FUNDAMENTALS OF PROPERTY OWNERSHIP

Property • “Estate” means the degree of an owner’s

• Real estate (land, buildings) or real interest in land.
property (includes real estate as well as
intangible properties). Real Property
• Property is also classified as “tangible” • Includes all the rights, interests, and
(land, buildings, cars, etc.) benefits related to the ownership of real
• “Intangible” assets (patent, contract, estate.
franchise, shares of stocks, etc.)
Basic types of Estates
Ownership – Independent right of a person,
such as: Freehold – ownership is backed by title;
• Exclusive enjoyment and control of a includes:
property.
• Disposition and recovery. • “Fee simple” – absolute unrestricted
• Subject only to the restrictions estate in perpetuity.
established by law and rights of others. • “Fee tail” – designed to pass title to heirs.
• “Life estate” – ownership only as long as
Rights included in Ownership: grantee is alive.

Fee Simple – highest form of ownership and Less than Freehold – limited possession.
consists of the “bundle of rights” inherent in
to ownership. Without any limitations or • “Estate for years” – a lease (99 years
restrictions except those imposed by law or max under Civil Code).
contract. • “Tenancy” – leases or rentals; period
may be specified or if not, the lessor may
Bundle of rights: terminate at will.
• Right to Possess.
• Right to Use and enjoy. Right to Own
• Right to Fruits (Natural, Industrial, Civil)
• Right to Dispose (sell, donate, assign, GR: only Filipino citizens and corporation with at
exchange) least 60% capital of which is owned by Filipinos
• Right to Vindicate or recover. (Titled are entitled to acquire or own in the Philippines.
property with squatters)
• Right to Exclude others (putting up a E: aliens can acquire real estate in the PH.
concrete wall).
Acquisition:
Fruits a) Before the 1935 Constitution.
• Natural – spontaneous products of soil. b) Through hereditary succession if the
• Industrial – produced by cultivation or acquiree is a legal heir.
with human labor.
• Civil – rental income. Purchase:
a) Not more than 40% interest in a condo
Real Estate project.
• refers to land and improvements thereon. b) Former natural born Filipino citizens
• Physical entity, together with all additions subject to BP.185 and R.A. 8179
and improvements thereon.

Prepared by: Mari Dece Creche P. Biscocho 1

BS in Real Estate Management
GR: A Filipina who marries an alien retains her o Dominant Estate- The entity
Philippine Citizenship (unless the law of her enjoying the right of way
husband’s country makes her assume the • Usufruct - transfer to another person
citizenship of her husband because of such of the right to enjoy the fruits of the
marriage) and therefore acquire real estate in property.
the PH. • Use Restrictions - restrictions
imposed as part of the contract to sell
Limitation on Rights to Ownership

Those imposed by: Kinds of Ownership

1. State
• Taxation, police power, and power of • Sole ownership – benefits and property
eminent domain. interest are undivided; “whole property
2. Law interest.”
• Legal easement, legitimate • Co-ownership – benefits are presented
succession, zoning, building code, in proportion to the co-owners.
rent control, urban and agrarian
reform, subdivision regulations, and Article 484 of Civil Code states:
escheat.
3. Grantor • There is co-ownership whenever the
• Property on the Grantee by contract ownership of an undivided thing or right
like donation, last will, or usufruct. belongs to different persons.
4. Owner • There is no co-ownership when the
• Voluntary easement, lease, mortgage. different portions owned by different
people are already concretely
determined, even if this is not yet
Legal Restrictions of Ownership technically described.

1. Power of eminent domain – power to Article 1612, 1889, 1515 of the New Civil
take private properties for public use Code:
upon just compensation.
2. Escheat – reversion of property to the • Right of repurchase, pre-emption or
State due to intestate death of an owner redemption.
with no heir. o The right to repurchase applies
3. Police power of the State only to the extent of shares owned.
• Taxation – power of the State to
impose or collect real estate charges. Article 1623 of the Civil Code:
• Zoning laws, building codes, etc. • The right of legal pre-emption or
which are regulations of the LGU. redemption shall not be exercised except
4. Voluntary or contractual restrictions within 30 days from the notice in writing
• Lease Contract - temporary by the prospective vendor. The Deed of
surrender of the rights to possess, Sale shall not be recorded in the Registry
use and enjoy to lessee renter. of Property, unless accompanied by an
• Right of way Easement - given to an affidavit of the vendor that he has given
owner of an adjoining land to pass or written notice thereof to all possible
have access redemptioners.
o Servient Estate- The property
owner giving the right of way Article 493 of the Civil Code:

Prepared by: Mari Dece Creche P. Biscocho 2

BS in Real Estate Management
 • A co-owner may sell his right over an lands are occupied by the new
undivided portion, cannot sell those of bed in proportion to area lost.
others b. Landowners adjoining the same
• Condominium ownership – old bed may acquire the same –
combination of sole and co-ownership Riparian Owner.
o Sole ownership – refers to c. When a river opens a new bed by
condominium unit susceptible to natural action, the bed shall
independent use. become a public domain and not
o Co-ownership - in condominium automatically belong to the
project, unit owners are co-owners Riparian owner.
on land and common areas of the
building – these are non-alienable b) Right to hidden Treasure
areas of the condominium project. a. Belongs to the owner of the land,
except if with ID mark.
a) Corporeal Ownership b. When the discovery is made on
• Corporeal Ownership is the complete the property of another, the finder
ownership of material objects like Car, of hidden treasure (not the
House, Land etc. landowner) is entitled to 50%
b) Incorporeal Ownership : unless he is a trespasser, he shall
• Incorporeal ownership is the ownership not be entitled to any share of the
of a right. Ownership of a copyright , treasure.
trade mark, patent is incorporeal. c. The State may acquire at a just
c) Trust and Beneficial Ownership price those of interest to science
• Trust ownership is an example of or arts.
duplicate ownership. Trustee is the
nominal or legal owner. In the eye of Law c) Right of Accession – to everything
the trustee represents his beneficiary. which is produced, incorporated,
attached to property, naturally or
Diverse ownership – benefits are assorted into artificially.
different kinds like different owners or a. Fruits, accretion.
shareholders in a corporation.

Ownership of land – includes ownership of Documents of Ownership

portions beneath the surface and above the
surface, subject to servitudes, special laws, or Title – generic word as “proof of ownership” or
contract. the “muniments” of ownership documents.
• Tax declaration
• It includes ownership of surface, • Realty tax payments
beneath the surface (subsurface), and • Deed of sale
above the surface (air rights), subject to • Original certificate of Title or Transfer
servitudes, special laws, or contract. Certificate of Title.

a) Rules affecting landowners of NOTE: Philippines’s titling system is based on

adjoining rivers – accretion, due to the Torrens developed in Australia.
effects of current of water, except, land
left due to natural effects or lose that Deed – a written instrument used to transfer
which was inundated by flood water. ownership of and improvements.
a. Riverbeds that have dried up can
be acquired by those whose own Deeds must have:

Prepared by: Mari Dece Creche P. Biscocho 3

BS in Real Estate Management
 • Grantor and Grantee 6657 (CARP 1900) and various
• Word of Conveyance extensions;
• Signature of Grantor and at least two • Reclamation - under Public Estates
Witnesses. Authority: gov’t still owns reclaimed land
• Notarization. but may pay reclaimers through portions
of said land.
Muniments of Title – instruments, written • Adverse possession or Prescription –
evidence that one possesses to susceptible and acquisition of title by actual, open,
prove title on his estate. continuous, and uninterrupted
possession for the period required by law.
Quieting of Title – action brought to court to o Applies to alienable agricultural
remove a cloud or question as to the ownership land, continuously occupied by a
of property, a plaintiff must have documents but citizen;
need not be in possession to bring the action. a. Ordinary – 10 years possession in
good faith with just title.
Basic requisites for the validity of contracts b. Extraordinary – 30 years
to buy/sell real property – COC continuous possession. = bad
• Consent of the contracting parties. faith.
• Object certain which is the subject matter
of the contract. • Accretion – acquisition of more lands,
• Cause or consideration of the obligation the adjoining the banks of rivers due to
which is established. the gradual deposit of soil as a result of
the river current.
Contract is void if consent from – • Process of adding land due to
• Unemancipated minor or those persons alluvium, changes in natural riverbed.
below 18 years old.
• Insane or demented person or deaf- a) Accretion – the process of adding land
mutes who do not know how to write; (Art. b) Alluvium – added land by the process of
1327, New Civil Code). accretion
c) Accession – right of the owner to things
**If consent is given through mistake, violence, added to the land whether naturally (say
intimidation, undue influence or fraud, the trees and plants) and artificially (say
contract will be voidable or valid until annulled building or fixtures)
(Art. 1330 NCC).** d) Riparian owner – owner of land adjoining
rivers; belongs the alluvial deposits
Modes of Acquiring Title caused by accretion

Private Transfer – voluntary transfer or Succession or inheritance – acquisition of

conveyance of private property by a private ownership from an owner who has dies or
owner, such as sale, assignment, donation, or hereditary succession.
exchange.
Descent or devise
Public Grants • Descent – hereditary succession without
• Free Patents - Homestead patents given will of the deceased
by DENR • Devise – even a stranger may acquire if
• Emancipation Patents - (Now CLOA - disposition has been made by the
Certificate of Land Ownership) - testator through a will subject to the
Originally est. by PD 27, continued by RZ probate of the court.

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BS in Real Estate Management
 • Legitime – the property set aside by the be effected through a will wherein the
court or by law to compulsory heirs. The legal cause shall be specified. (Art.
deceased may have free portion if there 919 CC)
is a will; without a will, there is no free • A legally adopted child has the same
portion. right and share in the same manner
• Illegitimate child is a compulsory heir and as a legitimate child.
gets ½ of the share of the legitimate heir, • In default of legitimate children and
as a general rule, in case there is no will. descendants of the deceased, his/her
parents and ascendants shall inherit
Succession is a mode of acquisition or from him/her. (if none)
transferring property through: • In the absence of legitimate
• The death of the owner of the property descendants or ascendants, the
• By will (testamentary succession – with a illegitimate children shall succeed to
will) the entire estate of the deceased.
• By operation of law (legal) or intestate
succession (without a will)
Involuntary Grant – acquisition of private party
Decedent is the general term applied to against the consent of the former owners, such
the person whose property is transmitted as foreclosure sales, exchange sale, or tax
through succession. sales. Expropriation, execution by the Sheriff to
satisfy judgment, foreclosure of mortgaged
• Devises and legatees (legacy is given) property.
are persons to whom gifts of real and
personal property are respectively
given by virtue of a will. Rights and Restrictions of Private
• Will is an act whereby a person is Corporation
permitted to control to a certain
degree the disposition of his estate to • Private Corporations or associations
take effect after his death (free organized under the laws of the
portion). Philippines with 60% capital owned by
• Codicil – a supplement or addition to Filipinos are entitled to acquire and own
a will, made after the execution of the private lands but not in excess of 1,024
will ha. If leasing, not to exceed 2,000 ha.
• Testator – the person living a will They may hold alienable agricultural
• Died testate – died with a will lands of the public domain only by
• Died intestate - died without leaving a lease for a period not to exceed 25 years
will renewable for not more than 25 years
and not to exceed 1,000 hectares.
Legitimate – testator’s property that he
cannot dispose of because the law has
reserved it for certain heirs who are,
therefore, called compulsory heir. (Art Obligations of Property Owners in the
886 CC). Philippines
• All illegitimate child is a compulsory
heir. • Pay annual Real Property Tax (RPT) and
• A compulsory heir may, in Special Education Fund Tax (SEFT);
consequence of disinheritance, be • Comply with the Building Code on its
deprived of his legitimate, for causes requirements.
expressly stated by law. It can only
Prepared by: Mari Dece Creche P. Biscocho 5
BS in Real Estate Management
 • Observe Subdivision Regulations in case still separate; those acquired during marriage by
of subdivision lot. gratuitous title, by redemption, barter, or
• Comply with zoning regulations of the exchange with one’s exclusive property or
LGU. purchased with exclusive money are also
• Comply with Philippine laws on Eminent separate.
Domain, Escheat, Easement of Right of
Way, taxation, etc. Additional note/s:
• Gambling loses not chargeable to
In case of condominium, unit owners are community property; winnings are part of
obliged to – it.
• Pay RPT and SEFT on his unit; Share in • Spouses jointly administer community
RPT and SEFT on common area and property, but in disagreement husbands
land. decide.
• Get insurance on the unit; Share in the • Termination of conjugal partnership:
payment of insurance premium on the death, judicial decree of separation,
common areas. marriage annulment
• Comply with use restrictions; pay • Causes for judicial separation of property:
condominium and association dues and judicially declared absentee, sentence to
assessments. jail long-term, abandonment, separation
at least one year, abuse of power.
Property Relations Between Spouses • Living-in couples: co-ownership rules
(E.O. 209, Family Code, July 6, 1987) prevail if both have a capacity to marry; if
not, only the property they acquired while
Types of relationships: Absolute Community, living together are common.
Absolute Separation, Conjugal Partnership
of Gains.

• Before marriage, spouses may choose

from three (3) types of relationships by
signing a public instrument (pre-nup) to
be registered in the local civil registry. If
none is made, Absolute Community
governs.

Absolute Community – co-ownership of all

properties acquired before and during marriage,
except for “exclusive properties” which are:
those acquired by gratuitous title during
marriage, properties for personal use (except
jewelry), and properties acquired before
marriage by a spouse with legitimate
descendants by a former marriage.

Absolute Separation – ownership of all

properties acquired before are separate.

Conjugal Partnership of Gains – only those

properties acquired during marriage are
conjugal; those acquired before marriage are
Prepared by: Mari Dece Creche P. Biscocho 6
BS in Real Estate Management