What They Don’t Tell You When Buying Farm Lot in the Philippines

Crucial Things You Should Know Before You Purchase a Farm Lot

There are many affordable lot properties for sale nowadays with flexible installment offers. Some may think they’ve found the best deal, only to find out later that it’s not legally transferable. Buying a farm lot in the Philippines comes with a lot of careful considerations before signing the contract. If you’re planning to buy a property, there’s something the seller might not tell you. Read on to discover the red flags of purchasing farm lots as well as tips to avoid disputes in the future.

Verifying the Classification of the Property

The most common issue with farm lots in the Philippines is the classification and use of the land. Disputes are commonly due to the land being under CLOA or classified as agricultural property, so due diligence is a must for buyers. The key is to verify the deed with the Registry of Deeds and make sure the property is not under the 10-year rule and no unpaid taxes.
In the Philippines, many subdivided farm lots that are for sale have CLOA titles or Certificate of Land Ownership Award title. It’s not enough to have a Deed of Sale to safely buy these properties for some legal reasons. If the land is under CLOA, it means you can’t simply sell it or transfer the ownership, and the sale can be null and void.
Here are critical things about CLOA lands that not all buyers are aware of:

• There’s a 10-year rule for CLOA farm lots which means the owner cannot sell it within 10 years after the awarding.
      
  
• In addition to the Deed of Sale, you also need DAR Clearance to legally sell the lot property.
      
  
• Not all farm lots can be transformed into a residential property as they are still classified as agricultural land. This is why buyers can’t get building permit and usually get stuck from constructing in the farm lot.
      
  
• Many farm lots seem to be a subdivision project, but they remain an agricultural land and so the owner doesn’t have License to Sell.
  

Tips to Avoid Problematic Farm Lots

Just because the property is fenced, with receipt and Deed of Sale doesn’t mean it’s safe to buy. Always remember to check the title, LTS, DAR clearance, and the classification of the property before buying. What’s the beauty of the view, or the affordability of the property if you cannot transfer the ownership under your name.

Final Thoughts

Buying a CLOA land in the Philippines without knowing the legalities can be a dangerous move for buyers. Many farm lots are agricultural lands wherein you cannot build any structure unless there’s a DAR clearance and building permit. Make sure to verify the title with the Registry of Deeds before you decide to buy a farm lot. For safer options, you may check out REALS.PH for house-and-lot developments in Baguio City or lot properties that are legal to buy in any city nationwide.