Rights of Ownership in Real Estate

Here are answers of the frequently asked questions about subject matter of Fundamental Rights of Ownership during the past real estate broker licensure examination.

What documents serve as Proof of Ownership of real estate?

A TITLE is the primary evidence of ownership. The primary documents proving the ownership are Original Certificate of Title, Transfer Certificate of Title, and Condominium Certificate of Title.
In the absence of any one of the primary documents, some secondary evidences may be used to re-establish the primary evidence. Examples of secondary evidences are Tax declaration, realty tax receipts, Deed of Sale, Deed of Donation, mortgage papers, insurance policies, and any other document that has referred to the existence of the primary document.

What is Land Ownership?

Land Ownership is the right and interest which a person has in land to the exclusion of others. It is the independent right of exclusive enjoyment and control over land for the purpose of deriving there from all advantages required by the reasonable needs of the holder of the right and the promotion of the general welfare but subject to the restrictions imposed by law and the rights of others.

Who can own land in the Philippines?

Acquisition and ownership of private lands is limited and/ or reserved to Filipinos or to corporations or partnership where at least 60% of the authorized capital of which is owned by Filipino citizens. Exemptions:

  • When such property is acquired prior to the 1973 Constitution
  • Acquisition by an alien or foreigner by hereditary succession
  • Foreigners/ aliens owning not more than 40% interest in a condominium project pursuant to RA4726
  • Where a former natural born Filipino who became a citizen of another country but is now returning to the Philippines to reside permanently. Hence, may acquire sale, donation, or through a tax sale, foreclosure sale or execution sale not more than 1000sqm for urban land or not more than one hectare for rural land to be used solely for residential purposes and subject to other limitations and requirements as provided under said law
  • A Filipina who marries an alien retains her Philippine citizenship (to avoid being stateless) unless by her own act or omission she is deemed to have renounced her Filipino citizenship, may acquire and own private lands in the Philippines

What are the kinds of land ownership?

  • Full Ownership- this includes all the right of an owner
  • Naked Ownership- an ownership where the right to the use and the fruits has been taken by another such as in the case of a usufruct
  • Sole Ownership- where ownership is vested in only one person
  • Co-Ownership- where ownership of land as a whole is vested in two or more persons

What are the modes of acquiring land?

  • Public Grant
  • Adverse Possession
  • Accretion
  • Reclamation
  • Voluntary Transfer or Private Grant
  • Involuntary Alienation or Involuntary Grant
  • Descent
  • Devise
  • Emancipation Patent

What is Public Grant?

This pertains to the different administrative methods of acquiring public lands, such as, homestead or free patent. (i.e.) The Spanish government distributed lands by issuing Royal Grants and concessions to discoverers, settlers, vassals and other people in varied forms. Because of these grants and concessions titles to land were acquired by the respective grantees.

What is Adverse Possession?

  • Adverse Possession is the right of an occupant of land to acquire title against the real estate owner, where possession has been actual, continuous, hostile, visible, distinct, and in the concept of owner for the statutory period of 30 years
  • Adverse possession does not apply on lands titled under the Torrens System)
  • The other term of Adverse Possession is Prescription.

What is Accretion?

It is the process by which soil is deposited to lands adjoining rivers. The owners of lands adjoining banks of rivers are also the owners of the accretion which they gradually receive from the effects of the current of waters. (Art.457 NCC)

What is Reclamation?

It is the deliberate act of filling of submerged land to create land above sea level. Example is the reclamation of Manila Bay where you can now find the Mall of Asia.

What is Voluntary Transfer or Private Grant?

It is the owner’s execution of the appropriate document transferring ownership to another. One example is the transfer of ownership through a Deed of Donation.

What is Involuntary Alienation or Involuntary Grant?

It is the process by which the land is taken through legal proceeding that renders a decision against the consent of the owner. Example is expropriation proceeding, execution of judgments, tax sales and foreclosure of mortgage. Squatting is the illegal type of Involuntary Alienation.

What is Descent?

It is the acquisition of land by virtue of hereditary succession as an heir.

What is Devise?

It is the acquisition of land by a person thru the will of the owner or testator. A devise is normally evidenced by a Last Will and Testament.

What are the characteristics of ownership?

  • It is a general right over all the utilities of a thing subject to the limitations of real rights of others.
  • It is an independent right since it can exist without the necessity of any other right.
  • It is an abstract right because it can exist distinct and independent of its constituent parts.
  • It is an elastic right in the sense that the power which is included therein may be reduced in quantity or quality without affecting the nature of the dominion.
  • It is an exclusive right for there can only be one ownership although there may be two or more owners.
  • It is generally a perpetual right in that it is not usually limited by time and may last as long as the thing exists.

What is Regalian Doctrine of property ownership?

It is a principle of law which means all natural wealth—agricultural, forest or timber, and mineral lands of the public domain and all other natural resources belong to the state. Thus, even if a private person owns the property where minerals are discovered, his ownership for such does not give him the right to extract or utilize said minerals without permission from the state to which such minerals belong.

In simpler manner, Regalian Doctrine says that “everything in the country without a registered owner is owned by the State.” “Regalian” comes from the root word “Regal” meaning Royal or Royalty.

What is Res Nullius?

Res Nullius says that “everything in earth must have an owner.” Since everything must have an owner, if there are no private claimants or owners, then that particular property is presumed to be owned by the State. Likewise, when a person dies without any heir, then the State succeeds to the estate of the deceased. Res Nullius is a Latin term where “Res” means Things, and “Nullius” means Without.

What is Stewardship Concept of real estate ownership?

Stewardship Concept is based on the principle that ownership of land carries with it a distinct social obligation. Owners are obliged to use their properties to promote the general welfare and not only their interest, thus the State may regulate or control land ownership.

What is Expropriation of Land?

It is an act of Government to take ownership of land for whatever purpose it may serve the state. This act is based on the government’s Right of Eminent Domain.

What is Emancipation Patent?

It is the grant of agricultural lands to tenant-farmers in the implementation of the land reform program of the government.

What private lands are still owned by aliens?

  • Lands acquired before the 1935 Constitution
  • Lands acquired by inheritance
  • Lands acquired by foreigners who were formerly natural-born Filipino citizens

What are the rights of an individual over a real estate that he owns?

NOTE: Real estate owners have certain rights over the property. However, as they say, freedom comes with responsibility, and it is the role of the State to ensure this. When reading these ownership rights enumerated below, the reader must note that under the Regalian Doctrine and Steward Concept, the government has certain rights and powers that are superior to the rights of an individual property owner.

  • Jus Utendi (The Right to Use). Jus Utendi means the right to use property, without destroying its substance. The real estate owner has the right to utilize the property for whatever purpose it may serve him best.
  • Jus-Fruendi (The Right to the Fruits). Jus Fruenti means the right to the yield of the property, the product of the trees or the soil, the increase in value of the property, and the payments of the rent. The real estate owner has the right to enjoy the production of goods and services on his property. This includes the right to natural, industrial and civil fruits.
  • Jus-Disponendi (The Right to Dispose). The real estate owner has the right to transfer the ownership to another, provided that there is no prior agreement or law that specifically regulates the exercise of the right. This includes the right to donate, to sell, or to mortgage.
  • Jus-Abutendi (The Right to Abuse). Since the real estate owner has full access to a real estate he owns, he has all the opportunity to do whatever he wants to the property. However, this is the right that is regulated by law to prevent the owner from abusing his property that may lead to destruction of environment or disturbance of social order.
  • Jus-Vindicandi (The Right to Recover). Real estate owners have the right to recover his property. However, the law provides that the owner must use judicial process if the property comes into the unlawful possession of another. He should not take the law into his own hands.
  • Jus Possidendi (The Right to Possess). Real estate owners have the right to possess his property and exclude others from enjoying the rights of owning it. This includes the right to exclude any person from the enjoyment and disposal of the property. For this purpose, the owner may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of the property. The property owner however, cannot use it in such a manner as to injure the right of others.

What are the rights that are incidents to ownership?

  • To enjoy and dispose of a property without other limitations than those established by law
  • The right to file action against third parties to recover ownership
  • To use force as may be reasonably necessary to repeal or prevent an actual or threatened unlawful invasion or usurpation of his property (Art. 429, NCC, relate to Art. 312, RPC)
  • The right to enclose or fence property—walls ditches, live or dead hedges—or by other means without detriment of servitudes constituted thereon
  • To demand indemnity for damages cause to property
  • The right to compensation in the event of expropriation
  • Right to be restored to possession in case of unlawful dispossession
  • Right to the surface/ subsurface of the land, right to construct thereon any works, plantation and excavations without detriment to servitude and subject to special laws and ordinances and without right to complain of the reasonable requirements of aerial navigation (Art. 437, NCC)
  • The right to hidden treasure (Art. 438, NCC)
  • Right to accession and fruits of the property
  • The right to “quiet title” to real property or any interest therein

Who owns the hidden treasure found in a privately owned real estate?

Hidden treasure belongs to the owner of the land, buildings, or other property on which it is found. Nevertheless, when the discovery is made on the property of another, or of the State or any of its subdivisions, and by chance, one half (1/2) thereof 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 the arts, the State may acquire them at their just price, which shall be divided in conformity with the rule stated. (Art. 438, NCC)

What is Right to Accession?

It is the right of the owner to everything that produced, incorporated or attached thereto naturally or physically (i.e. fruits, buildings, formations, and improvements).

What is Accretion?

It is an act by which the land bordering a stream or body of water increases its area by the river or other natural process.

What is Alluvion and how does it differ from the term Accretion?

Alluvion refers to the soil deposited, while accretion refers to the process.

What is Avulsion?

It is the process by which the current of the river, creek or torrent segregate from an estate to a known portion and transfer it to another estate.

What are the differences between Alluvion and Avulsion?

In Alluvion, there is a gradual deposit of soil, while in Avulsion, there is a sudden segregation of an estate.

In Alluvion, deposited soil belongs to the owner of the property where it was deposited, while in Avulsion, original owner retains ownership of the segregated portion.

In Alluvion, soil deposited cannot be identified as to its source, while in Avulsion, portion segregated can be identified

What are the limitations on Right of Ownership?

  • Constitutional
  • police power
  • eminent domain expropriation of private property for public use
  • taxation and escheat
  • Legal
  • Zoning ordinances
  • Regulations on subdivision projects
  • Building code
  • Other special laws and regulations (i.e. legal easement, right of way, right of water, Rent control Law, PD 957, Comprehensive Agrarian Reform Law, Urban Land Reform Law or PD 1517)
  • Consensual/ Voluntary
  • Easements and servitudes
  • Usufructs
  • Lease agreements
  • Restrictions in subdivision
  • Condominium deed of restrictions

What is Police Power of the State when it comes to real estate?

It is the right of the state to regulate and restrict personal property right for a common welfare. Based on the maxim, “welfare of the people is the supreme law of the land.” (i.e. when there is fire in a neighborhood, some houses may be destroyed or demolished by firemen to prevent the spread of fire without compensation to the owner)

What is the Government’s Power of Taxation?

It is the inherent power of the state to raise income or revenue to defray necessary governmental expenses for a public purpose.

What is Government’s Power of Eminent Domain?

It is the superior right of the state to take certain properties under certain condition. The right of the State is based on the need for human progress and community welfare and development.

What are the requisites of Eminent Domain?

  • Property must be taken for public use
  • The taking must be by competent authority
  • Due process of law must be observed
  • Just compensation must be paid

What is the difference between Eminent Domain and Expropriation?

Eminent Domain refers to the right while Expropriation refers to the procedures.

What is Escheat?

It is the reservation or automatic conveyance of real property to the State upon the owner’s death due to the absence of will heirs or other legal claimants, to the title, or when the owner fails to pay the real estate taxes.

What is the difference between Easement and Servitude?

Easement refers to a right enjoyed by another while Servitude is a burden imposed upon another. Thus, it is stated that a person has a right (easement) to impose a burden (servitude) upon another in cases provided for by law.

What are the requirements for a compulsory easement of Right of Way?

  • Property is surrounded by other properties and there is no adequate exit to the public highway
  • Payment of the proper indemnity
  • The isolation was not due to owner’s own acts
  • The right of way claimed is at the point least prejudicial

What is a Torrens Title and what is its implication?

A Torrens Title is a certificate of ownership issued under the Torrens System of registration by the government, through the Register of Deeds, naming and declaring the owner in fee simple of the real property described therein, free any and/ or liens and encumbrances except such as may be expressly noted thereon or otherwise reserve by law.

What is Immovable Property?

It is a property which, from its nature, destination or the subject to which it is applied, cannot be moved or be removed.

What is Movable Property?

It is a property which, generally, as the words imply, can be moved from one place to another. However, there are movables which under certain conditions, maybe considered immovable by virtue of their being attached to an immovable for certain specified purpose. Example of this is mobile house, boat house, and tents.

What are the examples of Immovable property?

  • Land, building, roads, and construction of all kinds adhered to the soil
  • Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable
  • Everything attached to an immovable in a fixed manner; in such a way that it cannot be separated therein without breaking the material or deterioration of the subject
  • Statues, reliefs, paintings or other object for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements
  • Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building on a piece of land, and which tend directly to meet the needs of the said industry or works
  • Animal houses, pigeon house, beehives, fish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included
  • Fertilizers actually used on a piece of land
  • Mines, quarries and slag dumps while the matter thereof forms part of the bed, and water either running or stagnant
  • Docks and structures which, though floating, are intended by their nature and object to remain at a fixed placed on a river, lake or coast
  • Contracts for public works, and servitude and other real rights over immovable property (Art. 415, NCC).

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