Is An Unnotarized Contract Effective in a Real Estate Transaction?

Unnotarized Deed of Sale: Is It Valid or Not?

Contract validity is often an argument when it comes to real estate transactions. Hence, it’s worth covering this topic on our blog to educate buyers and ensure their documents are always valid. After making an agreement, notarization is next, or the registration of the newly bought property. Let’s find out how crucial notarization is when buying a house and lot, condominium unit, or subdivision lot in the Philippines.

Contract Validity & Notarization

According to Article 1356 of the Civil Code, there’s no requirement for a Deed of Sale to be notarized for the contract to be valid. As long as the contract meets the necessary requisites, it’s valid in the selling of a property. The only thing that is essential in this transaction is that both parties come up with an agreement in terms of the sale of a property or land.

Here are the requirements for contract validity:

• There should be a consent or agreement between the contracting parties.
      
• The object or property in the contract must be defined.
      
• The reason the contract has been made should be clear.

On the other hand, notarization will become important during the registration of the property to the new owner, as required by the Property Registration Decree. A notarized contract, therefore, becomes a public document, as Article 1358 requires real property contracts to be public documents. But again, notarization is not essential for a sale to be valid. The convenience of this public document requirement is to protect buyers against any third parties.


Notarized Deed of Sale for Registration

According to Presidential Decree No. 1529, it is a requirement to notarize your Deed of Sale so that you can register the property. While it is valid for both parties to have an unnotarized Deed of Sale, the contract is simply not registerable in the absence of notarization. To expedite the process of transferring the property title to the new owner, make sure to get a lawyer who can notarize your Deed of Sale.

Now that you know the difference between notarization for contract validity and notarization for registration, it’s easier to make confident decisions when buying real properties. This will ensure protection when dealing with a seller while preventing third parties from getting involved in the selling of the property. Whether you’re purchasing a new condo unit, house and lot, or a residential lot in your local subdivision, always follow the right steps to avoid future issues.

Final Thoughts

This is for academic purposes only. We advise you to ask for professional assistance from a lawyer if you are in doubt. You may contact us if you have any questions, or planning to sell your property. Just register on the official REALS Corporation website on our home page to list your property for sale in Baguio, Alabang, or anywhere in the Philippines. Talk to our real estate agents now and get a free consultation. 

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