When a person builds, plants, or sows on land belonging to another, the Civil Code rules on accession determine the rights of the parties, and the outcome depends heavily on good or bad faith. A builder (or planter or sower) in good faith is one who builds believing they are the owner of the land or that they have a right to build on it, unaware of any flaw in their title or mode of acquisition. When the builder is in good faith and the landowner is also in good faith, the landowner has the option: either to appropriate (keep) the building or improvement upon payment of the proper indemnity to the builder, or to oblige the builder to buy the land (unless its value is considerably more than the building, in which case the builder pays reasonable rent instead). The choice belongs to the landowner, not the builder, but the builder in good faith has the right of retention, meaning they may keep possession until paid the indemnity. If the builder is in bad faith (knowing the land was not theirs), the landowner may appropriate the improvement without indemnity, or demand demolition at the builder's expense, or oblige the builder to pay for the land, plus damages. If the landowner is in bad faith (knew and allowed the building) while the builder is in good faith, the rules favor the builder. So the law protects a builder who acted honestly while giving the landowner the primary choice, and it penalizes bad faith. Understanding this matters in boundary encroachments and disputes over improvements on another's land.
Who Is a Builder in Good Faith
A builder, planter, or sower in good faith builds believing they own the land or have a right to build, unaware of any flaw in their title.
The Landowner's Options (Both in Good Faith)
The landowner may either appropriate the improvement by paying indemnity, or oblige the builder to buy the land (or pay rent if the land is worth much more). The choice is the landowner's, but the builder has a right of retention until paid.
Bad Faith Changes Everything
A builder in bad faith may lose the improvement without indemnity, face demolition, or be made to buy the land, plus damages. A landowner in bad faith (who knew and allowed it) is treated less favorably.
Practical Takeaways
- A good-faith builder is protected and can retain until paid;
- The landowner chooses to keep and pay or sell the land;
- Bad faith forfeits protection and adds damages.
Frequently Asked Questions
Who is a builder in good faith? One who builds, plants, or sows on land believing they are the owner or have a right to build, unaware of any flaw in their title or mode of acquisition.
What are the landowner's options against a good-faith builder? To appropriate the improvement upon paying the proper indemnity, or to oblige the builder to buy the land, unless the land's value is considerably more, in which case the builder pays reasonable rent.
Who chooses what happens to the improvement? The landowner holds the choice, not the builder. But a builder in good faith has the right of retention and may keep possession until paid the indemnity.
What if the builder acted in bad faith? The landowner may appropriate the improvement without indemnity, demand its demolition at the builder's expense, or oblige the builder to pay for the land, plus damages.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
If you have questions about your rights or options under Philippine law, our firm is available to assist. You may reach us via Viber or WhatsApp, call us at 0995 433 5550, or send an email to vivasnobles@gmail.com. We look forward to hearing from you.