Mr. A sold his vacant lot, measuring 500 square meters, to Mr. B for 1.5 million pesos in 2006. A year after or in 2007, Mr. A sold the lot again to Mr. C. for the same amount.
Who between Mr. B and C has the bigger right over the property?
Real estate laws in the Philippines say the buyer in good faith who first registered the sale has priority right over the 500-square meter lot.
If Mr. C, who paid for the property a year later than Mr. B, first registered the sale with the Register of Deeds, he gets ownership of the land.
Cesar E. Santos, a licensed real estate realtor, appraiser, and consultant, said this is because in real estate transactions, great weight is given to what is annotated on the title of a property.
Buyers of land have to register their newly acquired property once the sale is consummated so the transaction would reflect on the seller’s original certificate of title (if he or she is the original owner) or transfer certificate of title (if he or she is not the original owner) .
After all, Santos added, any would-be buyer of real property or his or her agent, researching on the status of a residential, commercial, or industrial lot, has to be able to trust what is on the face of the title.
Unregistered transactions–like sale or even mortgage– do not reflect on the face of the title and have no way of binding third parties.
If Mr. B and Mr. C were not able to register the sale, but Mr. C first took possession of the property, then he has a bigger right over it.
In the absence of registration and possession, Santos said the property goes to the buyer in good faith who can present the oldest title.
Nevertheless, Mr. B, who did not register the sale, still has recourse in the courts. But against Mr. A, not Mr. C.
Mr. B might still recover the amount he paid Mr. A for the land but the property is unfortunately lost to him.