Sunday, July 14, 2013

Buying a building built on own lot

Dear PAO,
My sister-in-law built an apartment on our lot with our permission. She is now selling the apartment to us because of some financial difficulties. Do we still need to execute some documents for the sale?

Dear JV,

A contract of sale is one where one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent (Article 1458, Civil Code of the Philippines). It is a consensual contract which is perfected at the moment there is a meeting of minds between the seller and the buyer upon the thing which is the object of the contract and upon its price. From its perfection, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts (Article 1475, Civil Code of the Philippines).
As a rule, no other form shall be necessary for the perfection and validity of a sale. However, there are certain sales which the law requires to be in writing, not for its validity, but for its enforceability. Article 1403 of the Civil Code of the Philippines requires agreements for the sale of real property or an interest therein to be put into writing:

“Article 1403. The following contracts are unenforceable, unless they are ratified:


2) Those that do not comply with the Statue of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable action, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents:


e. An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein;


(emphasis supplied)

Based on the foregoing, if you will buy the apartment which was built on your land, you and your wife, as the buyer, and your sister-in-law as the seller, shall execute a Deed of Sale of the apartment. The deed shall contain a clear description of the apartment that you are buying, its price, such other terms that you deem proper provided that they are not contrary to law, morals, good customs, public order or public policy (Article 1305, Civil Code of the Philippines).

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

source:  Manila Times' Column of  Atty. Persida Acosta

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