRC worked under the Department of Justice
▪ LRC had direct control of the Register of Deeds
▪ Establishment of RDs in every city and province

4. Executive Order No. 649: February 9, 1981

▪ LRC was reorganized and became NLTDRA – National Land Titles
and Deeds Registration Administration

5. Executive Order No. 292: July 25, 1987

▪ NLTDRA was changed to Land Registration Authority (LRA)

Mandate of LRA
➢ To implement and protect the Torrens System of land titling and
registration.
➢ To be the central repository of all land records, registered or titled.
➢ To issue degrees of registration proceedings and cause the issuance by a
registrar of deeds the corresponding certificate of titles.
➢ To issue all subsequent or Transfer Certificate of Titles (TCT) which may
either be issued judicially or administratively.
➢ To keep the title history or records of transaction (chain of title) involving
titled or registered lands.
➢ To exercise control over the disposition or alienation of registered land in
accordance with existing government rules and regulations.
➢ To provide legal and technical assistance to the courts on land
registration cases.
➢ To extend assistance to other agencies of the government in the
implementation of the agrarian reform program.
➢ To collect revenue for the government.

Land Titling Computerization Project (LTCP)

A combination of microfilm and computerized database systems that improved
the security, reliability and accessibility of land title information of the register
of deeds. However, the steady introduction of new land title documents
continue to challenge LRA’s ability to keep up with the microfilm operations,
and the corresponding development of computerized databases. Moreover, the
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need for a more secure, accurate, efficient and modern land titling system cannot
be over emphasized, for an effective land titling and registration system is a
major force in the economic stability and progress of any country.

The advent of Republic Act 7718 (the “BOT Law”) and its enhancement to
include information technology (IT) projects has provided LRA with a timely
avenue by which it will be able to realize its mission and vision to improve its
ability to secure its land titles and other documents and to deliver its services
more efficiently and effectively. By focusing on IT as a key strategy, the LRA will
strengthen the implementation of the land titling system in the country not only
as a significant revenue source for the government, but more importantly, to
enhance the integrity of the Torrens System. With the Land Titling
Computerization Project (LTCP), a query on the status of a land title can be made
anywhere, anytime from any of the various Registries of Deeds nationwide; that
there will be a shift from largely paper-based to a largely paperless system
thereby securing tighter control over land titles; that it will hasten the turn-
around time in the generation and issuance of land title, among others.

Requirements to secure a Certified True Copy/Certification/Verification

1. Letter of Request or Transaction Application Form (TAF)
2. Photocopy of Title
3. Identification Card

REGISTRATION BASIC STEPS

1. Registration Information Officer (RIO) : Verify if submitted documents are
complete.
2. Entry Clerk : Submit complete documents for evaluation, given Claim
Assessment Slip (CAS) if filed complete documents for processing.
3. Cashier for payment of Registration fee and IT Fees indicated in the CAS.
Receive receipt and claim stub.
4. Claim document from the Releasing Clerk on the date indicated on your claim
stub.
5. Same process to secure the Certified True Copy/Certification.

Requirements for Registration

1. Original deed/instrument (if the original document cannot be presented, the
duplicate original or certified true copy shall be presented together with a
sworn affidavit executed by the interested party stating why the original
documents cannot be submitted.)
2. Certified copy of the latest Tax Declaration of the property.
3. If titled property, owner’s copy of the certificate of title, and all issued co-
owner’s copy if there is any
Note:

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a. If a document was executed abroad, a Certificate of Authentication by the

nearest Philippine Consulate is required.
b. If either party is a corporation, the following are also required:
➢ Secretary’s Certificate/Board Resolution indicating the authorized
signatory/ies and the scope of authority
➢ Articles of incorporation
➢ Certificate of SEC that the articles of incorporation has been registered

Additional Requirements for the Issuance of Title Transactions

1. BIR Certificate Authorizing Registration (CAR) : payment of capital gains tax
or donor’s tax, as the case may be
2. Real property tax clearance : up-to-date payment of taxes
3. Proof of payment of transfer tax
4. If the land is covered by CARP, DAR clearance and Affidavit of Landholding
of transferee

Additional requirements for specific types of issuance transactions:

1. Extra-judicial Settlement / Adjudication
• Affidavit of Publication stating that the notice of settlement has been
published once a week for (3) consecutive weeks
• If minors are involved, Court Order approving the settlement

2. Judicial Settlement of Estate

• Court Order approving the partition
• Certificate of Finality of the court order
• If the property is being sold or encumbered during the settlement
proceedings, Letters of Administration
3. Extra-Judicial Foreclosure of Mortgage
• Certificate of Sale by the sheriff/notary public
• Approval of the Executive Judge, RTC
4. Consolidation of Ownership
• Affidavit of Consolidation of the purchase or Final Bill of Sale executed by
the highest bidder
5. Judicial Foreclosure of Mortgage
• Court Order directing the sale by public auction
• Deed of Sale issued by the sheriff
6. Execution
• Notice of levy or attachment must first be annotated accompanied with a
writ of execution
• Certificate of Sale
• Final Deed of Sale
7. Registration/Sale of Subdivision Project
• License to Sell
➢ Development Permit
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➢ Certificate of Registration

Additional Requirements for Annotation Transactions

1. Real property tax clearance : up-to-date payment of taxes

Additional requirements for specific types of annotation transactions:

1. Mortgage / Lease
➢ Documentary stamp tax

Additional Requirements For Subdivision and/or Consolidation Transactions

1. Letter request for subdivision/consolidation
2. Sepia or polyethylene film of the plan duly approved by Land Registration
Authority or the Land Management Bureau
3. Blue copy of the plan
4. Original technical description (duly approved)

If with change of ownership, the following additional documents are required:

1. Agreement of partition
2. Real estate tax clearance

Additional Requirements For Condominium Sale Transactions by Developer:

1. Master Deed
2. Declaration of Restriction
3. Diagrammatic Floor Plan
4. HLURB Certificate of Registration
5. HLURB License to sell
6. Development permit
7. Owner’s duplicate of the title of the land and all issued co-owner’s duplicate,
if any

For subsequent transfer of CCTs:

1. Certificate of Management

REGISTER OF DEEDS (RD)

Is a satellite office of the LRA that constitutes a public repository of records of

instruments affecting registered or unregistered lands and chattel mortgages in
the province or city, wherein such office is situated.

Its functions are:

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1. Immediately register an instrument presented for registration dealing with

real or personal property which complies with the requisites for registration.
2. See to it that said instrument bears the proper documentary stamps and that
the same are properly cancelled.
3. If the instrument is not registerable, shall deny the registration thereof and
inform the presentor of such denial in writing, stating the ground or reason,
and advising him of his right to appeal by consulta in accordance with Sec.117
of PD 1529.
4. Keep an index system that contains the names of all registered owners and
lands registered.

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