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Buying/Leasing land or house in Philippines

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gregpinton:
Hi everyone, this may have been covered already, but i am still confused, so i will explain my situation and see if someone can advise the correct law.

I am 61y/o Australian guy, married 28 years to a Filipino woman, we live in Australia.

We are going to Philippines in April 2019 for 2 month holiday, and 4 weeks will be spent in far northern Palwan (Diapila Bay) as we want to try and set up a couple of small cottages to rent out to tourists as there is only one other place there, a 2 story concrete house with 3 bedrooms that is available for tourists, which is owned by a local resident who also runs an island tour business in El Nido.

This guy tells me that he and his nephew are the primary land owners around Diapila Bay, but has no titles for any of his properties, just Tax Dec and some maps with lines drawn on them to show roughly what properties are his.

I asked if he had any beachfront property he can sell to me and my wife (1000sm to 5000sm) and he has such a property on the main beach but will only lease it for P100k per year for 10 years, which i think is too expensive, but i can negotiate with him i think when we go there next year.

He has a small beat up cottage on that land which he will get rid of, and he will tidy it up and also arrange to build 3 small Nipa hut cottages for us at a very reasonable cost, suitable for couples to stay in, and he will arrange for a local family to cook their meals and charge a small fee for this service, and he will have a local man maintain the 3 cottages and the surrounding land at no extra cost.

What would be required of my Wife and I to lease this land from the owner for say 10 years and then build the 3 cottages, as i understand that when the lease is over, we may have the choice of extending, or he can simply take the land back with the cottage on it, and start using it for his own business.

Would this guy need to pay us something for those cottages, and if so, should we include this in any lease agreement that we make (in writing) between him and my Wife and I.

Cheers

lost_in_samoa:

--- Quote from: gregpinton on September 01, 2018, 12:03:22 PM ---has no titles for any of his properties, just Tax Dec and some maps with lines drawn on them to show roughly what properties are his.
--- End quote ---

We have see "informal" real estate agreements work out and turn into a mess both here and in Samoa.

In the good cases .... well it was good.  Folks got what they wanted and profited from each other.

In the bad cases it tore families apart.  Caused people to get in fights.  Wasted huge amounts of resources in court.

Without the possession of a clear, surveyed, deed of title then ownership and proceeds from that ownership can be called into question.

Any deal would be a subjective ...... faith ...... trust ...... based arrangement.

Ester and I looked for over a decade before we found a titled place.  IMO it is  crawling through a barrel of fish hooks.

gregpinton:
Thanks for the reply, not exactly the information i wanted, so i will see what other might have to say, especially because we want to get a legal document signed by the land owner for the Leasing of a property, so he can't pull the pin out from under us until the lease comes to term.

The whole idea is for us to build the 3 or even 4 Nipa style cottages (without any concrete construction) with all the floor, walls and roof built from hardwood timber frame with split bamboo on the floor, and the walls and roof clad with thatch, which will be the cheapest method of building, and easy to dismantle if we ever had to.

We want to make money from these cottages, and we would employ a local resident who can look after the guests, take the money, prepare the meals and maintain the cottages for us when we are not there, and the land owner will provide his boats for tours to surrounding beaches and islands, and for commuting them back and forth to and from El Nido, where they will initially arrive and depart from.

Cheers

suzukig1:
Unless you can agree on a contract that will result in a different outcome the land owner has control of what happens to improvements on the land at the end of a lease.

One option is that the land owner can require that the land be brought back to it's original condition at the lessee's expense.  This is the big club that usually forces the lessee to give up any improvements without recovering much from the land owner.  Option 1: You give everything to the land owner and end up with nothing.  Option 2: You pay to have the land brought back to it's original condition and end up with nothing (unless you can somehow save and move any structures).

You need a lawyer that has experience with drawing up leases.

As a start read the PHL Civil Code re: leases.  http://www.chanrobles.com/civilcodeofthephilippinesbook4.htm

lost_in_samoa:

--- Quote from: gregpinton on September 01, 2018, 03:58:53 PM ---not exactly the information i wanted
--- End quote ---

I understand. 

What I can do is tell you about a fellow I knew in Samoa.  Kiwi,  fairly nice guy.  He took a long lease on a hill side lot from a local who had the same ownership documentation as is common here.  No title, just tax receipts and a few other circumstantial documents.

He and the "owner" worked out a contract on the lease and disposition of the improvements at expiry.  My friend executes the lease, finishes construction of a nice place.  He moves in with his new bride.  A cousin to the "owner".

Well couple of years later a "brother"  returns from serving in Iraq.  Spy's a nice looking place on the property.  Decides he likes it.  And takes his brother and my friend to court.  Sue's over lost income and sundry other charges.

The local community kinda rallied behind the veteran, and he prevailed in court.  Property was split between the brothers.  The leased lot being awarded to Iraq brother.

The lease was nullified.  My friend was evicted.  His improvements confiscated without compensation and transfered to Iraq brother.

I understand your situation.  But as long as the "owner" does not have title then there is the possibility that "Uncle Tito" can appear out of nowhere and make a claim.  The courts and community will probably favor him.

Hope this helps.

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