How to buy real estate (almost) worry-free
By William L. Jasarino
Philippine Daily Inquirer
First Posted 20:32:00 03/07/2008
MANILA, Philippines—Last week, this writer enumerated tips for people who are buying a unit or house to live in and who may not have ready access to professional legal assistance. This is intended to arm ordinary buyers with sufficient knowledge that will prevent, if not lessen, headaches or heartaches when making a purchase.
Here are other tips:
• Get a copy of documents to be signed and study them.
The basic documents include a reservation agreement (although this is not always required), contract to sell and deed of absolute sale. For a condominium, a master deed with declaration of restrictions is indispensable. These documents generally provide the terms and conditions of the sale. The obligations of the buyer are expectedly favorable to the seller.
The interested buyer must take pains to read the documents and identify the provisions that are not clear to him, which will likely be many. He must pay special attention to provisions regarding payments that will be required of him, from reservation, downpayment, amortization, interest and charges for delayed payments to miscellaneous expenses. The important questions here are the exact amounts, in pesos and centavos, and due dates.
The other provisions that the buyer must know about pertain to the completion of the house or unit, if any, and of the entire project. A key document for this purpose is the contract to sell. When the house or unit will be finished, as in livable and delivered to the buyer, should be clear.
Related to this concern is the details of what to expect in the house or unit, viz., size or area, features (with partitions, etc.), kind of flooring, ceiling and wall finishing, kind of electrical fixtures, color, etc. These are not usually spelled out in ads or brochures. Neither are they referred to in any of the documents that the buyer is asked to sign. The prospective buyer must ask the seller to specify these items in writing to prevent a disappointing surprise. The model house or unit can give the parties a basis for doing an itemization.
Project completion is seldom mentioned in any document that the buyer is asked to sign or even in the seller’s advertisement. Nevertheless, this is important because no buyer would want to live in a subdivision or condominium that is incomplete. The not-so-obvious significance of this timetable is the buyer may lawfully suspend amortization payments, upon compliance with certain procedures, if the developer fails to complete the project within the required period for doing so.
This required period for project completion is found in the license to sell issued by HLURB.
A person interested to buy must insist on an explanation by the developer of the documents he will be required to sign before he signs them. He must bear in mind that he will be bound by these documents for his entire life.
• Know the persons you are dealing with.
A buyer will invariably deal with a seller’s employee, whether a lowly clerk, a mid-level manager or a top vice president, a broker or salesman or some other representative.
As an objective criterion, a buyer must deal only with someone who can present a credential or what appears to be a credential, i.e. identification card, letter of authority, HLURB certification or license from the Bureau of Trade Regulation and Consumer Protection of the Department of Trade and Industry.
There may still be some bad apples, so to speak, among these credentialed guys but you have a better chance in going after them and getting some remedy if you will be so unlucky to fall into their hands.
And, always record the names and persons you talk to, their contact numbers and the date and approximate time of the interaction. One may never know when these information will become necessary or even indispensable.
Many times there will be guys who are part-timers in selling. These are one-time agent who are in this only for the commission. They include well-meaning friends and relatives who stumbled upon what they see as good properties. If you have to deal with this bunch, look for the guy behind them with the credential. If you cannot locate this fellow, forget it.
Why? If some unexpected problem is encountered, these guys will likely become difficult to find as their stake in the transaction is almost incidental.
• Know the seller.
The permits will tell you who the seller is. That’s good. But just as important is the reputation of the person or entity appearing as seller. And I’m not referring to the number of employees, the size of the organization, the network of the brokers and agents or the size of the projects. These may matter for other purposes but not always for worry-free buying.
A good source for determining reputation is HLURB, which maintains records of developers and the existence of complaint in their respective specific projects.
To inquire, one needs only to present the name of the owner-developer as well as the name and location of the project.
The number and nature of complaints given the size of the project will give a buyer a more informed judgment as to the reputation of the developer and, in the final analysis, an idea of whether or not there is a big chance that there will be repeats of the complaints in the project that he is buying into.
For sure, none of the foregoing tips should be relied on alone. All or most of them will have to be considered and followed in making a purchase that will be without or with few problems.
(The author is a practicing lawyer and the special assistant to the national president of the Chamber of Real Estate and Builders’ Associations Inc. He was a co-managing partner at Fondevilla Jasarino Young Rondario & Librojo Law Offices.)