Fundamentals of Real Estate PDF

1 1st PHASE: FUNDAMENTALS OF REAL ESTATE BY COACH ARIIA A THING OR OBJECT can be understood in two ways: Literal Meaning: In a straightforward sense, a "thing" or "object" is any physical item you can see, touch, smell, taste, or hear. Example: A book is a thing you can hold, see, an...

1 1st PHASE: FUNDAMENTALS OF REAL ESTATE BY COACH ARIIA A THING OR OBJECT can be understood in two ways: Literal Meaning: In a straightforward sense, a "thing" or "object" is any physical item you can see, touch, smell, taste, or hear. Example: A book is a thing you can hold, see, and read. It's a material item you perceive through your senses. Legal Meaning: Legally, a "thing" or "object" is anything that someone can own or hold rights over, not just physical items but also abstract rights. Example: Property rights over a piece of land. Even though "rights" are not something you can touch, they are legally considered "things" because they give you control and ownership over the land. 3 KINDS OF THINGS, ACCORDING TO NATURE OF OWNERSHIP Res Nullius Res Communes Res Alicujus (belongs to no one) (belongs to everyone) (belongs to someone) Things that belong to no one Owned by everybody in that their use Objects, tangible, or intangible, but may be object of and enjoyment are given to all of which are owned privately appropriation mankind. Common things such as sunlight and air. - These are objects, tangible or Ex: Fish swimming in the intangible, which are owned ocean or abandoned things - Cannot be appropriated and cannot privately, either in a collective or (res delierictae) by the be possessed. individual capacity. owner. 1. Res Communes Res Communes means "things common to everyone." These are things that are not owned by any one person or group because they are meant for public use and bene it. They are shared resources available to everyone and cannot be owned or controlled privately. · Example: The air we breathe, and the oceans are considered res communes. Anyone can enjoy the fresh air or sail on the ocean, but no individual or country owns them. 2. Res Nullius Res Nullius means "things belonging to no one." These are things that currently have no owner but can potentially be claimed or owned by someone if they take possession. · Example: Wild animals in their natural habitat are considered res nullius. Until someone captures or tames an animal, it is not owned by anyone. If a person captures a wild bird, it becomes their property. 3. Res Alicujus Res Alicujus means "things that belong to someone." These are things that are privately owned by individuals or entities and cannot be freely used or taken by others without permission. · Example: A house or car that someone owns is res alicujus. Only the owner (or someone they give permission to) has the right to use it. PROPERTY anything which is or maybe the object of appropriation and which is already possessed and found in the possession of man. a legal concept covering all the interests, rights and bene its related to ownership. can be a physical tangible or corporeal object (like land and building) or an intangible object. (like goodwill, patent, franchise, copyright, shares of stocks, etc.). Real Estate Land; a portion of the earth’s surface extending downward to the center of the earth and upward in initely into space, including all things permanently attached thereto, whether by nature or by man. Real Property includes all the rights, interests and bene its related to the ownership of real estate which interest in real property is normally demonstrated by some evidence of ownership (e.g., title) separate from physical real estate. Hence, real property is a non-physical concept.  2 Estate refers to the totality of the assets owned by a person which includes real estate and personal properties. Improvement all the additions attached to the land such as dwellings, garages, screened porches, decks, out buildings, and sheds on your property. Classi ications of Property 1. As to Mobility: Movable/Personal & Immovable/Real 2. As to Ownership: Public/Private 3. As to Alienability: Within the commerce of men/Outside the commerce of men 4. As to Existence: Present/Future 5. As to dependence: Principal/Accessory 6. As to capability of substitution/homogeneity: Fungible/Non-fungible 7. As to nature/de initeness: Generic/Speci ic 8. As to its Essential Form: Corporeal/Incorporeal 9. As to its Custody of Court: Property in Custodia Legis/Not in Custodia Legis 1. According to Mobility: Real Property (Immovable Property) - ownership of an interest in real estate (land, building, improvements, ixtures) Personal Property (Movable Property) - ownership of an interest in items other than real estate. It includes interest in tangible and intangible items which are not real estate. Sometimes referred to as “Chattels” or “Personalty” Civil Code of the Philippines: Art. 414. All things which are or may be the object of appropriation are considered either: (1) Immovable or real property; or (2) Movable or personal property. (333) Art. 415. The following are IMMOVABLE PROPERTY: (1) Land, buildings, roads and constructions of all kinds adhered to the soil; (2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable; (3) Everything attached to an immovable in a ixed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object; (4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements; (5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works; (6) Animal houses, pigeon-houses, beehives, ish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included; (7) Fertilizer actually used on a piece of land; (8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant; (9) Docks and structures which, though loating, are intended by their nature and object to remain at a ixed place on a river, lake, or coast; (10) Contracts for public works, and servitudes and other real rights over immovable property. (334a) Art. 416. The following things are deemed to be PERSONAL PROPERTY: (1) Those movables susceptible of appropriation which are not included in the preceding article; (2) Real property which by any special provision of law is considered as personal property; (3) Forces of nature which are brought under control by science; and (4) In general, all things which can be transported from place to place without impairment of the real property to which they are ixed. (335a) Art. 417. The following are also considered as PERSONAL PROPERTY: (1) Obligations and actions which have for their object movables or demandable sums; and (2) Shares of stock of agricultural, commercial and industrial entities, although they may have real estate.  3 Art. 418. Movable property is either consumable or non-consumable. To the irst class belong those movables which cannot be used in a manner appropriate to their nature without their being consumed; to the second class belong all the others. (337) CLASSIFICATION OF REAL PROPERTY (NIDA) Real Property can be considered immovable: 1. by NATURE - cannot be carried/transferred from one place to another place. 2. by INCORPORATION - attached to an immovable in a ixed manner to be an integral part thereof 3. by DESTINATION - placed in an immovable for the utility it gives to the activity being carried upon and 4. by ANALOGY - classi ied by express provision of law Jus In Re / Real Right A complete and absolute right to a thing It gives the holder the right to use, sell, or transfer the property without interference from others. For example, if you own a house, you have jus in re over that property Enforced against the whole world Jus Ad Rem / Personal Right An incomplete or inchoate right to a thing It gives the holder the right to demand delivery or possession of a thing, but they don't have the right to vindicate possession. For example, a mechanic's lien is a jus ad rem that gives the mechanic the right to the car as security for the debt if the owner doesn't pay for repairs. Enforced against a person. 2. According to Ownership: Public vs Private Public Domain REGALIAN DOCTRINE (JURA REGALIA) - All Lands of the public domain belong to the State. “All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, isheries, forests or timber, wildlife, lora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into coproduction, joint venture, or production- sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. x x x” [Sec. 2, Art. XI1 1987 Philippine Constitution] The Regalian Doctrine is a fundamental principle of Philippine land laws that states that all lands and natural resources belong to the state. It has been a part of the Philippine Constitution since 1935. The Constitution also recognizes native title as an exception to the doctrine. It classi ies lands into different types, including agricultural lands, forests or timber, mineral lands, and national parks. The state can only declassify forest land for agriculture or other purposes through an act of the executive branch. LANDS OF THE PUBLIC DOMAIN 1. Lands of the public domain are classi ied into: o Agricultural - Lands devoted to or suitable for the cultivation of the soil, planting of crops, growing of trees, raising of livestock, poultry, ish or aquaculture production, including the harvesting of such farm products, and other farm activities and practices performed in conjunction with such farming operations by persons whether natural or juridical. This is the only alienable land of the Public Domain. o Forest or timber - These are lands that are covered with forests or potential sites for forest development. They are designated for the purpose of preserving the natural lora and fauna. o Mineral Lands - These are lands that are rich in minerals and are reserved for mining activities o National parks - These are areas of natural beauty that have been designated for preservation and public enjoyment. They are protected areas that are maintained by the government.  4 2. Alienable lands of the public domain shall be limited to AGRICULTURAL LANDS. 3. Private corporations and associations may hold such alienable lands of the public domain only by LEASE for a period not exceeding 25 years, renewable for not more than 25 years, and not to exceed 1,000 has. 4. Filipino citizens may lease not more than 500 hectares, or acquire not more than 12 hectares by purchase, homestead, or grant. [Sec. 3, Art. XII, 1987 Philippine Constitution] Public Domain = Public Dominion + Patrimonial Property Public Dominion The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports arid bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth [ Art. 420, NCC] These properties are inalienable and cannot be appropriated for private ownership unless reclassi ied or declassi ied by law. The characteristics of properties classi ied as public dominion are as follows: 1. They cannot be privately owned or appropriated. 2. They are not subject to contracts, meaning they cannot be sold, transferred, or encumbered (they are considered beyond the reach of private commerce). 3. They cannot be acquired through prescription (continuous possession or use over time). 4. They are exempt from attachment or execution, protecting them from seizure to satisfy debts. 5. They cannot be burdened with voluntary easements (restrictions or rights granted for private use). Examples of properties for public use: a. Roads, bridges, and public highways. b. Public plazas and parks. c. Navigable rivers and streams. Examples of properties for public service: d. Government of ices and buildings. d. Public hospitals and schools. Examples of properties for national wealth development: f. Mineral resources. f. Public forests. Patrimonial Property All other property of the State, which is not of the character stated in the preceding article, is patrimonial property. [Art. 421, NCC] Art. 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State. [ Art. 422, NCC] Patrimonial Property refers to properties owned by the State but are not designated for public use, public service, or the development of national wealth. These properties are alienable and may be leased, sold, or transferred for private purposes. These include properties no longer needed for public service or use. Examples: State-owned lands declared as alienable and disposable (e.g., portions of government land sold to private individuals for residential or commercial purposes). Former government of ices or buildings repurposed for private leasing. Idle lands held by the government that are available for private investment.  5 KEY DIFFERENCES Criteria Public Domain Public Dominion Patrimonial Property General ownership by Public use, service, or wealth Not for public use; may be privately Purpose the State. development. owned. Generally not Inalienable unless Alienable? Alienable and disposable. alienable. reclassi ied. Forest lands, Roads, bridges, schools, Alienable public lands, repurposed Examples unoccupied lands. parks. government buildings. 3. As to Alienability: Within the commerce of men/Outside the commerce of men Alienable properties or rights can be transferred, sold, or assigned to others. (Within the commerce of men) Example: Private land or assets like a house, which can be sold or inherited. Inalienable properties or rights are protected from such transactions. (Outside the commerce of men) In the context of real estate, properties categorized as inalienable (e.g., public highways, parks) cannot be part of private transactions or ownership unless speci ic legal processes (like reclassi ication) occur. 4. As to Existence: Present/Future Present Property De inition: Refers to property that exists and is owned at the current time. This includes tangible or intangible assets that are in the possession or control of the owner at the moment of the transaction or agreement. Example: o A house and lot currently owned by an individual. o A vehicle registered in the owner’s name. o Shares of stock in a company already issued to the owner. Future Property De inition: Refers to property that does not yet exist or is not yet owned by the person at the time of the transaction but is expected to come into existence or ownership in the future. Example: o Crops to be harvested next season from a farm. o Income from a business or salary expected to be earned in the future. o A building that is planned or under construction but not yet completed or transferred to the owner. KEY DIFFERENCE Aspect Present Property Future Property Existence Already exists and is owned. Does not yet exist or is not yet owned. Can be immediately transferred Ownership or transfer depends on future realization or Ownership or sold. acquisition. 5. As to Dependence: Principal/Accessory Principal Property De inition: Refers to a property that exists independently and does not rely on another property for its existence or purpose. It has its own value and function.  6 Example: o A house or building. o A parcel of land. o A vehicle. Accessory Property De inition: Refers to a property that is dependent on a principal property for its existence or purpose. It is intended to serve or complement the principal property. Example: o A fence surrounding a house (accessory to the house or land). o A garage attached to a house (accessory to the house). o A solar panel system installed on a building (accessory to the building). 6. As to capability of substitution/homogeneity: Fungible/Non-fungible Fungible Belong to a common genus which includes several species of the same kind, perfectly permitting substitution of one by the others – grain, wine, oil, etc. Non-fungible Speci ically determined and cannot be substituted by others – lands, buildings, etc. (speci ic & determinate) 7. As to nature/de initeness: Generic/Speci ic Generic - Indicates its homogenous nature, but not the individual. (Ex: the house) Speci ic - indicates the species or its nature. (Ex: Block 9 Lot 15 Phase 1 Camella Tanza) 8. As to its Essential Form Corporeal - Something that has a physical existence, such as land, buildings, money, or machines. Corporeal ownership is the right to possess, use, and enjoy a material thing Incorporeal - Something that is intangible and has no physical existence, such as intellectual property, patents, or copyrights. Incorporeal ownership is the ownership of a right. 9. As to Custody of the Court Property in Custodia Legis - Refers to property under the custody or control of the court. CUSTODIA LEGIS is a Latin phrase that means "in the custody of the law". It refers to when a court or public of icial lawfully takes possession of property during a legal case. Examples: Properties seized during foreclosure, properties subject to litigation, or assets held by the court for distribution in probate cases. Property Not in Custodia Legis - Refers to property that is not under court custody and is freely available for the owner’s use or disposition. Examples: Private properties not subject to any legal proceedings or disputes. FUNDAMENTALS OF PROPERTY OWNERSHIP OWNERSHIP - independent right of a person to the exclusive enjoyment and control of a property, including its disposition and recovery, subject only to the restrictions established by law and rights of others. Ownership may be exercised over things or rights (Art. 427, NCC). Interest (Real Property) - A right, claim, or privilege that an individual has in relation to real estate or land. Estate in Land - is the interest a person has in real property, which can include the right to own or possess the land. Estates in land can be broken down into two main types: freehold and nonfreehold Types of Estate in Land: 1. Freehold Estates - means that a person owns the property and has the right to use it inde initely. The owner has the right to transfer ownership, and the property can be inherited.  7 2. Non-Freehold Estates - also known as a leasehold estate, means that a person occupies the property for a set period of time but does not own it. The person is leasing the property from the owner, who is called the landlord. Freehold Estates: 1. Fee Simple Estate - de ined as the absolute right of ownership without limitations to any particular class of heirs or restrictions, but subject to the limitation of the Escheat, Police Power, Eminent Domain, and Taxation. Fee Simple Absolute - grants the property owner rights to the property title in perpetuity. They can do whatever they want with their property, provided that they do not violate any active easements or restrictions on it. Fee Simple Quali ied - Ownership with speci ic conditions or restrictions, which, if violated, can lead to termination of the estate. Fee Simple Defeasible - A type of quali ied estate that can be voided or reverted to the grantor upon the occurrence of a speci ied event. There are three different types of fee simple defeasible ownership. All are similar, but each with one key difference: Fee simple determinable - the clearest and most binding form of fee simple defeasible. In this situation, if the buyer violates the seller’s explicitly stated stipulations, then the property immediately reverts back to the seller, or the seller’s heirs. Fee Simple Conditional - gives the grantor the right to reclaim the property if certain conditions are not met. It's also known as a fee simple subject to a condition subsequent estate. Previous owner can regain possession through legal action. Special Limitation - With this condition, the original land owner does not have sue to take back the property if the deed condition is violated. Ownership reverts to the previous owner without the need of legal action. 2. Life Estate - Ownership limited to the lifetime of a designated individual; reverts to the grantor or another party after their death. A Life Estate is a form of property ownership where the owner (life tenant) has rights to use, occupy, and bene it from the property during their lifetime. However, they cannot pass the property through inheritance. Upon their death, ownership either reverts to the original grantor (reversion) or passes to a third party designated in the deed (remainder). Remainderman - a person who inherits property after the end of a life estate or other estate Reversion - The property is given to someone to use during their life, and then reverts to the original owner when they die. A Life Estate Pur Autre Vie (French for "for another's life") is similar to a life estate but is measured by the lifespan of someone other than the life tenant. Example: John grants Mary the right to live on his property for as long as Mary’s brother, Alex, is alive. Mary’s right to the property ends when Alex dies, even if Mary is still living. This type of estate is often used in unique situations, such as accommodating a third party's needs or arrangements in estate planning. Non-Freehold Estates:  Leasehold Estate - legal agreement that grants a tenant the right to use a property for a set period of time in exchange for rent or other payment o Leasehold Interest - The interest of the tenant in the property, which grants them the right to use and occupy the property for the duration of the lease. The tenant is also obligated to pay rent during the lease term o Lease Fee Interest - ownership interest of a landlord in a property that is leased to a tenant. The landlord retains certain rights, such as the right to receive rent and to regain possession of the property at the end of the lease.  Estate of Tenancy - a type of leasehold that gives a tenant limited rights to a property for a set period of time. There are several types of estates in tenancy, including: o Estate for years - Also known as TENANCY FOR YEARS. This is a lease with a speci ic beginning and end date. The lease automatically ends on the speci ied date, and the tenant doesn't need to give notice to vacate o Estate from Period to Period - Also known as PERIODIC ESTATE. This is a lease that continues for successive periods until the tenant or owner gives notice to terminate. The amount of notice required is speci ied in the lease or state law  8 Estate at Will - Also known as TENANCY AT WILL. This can be terminated at any time by either the owner or tenant. Estate at Sufferance - Also known as TENANCY AT SUFFERANCE. This is the lowest form of estate in law and occurs when a tenant remains on the property after their lease expires without the owner's consent. NON-POSSESSORY INTERESTS Non-possessory interest - is the right to use or restrict the use of another person's real property or land. In some cases, the nonpossessory interest arises from a voluntary contract made between two parties, as in the case of a lease agreement. Encumbrances - any claims, charges, or liabilities that affect the title of a property. They can include liens, easements, restrictions, or any other legal interests that limit the owner’s rights. Easements - a nonpossessory right to use another person's land in some limited way that does not constitute full ownership. The person or legal entity that bene its from the easement has a nonpossessory interest in the other person's land. This means the owner of the property is burdened by the easement. Easement in Gross - Granted by a property owner to an individual or entity, but usually ends when the property is sold. This is often granted to utility companies, allowing them to install public infrastructure on private land. Easement Appurtenant - Attached to the land, so it continues when either parcel of land is sold. o Dominant Estate - The property that bene its from the easement, also known as the dominant tenement. The owner of the dominant estate is responsible for maintaining the easement. o Servient estate - The property that is subject to the easement, also known as the servient tenement. The owner of the servient estate is obligated not to interfere with the easement. Encroachment - an improvement that extends beyond a property owner's boundary line and encroaches on an adjacent property. Examples of encroachments include building or overhanging eaves, outbuildings, fences, driveways, and walkways. Leases - a contract between a property owner (lessor) and a person or entity who wants to rent the property (lessee). Under a lease, the lessor agrees to allow the lessee to occupy and use the property in exchange for rent or valuable consideration. Liens - legal claims against a property that provide security for the payment of a debt or obligation. Common types of liens include mortgages, tax liens, mechanic liens, judgment liens. Restrictions/Restrictive Covenants - an enforceable condition that appears as a clause in a deed that limits the manner in which real property can be used. These covenants burden property owners to perform or not perform in speci ied manners. Examples of protective or restrictive covenants include constraints for minimum square footage in a new building, architectural design, setback and sideline from roads or adjacent properties, and exterior home color. BUNDLE OF RIGHTS FEE SIMPLE consists of the “Bundle of Rights”, which are inherent in or appurtenant to ownership, without any limitations or restrictions other than those imposed by law or contract. The BUNDLE OF RIGHTS is a legal term that refers to the collection of rights that a real estate buyer receives when they transfer the title to a property. It's a metaphor that describes property ownership as a collection of rights, rather than a single right to a physical property. The bundle of rights includes the following: the right to use (Jus-Utendi), the right to enjoy the fruits of (Jus-Fruendi), the right to dispose (Jus-Disponendi), the right to abuse (Jus-Abutendi), the right to recover (Jus-Vindicandi), the right to possess (Jus-Possidendi) The right to accessories - (Jus Accessiones)  9 Limitations on right of property ownership: 1. CONSTITUTIONAL - such as police power, eminent domain or expropriation of private property for public use, taxation and escheat when revision of private property to state ownership in case of death of property owner without an heir. 2. LEGAL - zoning ordinances, regulations on subdivision projects, building code, and other special laws and regulations; and 3. VOLUNTARY - easements and servitudes, usufructs, lease agreements, restrictions in subdivision and condominium deeds or restrictions. Public Limitations: (PETE) 1. Police Power: The government's authority to regulate land use and enforce laws to protect public health, safety, morals, and general welfare (e.g., zoning laws, building codes). 2. Eminent Domain: The government's right to take private property for public use, provided the owner is given just compensation. 3. Taxation: The government’s power to impose property taxes to fund public services like schools and infrastructure. 4. Escheat: The state's right to claim ownership of property when an owner dies without a will or heirs. PARENS PATRIAE - a legal doctrine that means "parent of the nation" in Latin. It allows the government to act as a parent for non sui juris (those who cannot care for themselves, such as minors, the elderly, or people with disabilities.) In relation to property, Parens Patriae allows the government to step in and manage or take control of property when it is in the best interest of the public or when the rightful owner is unable to do so. This might happen in situations where: A property is abandoned, and the government steps in to preserve or repurpose it for public use. A person is unable to manage their property due to mental incapacity, and the state appoints someone to oversee it. The government acts to protect natural resources, historical sites, or other properties considered important for public welfare. Private Limitations: 1. Deed Restrictions: Conditions set by the seller or developer that limit how the property can be used (e.g., prohibiting commercial use in a residential subdivision). 2. Easements: Legal rights granted to another party to use a portion of the property for a speci ic purpose (e.g., utility lines or access roads). 3. Leases: Agreements allowing a tenant to use the property under speci ic terms set by the landlord. 4. Mortgages: A lender’s claim to the property as collateral until the loan is repaid. 5. Encroachments: Unauthorized intrusions onto a property by structures or features (e.g., a neighbor's fence crossing a boundary). 6. Liens: Legal claims placed on the property as security for a debt (e.g., unpaid taxes or contractor fees). The owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person (Art. 431, NCC). Kinds of Ownership 1. Full ownership - refers to all the rights of the owner 2. Naked ownership - refers to ownership where the right to use and the fruits has been denied 3. Sole ownership refers to ownership which is vested to only one person 4. Co-ownership - refers to ownership rights to own a whole property together with the others and at the same time owner of an aliquot part thereof STEWARD CONCEPT OF OWNERSHIP A legal doctrine that ownership carries with it a distinct social obligation. As a mere steward, the property owner must exercise his right to the property not just for his own exclusive and sel ish interest, but for the good and general welfare of the nation as a whole. RIGHT TO OWN Modes of Acquiring Ownership 1. Original Modes - ownership is not acquired from an immediately preceding owner.  10 Occupation - Things appropriable by nature that are without an owner, such as animals that are the object of hunting and ishing, hidden treasure, and abandoned movables, are acquired by occupation. ESSENTIAL REQUISITES FOR OCCUPATION: There must be seizure or apprehension The property seized must be corporeal personal property The property seized must be susceptible of appropriation There must be intent to appropriate The requisites or conditions of the law must be complied with SOME KINDS OF PROPERTY ACQUIRABLE BY OCCUPATION Those without an owner Hidden treasure Abandoned movables WHEN THING IS CONSIDERED ABANDONED The expectation to recover is gone—SPEC RECUPERANDI The intention to return or have it returned has been given up by the owner—ANIMO REVERTENDI Art. 714. The ownership of a piece of land cannot be acquired by occupation. (n) RULES ON HIDDEN TREASURE: 1. Hidden treasure belongs to the owner of the land, building, or other property on which it is found. 2. Nevertheless, when the discovery is made on the property of another, or of the State or any of its subdivisions, and by chance, one-half thereof shall be allowed to the inder. If the inder is a trespasser, he shall not be entitled to any share of the treasure. 3. If the things found be of interest to science of the arts, the State may acquire them at their just price, which shall be divided in conformity with the rule stated. (351a) 4. A stranger is entitled to hidden treasure if the following concurs: treasure must consist of money, jewelry, or other precious objects It must be hidden and unknown Its lawful ownership does not appear The discovery must be by chance The discover must be a stranger and not a trespasser Intellectual Creation - is an original mode of acquiring ownership whereby the creations or products of one's mind or intellect such as writings, musical compositions, artistic creations, discoveries, and inventions, become his exclusive property, giving him the right to authorize or refuse the publication or production of such creations. Intellectual property (IP) - refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. Ex. book copyrights, patented inventions, trademarks, letters. 2. Derivative Modes - based on a right previously held by another person. Donation - It is an act of pure liberality whereby a person disposes gratuitously of a thing or right in favor of another who accepts it. Elements of a Valid Donation: o Donor must have capacity to make the donation of a thing or right o Donative intent (animus donandi) or intent to make the donation out of liberality to bene it the donee o There must be delivery, whether actual or constructive o Donee must accept or consent to the donation. In order that a person can accept a donation, only one requirement is necessary, that he must not be prohibited or disquali ied by law from accepting the donation. Types of Donation (As to Purpose or Cause):  Simple Donation - is one where the underlying cause is plain gratuity. This is donation in its truest form.  Remuneratory / Compensatory Donation - one made for the purpose of rewarding the donee for past services, which services do not amount to a demandable debt.  11  Conditional / Modal Donation - one where the donation is made in consideration of future services or where the donor imposes certain conditions, limitations or charges upon the donee, the value of which is inferior to that of the donation given.  Onerous Donation - that which imposes upon the donee a reciprocal obligation or, to be more precise, this is the kind of donation made for a valuable consideration, the cost of which is equal to or more than the thing donated. Types of Donations (According to Time/Effectivity):  Donation Inter Vivos: Made during the donor's lifetime. Becomes effective immediately upon execution and acceptance. Example: A parent donates a residential lot to their child while still alive.  Donation Mortis Causa: Takes effect upon the donor's death. Treated like a will, requiring compliance with laws on succession. Example: A person donates a property to a relative, to be transferred after their death.  Donation Propter Nuptias Those donations which are made before the celebration of the marriage, in consideration of the same, and in favor of one or both parties. The term is Latin for "gift because of marriage" Donations in the Philippines are prohibited in certain circumstances, including: o Spouses: Spouses cannot donate to each other during their marriage, except for small gifts during family events or for services rendered. o Guardians: Guardians cannot donate property on behalf of a minor or incapacitated person without a court's authorization. o Witness: Donations to attesting witness of the execution of the donation, if there is any, or to the spouse, parents, or children or anyone claiming under such witness, spouse, parents, or children o Donations between people convicted of crimes: Donations cannot be made between people who were convicted of the same crime or who were guilty of adultery or concubinage at the time of the donation. o Donations to public of icials: Donations cannot be made to a public of icial or their family members because of their of ice. o Priest/Minister of Gospels: Donations to priest who heard the confession of the donor during the latter's last illness, or the minister of the gospel who extended spiritual aid to him during the same period. Donations to relatives of such priest or ministers of the gospel within the fourth civil degree of consanguinity or af inity, the church, order, chapter or community or institution to which such priest or minister may belong o Physicians/Surgeons/Nurses: Donations made to physician, surgeons, nurse, health of icer or druggist who took care of the donor during his last illness. o Donations contrary to law: Donations that go against the law, public policy, morals, or public order are prohibited. Succession - mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law Kinds of Succession 1. Testamentary Succession o The transfer of the decedent's property occurs through a will, which is a written legal document expressing the wishes of the deceased. o The decedent (testator) determines how their estate will be distributed. o Subject to certain legal limitations, such as the legitime of compulsory heirs. 2. Legal or Intestate Succession o Applies when a person dies without a will or when the will is declared invalid.  12 oThe law determines the distribution of the estate to the compulsory and other heirs based on rules of intestate succession. 3. Mixed Succession o Occurs when the decedent leaves a valid will, but not all of the estate is disposed of by the will. o The portion not covered by the will is distributed according to the rules of intestate succession. Kinds of Wills In Philippine law, there are two primary kinds of wills: 1. Notarial or Ordinary Will o Must be in writing, signed by the testator and attested by at least three credible witnesses. o Must comply with the formalities outlined in Articles 805–808 of the Civil Code, such as notarization and a clear declaration of testamentary intent. 2. Holographic Will o Entirely handwritten, dated, and signed by the testator. o Does not require witnesses or notarization, making it simpler to execute. o Must comply with Article 810 of the Civil Code, requiring the writing, dating, and signature to all be in the handwriting of the testator. Legacy ("bequeathed"): A legacy is a gift of personal belongings or movable property (like money, jewelry, or a car) that someone leaves to another person in their will. Devise ("devised"): A devise is a gift of real estate or immovable property (like land or a house) that someone leaves to another person in their will. Law - Legal provisions that categorically states who the owner of a property is. Tradition - a derivative mode by virtue of which they are transmitted from the patrimony of the grantor to that of the grantee by means of a just title, there being both the intention and the capacity on the part of both parties. Kinds of Tradition: 1. Real Tradition - is by delivery or transfer of a thing from hand to hand if it is movable, or by certain material and possessory acts of the grantee performed in the presence and with the consent of the grantor if it is immovable. 2. Constructive Tradition - is by delivery of a movable or immovable thing by means of acts or signs thereof. This delivery may take place in the following ways: a. Traditio Symbolica - is by delivery of a symbol representing the thing which is delivered, such as the key to a warehouse. b. Traditio Longa Manu (Delivery with Long Hand) refers to the act of delivery of a transferring party to the receiving party who does not yet have the object in their possession. For example, if a party purchases a car from an auto dealer that is on the auto dealer’s lot, the transferor auto dealer will deliver the vehicle to the transferee/purchaser at the purchaser’s home. c. Traditio Brevi Manu (Delivery with Short Hand) is when the grantee is already in possession of the thing under a title which is not of ownership, such as when the lessee purchases from the lessor the object of the lease. d. Traditio Constitutum Possessorium - by the grantor alienates a thing belonging to him, but continues in possession thereof under a different title, such as that of a lessee, pledgee or depositary. The delivery consists in the owner’s continuous possession of the property he had already sold to another person but his present possession is no longer that of an owner but under another capacity, like that of a lessee, pledge, depository, etc. Under this kind of tradition, the law considers all these formalities to have taken place by agreement of the parties (Carboneel v. CA, G.R. No. L-29972, January 26, 1976). There is both constructive and actual delivery in traditio constitutum possessorium. Quasi-tradicion - a mode of acquiring ownership that’s similar to tradition but doesn’t involve a direct physical delivery of the property. It’s used when the item being transferred is already in the possession of the buyer or new owner but was previously owned by someone else. Delivery of rights, credits or incorporeal property, made by: a. Execution of public instrument; b. Placing title of ownership on the hands of buyer; or  13 c. Allowing the buyer to make use of rights (Civil Code, Art. 1501) Tradicion por ministerio de la ley - is delivery which takes place by operation of law, such as by the registration of a deed of transfer of titled land which is also the operative act in order to bind innocent persons in such deeds. 3. Mixed Modes Prescription - Acquisition of right through the lapse of time. Ownership is acquired through continuous and uncontested possession for a period de ined by law (e.g., someone occupying a lot for 30 years without the owner's objection). Types of Prescription 1. Ordinary Prescription o Requires possession in good faith (believing that one has a legitimate claim or title to the property). o The possessor must also have a just title, meaning a document or basis that appears to grant ownership but may have a law (e.g., a defective deed of sale). o The possession must last for ten (10) years, as provided under Article 1134 of the Civil Code. 2. Extraordinary Prescription o Does not require good faith or just title. o The possessor must show uninterrupted adverse possession of the property for thirty (30) years, as stated in Article 1137 of the Civil Code. o This applies to cases where there is no valid claim of ownership, or the possessor knows the property is not theirs. UNDERSTANDING PRESCRIPTION In the Philippines, there are two types of acquisitive prescription: ordinary or extraordinary. Ordinary acquisitive prescription requires an uninterrupted possession in good faith and with just title for ten years. This means that a possessor in good faith and with a just title may no longer be dispossessed by the real owner after ten years (especially if the real owner fails to exercise any act of ownership during the ten-year period – this is called Extinctive prescription). On the other hand, an uninterrupted adverse possession prescribes in thirty years without need of title or good faith. The following case is illustrative. Dorothea Salvacion died without a last will and left behind a piece of real property. Her only heirs were her 5 children who divided the property equally among themselves. One of the children, Mario, occupied more than what he was entitled to under the partition agreement. He encroached upon the share of two of his siblings, Salvador and Arthur. After 55 years, the heirs of Salvador questioned the encroachment arguing that a “constructive trust” was created when Mario occupied the questioned portions. The Supreme Court ruled that acquisitive prescription had set in. Mario’s uninterrupted adverse possession of the contested property since 1945 was clearly established. It was only in the year 2000, upon receipt of the summons to answer petitioners’ complaint, that Mario’s peaceful possession of the contested portion was interrupted. 55 years had elapsed. Therefore, Mario had more than satis ied the requirement of 30 years. On the claim of the heirs of Salvador that a constructive trust was created, even if this was the case, an implied or constructive trust prescribes in ten years from the time the right of action accrues. This is the other kind of prescription under the Civil Code, called Extinctive prescription, where rights and actions are lost by the lapse of time. The action of the heirs of Salvador for recovery of possession is also barred by extinctive prescription. While Mario’s fraudulent act of depriving his siblings of their rightful shares is deplorable, the fact is that the siblings wasted their opportunity to question his acts in a timely manner. (Based on G.R. No. 184109, February 1, 2012)  14 Table Summary of Modes of Acquiring Ownership Mode of Category Description Examples Acquisition Picking fruits from Acquiring ownership of property that has no Occupation unowned trees, catching owner by taking possession. ish. Original Intellectual Ownership of property resulting from original Copyrights, patents, or Creation ideas or creative work. original inventions. Transfer of ownership through a voluntary act Receiving land, money, or Donation of giving without expecting compensation. assets as a gift. Ownership transferred after the owner's death, Inheriting a house or Succession either by will (testate) or by law (intestate). property. Derivative Ownership of Ownership conferred directly by law without Law expropriated land for voluntary action from the owner. public use. Ownership transferred through the delivery of Delivery of a car after Tradition property as part of a legal transaction. purchase. Ownership acquired by continuous, public, and Acquiring land through Mixed Prescription uninterrupted possession for a period adverse possession. prescribed by law. RIGHT TO ENJOY THE FRUITS USUFRUCT The term usufruct is derived from the Late Latin word usufructus, or in its full form, usus et fructus, which translates to “use and enjoyment” (i.e., usus means “use” and fructus means “enjoyment”). Thus, it is the right to use (jus utendi) and enjoy (jus fruendi) another’s property. Usufructuary refers to the person who enjoys another’s property, while the one who actually owns it is called, in legal terms, the naked owner. In a usufruct, only the jus utendi and jus fruendi over the property are transferred to the usufructuary. The naked owner of the property maintains the jus disponendi (right to dispose) or the power to alienate, encumber, transfer, and even destroy the same (Hemedes vs. CA, 316 SCRA 347, 1999). The Civil Code de ines usufruct as the “right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides” (Art. 562). In the Philippines, usufruct roughly translates to “karapatang gamitin ang ari-arian ng iba sa loob ng itinakdang panahon.” It usually applies when a landowner grants a legal right to a tenant or “taga-bantay” to use the former’s property (i.e., usually agricultural land) and bene it from the crops produced by it. Obligations of Usufructuary 1. Before the usufruct - inventory of all property 2. During the usufruct- take good care of the property 3. After the usufruct - the duty to return & indemnify in the proper case  15 RIGHT TO POSSESS Possession is the physical occupation or material holding of a thing, or the enjoyment of a right, with the intent to possess it as one’s own. To possess means to physically and actually occupy a thing, whether or not one has a lawful claim to it. Kinds of Possessors 1. Possessor in Good Faith o Someone who believes, without knowledge of any laws, that their title or mode of acquisition is valid. o Good faith is presumed by law, and anyone alleging bad faith has the burden to prove it. 2. Possessor in Bad Faith o Someone who knowingly possesses a thing despite being aware of circumstances that invalidate their title or right. Forms or Degrees of Possession 1. Possession Without Title o Possession without any legal basis or right. o Example: A thief or an illegal settler. 2. Possession With Juridical Title o Possession based on a legal relationship between the possessor and the owner. o Examples: Lessee, usufructuary, depositary, agent, pledgee, or trustee. 3. Possession With Just Title o Possession by someone whose claim to ownership is valid but has a law preventing the full transfer of ownership. o Example: A buyer in good faith who unknowingly purchases from someone without the authority to sell. 4. Possession With Title of Ownership (Fee Simple) o Possession based on ownership or the right of dominion. o Example: A property owner with freehold title. RIGHTS TO RECOVER PROPERTY Actions to Recover Real Property 1. Accion Interdictal - a summary legal proceeding used to recover possession of real property. It can be used in cases of forcible entry or unlawful detainer, and is brought in the proper inferior court o Forcible Entry  This legal action seeks to regain physical possession of a property when someone has been unlawfully deprived of it through force, intimidation, strategy, threat, or stealth.  The issue concerns mere physical possession (not ownership or legal possession) and applies when possession was unlawful from the start. o Unlawful Detainer  This is iled to recover possession of a property that was initially lawful, such as under a lease or other agreement, but has become unlawful after the contract expires or is terminated.  The action must be iled within one year from the time possession became unlawful. 2. Accion Publiciana o A civil action to recover the better right to possession of property, excluding cases of forcible entry and unlawful detainer. o This is applicable when the deprivation of possession has lasted for more than one year. 3. Accion Reivindicatoria o An action to recover ownership of real property. o The issue involves the right of ownership, not mere possession. o It must be iled in the Regional Trial Court (RTC) within:  10 years if acquired through ordinary prescription.  30 years if acquired through extraordinary prescription. Actions to Recover Personal Property 1. Replevin o The legal action used to recover personal property that has been unlawfully taken or detained.  16 Doctrine of Self-Help Property owners or lawful possessors may use reasonable force to protect their property when the following conditions are met: o The force is employed by the owner or lawful possessor. o There is an actual or imminent invasion or unlawful taking of the property. o The force used is reasonably necessary to repel the invasion. Quieting of Title This is a legal action to remove doubts or disputes over the ownership or rights to real property. The best proof of ownership is the Torrens Certi icate of Title, which is indefeasible (cannot be contested) and imprescriptible (does not expire). Cloud on Title A cloud on title refers to an invalid or unfounded claim or document that falsely appears to affect ownership of property. Examples of situations creating a cloud on title include: 1. A ictitious or simulated sale. 2. A sale made by an agent without proper authority. 3. A forged document. 4. A sale or donation rendered void due to failure of conditions by the buyer or recipient. 5. A voidable contract (e.g., one entered under duress or fraud). FORMS OF PROPERTY OWNERSHIP (US CONCEPT) 1. Sole Ownership o One person holds full legal title to the property and has exclusive control, rights, and responsibilities over it. o Example: An individual who purchases a house and holds the title in their name alone. 2. Joint Tenancy o A form of co-ownership where two or more people own property equally, with the right of survivorship. When one owner dies, their share automatically passes to the surviving owners. o Example: A married couple who jointly owns a home, and upon one spouse’s death, the surviving spouse automatically inherits the property. o Key Feature: Right of survivorship (the surviving owner(s) automatically inherit the deceased owner's share). 3. Tenancy in Common o A form of co-ownership where two or more individuals share ownership of property, but without the right of survivorship. Each owner has a distinct, transferable share. o Example: Three siblings inherit a family house, each owning a 1/3 interest. If one sibling dies, their share can be passed on to their heirs. o Key Feature: Each co-owner has a separate, transferable share in the property. 4. Community Property o Property acquired during the marriage is owned equally by both spouses, regardless of who earned or purchased it. o Example: A couple buys a car during their marriage. Both spouses have equal ownership, regardless of whose name is on the title. o Key Feature: Equal ownership of assets acquired during the marriage, subject to state-speci ic laws. 5. Tenancy by the Entirety o A form of joint ownership available only to married couples, where both spouses have an equal, undivided interest in the property. It includes the right of survivorship. o Example: A married couple jointly owns their home, and if one spouse dies, the surviving spouse automatically inherits the entire property. o Key Feature: Only married couples can hold property this way, with the right of survivorship. 6. Trust Ownership o Property held in a trust, where a trustee manages the property for the bene it of the bene iciaries. The trustee holds legal title, while the bene iciaries hold equitable title.  17 o Example: A family sets up a trust where the trustee manages a family vacation home for the bene it of the children. o Key Feature: Legal title is held by a trustee, but the bene icial ownership lies with the bene iciaries. 7. Life Estate o A property interest that lasts for the life of a speci ied individual (the life tenant). After their death, the property passes to a remainderman (another individual or entity). o Example: A person may grant their children a life estate in their property, with the property passing to the children’s heirs after their death. o Key Feature: The life tenant has the right to use and enjoy the property during their lifetime, but cannot sell or dispose of it permanently. 8. Condominium Ownership o Ownership of an individual unit within a larger building or complex, along with shared ownership of common areas (e.g., hallways, elevators). o Example: A person buys an apartment in a condominium complex, owning the individual unit but sharing ownership of the building's common areas with other unit owners. o Key Feature: Ownership of individual units and shared common areas. 9. Cooperative Ownership o In a cooperative, residents do not own their individual units but instead own shares in the cooperative corporation, which holds title to the entire property. Residents have the right to occupy a speci ic unit based on their shareholding. o Example: A person buys shares in a cooperative building, granting them the right to occupy an apartment. o Key Feature: Ownership is through shares in the cooperative, not direct property ownership. RULES ON OWNERSHIP IN THE PHILIPPINES General Rule - Who are entitled to acquire land in the Philippines?  Only Filipino citizens: By birth Naturalization Process Act of Congress Repatriation  Dual Citizenship  Corporations or partnerships at least 60% of the capital of which is owned by Filipinos As an exception to the general rule, alien acquisition of real estate in the Philippines is allowed in the following cases: Acquisition before the 1935 Constitution Acquisition through hereditary succession. If foreign acquirer is a legal heir; This simply means that when the non-Filipino is married to a Filipino citizen and the spouse dies, the non-Filipino as the natural heir will become the legal owner of the property. The same is true for the children. Every natural child (legitimate or illegitimate) can inherit the property of his/her Filipino father/mother even if he/she does not have any Filipino citizenship. Purchase of not more than 40% interest in a condominium project; Purchase by a former natural-born Filipino citizen subject to the limitations prescribed by Law (Batas Pambansa 185 and R.A. 8179) A Filipino who married an alien retains her Philippine citizenship (unless by her act or omission, she is deemed to have renounced her Philippine citizenship) and may therefore acquire real estate in the Philippines. ACQUISITION BY FORMER NATURAL BORN FILIPINO CITIZEN Mode of acquisition is not limited to voluntary deeds (such as sale or donation) but includes involuntary deeds (such as tax sale, foreclosure sale, or execution sale).  18 1. Maximum area that may be allowed is as follows: For residential purpose - 1,000 square meters of urban land or one (1) hectare of rural land (BP 185, S. 1982 - Balikbayan Act) For business or other purposes - 5,000 square meters of urban land or three (3) hectares of rural land. (RA 8179 - AN ACT TO FURTHER LIBERALIZE FOREIGN INVESTMENTS, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 7042, AND FOR OTHER PURPOSES) "Business or other purpose" refers to the use of the land primarily, directly and actually in the conduct of business or commercial activities in the broad areas of agriculture, industry and services, including the lease of land, but excluding the buying or selling thereof." 2. In case of married couple, one or both of them may avail of the privilege, provided that the total acquisition shall not exceed the maximum area allowed. 3. A transferee of residential land under BP 185 may still avail of the privilege granted under RA 8179. 4. A transferee who already owns urban or rural land for residential purpose, may acquire additional urban or rural land for residential purpose which, when added to that already owned by him shall not exceed the maximum area allowed by law. The same privilege applies to a transferee who already owns urban or rural land for business purposes. 5. A transferee may not acquire more than two urban or two rural lands which should be located in different cities or municipalities. 6. A transferee who has already acquired urban land for residential purpose shall be disquali ied to acquire rural land for residential purpose and vice versa. The same rule applies to a transferee of land for business purposes. WHAT IS URBAN LAND? Urban land shall refer to land located in an urban area. The urban areas shall include: In their entirety, all municipal jurisdictions which, whether designated or not as chartered cities, provincial capitals, have a population density of at least 1,000 persons per square kilometer; Poblaciones or central districts of municipalities and cities which have a population density of at least 500 persons per square kilometer; Poblaciones or central districts (not included in 1 and 2 above) regardless of population size which have the following: (a) A street pattern, i.e., a network of streets in either at parallel or right angle orientation (b) At least six establishments (commercial, manufacturing, recreational and/or personal services) (c) At least three of the following:  A town hall, church or chapel with religious services at least once a month;  A public plaza or cemetery;  A market place of building where trading activities are carried on at least once a week; and  A public building like a school, hospital, puericulture and health center or library. Barangays having at least 1,000 inhabitants which meet the conditions set forth in the preceding subparagraph [sub-par. (3)J and In which the occupation of the inhabitants is predominantly other than farming or ishing. Rural lands shall refer to land located in a rural area. The rural areas shall refer to all areas of the Philippines which do not meet the conditions set forth in the de inition of urban areas found in the immediately preceding paragraph (par. 3) of this Section. (Sec. 1, IRR, BP 185) BP 185, S. 1982 - Balikbayan Act Acquisition shall not exceed:  1,000 square meters for urban land or  1 hectare for rural land to be used solely for residence of the buyer In case of married couples, one or both of them may avail of the privilege provided that the total area shall not exceed the maximum limit When the transferee already owns urban or rural lands for residential purposes, he shall be entitled to acquire additional urban or rural land for residential purposes which, when added to those already owned by him, shall not exceed the maximum area allowed by law. No deed of conveyance in favor of a transferee under Batas Pambansa Big. 185 shall be registered by the Register of Deeds unless accompanied by a sworn statement showing the:  date and place of the transferee’s birth;  names and addresses of his parents, of his spouse and children, If any;  19  area, location and mode of acquisition of his landholdings in the Philippines, if any;  his intention to reside permanently in the Philippines;  date he lost his Philippine citizenship, and  country of which he is presently a citizen. The sworn statement hereinabove mentioned shall be in addition to the documentary requirements prescribed as prerequisites for the registration of titles under existing law, rule and regulation. (Sec. 4, IRR, BP 185) RA 8179 - AN ACT TO FURTHER LIBERALIZE FOREIGN INVESTMENTS, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 7042, AND FOR OTHER PURPOSES Any natural born citizen who has lost his Philippine citizenship and who has the legal capacity to enter into a contract under Philippine laws may be a transferee of a private land: up to a maximum area of ive thousand (5,000) square meters in the case of urban land or three (3) hectares in the case of rural land to be used by him for business or other purposes. In the case of married couples, one of them may avail of the privilege herein granted: Provided, that if both shall avail of the same, the total area acquired shall not exceed the maximum herein ixed. In the case the transferee already owns urban or rural land for business or other purposes, he shall still be entitled to be a transferee of additional urban or rural land for business or other purposes which when added to those already owned by him shall not exceed the maximum areas herein authorized. A transferee under this Act may acquire not more than two (2) lots which should be situated in different municipalities or cities anywhere in the Philippines: Provided, That the total land area thereof shall not exceed - ive thousand (5,000) square meters in the case of urban land or - three (3) hectares in the case of rural land - for use by him for business or other purposes. A transferee who has already acquired urban land shall be disquali ied from acquiring rural land and vice versa”. (Sec. 10, RA 7042 as amended by R.A. 8179, Approved March 28, 1996)) Dual Citizens (RA 9225 - Citizenship Retention and Re-acquisition Act of 2003 or the Dual Citizen Law) Dual citizenship means having two citizenships and passports from two different countries. Dual citizenship allows the citizenship holder full rights of possession of Philippine real property. This is a new law, and it is still unclear as to the procedures involved to implement it. Dual citizenship is now available for the following: Former Filipino citizens born in the Philippines, who have immigrated to another country and obtained citizenship of that country. Note: For former natural born Filipino Citizens, please visit the Philippine Embassy in your country for more information or to apply for Dual Citizenship. Foreign Ownership as a Philippine Corporation Foreign nationals or corporations may completely own a condominium or townhouse. To take ownership of a private land, residential house and lot, and commercial building and lot, foreign nationals or corporations should form a Philippine corporation. The corporation is to be 40% foreign-owned (maximum) and 60% Filipino-owned (minimum), and with at least ive incorporators. Upon incorporation, a main bank account should be tied to it. A foreign national may be the sole person in the bank account, allowing him/her total control over the funds derived from the corporation and the income or sale of the asset or property. Foreign Leasing of Philippine Real Estate Property PD 471 - DURATION OF LEASES OR PRIVATE LANDS TO ALIENS The maximum period allowable for the duration of leases of private lands to aliens or alien-owned corporations, associations, or entities not quali ied to acquire private lands in the Philippines shall be twenty- ive years, renewable for another period of twenty- ive years upon mutual agreement of both lessor and lessee. RA 7652 - FOREIGN INVESTORS LEASE ACT A foreign national and or corporation may enter into a lease agreement with Filipino landowners for an initial period of up to 50 years and renewable for another 25 years.  20 The leased area shall be used solely for the purpose of the investment upon the mutual agreement of the parties. KEY DIFFERENCES Aspect PD 471 RA 7652 Scope General leasing rules for foreigners. Encourages investments by foreign entities. Lease Duration 25 years, renewable for 25 years. 50 years, renewable for 25 years. Purpose of Lease Not speci ic (general use) Requires lease to be for investment purposes. Policy Objective Preserve land control for Filipinos. Boost economic growth via foreign investment. Principle of Jus Sanguinis - refers to the principle of citizenship observe in the Philippines based on the parent's nationality (citizenship). Principle of Jus Soli - refers to the principle that states that the citizenship of a person shall be based on the place of birth of a person. RIGHT OF ACCESSION GENERAL PROVISION The ownership of property gives the right by accession to everything which is produced thereby, or which is incorporated or attached thereto, either naturally or arti icially. (Art. 440, NCC) Kinds of Accession 1. Accession Discreta - the right pertaining to the owner of a thing over everything produced thereby (by internal forces) Classi ication of Fruits Natural fruits are the spontaneous products of the soil, and the young and other products of animals. Industrial fruits are those produced by lands of any kind through cultivation or labor. Civil fruits are the rents of buildings, the price of leases of lands and other property and the amount of perpetual or life annuities or other similar income. (Art. 442. NCC) 2. Accession Continua - the right pertaining to the owner of a thing over everything that is incorporated or attached thereto either naturally or arti icially, by external forces Forms of Accession Continua (Immovable Property): 1. Accession industrial - Additions to property caused by human actions (e.g., buildings constructed, or crops planted on land). This may take the form of building, planting or sowing 2. Accession-natural - Additions to property caused by natural events (e.g., land gained by river deposits or fruits growing on trees). This may either be alluvion, avulsion, change of course of river, or formation of islands. Alluvium - the soil deposited on the estate fronting the riverbank Accretion - the process whereby the soil is deposited along the banks of rivers.  21 RULE ON ALLUVIUM: The additional soil deposit becomes private property and shall belong to the owner of the land contiguous to the river, creek, stream, or lake. Requisites: the accumulation of soil or sediment be gradual and imperceptible it is the exclusive result of the action of the waters the land where the accretion takes place is adjacent to the bank of the river, creek, stream, or lake shore. Avulsion - the transfer of a known portion of land from one tenement to another by the force of the current. The portion of land must be such that it can be identi ied as coming from a de inite tenement. RULE ON AVULSION: The owner of the land from where the portion is detached retains the ownership thereof but he is required to physically remove the same within two years. uprooted trees, a mere claim by the owner within six months is suf icient to retain ownership of the tree. Requisites: it takes place only along the banks of rivers, creeks, streams, and lakes; it is caused only by the force of the current of the water independently of the act of man; the deposit of soil is sudden and abrupt the detached portion can be identi ied. Change of Course of Rivers Rule: Rivers and their natural beds are property of public dominion of the State. Exception: Riverbeds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners whose lands are occupied by the new course in proportion to the area lost. However, the owners of the lands adjoining the old bed shall have the right to acquire the same by paying the value thereof, whose value shall not exceed the value of the area occupied by the new bed. Requisites: The claimant must prove three key elements by clear and convincing evidence: the old course of the river or creek the new course of the river or creek the change of course of the river or creek from the old location to the new location by natural occurrence, Formation of Islands When the current of a river divides itself into branches, leaving a piece of land or part thereof isolated, thus forming an island, the owner of the land retains his ownership over the island. Article 464: Islands formed on the seas within the jurisdiction of the Philippines, on lakes and on navigable or loatable rivers, shall belong to the State, as patrimonial property, Article 465: An island formed through in non-navigable or non- loatable rivers shall become private property, as follows: the island so formed belongs to the owners of the margins or banks nearest to the island if the island is in the middle of the river, it shall belong to the owners of both margins, in which case it shall be divided longitudinally" in halves if, however, a single island thus formed be more distant from one margin than from the other, the owner of the nearer margin shall be the sole owner Forms of Accession Continua (Movable Property): 1. Adjunction - One item is attached to another (e.g., attaching gold handles to a wooden cabinet). The primary item determines ownership. Example: Gold handles belong to the cabinet owner if the cabinet is the principal object. 2. Commixtion/Confusion: Mixing liquids or solids owned by different people (e.g., combining grains of rice). Example: If rice from two farmers is mixed, ownership is divided proportionately. 3. Speci ication: New items are created using someone else’s materials (e.g., making a statue out of marble). Example: Ownership might go to the sculptor if the creation adds signi icant value, with compensation to the marble owner.  22 CONCEPT OF TITLE "TITLE" is not synonymous with Torrens Certi icate of Title. It is a generic term which means evidence or proof of ownership, such as tax declaration, realty tax receipts, deed of sale, and Torrens Certi icate of Title. The best evidence of ownership of title is the Torrens Certi icate of Title because it is imprescriptible and indefeasible. A person is deemed to have title to a property when he can exercise or has the bundle of rights over it MODES OF ACQUIRING TITLE 1. Private Grant - voluntary transfer or conveyance such as sale or transfer. Sale - Ownership of land is transferred in exchange for a price (money or other valuable consideration). Donation - Ownership of land is transferred as a gift, without requiring payment, typically through a Deed of Donation. Succession - Ownership of land is transferred from a deceased person to their heirs based on a will (testate) or by operation of law (intestate). 2. Public Grant - acquisition of alienable public land by homestead patent, free patent, sales patent, or other government award. A PATENT is a legal document issued by the government that gives someone ownership of a piece of land. It’s like an of icial certi icate that proves the land belongs to you, usually after meeting certain rules or conditions: Homestead Patent - A grant to individuals who cultivate and improve a portion of agricultural public land, provided they comply with residency and cultivation requirements. Requirements:  Be a citizen of the Philippines;  Be eighteen (18) years of age, or the head of the family;  Not be an owner of more than ive (5) hectares of land;  Have resided continuously for one (1) year in the municipality where the land is located;  Have cultivated at least one- ifth (1/5) of the area of the land applied for within six (6) months from the approval of the application. Free Patent - A grant of agricultural public land to a natural-born Filipino who has occupied and cultivated it for a certain period. Requirements: For RESIDENTIAL LAND:  Be a citizen of the Philippines;  Not be an owner of more than 12 hectares of land;  Have actual possession and occupation of the land for at least 10 years; and  Show proof that the land subject of the application was already zoned for residential purposes.  Any Filipino citizen who is an actual occupant of a residential land for at least 10 years is eligible to apply for a Residential Free Patent, subject to the following area limitations: o 200 SQ. M. – HIGHLY URBANIZED CITIES o 500 SQ. M. – OTHER CITIES o 750 SQ. M. – 1ST AND 2ND CLASS MUNICIPALITIES o 1,000 SQ. M. – ALL OTHER MUNICIPALITIES  Residential lands which are more than 1,000 sq. m. are subject to the miscellaneous sales provisions of the Public Land Act and RA 730 For AGRICULTURAL LAND:  Be A Filipino citizen;  Not be an owner of more than twelve (12) hectares of land;  Have continuously occupied and cultivated, either by the applicant or through his/ her predecessors-in-interest, the land subject of the application for at least 20 years  Have paid taxes on the land  23 Sales Patent - Public agricultural lands sold by the government to individuals or corporations quali ied to acquire and develop them. A Sales Patent may be issued based on the: 1. Miscellaneous Sales Application under Chapter 9 of CA No. 141 (For Residential, Commercial, Industrial, Educational, Charitable, or other productive purposes other than agricultural):  Public bidding is mandatory; and  Also public bidding - if the land area exceeds 1,000 square meters under RA 730 2. Miscellaneous Sales Application under RA 730 (For Residential Purposes)  Direct Sale without public bidding – if the land area is 1,000 square meters or below, and the house is constructed on the land actually occupied as residence. QUALIFICATIONS OF AN APPLICANT FOR SALES PATENT  Be a citizen of the Philippines;  Be of legal age;  Not own any homelot in the city or municipality where the land applied for is located;  Not own more than ive (5) hectares of land;  Have actually occupied in good faith the land applied for and constructed a house thereon where he/ she is actually residing  Show that the land is for residential purposes and its area is not more than 1,000 sq. m. Otherwise, the sale is through bidding; and  Be willing to pay the appraised or re-appraised value of properties under DAO No. 2010-26. Republic Act No. 730 which was enacted on June 18, 1952 is a law that permits the sale without public auction (through Miscellaneous Sales Application or MSA) of Alienable and Disposable (A&D) lands of the public domain of the Republic of the Philippines (RP) for residential purpose to quali ied applicants under certain conditions.  The application to purchase the land is called the Miscellaneous Sales Application (MSA) and the corresponding patent is called the Miscellaneous Sales Patent (MSP).  The applicant can only be granted a maximum area of 1,000 square meters. Special Patents - Grants for public lands for public purposes, often for government agencies, local government units (LGUs), or public institutions. Requirements: Used for a speci ic public purpose such as schools, government of ices, or housing. 3. Involuntary Grant - acquisition against consent of owner, such as foreclosure or executive sale. 4. Inheritance - acquisition by hereditary succession. 5. Reclamation - illing of submerged land subject to government regulations and existing laws. 6. Accretion - acquisition of land adjoining banks of rivers due to gradual deposit of soil. 7. Prescription -acquisition of title by actual, open, continuous, and uninterrupted possession for a period of time under claim of title - Ten (10) years in good faith - Thirty (30) years if in bad faith.