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If you want to avoid spending your money on a fraudulent property purchase, one way to protect yourself is by checking the authenticity of the title.
Purchasing real estate is a costly transaction, and therefore requires careful consideration. Aside from inspecting the property itself, you also need to ensure that all documents are in place so that the transfer of ownership goes as smoothly as possible. But this is not always the case; there are people who were unfortunate enough to have purchased properties with fake land titles.
One of the biggest cases of land title scams to date is that of a 770-hectare property in General Santos City. Although owned by the government, a group of individuals claimed the land using fake land titles. They then proceeded to sell it to Metro Manila businessmen for millions of pesos.
As in any situation that involves big financial decisions, the best defense is to protect yourself. This means practicing due diligence.
“Conducting due diligence is crucial before buying a real estate property,” said Hardy Lipana, president and CEO of title transfer services company Conveyance Realty Services Inc. “This is a process wherein research and analysis are involved to validate the accuracy and legality of ownership documents and checking the validity of title. It is a component of property acquisition that is often overlooked or taken for granted.”
One important aspect of due diligence is title verification. According to Mr. Lipana, the things that you would need to check for are the actual owner of the property, exact property location, existence of claims and encumbrances on the property, and actual use of the property.
Q: How do I check if my land title is real?
A: The Land Registration Authority (LRA) issues registration and certificates of title and register documents, patents, and other land transactions. Every property title comes in two copies. The Registry of Deeds stores the original copy, while the property owners keep the duplicate carbon copy. Both the original copy and the one issued to the property owner should have the exact same information.
These are the things to check for to ensure that your title is real:
- Signatures and initials on both the original and owner’s duplicate copies should be exactly the same.
- The technical description that describes the property location, area of the property, and property boundaries should also be the same for both owner’s duplicate and original copies.
- The original and owner’s duplicate copies of title should bear the same annotations and encumbrances at the back page.
- The serial numbers should be the same for both original and owner’s duplicate copies. It should correspond to the particular Registry of Deeds that issued the title.
- The duplicate copy should contain the words “Owner’s Duplicate Certificate”. It should also have a red seal that should not blot or stain when wet.
- If an owner’s duplicate copy is lost or destroyed and reconstituted, it should bear the letters “RT” preceding the title. Meanwhile, the original copy of the title that was reconstituted should contain the letters “RO” before the title number.
- Check if the Register of Deeds that signed and issued the title was the incumbent register of deeds at the time the title was issued.
- Consult the Registry of Deeds Releasing Book to see if the registry released a title carrying such number on that specific date.
- Check the issuance of Decree at the Land Registration Authority.
- Hold the certificate of the title against the light (original and owner’s if possible) to verify if it bears security marks or water marks such as “NLTDRA” or “LRA”
- The last two digits of the title number should be the same as the last two digits of the page number found at the top right portion of the title
- Verify from the LRA if the serial number (upper left side portion) corresponds to the series of titles assigned or allocated to the Registry of Deeds that issued the title.
Is there a way to protect people from fraudulent titles?
Currently, laws against falsifying land titles are written in Act No. 3815 or the Revised Penal Code, specifically under Section Four: Falsification of Legislative, Public, Commercial, and Private Documents, and Wireless, Telegraph, and Telephone Messages. Under Articles 171 and 172, the penalty for people who are proven to have falsified documents is six months in prison and a fine of Php5,000.
However, there are those who feel that these sanctions don’t go far enough. In 2016, Quezon City Rep. Alfred D. Vargas III proposed House Bill No. 6357, which will amend the aforementioned Articles to punish violators with up to life imprisonment, depending on the value of the property indicated in the falsified title.
The LRA also initiated a government inter-agency task force, Task Force Titulong Malinis (TFTM) which involves the Department of Justice (DOJ), Office of the Solicitor General, and the National Bureau of Investigation (NBI), among others. The task force is in charge of the investigation and prosecution of illegal activities of fake title syndicates. It also files the cancellation of title proceedings for titles that are considered fake.
The LRA also launched the Voluntary Title Standardization Program. Through it, property owners can upgrade their manually issued titles to electronic titles or eTitles. One of the main advantages of an eTitle is it protects the title from damage, loss, or theft. There are distinct security features that protect an eTitle, such as a unique barcode and watermark. This prevents tampering or unauthorized data substitution, said to be the common cause of the issuance of fake titles.
As daunting a task as it is to verify a land title, a buyer must not disregard it. Should they be unsure of the process, Mr. Lipana advises consulting someone who has the experience and expertise in land titling.
“Proper due diligence before buying a real estate property can prevent you from having bigger potential problems in the future. It can also save you from spending your hard-earned money on a property that is not worth your investment,” Mr. Lipana explained.
This article was written in collaboration with Conveyance Realty Services Inc., a professional company specializing in title transfer services and similar services such as title due diligence, assistance in issuance of lost titles, assistance in verification of property location, assistance in extrajudicial settlement for real estate properties, and assistance in application of eTitles. For more information about Conveyance, visit www.conveyance.com.ph.