FUNDAMENTALS OF PROPERTY OWNERSHIP in REAL ESTATE PRACTICE

Real Estate Ownership: PHILIPPINE REAL ESTATE

CONCEPT OF OWNERSHIP
Ownership is the independent right of a person to the exclusive enjoyment and control of a
property including its disposition and recovery subject only to the restrictions established by law
and rights of others.

RIGHTS INCLUDED IN OWNERSHIP
Fee simple consists of the so called bundle of rights which are inherent in or appurtenant to
ownership, without any limitations or restrictions other than those imposed by law or contract.
The bundle of rights include the following: 1) Right to possess 2)Right to use and enjoy 3) Right
to the fruits 4) Right to dispose 5) Right to vindicate or recover

LIMITATIONS ON RIGHT OF OWNERSHIP GLOWS
1) Those imposed in general by the State in the exercise of the power of taxation, police power,
and power of eminent domain.
2) Those imposed by law such as legal easement, requirement of legitimate succession, zoning,
building code, rent control, urban and agrarian reform, subdivision regulations, escheat.
3) Those imposed by the grantor of the property on the grantee by contract, such as donation, last
will, or usufruct.
4) Those imposed by the owner himself, such as voluntary easement, lease, mortgage.

SURFACE, SUBSURFACE AND AIR RIGHT
Land, in its legal signification, extends from the surface downwards to the center of the earth and
extends upwards indefinitely to the skies. The surface and subsurface of rights of an owner
entitle him to construct thereon any works or make any plantations and excavations without
detriment to servitudes and special laws. Air right is the right of an owner to use and control the
air space over his land subject to the requirements of aerial navigation, laws, or contract.

RIGHT TO HIDDEN TREASURE
Hidden treasure belongs to the owner of the land, building, other property on which it is found.
When the discovery is made on the property of another, or of the State or any of its subdivisions,
and by chance, one-half of the treasure shall be allowed to the finder. If the finder is a trespasser,
he shall not be entitled to any share of the treasure. If the things found be of interest to science or
arts, the State may acquire them at their just price, which shall be divided in conformity with the
rule above stated. Hidden treasure, for legal purpose, is understood to be any hidden unknown
deposit of money, jewelry, or other precious objects, the lawful ownership of which does not
appear.
RIGHTS OF ACCESSION
1) In General The ownership of property gives the right by accession to everything which is
produced thereby, or which is incorporated or attached thereto, whether naturally or artificially.
2) With Respect to Produce of Property To the Owner belongs the:
a) Natural fruits the spontaneous product of the soil
b) Industrial fruits those produced by land cultivation or labor
c) Civil fruits the rental income of buildings and /or lands
3) With Respect to Immovable Property:
a) The owner of the land on which anything has been built, sown or planted in good faith shall
have the right:
aa) To appropriate as his own the works, sowing or planting after payment of indemnity
provided by law, or
bb) To oblige the builder or planter to pay the price of the land. However, the builder or
planter cannot be obliged to pay for the land if its value is considerably more than that of the
building or planting. In such case, he shall pay reasonable rent if the owner does not choose to
appropriate the building after proper indemnity. The parties shall agree on the terms of the lease
and in case of disagreement, the court shall fix the terms thereof.
b) The owner of the land on which anything has been built, planted or sown; in bad faith may:
aa) demand the demolition of the work or removal of the planting or sowing at the
expense of the builder or planter, or
bb) compel the builder or planter to pay the price of the land and the sower, the proper
rent. The landowner is also entitled to damages from the builder planter or sower.
cc) To the owners of land adjoining the banks of rivers belong the accretion which they
gradually receive from the effects of the current of the water.
dd) Whenever a river, changing its course by natural causes, opens a new bed through a
private estate, the new bed shall become a public dominion.
Modes of acquiring title
Private Grant voluntary transfer or conveyance of private property by a private owner, such as
sale or donation.
Public Grant acquisition of alienable lands of the public domain by homestead patent, free
patent, sales patent, or other government awards.
Involuntary Grant acquisition of private party against the consent of the former owners, such as
foreclosure sale, execution sale, or tax sale
Inheritance acquisition of private property through hereditary succession
Reclamation - filling of submerged land, subject to existing laws and government regulations.
Accretion acquisition of more lands adjoining the banks of rivers due to the gradual deposit of
soil as a result of the river current
Prescription acquisition of title by actual, open, continuous, and uninterrupted possession in the
concept of owner for the period required by law

RIGHT TO OWN
1. General Rule Only Filipino citizens and corporations at least 60% capital of which is owned
by Filipinos are entitled to acquire and own land in the Philippines.
2. Exceptions to the General Rule Alien acquisition of real estate in the Philippines is allowed
in the following cases:
a) Acquisition before the 1935 Constitution.
b) Acquisition thru hereditary succession if the acquiree is a legal heir.
c) Purchase of not more than 40% interest in a condominium project
d) Purchase by former natural born Filipino citizens subject to limitations prescribed by B.P.
185 and R.A. 8179
3. A Filipina who marries an alien retains her Philippine citizenship (unless the law of her
husbands country makes her assume the citizenship of her husband because of such marriage)
and can therefore acquire real estate in the Philippines.

ACQUISITION BY FORMER NATURAL BORN FILIPINO CITIZENS
1. Mode of acquisition is not limited to voluntary deeds (such as sale or donation) but includes
involuntary deeds (such as foreclosure, execution or tax delinquency sale)
2. Maximum area that may be acquired:
a) For residential purpose 1,000 square meters of urban or one hectare of rural land.
b) For business purpose 5,000 square meters of urban land or 3 hectares of rural land.
Business purpose refers to the use of land primarily, directly, and actually in the conduct of
business or commercial activities in the broad areas of agriculture, industry, and services,
including the lease of the land but excluding the buying or selling thereof.
In case of married couple where both spouses are former natural born Filipino citizens, both of
them may avail of the right provided that the total acquisition shall not exceed the maximum area
allowed.
A transferee who acquired urban or rural land for residential purpose while still a Filipino citizen
may acquire additional urban or rural land for residential purpose which, when added to that
already owned by him, shall not exceed the maximum area allowed by law.
Rule in case of double sale
The priority of rights in case of double sale of titled property shall be governed by the following
rules:
1. The buyer who acquired in good faith and was the first to register the sale shall have a better
right.
2.If none of the buyers registered the sale, the buyer who acquired in good faith and was the first
one in possession shall have a better right.
3. If none of the buyers registered the sale or took possession, then the buyer who acquired in
good faith and has the oldest title shall have a better right
Contract of Sale and Contract to Sell
1. Distinction: In a contract of sale, there is already a transfer or ownership. In a contract to
sell, there is no transfer of ownership yet but merely a mutual promise to buy and sell.
2. Criterion: The test to determine whether a contract is a contract of sale or a contract to
sell is not the manner of payment whether cash or installment, but whether or not there
is conveyance of ownership in the dispositive or grant clause of the deed. There is
transfer of ownership when the dispositive clause states that the vendor hereby sells,
transfers and conveys unto the vendee in a manner absolute and irrevocable x x x