Government claiming properties from a person who died without a will

“Death is not the end,” said American journalist Ambrose Bierce. “There remains the litigation over the estate.”

This applies, whether the decedent or owner of the estate died with or without a will.

The Supreme Court has consistently held that from the moment of the decedent’s death, the heirs become absolute owners of his property, subject to his rights and obligations thereon, and even before judicial declaration of their being heirs in the corresponding proceedings.

Where the decedent died intestate, or without a will, his heirs shall inherit in the prescribed order under the Civil Code. Absent any of these heirs, the Philippine State shall inherit the entire estate pursuant to the law governing escheat proceedings.

In Republic v. Court of Appeals, the Supreme Court defined escheat as a proceeding where the State, by virtue of its sovereignty, steps in and claims the real or personal property of a person who has died intestate, leaving no heir. Absent any lawful owner, a property is claimed by the State to forestall an open “invitation to self-service by the first comers.”

Since escheat is one of the incidents of its sovereignty, the State may prescribe conditions and limits the time within which a claim to the estate may be made.

Under the Rules of Court, the Solicitor General or his representative may file a petition instituting escheat proceedings before the Regional Trial Court (RTC) where the decedent last resided or if he resided out the Philippines, where he had estate.

If the petition were sufficient in form and substance, the RTC shall issue an order fixing a date and place for the hearing thereof. This date shall not exceed six months after the entry of the order. Meanwhile, a copy of that order shall be published before the hearing at least once a week for six successive weeks in some newspaper of general circulation published in the province, as the court shall deem best.

At this hearing, the court shall pass on the sufficiency of proof that: (a) its earlier order was published, as directed; and (b) the decedent died intestate, seized of real or personal property in the Philippines, leaving no heir or person entitled to the same.

Afterwards, no sufficient cause being shown to the contrary, the RTC shall adjudge that the decedent’s estate in the Philippines shall escheat, after payment of just debts and charges. Moreover, pursuant to the applicable law, the RTC shall assign the personal estate to the municipality or city where he has last resided in the Philippines, and the real estate to the municipalities or cities, respectively, in which the same is situated.

If the decedent never resided in the Philippines, the whole estate may be assigned to the respective municipalities or cities where the same is located, for the benefit of similarly located public schools and public charitable institutions and centers. In this regard, the Civil Code authorizes the RTC, at the instance of an interested party, or on its own motion, to order the establishment of a permanent trust so that only the income from the property shall be used.

A devisee, legatee, heir, widow, widower, or other person entitled to the decedent’s estate should file a claim thereto with the same court within five years from the date of such judgment. Afterwards, this claimant shall have possession of and title to the same, or if sold, the municipality or city shall be accountable to him for the proceeds after deducting reasonable charges for the care of the estate.

A claim not made within this five-year period shall be forever barred, even when as alleged in the Republic case, the supposed claimant, a donee of a property belonging to the decedent’s estate, has only discovered the purported deed of donation beyond said period.

A judgment in escheat proceedings, when rendered by a court of competent jurisdiction, is conclusive against all persons with actual or constructive notice, absent dishonest intent on the part of petition to deprive such persons of any right, or in any way injure him.

Source: Inquirer

Senate bill meant to boost cities’ realty taxes passed on 3rd reading

The Philippine Senate on Monday approved on third and final reading a priority bill seeking to fast-track and boost the monitoring of real property sales of local government units (LGUs) and to maintain a digital database of up-to-date market values.

In a 23-0-0 vote, senators voted in favor of Senate Bill No. 2386 or the Real Property Valuation and Assessment Reform Act, which aims to improve real property tax collections by updating valuations without increasing or imposing new taxes.

The bill, which was sponsored by Ways and Means Committee chairperson, Sen. Sherwin T. Gatchalian, would also grant amnesty for unpaid real property taxes and interests.

“Through this proposed measure, we not only pave the way for greater efficiency and accuracy in property valuation but also extend a helping hand to our delinquent property owners and low-income LGUs,” he told the Senate floor after the measure’s approval.

Under the proposal, a real property information system would be maintained to make accurate property valuations readily available and reduce discrepancies in these transactions.

The system would provide an up-to-date database of the sale, exchange, lease, mortgage, donation, transfer among other real property transactions.

The Department of Information and Communications Technology (DICT) will be tasked to assist lower-income class LGUs to support a real property tax administration fund.

The measure aims to boost tax collection efficiency through the automation of real property services provided by local governments.

The Bureau of Local Government Finance (BLGF), which is under the Department of Finance (DoF), would be the primary agency to develop valuation standards for real property appraisal used for taxation and to ensure LGU compliance.

A new unit of the BLGF called the Real Property Valuation Services would be established to support the development valuation of real property taxes.

New schedule of market values, the basis for calculating property tax, would take effect within two years of the bill’s approval.

During these two years, a one-time 6% cap on each type of real property tax would be imposed to allow taxpayers to adjust to new real property market values. LGUs would have the authority to extend the cap once it expires.

The House of Representatives approved a counterpart bill on third reading in December, 2022.

Last December, the DoF said the measure would boost investor confidence through the adoption of internationally accepted valuation standards.

Based on Philippine Statistics Authority (PSA) data, the gross value-added contribution of real estate and ownership of dwelling last year was at 5.6% of the Philippine gross domestic product, or about P1.37 trillion.

Real property collections by cities only grew by 5.3% between 2019  and 2021, the Congressional Policy and Budget Research Department (CPBRD) said in a report last year.

The late and former Senate President Edgardo Angara J. Angara had filed a similar measure in 2005.

“For almost two decades, a dream has echoed in the halls of Congress: a single, transparent, and updated valuation system,” Mr. Gatchalian said. “Today, that vision inches closer to reality.”

Source: Business World

Is an oral sale of land really unenforceable?

In the Philippines, the enforceability of an oral sale of land depends on the circumstances. Let’s explore this further:

• Unenforceability Under the Statute of Frauds:

• Generally, an oral sale of real property is not considered void, but it is unenforceable under the Statute of Frauds. This means that while the oral agreement itself may not be legally binding, it can still have some legal effects.

• The Statute of Frauds requires certain contracts, including real estate transactions, to be in writing to be enforceable. However, there are exceptions.

• Partially or Completely Executed Contracts:

• If the oral sale has been partially or completely executed, it may still be enforceable. In other words, if the parties have already taken significant steps (such as possession, payment, or other acts) based on the oral agreement, it can be upheld.

• The Statute of Frauds is not applicable in cases where the verbal sale has been executed, meaning that the parties have fulfilled their obligations under the agreement.

• Legal Effects Between the Parties:

• Even without a written contract, an oral sale of real estate can still produce legal effects between the parties.

• Courts recognize that practical considerations and actions taken by the parties can validate an oral agreement, especially when it has been acted upon.

In summary, while an oral sale of land is generally unenforceable under the Statute of Frauds, its validity depends on the specific circumstances and whether it has been partially or completely executed.

Source: ZigguratRealestate.ph