EXPENSE OF SUBDIVIDING RESIDENTIAL LOT: BUYER OR SELLER?

By | July 4, 2018

“Laws relating to family rights and duties,or to the status, condition and legal capacity of persons are binding upon Filipino citizens, even though living abroad.” (Article 15 Civil Code of the Philippines)

Q. Hi atty,  my parents bought a portion of a residential lot. The seller promised to subdivide the lot but to no avail up to this writing. My parents died and the seller now insist to us the heirs that we shoulder the expenses for the lots subdivision. Any suggestion on which way we are going to negotiate this mess. Thanks. IP


ANS: First things first .You said the developer made a promise to subdivide the lot. Go over the documents(Contract to sell/Deed of Sale/Conveyances ) that your parents have executed with the Developer or Seller over that portion of the undivided lots. What does it says? To whose account(s) should the expenses be chargeable?

If the document clearly states that it is the Seller bears the expense and the latter refuses to do its obligation then you bring the matter to the court and sue for specific performance.

However, if the sales document is silent as to who bears the expense, it is the buyer who should shoulder the cost of subdividing the property purchased by their deceased parents, on the following grounds:

Your parents and now being substituted by the heirs are considered and in fact co-owners of that portion of the undivided lots to the extent of the interest or area that they have purchased.
Under the law, every co-owner has the right to demand for the partition of the co-owned property anytime . It is the buyer/purchaser who stand to benefit the subdivision or partition of the lot . This include the issuance of separate land title of the purchased property.
It is the buyer who will be prejudiced should that portion of the property will remain part of the whole and undivided property;
Considering that your parents who purchased the said property are already dead , there are still formalities required by law to be done in the titling and subdivision of the lot. Foremost of which is the settlement of the estate of the deceased parents. This means the heirs must amongst themselves first adjudicate the estate of their parents first , including the Settlement of the Estate and the payment of the estate tax, among others. This entails expense, more particularly the payment of estate tax, documentary stamp tax, transfer tax and publication of the settlement of the estate by the heirs in the newspaper of the general circulation, among others; and
You stand to lose should the lot remain undivided.

Moreover, the partition and titling of the lots will also require the services of a Geodetic Engineer to work out the subdivision and lot plan with the corresponding approval of the technical descriptions thereof by the Land Registration Authority(LRA) and by other government agencies, such as the DENR as the case may be.

For above purposes, you should ask your lawyer to prepare the legal documents relative to the settlement of the estate of your decease parents(Extrajudicial Settlement of Estate with Deed of Partition). Delay in the payment of the required taxes mentioned above means surcharges, penalty charges and the payment of interest on the tax due thereof at 20% per month.

Looking forward you’ll find the above in order as the “Batas Pinoy Global Community”(BPGC), welcomes you in this program.

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