Sale of property acquired by unmarried couple
A couple has been living together for a couple of years. They acquired several properties, and these were registered in their names except for one lot which was solely registered in the woman's name. She want to sell the lot registered solely in her name and a prospective buyer is interested in buying the property, but he allegedly needs the live-in partners' signature in the deed of sale. Is the signature of the live-in partner really necessary in the deed of sale? If so, what is the rationale behind such requirement?
In general, a co-owner may dispose his proportionate share in the property owned in common in accordance with Article 493 of the New Civil Code of the Philippines which states that:
"Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership."
The properties acquired by a man and a woman who are living together and who possess the legal capacity to marry is specifically governed by special co-ownership under Article 147 of the Family Code of the Philippines, which provides that:
"When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership.
"xxx Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during cohabitation and owned in common, without the consent of the other, until after the termination of their cohabitation."
Based on the above and absent any legal impediment for them to marry each other, the properties the partners share are covered by a special co-ownership under Article 147 of the Family Code of the Philippines.
The registration of the subject lot in the name of the woman only would not eliminate it from their common or shared properties as the property was acquired during their cohabitation and there is no termination of such relationship yet. Since the lot is owned in common, the consent or signature of the live-in partner in the intended sale is necessary.
The rationale for this rule was elaborated in the case of Perez Jr. vs. Peres-Senerpida, GR 233365, March 24, 2021, where the Supreme Court speaking through Justice Alfredo Benjamin S. Caguioa stated that:
"x x x If the parties are allowed to dispose of their shares in said properties like in a true co-ownership, it will destroy their relationship. The Family Code, as already stated, would like to encourage the parties to legalize their union some day and is just smoothing out the way until their relationship ripens into a valid union."
Thus, in order to preserve the relationship and encourage the parties to legalize their union in the future, the State deemed it fit to disallow the disposition of the property owned in common by one partner during the cohabitation and without the other partner's consent.
Source: Manila Times