The paper you were shown is not the check
Nearly every rescue call we take starts the same way: the buyer was shown a clean-looking photocopy of a certificate of title, a tax declaration, and a confident seller. None of that is verification. Due diligence begins by setting the folder you were handed aside and going to the source — a certified true copy of the title drawn by us from the Register of Deeds that holds the original, on a date we can prove. We do this because the frauds that actually work here are not clever. They are an altered owner's duplicate, or a perfectly genuine title that no longer says what your copy says, because something was written on the registry copy after your copy was made.
The chain behind the current owner
We trace the title backwards through the transfers that produced it: which title it cancelled, what cancelled that one, and how each step happened — sale, extrajudicial settlement, foreclosure, donation, court order. Breaks in that chain are where later claimants come from, and they surface years after closing. For a foreign buyer the chain carries an extra question, because a name in it can raise whether an earlier transfer was valid at all. It also cuts the reassuring way: in Borromeo v. Descallar (G.R. No. 159310, February 24, 2009) the Supreme Court held that where land invalidly transferred to an alien is later conveyed to a Filipino, the flaw in the original transaction is considered cured and the transferee's title is valid. The same decision is why we never stop at the title itself:
It is settled that registration is not a mode of acquiring ownership. It is only a means of confirming the fact of its existence with notice to the world at large. Certificates of title are not a source of right. The mere possession of a title does not make one the true owner of the property.
Everything written on the back page
The Memorandum of Encumbrances is where the trouble lives, and it is the page sellers photocopy last. We read every entry and chase each to its own record:
- Mortgages and loan annotations. A subsisting mortgage means the bank, not the seller, holds the release you need. Payment schedules and the actual cancellation instrument have to be verified, not promised.
- Notices of lis pendens. Someone is litigating over this property right now, and whoever buys it takes it subject to the result. This alone has ended deals in our office in one afternoon.
- Adverse claims, levies and attachments. A third party is asserting a right, or a creditor has reached the land to satisfy a judgment. Each needs its underlying case file read, not just its date noted.
- Extrajudicial settlement annotations. Where the seller's title came from heirs who divided an estate among themselves, Section 4 of Rule 74 of the Rules of Court gives an omitted heir or an unpaid creditor a period of two years from the settlement to come after the property. Put plainly: for those two years, the family's private arrangement is still your problem.
- Restrictions, easements and rights of way. Homeowners' association covenants, road lots, setbacks and utility easements decide whether the house you are planning can actually be built.
Is the person selling actually the owner?
We match the seller against the registered owner — identity documents against the name on the title, civil status against the deed, and, where the seller is married, whether the spouse's consent is required and given. Where a corporation sells, we ask for the board authority and the secretary's certificate. Where the owner is abroad and a relative signs, we examine the special power of attorney closely: properly apostilled or consularized, specific to this property and to the act of selling, current, and with the principal alive on signing day. A genuine title sold by someone without authority produces a void sale — and the money is usually gone before the defect surfaces.
Unpaid taxes travel with the property, not the seller
We obtain real property tax clearance from the city or municipal treasurer and check the tax declarations against the title, because arrears attach to the land and the registry will not process a transfer without the clearance. Then we look upstream: where the current title passed through someone's death, nothing moves until the estate has been settled and the Bureau of Internal Revenue has issued the electronic Certificate Authorizing Registration. That is a common and expensive discovery — a buyer who has paid in full but cannot register, because a grandparent's estate was never closed. Our estate tax and eCAR page explains that gate.
Fabricated titles and the property sold twice
Two patterns account for most catastrophic losses, and both are defeated by the same discipline. The first is a title that does not exist in the registry's records at all, or exists over different land: caught by comparing your document against the registry copy and the registry's own indexes. The second is the property sold to more than one buyer, where the seller collects from several people and the winner is decided by registration and good faith rather than by who paid first. This is why we insist that payment be staged against verified milestones, and why an unregistered deed sitting in a drawer is not a purchase.
Does the land on paper exist on the ground?
We read the technical description — lot and plan numbers, bearings, area — and where the price or the terrain justifies it, we recommend a relocation survey by a licensed geodetic engineer. We also ask who is physically on the land. Tenants, long-time occupants, a caretaker asserting rights, or a neighbour's fence three metres inside your boundary are facts no certificate will tell you, and they are far cheaper to discover before closing than to litigate afterwards.
What happens to the findings
Every item above lands in a written report with a clear recommendation — proceed, proceed on conditions, or walk away — and, where a defect is curable, what curing it requires and who should pay for it. That is the whole point of the exercise: a finding discovered before money moves is a negotiating position, and the same finding discovered afterwards is a lawsuit. See how the engagement runs, what the transaction taxes add to your budget, and, if you have already paid, what to do now.
Frequently asked questions
Is the owner's copy of the title the seller shows me enough?
No. We work from a certified true copy drawn from the Register of Deeds that holds the original, on a date we can prove. The copy in a seller's folder can be altered, can be genuine but stale, and cannot show you what was annotated on the registry copy last month.
Does a foreigner's name in the title history make the property unsafe?
Not automatically. In Borromeo v. Descallar the Supreme Court held that where land invalidly transferred to an alien is later held by a qualified Filipino, the flaw in the original transaction is considered cured and the transferee's title is valid. What matters is who holds it now and how the chain reads, which is exactly what the examination establishes.
What happens if the seller has unpaid real property tax or estate tax?
The problem stays with the property, not the seller. Real property tax arrears attach to the land and a treasurer's clearance is part of the transfer papers. Where the title passed through a death, the estate side must be settled and an electronic Certificate Authorizing Registration issued before your purchase can be registered at all.
Can due diligence be done after I have already paid a deposit?
Yes, and it is still worth doing, but the leverage is different. Before money moves, findings become conditions, price adjustments or a decision not to buy. After money moves, findings become a recovery problem. If you have already paid, treat it as urgent rather than settled.