Land Titles and Deeds

USPF

& Deeds

DUE
DILIGENCE
IN BUYING
PROPERTIES

Due diligence has been used since at least the mid-
fifteenth century in the literal sense “requisite effort.”
Centuries later, the phrase developed a legal meaning,
namely, “the care that a reasonable person takes to avoid
harm to other persons or their property”; in this sense, it
is synonymous with another legal term, ordinary care.
(Merriam-Webster)

JEDAIA B. BALUGO

The time between accepting a property offer and
closing the deal is known as due diligence. Because real
estate is generally a large investment, you don't want
to take chances without doing your homework.
Whether you are purchasing a single-family house or a
commercial property, it is critical that you conduct
thorough research. This is the moment to thoroughly
examine every component of the home you are
purchasing. This entails exercising prudence,
conducting calculations, analyzing paperwork,
speaking with insurance providers, inspecting the
property physically, and so on. You can cancel the
purchase and start looking for anything else if you
think it's too risky or if various things don't fulfill your
expectations.

A LIST OF KEY THINGS TO
CHECK BEFORE YOU BUY




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TITLE

Verify that the seller is the registered owner of the property. Ask for identification;
it's not uncommon for people who don't own the property to try to sell it. Obtain a
copy of the title, a copy of the survey plan, and a copy of the most recent tax
declaration from the seller. Take the copy to the Register of Deeds and request to
examine the master copy to ensure that all parties are in agreement. Check that the
copy given to you by the seller has the identical annotations on the back as the one at
the register of deeds. Verify that title is clean – meaning the property is not
mortgaged (no liens & encumbrances on the property). You can see that at the back
of the title with the heading “Encumbrances”. This page must be empty if you are
told that the title is “clean”. But sometimes the space for the technical description of
the property on the front page of the title is not enough and the description of the
property is continued on the “Encumbrances” page, this is of course all right.

TAX ASSESSOR

Check with the tax assessor to see if the tax
records match the records kept by the
Registrar of Deeds. A property title with a
house or any other permanent structure will
have two tax declarations, one for the land and
the other for the improvement. Bring a
photocopy of the tax declaration to the
Municipal or City Assessor and ask for a
Certified True Copy of the Tax Declaration. If
the property is currently or long past
mortgaged or encumbered, one will see that
“stamped” in the Certified True Copy of Tax
Declaration. If the property is clean, meaning
not mortgaged or encumbered, compare the
photocopy with the Certified True Copy of Tax
Declaration. If the entries are not the same, ask
the Assessor the reason for the discrepancy.

jedaia balugo

DUE
DILIGENCE

check before you
buy

MUNICIPAL TREASURER /
BACK TAXES

Request a Real Property Tax Computation from the
Municipal or City Treasurer with the Certified True
Copy of Tax Declaration. This is to see if the
property owner has paid their real estate taxes on
time.

TAX MAP OFFICE

To the Tax Mapping Office, bring a Certified
True Copy of Title. This is the location where
a province's lot plans and neighborhood
maps are archived. Obtain a copy of the lot
plan and a map of the surrounding area.

CAPITAL GAINS TAX

Capital Gains Tax is the seller's legal
responsibility, but who pays it is a
component of the acquisition discussions.
The seller may derive satisfaction from the
buyer's payment and be willing to
compromise on other concerns.

FORECLOSED PROPERTY ACCESS

Purchasing foreclosed property comes Check the legitimacy of any
with a slew of legal complexities. You may easement or right-of-way to
lose the property if the foreclosure was the property if it does not front
not handled properly, and you will have no on a public road. Consider
recourse against the seller. If you decide what your access road will be
to purchase a foreclosed property, make like during the wet season if
sure you hire an attorney you can trust. you buy during the dry season.

SURVEY

Verify that the land indicated on the title is the land you
are purchasing. Hire a private land surveyor or a
geodetic engineer to mark the boundaries of the
property you're buying if you're unsure. This is referred
to as a RELOCATION SURVEY.

CAVEAT EMPTOR!

PRESCRIPTIVE VACANCY
EASEMENTS
Make sure no one is
Examine the title for any
existing prescriptive residing on the property.
easements or current
uses such as water If they are, removing
lines, sewer lines,
electricity lines, paths, them can be a big pain
trails, or roads that are
not stated on the title. and/or expensive. Make it

Lot Plan the seller's responsibility

Verify the correctness of the boundaries to render the land
and exact location of the property.
Determine if the government has plans for unoccupied if somebody
expropriation, road expansion, community
development, and other projects. Local is living on it. Take steps
zoning laws might also limit the uses of the
property. These factors may also affect to ensure that the
the purchase price set by the seller.
property remains

unoccupied after closing.

jedaiabalugo

Land Titles and Deeds Jedaia Balugo

Due Diligence
in buying properties

These are a few of the things you need to do when doing your due
diligence when buying a property. Make sure that you have done this
before closing the deal. If you fail to do the recommended tasks,
problems might arise which might cause you to lose the money you
have invested. Although these tasks will eat a lot of your time, they
are all worthwhile. It is recommended though that you seek the
assistance of real estate agencies, land title services companies or the
likes to help you with your due diligence. It’ll be money well spent.