Clean Title | What Does It Mean?
By Definition A Clean Title means:
Unencumbered or unrestricted legal ownership that is free from doubt as to its validity.
The phrase implies that property is not subject to claims by anyone but the person holding the title. It is also called marketable title, or title that can be easily transferred or sold because of its lack of encumbrances. (Source: Legal Dictionary)
If you buy a property from individual owners
Make sure that the Certificate of Title is genuine. You can check this by securing a certified true copy of the title from the Register of Deeds. Request a photocopy of the title from the seller and submit this to the Register of Deeds with your application for processing of the certified true copy. As a buyer or a property seller like real estate agents and brokers, this is a must do to make sure that you are dealing with the right owner of the property and the right property. It is a must to check the authenticity of the title. With this single step, it will save you time and effort during your property hunting.
Inspect the title if it is clean. A clean title is free from any encumbrances such as mortgage from a bank or lending companies. Whatever transactions or legal matters that transpire on the land, as a rule, it must be annotated in the title. Check for these annotations. If the page is empty, it is clean.
Confirm that the land your are buying is what is truly described in the title. Validate it at the Register of Deeds. It is advisable to hire a professional surveyor to ensure that the actual property you are buying will match the technical description in the title. It will not cost much, and as the saying goes, an ounce of prevention is worth a pound of cure.
Make sure that yearly real estate taxes are paid and updated. The government imposes at least quarterly payment of taxes, and when a property is sold out, the government requires payment of the entire year, so negotiation as to what period buyers pay and what period sellers pay their tax dues should come into play in the sales transaction. It is critical that real estate taxes paid because of stiff penalties imposed by the government on delayed payments, and eventually, the government can impose a lien on the property which can extinguish the owners right of the property until taxes settled including penalties.
Ensure that the sellers are real owners of the property. Valid IDs should match the name in the title. Always inspect the original title, not a photocopy. Check with some authority figures within the locality like the Barangay captain as they also have valuable information about the property and can attest their real owners.
If the property you are buying is not a residential subdivision such as raw land, or beach lot, check with the DENR (Department of Energy and Natural Resources) with regards to the regulated use of the land. Lands have classifications such as farmland, industrial, commercial, residential and therefore, these should be utilized according to their classification,s though diversion may be applied but requires government approval and usually undergoes a tedious process or a reclassification.
Xy-Za Yape is a founding member and a blogger of Filipino Homes. She is also a PRC and HLURB Registered Real Estate Professional and a Licensed Financial and Investment Advisor. She is a Hubspot certified in Inbound Marketing. She is also the co-founder of Iligan Bloggers Society, Inc.