Short answer. Under Article 448, the landowner has two choices: appropriate the building by paying the builder the proper indemnity, or compel the builder to buy the land. If the land is worth considerably more than the building, the builder cannot be forced to buy — instead, the builder pays reasonable rent.
What the law says
The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land
Civil Code, Article 448 — Builder, Planter, Sower in Good Faith. Read the full provision →
Option one: appropriate the building
The first option gives the landowner the building itself. By paying the builder a proper indemnity — covering necessary and useful expenses under Articles 546 and 548 — the landowner acquires the structure and becomes its owner. This is often the preferable path when the building adds significant value to the land or when the landowner wants to keep both together. The builder receives compensation for the cost of construction and improvements, determined at their current value, not necessarily the original outlay.
Option two: compel the builder to buy the land
The second option lets the landowner keep the land by requiring the builder to purchase it at its fair value. This works when the landowner wants to be fully cashed out and has no use for a building on their land. The builder becomes the owner of both the land and the structure. However, there is a critical limit: the builder cannot be obliged to buy the land if its value is considerably more than that of the building or trees. Where a large disproportion exists, this option is not available to the landowner.
What happens when compelled purchase is unavailable
When the land's value is considerably more than the building, the landowner still has the option to appropriate the building with proper indemnity. If the landowner does not choose to appropriate, then the builder instead pays reasonable rent for the continued occupation of the land. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof. This rental arrangement continues until the parties reach a final resolution, which may eventually involve the landowner appropriating the structure.
Why the choice belongs to the landowner
Article 448 deliberately vests the initial choice in the landowner rather than the builder, because it is the landowner's property that was built upon. The builder, having acted in good faith, is protected from demolition orders and from compelled purchase of disproportionately expensive land — but the landowner decides how to resolve the situation. A builder who wants a specific outcome must wait for the landowner to make their election. Once the landowner has chosen, the parties move forward under that choice, and the court can fix terms if they disagree on the details.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Ophelia L. Tuatis vs. Spouses Eliseo Escol and Visminda Escol, et al, G.R. No. 175399, October 27, 2009 — read the decision on LawPhil →
- Leviste Management System, Inc,. vs. Legaspi Towers 200, Inc., and Vivian Y. Locsin and Pitong Marcorde/ Legaspi Toweres 200, Inc. vs. Leviste Management System, Inc., et al, G.R. No. 199353 / G.R. No. 199389, April 4, 2018 — read the decision on LawPhil →
- Communities Cagayan, Inc. vs. Sps. Arsenio (deceased) and Angeles Nanol, et al, G.R. No. 176791, November 14, 2012 — read the decision on LawPhil →
- Onesimo Agapito vs. Marilyn F. Agapito, G.R. No. 255157, July 4, 2022 — read the decision on LawPhil →