deed of assignment vs deed of sale ph

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Things you need to know about Deed of Assignment.

Last updated on 8 January 2024

1. What is a Deed of Assignment? 

A Deed of Assignment is a contract where the owner (the “assignor”) transfers ownership over property to another person (the “assignee”) by way of assignment. The assignee steps into the shoes of the assignor and assumes all the rights and obligations to the property.

If you will assign immovable property (e.g. land, house) then use this Deed of Assignment for Immovable Property instead.

2. When do you need a Deed of Assignment?

A Deed of Assignment is used when the owner wants to transfer ownership (and the rights and obligations) over property to another person.

3. What information do you need to create the Deed of Assignment?

To create your Deed of Assignment you’ll need the following minimum information:

• The type of assignor (e.g. individual or business) as well as name and details (e.g. nationality and address).
• The type of assignee (e.g. individual or business) as well as name and details (e.g. nationality and address).
• Brief description of the property to be assigned.

4.  How much is the document?

The document costs PHP 400 for a one-time purchase. Once purchased you have unlimited use and revisions of this type of document.

You can also avail of Premium subscription at PHP 1,000 and get (a) unlimited use of our growing  library  of documents (from affidavits to contracts); and (b) unlimited use of our “ Ask an Attorney ” service, which lets you consult an expert lawyer anytime for any legal concern you have.

Related Documents.

Activities that involve a Deed of Assignment sometimes use the following documents. You may be interested in them:

Deed of Assignment for Immovable Property

Assign your rights to immovable property (e.g. house, land) to another person

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Deed of Sale in the Philippines: Essential Tips for Buyers and Sellers

Are you planning to buy or sell property in the Philippines? Then, understanding a Deed of Sale is key to a successful transaction. This legal document serves as proof of transfer of ownership from the seller to the buyer, ensuring both parties are protected. But navigating the intricacies of a Deed of Sale can be overwhelming, especially for first-time buyers and sellers.

In this article, we will provide essential tips to help you navigate the Deed of Sale process in the Philippines.  From understanding the components of a Deed of Sale to ensuring its validity, we will cover everything you need to know. Whether you are a buyer looking for clarity on legal requirements or a seller aiming to protect your interests, our expert advice will guide you through the entire process.

What is a Contract of Sale?

Article 1458 of the Civil Code of the Philippines defines a Contract of Sale in this wise: “By the contract of sale, one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.”

In Pasco v. Cuenca(G.R. No. 214319, November 04, 2020), the Supreme Court of the Philippines defined a Contract of Sale as follows: “a contract of sale is a consensual contract which requires for its perfection and validity the meeting of the minds of the parties on the object and the price. The essential elements of a contract of sale are: (a) consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; (b) determinate subject matter; and (c) price certain in money or its equivalent. All these elements must be present to constitute a valid contract.”

Understanding the Deed of Sale

A Deed of Sale is a document where the terms and conditions of a Contract of Sale is found. It is a legally binding document between a buyer and a seller that outlines the terms and conditions of the property purchase and transfer. This document serves as one of the proofs of the transfer of ownership from the seller to the buyer.

The Deed of Sale contains vital information such as the buyer and seller’s details, property description, purchase price, payment terms, and any additional terms and conditions agreed upon by both parties. It serves as evidence of the transaction and can be used to settle future disputes or claims related to the property.

In the Philippines, the Deed of Sale is typically prepared by the seller or their legal representative. However, both buyers and sellers must have a clear understanding of its contents to ensure a smooth and legally binding transaction.

Importance of a Deed of Sale in the Philippines

The Deed of Sale holds great significance in the Philippines, as it is a legal requirement for property transfers. The Registry of Deeds of the Philippines requires a Notarized Deed of Sale before it updates the title of purchased real properties.  The Land Transportation Office likewise requires a written Deed of Sale before it transfers the registration of vehicles.

It is a crucial document that protects the rights and interests of both the buyer and the seller. Without a valid Deed of Sale, the transfer of ownership may not be legally recognized, leaving both parties vulnerable to potential disputes or complications.

For buyers, a Deed of Sale provides assurance that the property they are purchasing will be transferred to them legally.

For sellers, a Deed of Sale ensures that the property is transferred to the buyer in a legally binding manner. It protects their rights and interests, ensuring that they receive the agreed-upon purchase price and are released from any liabilities associated with the property.

Legal Requirements for a Deed of Sale

Certain essential requirements must be met to ensure the validity of a Deed of Sale in the Philippines. These requirements are in place to protect the rights of both buyers and sellers and to ensure a smooth transfer of ownership. Here are some of the key legal requirements for a Deed of Sale:

1. Consent of the parties: The Deed of Sale must be entered into willingly and voluntarily by both parties. Any form of coercion or fraud can render the agreement void.

2. Determinate subject matter or a clear description of the property: The Deed of Sale should accurately describe the property being transferred. This includes details such as the property’s address, lot and block number, and specific boundaries.

3 Agreed purchase price: The Deed of Sale must state the agreed-upon purchase price of the property. It should also specify the payment terms, including the mode of payment, down payment amount (if any), and the schedule of installment payments (if applicable).

4. Compliance with legal requirements: While this is not an essential element of a Contract of Sale, the Deed of Sale must still comply with the legal requirements set by the Philippine government for it to be recognized by 3 rd persons or the Philippine Government. This includes the payment of taxes and fees, such as the documentary stamp tax and transfer tax.

By ensuring that these legal requirements are met, both buyers and sellers can have peace of mind knowing that their transaction is legally valid and protected.

Steps to create a Deed of Sale

Creating a Deed of Sale in the Philippines involves several steps to ensure its validity and effectiveness. Here is a step-by-step guide to creating a Deed of Sale:

1. Gather necessary information: Collect all the relevant details, such as the buyer and seller’s information, property description, purchase price, and payment terms.

2. Draft the Deed of Sale: Prepare the Deed of Sale document, ensuring that it includes all the essential information discussed earlier. Use clear and concise language to avoid any ambiguity or confusion.

3. Review and edit: Carefully review the drafted Deed of Sale for accuracy and completeness. Make any necessary edits or revisions to ensure its clarity and compliance with legal requirements.

4. Consult a lawyer: It is highly recommended to seek legal advice and assistance when creating a Deed of Sale. A lawyer specializing in Contract Law, such as Ricasio law, can review the document, provide guidance, and ensure its legality and effectiveness.

5. Sign the Deed of Sale: Once the Deed of Sale has been finalized and approved, both the buyer and the seller should sign the document in the presence of a notary public. This ensures that the agreement is legally binding and enforceable.

By following these steps, buyers and sellers can create a legally valid and effective Deed of Sale that protects their interests and ensures a smooth transfer of ownership.

Seeking legal advice for a Deed of Sale

Given the complexities and legal requirements involved in creating a Deed of Sale in the Philippines, it is highly recommended to seek legal advice and assistance. A lawyer, like Ricasio Law, who specializes in real estate law and contracts law, can provide expert guidance, review the document, and ensure its legality and effectiveness. They can help protect your rights and interests as a buyer or seller, and ensure a smooth and legally binding transaction.

Whether you are a buyer or a seller, investing in legal advice can help you navigate the complexities of the Deed of Sale process with confidence. It provides peace of mind, ensures compliance with legal requirements, and protects you from potential disputes or complications in the future.

Conclusion: Ensuring a smooth and legally binding transaction

The Deed of Sale plays a crucial role in property transactions in the Philippines. It is a legally binding agreement that protects buyers’ and sellers’ rights and interests. By understanding the components of a Deed of Sale, ensuring its validity, and following the essential tips provided in this article, you can confidently navigate the process and ensure a smooth and legally binding transaction.

Whether you are a buyer looking for clarity on legal requirements or a seller aiming to protect your interests, the tips and advice shared in this article will guide you through the entire Deed of Sale process. Remember to seek legal advice from a lawyer specializing in real estate law and contract law, such as Ricasio Law, to ensure that your interests are protected and your transaction is legally valid.

So, whether you are about to seal the deal on your dream home or planning to sell your property, armed with the knowledge and tips shared here, you can confidently proceed with the Deed of Sale in the Philippines.

How Ricasio Law can assist you?​

Ricasio Law is a law firm in the Philippines and an expert in Contract Law. Our team of Contract Law experts can give you useful advice and help you figure out the best thing to do. Get in touch with us right away to talk about your case and let us help you prepare and review a Deed of Sale.

Disclaimer : The content on this website is offered as general information only and is not intended to be legal advice or a solicitation for legal services. The information is not being supplied as part of an attorney-client relationship between the Lawyers of Ricasio Law and anyone viewing it. Viewers should not rely on the information on this website for making legal decisions, but should instead get legal assistance from a skilled attorney. You should not act exclusively on the basis of the material on this website and are strongly recommended to seek the legal advice of a lawyer.

If you are interested in the legal representation, counseling, and other legal services that we offer, please contact us using the information provided on this website. You can also discover more about our real estate transaction services here.

Ricasio Law is a boutique law firm specializing in business law and contracts, litigation, and labor and employment. Our team of experienced lawyers are committed to providing personalized and effective legal solutions to our clients. Our practice areas are broad and designed to meet your needs. Our team is dedicated to helping you achieve your goals

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7 Frequently Asked Questions About the Deed of Absolute Sale

A deed of absolute sale of land states that one party is transferring his land rights to another. If either the seller or the buyer couldn’t be present to sign the document, as in the case of Overseas Filipino Workers (OFWs), an “AIF” or Attorney-in-Fact, must be appointed as a representative in the signing of the deed. The difference between a Deed of Absolute Sale and a Contract to Sell is that the Deed of Sale is preceded by a Contract to Sell since the Contract to Sell acts as the foundation for the Deed of Sale.

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Last Updated on September 6, 2022 by Lamudi

The buying and selling process of real estate could be overwhelmingly tough especially at first glance. With the number of legal documents that you need to prepare and understand, it’s normal to feel intimidated.

Familiarizing yourself with the necessary legal documents when purchasing or selling a property will protect you from fraudulent and malicious acts done by those who intend to transact in bad faith. It is important to know all these documents in order to ensure safe and smooth transactions in buying or selling properties. Knowing them one by one is essential in protecting you either as a buyer or a seller in transferring or paying for a certain property.

Among the most important legal documents in a real estate transaction is the deed of absolute sale of land . This document serves as proof of the sale of the property. ( Get the downloadable PDF sample form here  or the Tagalog Deed of Absolute Sale sample here ). To help you learn more about this legal document, we outlined here the most common questions about the deed of absolute sale:

1. What Is the Deed of Absolute Sale?

If you want to know the deed of sale meaning, it is an essential legal document that proves that both parties have fulfilled their obligations and the transaction can already be considered closed. It’s commonly used on transactions involving pure obligations. 

Pure obligations pertain to debts not subject to any conditions and are demandable at once. They are common in direct real estate transactions wherein the buyer pays in full through cash or cheque. For instance, when the buyer has delivered the payment on a certain piece of land, the seller is obliged to issue a deed of absolute sale of land as proof that the buyer paid what is due and is granted the ownership and legal rights to the said property.

A deed of absolute sale of land states that one party is transferring his land rights to another. This means that all the seller’s rights to the property have now been passed on to the buyer. The buyer has now the full right to use the property they purchased.

Keep in mind that the deed of sale of land is a legal document that proves and records the sale of the property. It is written proof that both the buyer and the seller have reached an agreement regarding the sale or purchase. With a deed of absolute sale of land , both the buyer and the seller are protected in case disagreements or problems about the lot arise in the future.

2. When Can You Expect the Deed of Absolute Sale?

The deed of absolute sale should be prepared as soon as the payment is made. The seller must first settle taxes due, such as the capital gains tax (if applicable), before executing the legal document.

On the buyer’s side, the deed of absolute sale of land is prepared when you pay the full purchase price of the lot, which includes all the underlying taxes such as the transfer tax, documentary stamp tax and all other fees related to the registration process. 

3. What Does the Absolute Deed of Sale Contain?

The deed of absolute sale is signed by both parties in front of a notary public. To be valid, the absolute sale deed must indicate the date and location of the filing, proper identification of the property, and the name and address of the buyer and the seller.

How do you ensure the validity of a deed of absolute sale in the Philippines? The legal document must contain the property’s identifying features, such as the complete address or detailed description of the property. Identifying features are crucial, especially when the subject is the land. The land is prone to disputes as sometimes there are no clear borders, which is why it is imperative that the deed of absolute sale of land includes a detailed description of the lot area or floor area to prevent legal issues. 

The document states that “the SELLER is willing to sell and the BUYER is willing to buy the above-described real estate property” and “acknowledged by the SELLER to her satisfaction, the SELLER SELLS, CEDES, TRANSFERS and CONVEYS in a manner that is absolute and irrevocable the above real property unto the BUYER, his heirs, assigns and successors-in-interest”. With this clause in the deed of absolute sale of land , the seller is essentially transferring the lot to the buyer.

The deed of absolute sale should also include a statement of assurance that the property has no pending transaction in the Registry of Deeds: “The SELLER warrants that she can transfer the title and possession of the aforesaid real estate property to the BUYER and that there are no other transactions pending registration with the Registry of Deeds.”

In addition, it must specify that the buyer will shoulder several taxes associated with the sale such as the Transfer Tax and Documentary stamp tax. The seller, meanwhile, will be the one responsible for the capital gains tax. 

And finally, this document must be fully notarized by a Notary Public in order to become a public document and would be binding to third persons. 

4. What If the Seller or Buyer Couldn’t Sign the Deed of Sale in Person?

If either the seller or the buyer couldn’t be present to sign the document, as in the case of Overseas Filipino Workers (OFWs) , an “AIF” or Attorney-in-Fact, must be appointed as a representative in the signing of the deed. The AIF must be legally appointed through a notarized Special Power of Attorney.

In cases of schedule conflicts, the seller or buyer may appear at different times before the same notary public before the deed of sale Philippines is notarized. In the alternative, the seller can appear before a notary public and have the deed of sale notarized and sent to the buyer, who then appears before a different notary public to sign the same deed to be notarized separately.

Aside from SPA, a General Power of Attorney bearing the current name of the representative is also acceptable. For married couples, the General Power of Attorney must contain the married name of the wife. Otherwise, the General Power of Attorney will not be honored. The bottom line is, there must be an appointed representative for signing the deed of absolute sale of land .

5. What Is the Significance of the Deed of Absolute Sale?

Aside from being proof of the purchase, a notarized Deed of Absolute Sale is among the required documents by the Bureau of Internal Revenue (BIR) in order to transfer the land title documents in the name of the seller to the buyer. Without a notarized Deed of Sale, the taxes cannot be paid and the transfer of title cannot take effect.

It is important for property seekers to be familiar with the differences between an absolute deed of sale and a conditional deed of sale. Unlike the conditional deed of sale, the absolute deed of sale immediately transfers all the rights to the new owner upon payment, which is recorded in the Registry of Deeds. A conditional deed of sale states various conditions before the property title will be transferred. Conditional deed of sale is common on short-term installment plans. 

The deed of absolute sale is necessary to confirm the validity of the transaction. There are various cases where malicious petitioners failed to secure their claim to the property after presenting an invalid or forged deed of absolute sale.  The absolute deed of sale of land is also a strong document that protects owners from unfair land borders. Since it contains a detailed description of the property, owners can assert their right to the property, protecting their interest. 

6. Are There Other Types of Deed of Sale Aside From the Deed of Absolute Sale?  

The type of agreement and the terms and circumstances established by the seller and buyer can influence the deed of sale. The two varieties of a deed of sale are as follows:

Conditional Deed of Sale

A conditional sale is a real estate transaction that is subject to conditions. The sale of goods under the terms of a contract, typically stipulating that ownership does not transfer to the buyer until after a certain amount of time has passed. It usually happens after the seller receives the last purchase price payment, even if the buyer already has the item and is legally required to become the owner.

• Absolute Deed of Sale

As stated above, the absolute sale happens when a contract or arrangement between the parties is entirely carried out, and the buyer acquires possession of the property. An absolute sale takes place without limitations. The seller freely gives the title to the buyer, subject only to the payment of the agreed-upon sum of money.

Understanding the documents in real estate processing is a vital step in preparing to buy or sell a property. It is important to fully comprehend these documents before signing in order to execute the transactions correctly and avoid costly mistakes in the future.

7. What is the difference between a Deed of Absolute Sale and a Contract to Sell?

The  difference between a Deed of Absolute Sale and a Contract to Sell  is that the Deed of Sale is preceded by a Contract to Sell since the Contract to Sell acts as the foundation for the Deed of Sale. The Deed of Sale contains an act of finality. On the other hand, the parties to the Contract to Sell are obligated to fulfill the conditions they agreed to. This indicates that such conditions must be met before a subsequent agreement is drafted. The procedure to effectively transfer property ownership cannot start until then.

Download the deed of sale Tagalog sample through this link.

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Deed of Sale Sample Philippines (Free Download)

You just finished talking to a buyer of your house and lot in Quezon City, so you need to draft a deed of sale. You are glad that, after intense negotiation, you have finally agreed on the contract price. 

How do you then draft a deed of sale to ensure all the terms and conditions you agree to are reflected in the contract? 

This guide will walk you through drafting a deed of sale. 

DISCLAIMER : This article has been written for general informational purposes only and is not legal advice or a substitute for legal counsel. You should contact your attorney to obtain advice with respect to any particular issue or problem. The use of the information contained herein does not create an attorney-client relationship between the author and the user/reader.

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Free downloadable/editable deed of sale sample templates.

To save you the hassle of writing a deed of sale  from scratch, you may download the following samples and edit the contents using the above guide:

1. Deed of Absolute Sale of Real Property

2. contract to sell real property, 3. deed of absolute sale of a motor vehicle, 4. deed of sale with pacto de retro, what is a deed of sale.

Under Article 1458 of the New Civil Code of the Philippines 3 , a deed of sale or a contract of sale is a document executed when one of the contracting parties (called the seller) obligates himself to transfer the ownership and to deliver a determinate thing (e.g., house and lot or motor vehicle), and the other (called the buyer) to pay the price certain in money or its equivalent. 

A contract of sale may be absolute or conditional. 

Deed of Absolute Sale vs. Deed of Conditional Sale vs. Contract To Sell: What’s the Difference?

1. deed of absolute sale.

The Supreme Court, in one case 4 provides that a contract of sale is absolute when :

• The title to the property passes to the buyer upon delivery of the property sold. Delivery is either actual (when the item is given to the buyer) or constructive (i.e., executing a Deed of Absolute Sale in the case of real property). 
• The contract has no statement or condition that the property title remains with the seller until full payment of the purchase price. 
• No provision in the contract gives the seller the right to cancel the contract unilaterally (meaning without the buyer’s consent) when the buyer fails to pay within the agreed period.

2. Deed of Conditional Sale and Contract to Sell

A conditional sale occurs when there is a condition in the contract of sale, and ownership of the property will only pass to the buyer upon fulfilling the condition. 

On the other hand, in the contract to sell 5 , the prospective seller binds himself to sell the property exclusively to the prospective buyer upon fulfilling the conditions agreed upon, e.g., the full payment of the contract price. In a contract to sell, the agreement is about the promise to sell.

The ownership in both conditional sale and contract to sell remains with the seller and does not pass to the buyer. 

However, in a deed of conditional sale (also known as a contract of conditional sale), the ownership is automatically transferred to the buyer when the condition is fulfilled. For example, you are the buyer, and the condition is the full payment of the contract price. Once you have fully paid the contract price, the ownership of the property is automatically transferred to you by operation of law without any further action to be done by the seller. 

It is not the same in a contract to sell. Ownership is not automatically transferred even if the buyer fulfills the obligation, and the property may have already been delivered. The prospective seller still has to transfer the title to the prospective buyer by executing a deed of absolute sale because the agreement in the contract to sell is only a promise to sell and not yet a sale of the property.

Please note that if the contract contains a clause that the seller shall execute a Deed of Absolute Sale only after full payment of the purchase price, it is a contract to sell.

Is there a need to execute a Deed of Absolute Sale in a Deed of Conditional Sale?

Although jurisprudence says ownership is automatically transferred to the buyer by operation of law without any further action to be done by the seller, in practice, a Deed of Absolute Sale still has to be executed because one of the requirements in the Register of Deeds for the transfer of title of the real property is a Deed of Absolute Sale. This also confirms the buyer has fulfilled the condition.

Deed of Absolute Sale vs. Contract of Sale With Pacto De Retro : What’s the Difference?

Property ownership transfer is absolute without conditions in the Deed of Absolute Sale. In a contract of sale with pacto de retro,  the buyer gives the seller the right to repurchase the property within the agreed timeline. 

If you execute a pacto de retro sale , the ownership of the property is immediately transferred to the vendee a retro (the buyer). However, since the seller a retro is given the option to buy back the property, the ownership reverts to the seller when the latter exercises this right.

The parties can fix the date when the seller should repurchase the property, but the period should not be more than ten years from signing the contract. The default is four years from signing the document if the period is not stated. 

How To Draft a Deed of Absolute Sale: 3 Steps

For this guide, we will be using the sale of real property as a sample, as it is the most common type of transaction.

1. Prepare the document

A Deed of Absolute Sale should contain the following parts:

• Title of the document . If it is an absolute sale, it should be titled as such
• Name of the seller ,  a statement that the latter is of legal age, civil status, citizenship, and residence address. 
• Name of the buyer ,  a statement that the latter is of legal age, civil status, citizenship, and residence address. 
• The identification  of the real property , its address, and the technical description (can be found on the title of the property) 
• The consideration or the purchase price .
• Warranty of the seller 
• The signature of the parties
• Signature of the witnesses
• Acknowledgment before a notary public

2. Print at least 3-5 copies of the document

• One copy goes to the notary public
• One or two copies go to the seller
• One or two copies go to the buyer

3. Go to a notary public to have your document notarized

Don’t forget to bring valid IDs, as the notary will have to verify the identities of the parties.

Tips and Warnings

• In drafting a contract of sale, it is crucial to ascertain the real intention of the parties. Several cases have been decided by the Supreme Court whereby an agreement titled a Deed of Conditional Sale was ruled to be a Contract to Sell due to the clauses in the contract. This is because it is not the title of the contract that will prevail but the express terms and conditions that will determine whether you entered into an absolute contract of sale, conditional contract of sale, or a contract to sell. 

Frequently Asked Questions

1. should a deed of sale of real property be notarized.

Yes. A sale deed of real property should be notarized per the requirements under Article 1358 of the New Civil Code, which provides that any contract that creates, transmits, modifies, or extinguishes rights over the real property should be in a public document. 

The notarization of a private document converts it into a public record.

2. How much is the cost for the notarization of a Deed of Sale in the Philippines?

The cost varies depending on the location or the IBP (Integrated Bar of the Philippines) Chapter to which the notary public belongs. The going rate is around 1% of the contract price. In IBP Cebu Chapter 6 , the standard rate seems to be 2% of the actual amount of the contract but not less than Php 1,500 whichever is higher. On the other hand, in Dumaguete 7 , the standard rate is a minimum of Php 2,000 or 3% of the property’s fair market value, whichever is higher.

3. Who pays for the notarization of a Deed of Sale ?

Depending on both parties’ agreement during the negotiation process, it could be the seller or the buyer.

4. How can I sign the Deed of Sale in the Philippines if I am abroad?

You may appoint a person based in the Philippines to sign the Deed of Sale on your behalf by executing a Special Power of Attorney in favor of your agent in the Philippines.

5. Does a Deed of Sale have an expiration date?

A Deed of Sale has no expiration date per se, but it can be extinguished (canceled or nullified) by the same causes as all other obligations.

For example, in a Deed of Conditional Sale, the contract may be extinguished due to the non-payment of the contract price or breach of other obligations.

In a Deed of Sale with Pacto de Retro , the sale is extinguished by the redemption of the seller of the property sold.

6. What is the difference between a Deed of Sale and a Deed of Donation ?

In donation, the transfer of property is gratuitous (meaning for free), usually because of the donor’s love and affection for the donee or due to the good service of the latter. There is always a consideration in the sale: money or its equivalent. 

Both transfers require payment of fees and taxes. In addition to transfer tax, documentary stamp tax, among others, a donation is subject to donor’s tax of  6% computed based on the total gifts over Php 250,000 exempt in a calendar year (effective 01 January 2018 based on RA 10963 or the TRAIN Law). 

On the other hand, a sale is subject to an outright capital gains tax of 6% of the total contract price or the fair market value of the property, whichever is higher, which must be paid to the BIR within 30 days from the date of signing the Deed of Sale.

A deed of sale and a deed of donation are both modes of transferring property ownership. However, the rules on donation are governed by Title III, while Title VI of Book III of the New Civil Code of the Philippines governs a sale.

7. What is an Open Deed of Sale ? Is it valid?

An open deed of sale is just like a regular deed of sale, but the buyer’s name and other contract details, such as the price and the date of signing, are left blank or open.

This practice is common in selling second-hand motor vehicles or in a dealership where the dealer’s possession of the vehicle is temporary until the dealer finally finds a buyer.  This scheme is done purportedly to avoid going through the rigorous process of transferring ownership of the vehicle and paying the transfer fees/taxes. 

The Open Deed of Sale, on its face, is not a valid form of contract as there is no meeting of the minds between the buyer and the seller appearing on the document.

This practice is also risky for both parties. Under the law, the owner of a motor vehicle is the person whose name appears on the Certificate of Registration (CR) issued by the Land Transportation Office (LTO); hence, even if you have already sold the motor vehicle, if your name still appears on the CR, you remain responsible for it. If the motor vehicle injures a person or property, the victim will go after you, even if you are not driving the vehicle.

The same is true if you are the buyer. It will be hard to find out if the car has been involved in a crime, was carnapped, or is collateral of a loan without your knowledge. 

It is best to avoid executing an open deed of sale; otherwise, you risk exposing yourself to the above-mentioned untoward scenarios.

• IBP Cebu releases minimum attorney fees table. (2020). Retrieved 6 October 2020, from https://abogado.com.ph/ibp-cebu-releases-minimum-attorney-fees-table/
• Dumaguete Lawyer - IBP Rates. (2020). Retrieved 6 October 2020, from http://www.dumaguetelawyer.com/rates/
• Republic Act No. 386: Civil Code of the Philippines (1949) .
• Sps Ramos vs. Sps Heruela , G.R. No. 145330, October 14, 2005.
• Ventura et al vs. Heirs of Spouses Endaya , G.R. No. 190016, October 2, 2013
• Dumaguete Lawyer – IBP Rates. (2020). Retrieved 6 October 2020, from http://www.dumaguetelawyer.com/rates/

Written by Atty. Kareen Lucero

in Juander How , Legal Matters

Atty. Kareen Lucero

Kareen Lucero is a lawyer previously doing litigation before working for different agencies in the government and for a multinational corporation. She has traveled to 52+ countries including a 3-month solo backpacking in South East Asia and more than 1 year of solo traveling across four continents in the world. As part of giving back, she is passionate about sharing her knowledge of law and travel. She is currently doing consulting work for a government agency. For inquiries, you may reach her via Facebook Messenger (https://m.me/kareen.lucero.77) or email ( [email protected] ).

Browse all articles written by Atty. Kareen Lucero

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Contract of Sale vs. Deed of Donation Which should you choose

Are you transferring property to a loved one? Or is a loved one transferring property to you? What is the best way to transfer property between relatives? In the Philippines, it's typical for parents to transfer properties to their children during their lifetime... either it's a gift as an advanced inheritance. Sometimes they do this so that the properties are already transferred before they pass away.

Our question comes from Ronald P. and he asks, Attorney,

My parents are old and they want to transfer their house and lot to me so that I won't have any more problems when they die. What's the best way for them to transfer the property to me? I heard from my friends that we can choose between a sale or a donation. Which do you think is better?

If you're in a similar position as Ronald? Stick around as we answer his question.

This video is brought to you by "Transferring Land in the Philippines" a workshop that teaches Filipinos the basic modes of transferring land and real properties in the Philippines. It provides the pros and cons of each mode, as well as the steps and procedures so that you eliminate your confusion and successfully navigate the whole process. Transfer with confidence. A transfer without fixers. Go to info.legalguide.ph to learn more.

Welcome to Legal Guide Philippines, where we simplify the law to help you make better choices. I'm Atty. Ramon Ramirez and I are with my partner, Atty. Erwin Zagala. So today we're talking about transferring properties to loved ones. Specifically, what's the best way to transfer property from one person to another, especially if it's to or from a loved one. Now, Atty. Ramon, we've seen a lot of these situations happening where parents will transfer their properties to their kids during their lifetime so that when they die, the kids no longer need to pay taxes. When they do that, what is the best way to transfer the property?

Do we document it as a sale or as a donation? Should we execute a deed of absolute sale or a DOAS, or a deed of donation? Okay, so you're correct Atty. Erwin, this happens a lot. This transfer is usually done by parents as some sort of "tax" planning strategy.

So, why? So that their children no longer need to bear the burden of a tax that we call, right now, we call it the estate tax. which is a tax that needs to be paid when a parent dies, and before the properties can be transferred to the children. Okay, so in effect, it's some sort of "tax planning" because it's already being done by the parents.

What is a sale and what is a donation

But before we answer that question, which is better? A sale or donation? I think I'd want to tackle three things first. So you need to understand these three? Yes. So that we can understand the answer. So we can understand the answer. The first thing we want to tackle is I think it would be helpful to explain what is a sale, and what is a donation and what is the difference? Let's start with the sale.

So under, of course, for lawyers, we have to give the definition under the civil code. Okay, Atty. Ramon, read. I am the Attorney. A sale is an agreement whereby one of the parties obligates himself to deliver something to the other, who on his part, binds himself to pay, therefore for a sum of money or its equivalent. The sale is very clear.

So let's break it down. So basically it's a contract whereby one party, says, okay, I'm going to deliver something to you. Like, let's say, I'm delivering this phone. Delivering something to you. On your part, you also bind yourself to pay for whatever it is that I delivered to you.

I deliver the payment? Yes. A sum of money or its equivalent. So elements of a sale, basically, like any contract, there's the meeting of minds. There's a definite agreement between the parties with respect to the thing, our object. And the cost or price of the thing. Let's say you're selling it, I'm selling it for 100 pesos. That is our cost.

Of course, it's important that both of us have legal capacity. So I think we look like we're of age. So we have legal capacity. We have the ability to enter into legal affairs or contracts. Okay, the second element is we should have an object or a subject matter which is a determinate thing to be sold.

So in our case, it's the cell phone. So it's the determinate thing. We agree that this is the thing that will be the subject of the sale. And last is the Cause or Consideration. As I said, it's 100 pesos. It's a price, certain in money. Very clear. Okay. Now, what is a donation Atty? Erwin?

It's better if we read it. Under Article 725, a donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another who accepts it. It's also clear. So basically, it's an act of liberality whereby, instead of involving money, I want to, because of my liberality, I will just give you my phone. So in Tagalog, give or bestow. Yes. But you also need to accept it.

It's a requirement. Because even if you give it, what if the other party doesn't want it? I think I saw a pattern, there's two B's. What's the first B attorney, "Buy", the other one is, "Bestow" Yes. Pick between the two Bs. Okay so, the sale buys a donation is bestow. B or B. Alright, so that is the difference of a sale between the sale and donation. I hope that's clear.

Okay, so it's actually even without the legal definitions, I think it's pretty clear in our heads. B or B. All right, now and then. Okay second, the second thing I want to discuss is now, how come you can "choose your own adventure", so to speak. In terms of how to transfer something to your loved one? Usually, people say "Ah land? Which is better? Sale or Donation?"

Why was there such a big fuss between sales or donations?

Now, why did this become popular? Well, well definitely under our laws parties are definitely free to contract in whatever manner they see fit, as long as they don't violate, of course, our laws, good morals, customs, etc. they can contract. But in my experience, the reason for this "choose your own adventure" kind of thing and why it became a thing was because well before the TRAIN law, the tax rates for these two kinds of contracts, the sale, and the donation were quite different.

Ah, there is an effect to the tax Atty. Ramon. So it was kind of a tax-driven decision. So on the one hand, for a sale of property or land or whatever. Usually, this will trigger a tax called the CGT or the Capital Gains Tax Remember that, CGT. That usually just means capital gains tax. Okay, which was 6% of the fair market value or gross selling price whichever is higher.

Just remember 6% as opposed to a donation before the train law, okay? Donations at that time, it was based on graduated rates ranging from 2% to 15%, so it changes. Yes. So depending on the value of what you will donate. So depending on how much you'll donate, it becomes more expensive Yes, you cap it around 15%.

And this is for relatives only. Okay, so it is a different topic when they are not your relatives. Like for example, we are not blood relatives, Even if we are "brotha from another motha" Even in that case, we are treated as strangers.

And at that time, if I donated something to you or you donated something to me, it was a whopping 30%. Yes. It's like they don't want us to give to each other. It's like getting a penalty when you give. Anyway, so that was why it became popular, so back in the day, people, what will they do?

They'll make computations on their Excel spreadsheets and determine which is cheaper. And then on top-line -- sale, bottom line -- donation, and you'll see which one is cheaper. It's like you are pulling from memory, it looks like you've had a lot of experience computing this. And then, of course, that's what you would base. If you're a service provider, you would base your advice on that.

"Guys this is much cheaper." So Atty. Ramon, basically the main consideration before is not the type of transaction, not it's not the B or B... It was because, "How much will I pay for it?" That's why it became a big issue before --- choosing between sale or donation. Which is better? Usually made that computation. The question has finally been answered. So in many ways, it made sense to regular people to do this.

Why? Because these CGTs or capital gains tax and donor's taxes were expenses of ordinary people. People like you and me who probably work jobs work really hard for our living. Why make waste money in our minds, unnecessarily on unnecessary taxes. As supposed to be a business expense, that the business pays. While this one comes from your own pocket. That's why this became rampant and of course, add to that some experts and advisors would advise them to pick and choose the transaction.

Atty. Ramon, you've mentioned before that, when the segment started, you said, "... before the train law" Yes. And now, the TRAIN law is in operation. So my big question is, and I'm that our viewers thought about this, is this still applicable considering the train law is now applicable? Thank you for that question Atty. Erwin. And that's exactly the third thing I want to talk about.

Is this still applicable now?

So the third thing I want to talk about is, is this still applicable now? Well, the answer is no. People have been doing this for years. Obviously, the BIR knows that people do this in sale versus donation. They're not stupid. The government knows this. No, they're not idiots. So they knew that this was being practiced. So they made important changes to our tax laws very recently through the train law.

Now with the new law, with the train law, this practice is no longer as prevalent. Why? Because now the rates are, remember CDT, what was the rate for CDT? six percent CGT then it's based on the fair market value or gross selling price. And then the donor's tax, you have your two to fifteen percent, or sometimes thirty percent. What is it now? Now they're both six percent.

Okay, so it's a pretty big leap. So I think that was a smart thing for the government, it is now equalized. Because it was just driving people to not tell the truth. And I would like to note, it's a very fair percentage. If you noticed, it's on the lower level. Not all of it was standardized at the top. We're at the bottom. Yeah. Thank you, legislators for that. Yeah. So, in fact, the donor's tax, before, you had to make a distinction.

Is it part of the family? Or stranger? Right? Now under new law, there's no such distinction that needs to be made. So that's pretty cool. Atty Ramon, you can now give me a piece of land. It's now possible at six percent. So now when you make a comparative computation, the values of the CGT and donor's tax, should generally not be too different. Okay, so of course, each tax is computed differently, so there may be differences, but generally they're not that different.

Okay, Atty. Ramon, I now understand that they're both the same now if you're gonna look at it from a tax perspective. So going back to our original question, Atty. Ramon, what's better, sale or donation? Okay, I said a lot already. We're gonna go back to the question. Okay. Which is better? I would say that the better option between a sale or donation is the contract that you really intended.

So if you intended to sale, you should execute a document that best reflects the intent of the parties for you guys. Okay. So if the party has intended a sale, then execute a deed of sale. If the party is intended a donation, then execute a deed of donation.

Don't simulate a contract, guys, that's just lying. Don't lie, please. Don't try to trick the others or the government just to save on some pesos. That's bad. We can do better than that. If you execute a deed of sale when you really secretly intended a donation, then that would be called a simulated sale.

And there are legal implications to that. Actually, a simulated sale may be invalidated, or it can be argued to be invalidated because there's really no consideration. For example, hey let's just execute this, let's execute this document as if it's a sale so that we can save on tax, but actually, it's a donation. So in truth, there's really one of the elements of a sale is a consideration.

Now, if there's no consideration, then it could be invalidated. In fact, during the time of BIR Commissioner Jacinto-Henares, it was really something that she wanted to crack down on. So she made it a point to really investigate the capacity to pay off so-called buyers. Okay, so if ever they find that there's no capacity, they assess additional taxes that need to be paid.

That's very useful Atty. Ramon, do you have any other tips for our viewers and listeners? Yes. Okay. So I hope I answered your question. So, sale or donation, the answer is, what's the truth? Go with that. You can never go wrong. It has the same tax rate. Okay. As a bonus tip.

Even this whole concept of transferring land to your kids to avoid paying so much estate taxes, later on, may no longer be such a good idea. Why? Because before, similar to the donor's tax, the estate tax rates would again be based on a graduated scale and the maximum, which would be around twenty percent. Okay. So it's a pretty big chunk that goes to taxes.

So and again, that was before. That's why a lot of people avoided it by "I'm gonna transfer it to my child so that there's no problem" but now under the train law, that is also six percent as well. So it's all the same level now: donation, sale, and estate are six percent. Same rate. Thank you. Thank you, legislators. Okay. And also another reason why I'd say probably doing that kind of tax planning is no longer as good as an idea as it was before is because we will be letting go of deductions.

Because the deductions have changed. Yes. It is much more beneficial now for the heirs. Yeah. So as opposed to CGT also and donor's tax where there's no deduction, the estate tax has deductions. Okay, so it might not be anymore that good of an idea. Again, you want to consult your lawyer on that. Or if you want a very quick intro on estate laws, you might want to consider info.legalguide.ph/estate to learn more. So that's it Atty. Ramon, thank you so much for all of those points.

And to recap guys, we've gone through a lot. First off, we talked about what is a sale and what is a donation. In its simplest terms, the two B's: "buy and bestow", choose which applies. Now, number two is we talked about why was there such a big fuss between sale or donation? Why was it like choose your own adventure for some people? And we went through the history that the tax rate was different before. So to take advantage, people chose the mode which was more beneficial to them.

Third, we talked about does it still apply today? Apparently not with the introduction of the train law, the tax rates are all equal. And as a result, if the tax is the same, have the contract reflect what is your original intent. Yes. And finally, we had a bonus tip. Pre-transferring your properties may no longer be such a good idea. Why? The allowable deductions changed under the estate law, it may be cheaper to pay estate tax instead of transferring it while you are alive.

Additional Resources

Now, if you want to learn more about how to transfer land in the Philippines, please go to info.legalguide.ph/land to learn more. And if you want to use to tackle your question in our show, go to legalguide.ph and click the submit topic button. Next, we would like to know what's your biggest takeaway from today's video. Write it down in the comments and let's talk about it. And if you feel we've earned a good rating, please give us a like and a subscribe. It gives us feedback that we're doing a good job and encourages us to make more videos. One last thing guys, trying to trick the government by concealing or simulating contracts just to save on a few thousand, hundreds, or even millions is very often a short-sighted strategy that can definitely bite you in the ass later on.

Many times cheating the government of its taxes by simulating contracts, or whatnot stems from merely a lack of understanding or lack of preparation and lack of planning. We can always educate ourselves, research, discuss, or even consult someone. Now, let's give our country what it's due by paying the right taxes, let's influence our leaders in government by being honest in all our dealings and transactions.

So wasn't that simple? Now go make better choices.

Deed of Assignment: Everything You Need to Know

A deed of assignment refers to a legal document that records the transfer of ownership of a real estate property from one party to another. 3 min read updated on January 01, 2024

Updated October 8,2020:

A deed of assignment refers to a legal document that records the transfer of ownership of a real estate property from one party to another. It states that a specific piece of property will belong to the assignee and no longer belong to the assignor starting from a specified date. In order to be valid, a deed of assignment must contain certain types of information and meet a number of requirements.

What Is an Assignment?

An assignment is similar to an outright transfer, but it is slightly different. It takes place when one of two parties who have entered into a contract decides to transfer all of his or her rights and obligations to a third party and completely remove himself or herself from the contract.

Also called the assignee, the third party effectively replaces the former contracting party and consequently assumes all of his or her rights and obligations. Unless it is stated in the original contract, both parties to the initial contract are typically required to express approval of an assignment before it can occur. When you sell a piece of property, you are making an assignment of it to the buyer through the paperwork you sign at closing.

What Is a Deed of Assignment?

A deed of assignment refers to a legal document that facilitates the legal transfer of ownership of real estate property. It is an important document that must be securely stored at all times, especially in the case of real estate.

In general, this document can be described as a document that is drafted and signed to promise or guarantee the transfer of ownership of a real estate property on a specified date. In other words, it serves as the evidence of the transfer of ownership of the property, with the stipulation that there is a certain timeframe in which actual ownership will begin.

The deed of assignment is the main document between the seller and buyer that proves ownership in favor of the seller. The party who is transferring his or her rights to the property is known as the “assignor,” while the party who is receiving the rights is called the “assignee.”

A deed of assignment is required in many different situations, the most common of which is the transfer of ownership of a property. For example, a developer of a new house has to sign a deed of assignment with a buyer, stating that the house will belong to him or her on a certain date. Nevertheless, the buyer may want to sell the house to someone else in the future, which will also require the signing of a deed of assignment.

This document is necessary because it serves as a temporary title deed in the event that the actual title deed for the house has not been issued. For every piece of property that will be sold before the issuance of a title deed, a deed of assignment will be required.

Requirements for a Deed of Assignment

In order to be legally enforceable, an absolute sale deed must provide a clear description of the property being transferred, such as its address or other information that distinguishes it from other properties. In addition, it must clearly identify the buyer and seller and state the date when the transfer will become legally effective, the purchase price, and other relevant information.

In today's real estate transactions, contracting parties usually use an ancillary real estate sale contract in an attempt to cram all the required information into a deed. Nonetheless, the information found in the contract must be referenced by the deed.

Information to Include in a Deed of Assignment

• Names of parties to the agreement
• Addresses of the parties and how they are binding on the parties' successors, friends, and other people who represent them in any capacity
• History of the property being transferred, from the time it was first acquired to the time it is about to be sold
• Agreed price of the property
• Size and description of the property
• Promises or covenants the parties will undertake to execute the deed
• Signatures of the parties
• Section for the Governors Consent or Commissioner of Oaths to sign and verify the agreement

If you need help understanding, drafting, or signing a deed of assignment, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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The Secret Of For Assume Balance (Pasalo) That You Need To Know

Leave a comment, george ryan sarmago.

#assume balance #pasalo #assumption of mortgage Here is what you need to know about Assume balance. Assume balance or sale with assumption of mortgage is basically buying a property through loan or equity assumption. 

There are a lot of reasons why buyers would want to have their property for assume. It can be because, as I mentioned, they lost their jobs and wanted some cash on hand. It can also be because they moved to another location or they need cash because of some emergency. They call it a sacrifice sale or a distress sale. This is a type of transaction that is often unplanned, and you are forced to be flexible and don’t have much leverage making you open for even lowball offers. 

The other scenario is where the assume balance is part of your plan. You buy a property at its introductory or preselling price and after a few years of construction or when the value of the property has increased, you have someone assume the remaining balance, and buyer pay you a lump sum plus premium. This is a type of transaction wherein you have more leverage and can demand premium because you can afford to wait until a better offer comes. Now you can assume balance in 2 different stages.

First is during the equity period. This is the period where you still process transfer thru the developer. You need to pay a transfer fee, or redocumentation fee usually between 20-25k and sign the waiver of rights to signify that you have waived and transferred your rights to the new buyer. The new buyer will then pay the reservation fee and submit the same set of requirements to the developer. 

The second stage is after the loan takeout or during the amortization process. This is the part where you are already paying monthly amortization with the bank, pag ibig or inhouse financing.   Now there are 2 ways to go about this. The easy but risky way or the harder but safer way. Let us start with the easy but risky. This is called an internal agreement where transfer of ownership happens upon full payment. So even if the buyer takes over payments and moves in to the property, the owner of the property is still under the name of the seller. This can be an option for buyers that have money but don’t have financial documents needed by banks or pag ibig or have been denied with a housing loan before. 

The next option is the harder but safer way. This is the immediate change of ownership. To do this you need to execute three documents. 

First is the deed of assignment. This legal document is one of the important documents in the loan assumption process because it is stating that the seller is transferring the contract’s obligations and benefits to you. It will also include an outline of the terms and conditions you and the seller agree on. 

Then you need to process the Notice of Assignment of Contract. Since this involves a third- party lender or creditor like bank or pag ibig, you need to notify them in writing about your agreement. This is very important so they will know that moving forward you’re the one settling obligations and receiving benefits. 

And the last needed document is the Deed of sale with assumption of mortgage. This is a document expressing the buyer pays the seller and the buyer now owns responsibility with the assumption of mortgage. The buyer will then take over the mortgage payment until property is fully paid.

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The Philippines, an archipelago in Southeast Asia, boasts a rich tapestry of culture, history, and legal traditions. Within its legal landscape, the process of transferring property is of paramount importance, and central to this process is the "Deed of Conveyance." This document plays a crucial role in ensuring secure and legal transactions involving real property.

What is a Deed of Conveyance?

In its essence, a Deed of Conveyance is a legal document used to transfer the title of real property from one person (the seller or donor) to another (the buyer or donee). It signifies the intent of the owner to convey the property and indicates that the transfer has been made willingly.

Types of Deed of Conveyance in the Philippines:

Deed of Absolute Sale : This is the most common type used when a property is sold, and ownership is transferred for a certain price. Upon payment, the seller conveys the property rights to the buyer without any conditions.

Deed of Donation : In this type, a property is given as a gift. The donor willingly transfers the property to the donee without expecting any monetary compensation in return.

Deed of Assignment : This is used for transferring rights, title, or interest in a particular property, often relating to mortgages.

Deed of Exchange : Here, properties are exchanged between two parties.

Essential Elements For a Deed of Conveyance to be valid, it must contain:

- Names and details of the parties involved (both the transferee and the transferor). - The legal description of the property being conveyed. - The consideration (which could be monetary or otherwise). - An assertion that the transferor has the legal right to convey the property. - The signatures of the parties involved.

Legal Processes and Requirements: After the Deed of Conveyance is executed, several steps need to be followed:

Notarization: This gives the document public trust. A notary public certifies that the parties appearing before them are the ones they claim to be and have executed the deed willingly.

Payment of Taxes: Before registering the sale with the Registry of Deeds, certain taxes, like the capital gains tax and documentary stamp tax, need to be settled.

Transfer of Title: The buyer must present the Deed of Conveyance to the local Registry of Deeds to apply for a new land title under their name.

Registration with the Local Government: After acquiring the new title, the buyer should register with the local assessor's office for tax declarations.

The Deed of Conveyance is an essential instrument in the Philippines, safeguarding the rights and interests of parties in real property transactions. It ensures clarity, legitimacy, and protection for both the buyer and seller. As with any legal process, it's crucial to understand the intricacies and seek legal counsel when engaging in property transfers to ensure that rights are protected and obligations are clearly defined.

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SUMMARY OF DIFFERENCE BETWEEN CONTRACT OF SALE AND DEED OF ASSIGNMENT

Contract of sale and deed of assignment are both documents used in real estate-related transactions in Nigeria. Although they are both used in property transactions the difference between both documents can be derived from their distinctive features and the role they each individually play in the acquisition of title to landed properties in Nigeria.

Generally, there are five stages involved in the process of acquisition of land in Nigeria, which range from the pre-contract stage to the post-completion stage. The contract of sale is executed at the second stage of a land transaction; it is evidenced in writing and is not mandated to be under seal. It is a preliminary land document executed in the transfer of ownership in the land to another from the seller to the buyer. A contract of sale takes effect after it has been exchanged between parties and it contains not only the basic requirements but goes further to include detailed terms, consideration, and future obligations of what the parties have agreed in respect of the land transaction. Some of the provisions of a contract of sale are:

• Full details of the parties – (name and address).
• Particulars of the property to be transacted (location, survey plan, etc).
• Particulars of witnesses.
• Purchase price of the property.
• Payment of deposit, to whom it is to be paid, and in what capacity.
• Balance and interest on unpaid purchase sum where the payment is to be paid in installments.
• The capacity of the vendor.
• Risk and insurance.
• Possession before completion
• Completion date of the transaction.
• Provision for fixtures and fittings.
• Specific terms, risks, etc.

Where a contract of sale has been executed between parties, an equitable right of the title is passed to the buyer as the vendor still retains legal title to the land and holds the same in trust for the buyer. A vendor cannot transact with the land contrary to the agreement in the contract and no party can rescind the contract without being held liable for a breach of contract.

Features of a Contract of Sale

• In a contract of sale, the vendor is committed to the transaction and the purchaser has sufficient time to investigate the title before the final completion of the transaction.
• The death of either party to the transaction does not terminate the contract as personal representatives can proceed with the contract of sale.
• A contract of sale prevents last-minute withdrawal as withdrawal would amount to a breach of the contract.
• A contract of sale protects the equitable interest of the purchaser
• It crystallizes the position of the parties as terms have been expressly agreed upon.
• The vendor cannot unilaterally and subsequently increase the purchase price as the price has already been fixed in the contract.
• Payment of lesser stamp duties.

Deed of Assignment is the legal instrument executed between a buyer and seller upon the negotiation and completion phase of a sale of land transaction, subject to perfection. It is usually demanded by the buyer of the real property at the conclusion of the property transaction as the final legal document that transfers the interest of title in a land without any conditions attached, beyond the payment of the consideration price of the property. In a deed of assignment, the nomenclature of parties changes from Vendor to Assignor and Buyer to Assignee. Upon the execution of a deed of assignment between parties, there is a permanent transfer of legal title and ownership to land from the assignor to the assignee for a consideration paid and accepted by the assignor.

Deed of assignment is required to be evidenced in writing; to be signed, sealed, and delivered by parties to the transaction. A deed of assignment is said to have been delivered when interest has passed to the Assignee and the interest can be passed with or without a physical handover.

Another major difference between a contract of sale and deed is that under a deed of assignment, the title of land acquired is required to be perfected upon payment of the full consideration and execution of the deed. The perfection of title involves the assignee taken the required steps to register the deed of assignment at the appropriate Land Registry. The process for the perfection of a deed of assignment involves the following three steps;

• Obtaining Governors Consent.
• Stamping of the deed of assignment, and
• Registration of the deed of assignment.

Finally, in a contract of sale, the buyer only acquires equitable interest in the property while the seller retains the legal interest in trust for the buyer. In the deed of assignment, the assignee acquires legal interest in the property and it can serve as a good root of title to subsequent buyers while the interest of the assignor on the same property is completely extinguished.

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Philippine Legal Forms and Resources: Affidavit, Deed, Contract, Memorandum

Tuesday, July 14, 2020

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Sec opinion 21-03: deed of trust and assignment over share of stock.

In SEC-OGC Opinion No. 21-03 dated February 18, 2021, the Securities and Exchange Commission ( “SEC” ) resolved the following issues:

• Whether a company with nominee shareholder can register in its Stock and Transfer Book ( “STB” ) and General Information Sheet ( “GIS” ) the changes in nominee shareholders pursuant to an existing Deed of Trust and Assignment without the need of an actual sale; and
• Whether there is a need to report to the SEC, through the company’s GIS, the said new nominee director.

Sysmex Philippines, Inc. ( “Sysmex” ) has five (5) nominee shareholders who also constitute the Board of Directors. One nominee shareholder/director is no longer connected with Sysmex; thus, the latter intends to appoint a new shareholder/director. However, Sysmex is in quandary on whether to execute a Deed of Trust and Assignment or Deed of Absolute Sale to effect such change. 

Since the contemplated transfer of share/s to the new nominee shareholder is for purposes of qualifying the said nominee shareholder to be a member of the Board, and to complete the number of directors composing the same, the SEC cited its previous opinions where it held that:

“ For purposes of complying with the statutory minimum number of stockholders/directors, the owner may transfer one (1) qualifying share to each nominee stockholders for purposes of qualifying them to become members of the Board, without giving them the beneficial ownership of the shares. Said transfer would be more of a “trust” and not a transfer of “ownership,” hence, the beneficial interest in such shares will remain with the assignor while the assignee will hold only the legal title to the stock.  In such case, the transferee should be described in the Deed of Assignment, corporate books and certificate of stock merely as a qualifying shareholder or nominee of the transferor. The fact that the stock standing on the corporate books is in the name of the person only as a qualifying shareholder or that the holder of the stock certificate is described merely as a nominee serves as a notice to the corporation and third parties that the holder thereof does not hold the share in his own right but holds it only as a nominee for the benefit of the real owner.”  [emphasis supplied]

Thus, the SEC opined that Sysmex can validly report in its GIS changes in nominee shareholders pursuant to a validly executed Deed of Trust and Assignment.

With respect to the second issue, the SEC held that Section 25 of the Revised Corporation Code (“ RCC ”), which categorically mandates the submission of information relating to the election of directors, trustees and officers, is intended to timely apprise the SEC of any relevant changes in the submitted information on file with the latter as they arise. Section 25 of the RCC thus provides:

“Section 25. Within thirty (30) days after the election of the directors, trustees and officers of the corporation, the secretary , or any other officer of the corporation, shall submit to the Commission, the names, nationalities, shareholdings, and residence addresses of the directors, trustees, and officers elected. x x x” [Emphasis supplied]

The election or appointment of a new director is a circumstance of Sysmex’s governance structure that needs to be reported to the SEC through its GIS as it involves a material change in the Board’s composition.

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Episode 57: A Report from Moscow and the Role of Denial with Lola Komarova, Ph.D

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“ Some patients are quite happy being in their internal world – maybe the government is too, they’re in one world and people can be in the other. The patients live in one world and what is happening  outside doesn’t bother them very much. It is about the avoidance of contact, the avoidance of the other ”

Lola Komarova, Ph.D

Episode description:, key takeaways:.

[5:31] Dr. Komarova talks about life in Moscow right now. [9:28] The smallpox epidemic in Moscow. [9:57] The relation between the community and the government during the current epidemic. [14:40] People realized they had to survive by themselves. [15:42] Dr. Komarova talks about the history of psychoanalysis in Moscow. [21:40] How do the multiple theoretical points of view come together in Dr. Komarova’s practice? [25:07] The pandemic and its impact on some patients who became disturbed and paranoid and, on the contrary, some other patients who managed to ignore the pandemic. [27:58] A specific form of denial. [31:15] People show no interest in reality but become immersed in their internal world. [32:07] Dr. Komarova shares how she is sustaining herself during this crisis. [36:05] Dealing with an unpredictable future.

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