PAREB-Muntinlupa Realtors Board

6th General Membership MeetingJune 17, 2010

Alabang Golf and Country Club

CASE WORKSHOP

Process and Factors to Consider in Transferring a Title

DISCUSSION

• Overview of title transfer process• Considerations in transferring of title– Pre-agency work– BIR– RD– Others

SCENARIO A

Spouses Albert and Barbara Rogers-Carpio, Filipinos, sold to Mr. Delfin and Elenor Francisco Galo, both Filipino, their property located at 111 San Bernardino St., Ayala Alabang Village. The sale was done on cash basis for Php 21,000,000. Property details: 2 storey, 3 bedroom house and lot , with a lot area of 507 sqm, floor area of 421 sqm. more or less.

SCENARIO ABoth parties signed the Deed of Absolute Sale on June 17,

2010. The buyer paid the balance in full and turned over the documents of ownership on the same day. Each party had their respective real estate brokers.

This is the first time Mr. and Mrs. Carpio are selling their

home, after 20 years of residing in Ayala Alabang Village. The property had a loan of Php 10M, but it was fully paid 3 years ago. The annotation on the title was not yet cancelled, based on the certified true copy of the title presented to Mr. Galo.

SCENARIO A

Both brokers have agreed to do the transfer of title and BIR registration together. They discussed what the requirements are to document the sale and the transfer of title. Each broker representing their respective parties agreed to provide the necessary documentary requirements.

SCENARIO A

Requirements:1) List the required steps , in sequential order, to secure the Certificate Authorizing

Registration, and to transfer the title to the new owner’s name. 2) For each stage, and depending if you are representing the buyer or the seller, find out for

purposes of filing and submission to the respective agencies:a) Essential information from your client required by the various agencies for purposes of

transferring the title b) Essential information you need from the agencies before you start filingc) Documents to be submitted by your clientd) Forms you need to accomplish and filee) Required payments and computations; identify the payee names for the check

payments and requirementsf) Deadlines for payment of respective and other documentation requirements

needed for the BIR and the transfer of title and the Registry of Deeds for each party.

SCENARIO A

Requirements:

3) What questions and clarifications can you provide your respective party with in order to ensure that he is ‘safe’ with his documentation?

SCENARIO BMr. Alvin Altamirano, single, and residing in 123 Southvale Drive, Ayala Southvale, Cavite, recently sold his lot of 550 sqm located at 123 Apo St., Ayala Alabang Village, to Brenda Bobadilla Baker, Filipino, married to Bobby C. Baker, American.

The lot was sold at a price of SIXTEEN MILLION PESOS only, spot cash basis. Closing date and signing of the Deed of Absolute Sale was June 17, 2010.

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SCENARIO B

Requirements:1) List the required steps , in sequential order, to secure the Certificate Authorizing

Registration, and to transfer the title to the new owner’s name. 2) For each stage, and depending if you are representing the buyer or the seller, find out for

purposes of filing and submission to the respective agencies:a) Essential information from your client required by the various agencies for purposes of

transferring the title b) Essential information you need from the agencies before you start filingc) Documents to be submitted by your clientd) Forms you need to accomplish and filee) Required payments and computations; identify the payee names for the check

payments and requirementsf) Deadlines for payment of respective and other documentation requirements

needed for the BIR and the transfer of title and the Registry of Deeds for each party.

SCENARIO B

Requirements:

3) What questions and clarifications can you provide your respective party with in order to ensure that he is ‘safe’ with his documentation?

DISCUSSION

SCENARIO A: OUTPUT

• Ask Seller if he wants to avail of capital gains tax exemption• Requirement to cancel annotation on title:

– Letter of cancellation of mortgage from bank where the loan was availed

– Owner’s duplicate TCT– Ask for the certified true copy of TCT after cancellation of mortgage

• Essential information from Seller:– TIN, full name of both spouses (including middle

name), mother’s maiden name, postal address, birthdays of both spouses, valid government IDs.

SCENARIO A: OUTPUT• Notarization of deed of absolute sale: both parties must appear in

person during the time of notarization; both parties must be of sound mind and body at the time of notarization.

• PAYEE NAMES: for capital gains tax (in Manager’s check form only): BPI South FAO [for the account of] Bureau of Internal Revenue IFO [in favor of]Seller’s Name + TIN No.; for documentary stamp taxes: BPI South FAO [for the account of] Bureau of Internal Revenue IFO [in favor of] Buyer’s Name + TIN No.

• Other documents: Certified true copy of title; acknowledgement receipts

• Refer to BIR docs list

SCENARIO A: OUTPUT

• Registry of Deeds, required documents:– Deed of Absolute Sale (DOAS) with BIR stamp– Tax clearance– CAR– Original TCT for transfer

• Pay transfer taxes: DOAS value x 75% of 1% , paid within 60 days from date of DOAS notarization (can be paid ahead of securing CAR, for as long as you can present claim stub + notarized deed of Sale)

• Pay registration fees (based on table from the Registry of Deeds); MC payable to “Registry of Deeds Muntinlupa”; for computations call Yolly Ybarle@ Registry of Deeds, Tel. # 861-1131

• Documents required to transfer the tax declaration in the name of the new owner:– Photocopies of the ff: new title, notarized DOAS, CAR, current tax declaration, tax clearance

SCENARIO A: OUTPUT

• HANDLING PROFESSIONAL FEES PAYOUT:

– Broker should ask permission from the SELLER if the buyer may aportion the broker’s PF in the breakdown, i.e. schedule of payments to the SELLER.

SCENARIO B: OUTPUT• SELLER: • Name, address, bday, TIN #; photocopy of valid government IDs of all parties

(preferrably original signed for clearer signature)• Check if association dues are fully updated• Provide co-broker with xerox copies of title, tax declaration; it is suggested that the

buyer’s broker secure the certified true copies of title and other documents of property ownership to protect the buyer’s side.

• Secure form 1904 (Appllication of Registration--for TIN verification of both parties)• Documents for BIR to secure the CAR: DOAS (Notarized), certification of no

improvement, which is issued by the Assessor, form 1904, form 2000-OT, form 1706, manager’s check payments for Capital gains tax, documentary stamps taxes. NOTE: Each accredited bank branch has a different payee name. Check it out with them. Accredited bank branches for BIR Muntinlupa include BPI Insular Life, BPI South (South Supermarket), Chinabank along Acacia Ave.

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SCENARIO B: OUTPUTS

• BUYER’S ESSENTIAL INFORMATION and documents on hand for RD:

– DOAS with BIR stamp– Original TCT for transfer– Tax clearance– Foreign spouse in a mixed marriage: before, waiver of foreign spouse

was required. This requirement was revoked – Transfer taxes must be paid within 60 days from the date of DOAS

notarization– NOTE that single buyer status is not critical; to note for this case, it’s

more important to address the status and declaration of Filipino married to a foreign national

VARIATIONS ON OWNERSHIP, WITH FOREIGN SPOUSE

• Legally a foreign spouse owns 50% of the house.

• Question: What if the Filipino spouse passes away, and there is no will?

• Answer: As exception, foreign spouse will own the property thru intestate succession

OTHER MATTERS

CLOSING REMARKS