Property scams in Cebu on high level – How to avoid being victimized
Is it enough that government agencies such as the Pag-Ibig Fund, the Housing and Land Use Regulatory Board (HLURB) and the Register of Deeds (RD) have adopted strict measures to ferret out unscrupulous land developers to avoid another scam such as that of Globe Asiatique?
The Globe Asiatique scam involved up to P7 billion of Pag-Ibig funds being lent to “buyers” of businessman Delfin Lee’s housing developments, 60 percent of whom turned out to be “ghost” borrowers, while the developer pocketed the proceeds and sold the units to other buyers, many of who were overseas Filipinos unaware that they were already buying “sold” units.
The biggest lesson to be learned from this grand scam is that buyers themselves must exercise due diligence in acquiring properties, and not leave the background checking entirely on the government. Here are 12 prudent measures that every prospective buyer should take to avoid falling victim to property frauds.
A big start-up property developer (Saekyung Realty Corp.) from South Korea, operating in Mactan Island, Cebu is currently under investigation for fraudulent activities and misrepresentations.
Presidential Decree No. 957 otherwise known as “Subdivision and Condominium Buyer’s Protective Decree” was initiated by the late President Ferdinand Marcos on July 12, 1976 and applied with the latest revised implementing rules and regulations in 2009.
The primary purpose of this decree is to protect the buyers of condominium projects and subdivision developments against misrepresentations and fraudulent activities of developers, sellers and operators.
Nowadays, real estate competition among developers, agents and operators is becoming more stiff. Some of these people would do anything just to close the deal with their clients. And the idea of “doing just anything” to close the deal is a double edged sword.
To do anything good to benefit both parties (the client and the seller) is what’s ideal and just. However, what if only one party benefits more in the transaction? In this case, it is usually the seller.
This happens when sellers (property developers, operators, brokers and salespersons) over-promise something to clients but under-deliver, deceive the client by fraudulent presentation or by simply feeding the client with information which are not true, incomplete or incomprehensive.
There were (and still are) numerous complaints against these unscrupulous activities of property developers, operators, brokers and salespersons reported to different government agencies such as the Housing and Land Use Regulatory Board (HLURB) and National Housing Authority (NHA).
Thus, this decree, PD 957, was passed to resolve these problems and to protect the welfare of the property buyers.
How to avoid being victimized ?
1. Check if the particular development you are eyeing has a License to Sell with the HLURB. A developer may undertake multiple projects, but each project must have a distinct HLURB License to Sell. Ask the seller or broker/agent of the developer for a copy of this License to Sell for the particular project. You can also verify this in the HLURB website (www.hlurb.gov.ph).
2 .Verify if the broker/agent is registered with the HLURB, and make sure that the property being eyed has not been sold to other buyers.
3. Visit the project site. One way of checking if the the stated address of the project corresponds to the location of the project site is to Google Map the address, says Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business Advisory.
Lawyer Joan A. De Venecia, Pag-Ibig Fund’s vice president for public relations and information services, reminds buyers that it is not enough for one to transact with sales agents in malls. Buyers must conduct an ocular inspection of the project site to see if there are illegal settlers in the area, or if the site has safety issues.
4. Standards of the structure. Check if the materials used to build the residential unit conforms with the development standards and approved construction specifications submitted to HLURB. Also check which party would have to shoulder the cost of the water and electric meters, the subdivision perimeter fence, etc. and who would eventually operate the subdivision/condominium building’s water system.
5. Do not sign blank Contract To Sell forms. “Overseas Filipinos are vulnerable to this method. Avoid signing any blank forms or housing contracts. Read thoroughly all the contents of the CTS, especially the terms and conditions in fine print. Secure a copy of the CTS and all other documents that you signed,” Soriano says.
Make sure also that the CTS would be registered by the owner/developer to the RD.
6. Consult a trusted lawyer to guide you in the legal jargon and paperwork before you sign any contract.
7. Buy or invest from reputable developers who have had a long and solid history of delivering quality properties on time. Soriano stresses that “if it’s a start-up developer, make sure the company is known in the community.”
8. If the Pag-Ibig Fund is the window of financing of the developer, buyers can check if the property they wish to acquire has already been mortgaged with the Fund.
Before developers can be approved for Pag-Ibig financing, the agency verifies documents of developers insofar as the project is concerned. Accrediting of development projects through the Pag-Ibig is pursuant to the agency’s loan processes only, De Venecia says.
9. Find time to verify with the RD if the title to the property you intend to buy has encumbrances. “Check with the RD if it has clean title,” stresses Florencio O. Galang, Pag-Ibig Fund’s department manager for public and media affairs. He adds that for other buyers whose project is not under the Pag-Ibig Fund as the (financial) window of the developer, it would be more prudent to check with RD.
10. If the project has a License to Sell, you may already enter into a contract to sell with the owner/developer. Things which must be checked before signing are:
• The date of completion of the project as indicated in the License to Sell;
• If the property has been mortgaged from the HLURB;
• The facilities and amenities represented in the advertisement flyers/brochures are in accordance with the approved subdivision and condominium plan on file with the HLURB.
11. Get the services of an organic seller or licensed broker to guide you in the process of buying a property, especially for preselling projects. Before you complete the purchase, make sure you transact directly at the developer’s head office.
12. Transact directly to the owner/developer or the marketing agent authorized by said owner/developer, and ask for official receipts on all payments, and keep these in your file.
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