Deed of Sale of Real Property

A Deed of Sale of Real Property is a document that sets forth the agreement between two parties called the buyer and the seller to transfer the ownership of the seller over a real property to the buyer in exchange for a purchase price. This document provides the terms and conditions of the sale. Real properties that can be sold under this agreement include a parcel of land, a house, a condominium, or the like.

This document may also include an assumption of mortgage where the buyer can assume or take over the mortgage that the seller has over the property. Assumption of mortgage means the buyer will continue paying off the mortgage on the property as if he is the actual mortgagor. This is usually under a deed of mortgage which uses the property as security for the payment of a loan.

This document can be used as one of the following:

• Deed of Absolute Sale. A Deed of Absolute Sale is executed when the ownership is transferred to the buyer upon the notarization of the Agreement even if the purchase price is not fully paid.

• Deed of Conditional Sale. A Deed of Conditional Sale is executed when the ownership is transferred to the buyer once the full purchase price is paid. In a Deed of Conditional Sale, the buyer can take possession of the property while the seller retains the ownership of the property. In this case, the buyer cannot register the property under his name until the full purchase price is paid.
• Contract to Sell. A Contract to Sell is an agreement to sell the property to the buyer, usually after the payment of the full purchase price. In this case, the buyer can also take possession of the property while the Seller retains the ownership. Once the purchase price is paid, the parties execute a Deed of Absolute Sale to transfer ownership of the property to the buyer.

How to use this document

The following information should be provided if applicable to complete the document:

• Information concerning the identity of the buyer and the seller,
• The details of the real property to be sold,
• The purchase price and the manner by which it is paid, and
• An option to include an assumption of mortgage.

The following should be attached if applicable:

• The proof of authorization for the representatives, such as a Secretary's Certificate if the party or parties are corporations, a Partners' Certificate if the party or parties are partnerships, or a Special Power of Attorney if the party or parties are sole proprietorships.
• A copy of the Transfer Certificate of Title or Condominium Certificate of Title.
• If there will be an assumption of mortgage, the Deed of Mortgage.

This document should be acknowledged before a notary public, and the parties (or their respective representatives) should present themselves before a notary public with all the original copies of the document and their attachments. The parties (or their respective representatives) should also bring a competent form of identification, such as a passport or driver's license.

The notary public will keep one original copy of the document, and both parties should each keep a copy of the document for their records.

This document can be used to register the transfer of ownership of the property at the Register of Deeds where the real property is located. The Register of Deeds has other documentary requirements to register the transfer of ownership of the real property aside from the original Deed of Sale. Other requirements may include the following:

• Transfer Tax Receipt. This is Proof of payment of the transfer tax imposed by the local government unit where the property is located.
• Real Property Tax Clearance. This is a certification from the local assessor's office indicating that all real property taxes due for the property have been paid up to date.
• Tax Clearance. A tax clearance certificate from the BIR stating that the capital gains tax, if applicable, has been paid.
• Certificate of No Improvement. Certification from the local assessor's office stating that there are no improvements (e.g., buildings) on the property, if applicable.
• Owner's Duplicate Copy of the Title (ODT). The seller (owner) of the property must present this document to the Register of Deeds in case he wants to transfer the ownership of the property to another's name.
• Others. Some documents may also be required to prove the status of the parties such as marriage certificates, or to prove the authority of the parties to transact such as special powers of attorney.

Applicable law

A Deed of Sale of Real Property is governed by the Civil Code of the Philippines. The 2004 Rules on Notarial Practice is also applicable if the document will be acknowledged before a notary public.

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