Foreigner 25 year lease

Has anyone had experience in seeking a 25 year lease agreement. My friend purchased a property here in his fiancé’s name and needs to protect himself. Thanks

I personally would never buy or lease anything in a gf or fiance's name unless the relationship is a very very long term strong relationship, if that relationship is a strong long term relationship why not wait until after marriage. It doesn't really make a lot of difference, even after marriage, if the relationship breaks down his fiancee or wife will own the land because a foreigner cannot own land.

Dennis52

He can lease the land from his fiancée, though if they marry, the lease will become null and void.  If they live together as husband and wife without a paper marriage, they will still be subject to common law marriage legalities when it comes to the property and all other things acquired during their time together.

If he leases the land from her, he will have to trust in the legal system and the validity of the lease in the case of her passing.  If the family contests the lease, there is always that small chance that the court may decide in their favor.  Honesty is the best policy, though everyone does not subscribe to that policy.

The land title / deed will be in her name, though he can have his name on the deed of sale stating Jane Doe a Philippine citizen married to John Doe a US citizen. It doesn't carry a lot of weight legally though it can't hurt and offers a little peace of mind.  If he does decide to trust in the lease and build, he can build the home in his name only. If he decided to sell, then obviously the leaseholder would have to agree to the lease transfer to a new homeowner or sell the land and the home in whole to a qualified Philippine citizen.

A very skittish friend of ours has put his home building plans on hold because of this very same situation. He simply does not trust her (his fiancée) or anyone else here enough to count on a land lease to build a home on.  We told him to buy a condominium.

https://legal-forms-philippines.blogspot.com/

Regards

Yeah, I sure wouldn't do it. No way the system will favor the foreigner, even though he paid for it.

Definitely depends on ones circumstances, we are a gay couple and legally not recognised in PH., many other countries yes. We purchased a property here some years ago in my better half name and I have a 25+25 years lease, own the buildings and improvements, in the contract and lease and have the rights to extend/develop and sell/bequeath the lease to whom I chose.

Back to the OP, forget it, read the law, TeeJay provided a good link.

Cheers, Steve.

It's a pretty sure bet that in the event of any legal action the courts will always side with a Filipino against a foreigner no matter what the merits of the case from a purely legal standpoint. It doesn't matter how strong your case is legally they will find (or invent) a loophole to come down on the side of the Filipino.

Thanks for the entertainment. Man never ever go to court in a foreign country against a citizen, just charge it to the game if it comes to that decision
Now, what I'm needing help with is contacting a smart realtor in Subic Bay area, to prearrange leasing a nice beach front property for when we arrive in a few months.
Thanks
SirDwight

Why on earth do you want to prearrange a lease on a property you haven't seen in foreign country? All kinds of issues might surprise you. Take nothing for granted here, based on your American experience. Finding a realtor you can trust from far away? Hahaha.

Why not just arrange a month or two in a hotel or resort while you and your realtor look around?

Lease in your own name 25+25 anything with your wife's name on it is covered by Filipino law if she dies her husband is way down on the list of survivors

bizwizard :

Why on earth do you want to prearrange a lease on a property you haven't seen in foreign country? All kinds of issues might surprise you. Take nothing for granted here, based on your American experience. Finding a realtor you can trust from far away? Hahaha.

Why not just arrange a month or two in a hotel or resort while you and your realtor look around?

I tend to agree with this. There are so many things that can surprise you when you get there. A garbage pile just around the corner, noisy neighbors, barking dogs, a busy street nearby, etc. These things are less likely in Subic, but it still pays to check things out ahead.

Bad move on your friend’s part. I sure hope everything turns out because even if he were able to get a lease, doesn’t ownership always trump a leasehold?

What TeeJay said +,

Be very careful with the "purchase" aspect of any land transaction.  It is possible the GF may be required to sign a document stating she paid for the transaction with her money.  Additionally, any statement that the foreigner bought or paid for the land is illegal.  Remember, "foreigners may own real estate property in the Philippines, but they are not allowed to buy and own land". 

Therefore, any documentation that shows the foreigner "Bought" the property can cause the transaction to be declared void in favor of the Fil citizen.  In the past, it has been my practice to place the word "Leasee" on the purchase documents vs. "buyer" (not used for married couples) when helping expats to avoid this violation.

I had a formal lease (for house and land) for 49 years drawn up professionally with only my name on the lease and had it notarized. I am no longer with the gf who was with me when I got the lease. A few have checked it out for their own interest and now know they can't take it off me. I have copy of the purchase agreement and just keep it for my own records.
I just pay the usual bills each month and the land tax each year; so far no problems.

chrisrimmo :

I had a formal lease (for house and land) for 49 years drawn up professionally with only my name on the lease and had it notarized. I am no longer with the gf who was with me when I got the lease. A few have checked it out for their own interest and now know they can't take it off me. I have copy of the purchase agreement and just keep it for my own records.
I just pay the usual bills each month and the land tax each year; so far no problems.

Do you pay the taxes as part of the lease agreement?   

The family has no say in the lease if the agreement was made between you the sole owner of the land. Meaning one name only appears as owner on the title / deed.   

Regards.

Yes, i pay the land tax as it was written in the lease agreement.  This also gives me peace of mind so i know its paid and won't be any problems. Anyway, land tax is only low. Maybe P2,500 a year.
Regards

How do you pay the lease, Chrisrimmo? Monthly? Annually?

Was there an up-front payment?

George

tenstarr :

Bad move on your friend’s part. I sure hope everything turns out because even if he were able to get a lease, doesn’t ownership always trump a leasehold?

Only an opinion but depends on how well the lease is written with regards to PH. law. At the end of the day as many upon many suggest/have suggested and have recommend, have an escape plan well thought about and in place to protect ones interests both emotional and financial......... No different to other countries.

Cheers, Steve.

Okieboy :

Lease in your own name 25+25 anything with your wife's name on it is covered by Filipino law if she dies her husband is way down on the list of survivors

Totally illegal to lease from your wife, day one,  considered the same entity in PH.

Cheers, Steve.

tenstarr :

Bad move on your friend’s part. I sure hope everything turns out because even if he were able to get a lease, doesn’t ownership always trump a leasehold?

Depends on the relationship with the lessor and contract. a registered lease (notated on title) and encumbered on a given registered "legal" title or at times, lets not go there as you will be the loser, go back to legitimate titles that can/could become encumbered to the letter of the land, Law not tax declared or it was in my family for 200 years, all could be revoked, venture in wisely and extremely cautiously, research, research and then more. God (as mentioned many times) helps those that help themselves and god help those that get caught.
Living in PH. is definitely an experience and defies western thinking to the nth degree and then some but a place many chose to live/do and do so successfully.

Cheers, Steve

I paid the lease for the total time up front.

chrisrimmo :

I paid the lease for the total time up front.

Chrisimmo,

I'm curious, after you completed the lease agreement. Was the title to the property annotated with an encumbrance indicating the existence of a lease with it's termination date and your name as the lessee with the register of deeds office?  If so, did you obtain a copy for your records?

Regards,

TeeJay

Hi Teejay
No to both. Not sure i would have any authority with the title of the house

chrisrimmo :

Hi Teejay
No to both. Not sure i would have any authority with the title of the house

Thanks for the reply.

Though your name cannot appear on the title as a foreigner (owner), it would be nice if the title could at least be annotated to indicate that the property had been leased for a specific time frame.  If the lessee's name could appear in that annotation, all the better. 

I am not sure if it is even possible to annotate the title with an indication of a lease.  Though it wouldn't hurt and a copy can easily be provided to you by the owner.

I am going to look into this a little further and see if an annotation can be made to the title indicating the land has a legal lease agreement for a specific time frame.

P.S. For what it's worth, my name does appear on the title and the deed of sale for my wife's property, as John Q Public married to (my wife's name).  She let's me live here if I behave.    :gloria

Regards,

TeeJay

"I am not sure if it is even possible to annotate the title with an indication of a lease.  Though it wouldn't hurt and a copy can easily be provided to you by the owner."

Below are the steps I have processed to get an expat's house listed for him as the owner.  I will list the key points below and ask that all understand that certain exact wording in each contract is critical to avoid an "illegal" transaction.

So yes.... It is possible and legal. 

The process must start with one contract to buy the land where the lessor and lessee are listed, with the lessor being the Filipino land buyer and the leasee being the foreigner and where a second contract shows the foreigner buying the house/building/structure only with a separate legal description and TD from the land. 

To be clear.....  this document will have 3 signature lines.....  the seller, buyer and a third signature for the Foreign lessee (as the "non buyer/owner, interested lessee") .

Note: Any land that already has a structure but does not have a separate TD means the structure was never reported as required for improvements, under the law. 

The right to own, sell improve or dispose of any structures must be also annotated in the house contract as the foreign buyer's right regarding the structures (not the land).  This must never be placed in the separate contract to buy the land.  Again, the foreigner must never sign or allow his/her name to be listed as the land buyer, purchaser and or owner.  It is 100% legal for the foreigner to be listed as the buyer of the structure(s) as secured by the 25+25 years lease co-executed during the process.

Of course all of this requires an instruction in the sales contract for the land buyer and the separate contract for the house buyer to register the above in the tax office and registrar of deeds as part of the signed/notarized sales instruments.  The portion of the contract to buy the land should have a signature line that reads "Buyer/Lessor" with another signature showing the foreigner as the "lessee" of the land.   The separate contract for the structure does have the foreigner's signature listed as "Buyer" for the house only, with only that legal description/TD listed.  This process forces the new TCT to point to and be annotated with the foreigner as the lessee of the land and owner of the structure with each new yearly house TD (not the land TD) caring the foreigner's name on the house taxes as owner.  Likewise, the land owner's TCT will carry the fact that there is a lease on the land that must be honored.

There is much more in the details but in summary, this is how I accomplished this task.

Calif Native,

Great information as always.

I have spent a few hours now researching annotations for lease agreements on land Titles. I have found it to be recommended, as well as not uncommon, to protect the lessee from unscrupulous owners and 3rd parties which would not be bound by the lease unless registered with the Register of Deeds office where an annotation would be placed on the last page of the title (the same as any encumbrance), indicating the start and termination date of the lease and the lessors name. This then binds third parties to the terms of the lease in case of the death of the lessor and protects the lessee. 

In one case, an expat leased from his girlfriend using an incompetent attorney and had a 99 year lease agreement written up. He then proceeded to build upon and improve the land during which time he and his girlfriend parted ways.  She then attempted to sell the land out from under him claiming the lease to be invalid because it did not follow the letter of the law with regard to the length of the lease listed on the agreement. The suit was thrown out of court, as they found the suit was brought by the girlfriend out of spite for their breakup. He was allowed to maintain the lease with the provision that it be re written to indicate a 25 year lease as was allowable under the law.

I also found that the lease should be very specific as to what the lessee is allowed to do with the property. Specifically defining improvements to include the building of a home, walls, landscaping, etc.  The more detailed the better if there came a time when a falling out might occur between the lessor and the lessee.  The terms of the agreement would be all a court would have to go by.

A copy of the lease must be submitted to the Register of Deeds office for review and legality prior to the annotation being made to the title. 
I found a laundry list of information regarding the practice and references to legal requirements for the registration of the lease.  One such reference below.

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Is there a need to register the deed of mortgage or lease:

Yes. Section 60 of P.D. 1529 requires that deeds of mortgage or
lease and all instruments which assign, extend, discharge or otherwise deal with the mortgage or lease shall be registered and shall take effect upon the title only from the time of registration.

Lease:

Is any agreement which gives rise to relationship of landlord and tenant.

What is the procedure for the registration of mortgages and leases:

The procedure for registration of mortgages and leases follows the general procedure for registering those which do not divest the ownership or title from the owner.
They shall be registered:    By filing them with the Register of Deeds

¨A brief memorandum shall be made by the Register of Deeds upon the certificate of title and the owner’s duplicate and shall be signed by the Administrator,
The discharge, cancellation or extinguishments of such
encumbrances or interests shall be registered in the same manner. (Sec 54, P.D. 1529)

Encumbrances:
is anything that impairs the use or transfer of property; anything
which constitutes a burden on a title; a burden or charge upon property.

(Phil.Law Dictionary, by Federico B. Moreno)

TeeJay,

We both get deep into these topics and what you posted is also 100% correct and very helpful.  The system here already splits the land from the structures and few seem to get how to properly document that split when a foreigner is involved.  The exclusive right of the foreigner to own, improve, sell or dispose of his/her house is the key to home security here in the PI. This is further backed in SC rulings where the funds to buy and improve the structure was proven to be from the foreigner's foreign account. 

I also recommend any expat considering this to keep their funds in their home country until it is needed for the purchase and to wire/transfer the funds directly to a Phil bank (in their name only) with clear "For home purchase" in the memo as reason for needing the transfer.  This chain must never be broken by introducing a spouse or third person that could claim they were co-owners of the funds or the foreigner's retirement/bank account.

Expats just need to learn to take control under existing laws, if and when they seek the aforementioned added protection.  I wish all the best to those seeking answers and or making these types of decisions.

Calif-Native :

TeeJay,

We both get deep into these topics and what you posted is also 100% correct and very helpful.  The system here already splits the land from the structures and few seem to get how to properly document that split when a foreigner is involved.  The exclusive right of the foreigner to own, improve, sell or dispose of his/her house is the key to home security here in the PI. This is further backed in SC rulings where the funds to buy and improve the structure was proven to be from the foreigner's foreign account. 

I also recommend any expat considering this to keep their funds in their home country until it is needed for the purchase and to wire/transfer the funds directly to a Phil bank (in their name only) with clear "For home purchase" in the memo as reason for needing the transfer.  This chain must never be broken by introducing a spouse or third person that could claim they were co-owners of the funds or the foreigner's retirement/bank account.

Expats just need to learn to take control under existing laws, if and when they seek the aforementioned added protection.  I wish all the best to those seeking answers and or making these types of decisions.

Well as a self proffered mouth piece offering legal and what appears as "legal "advice constantly, (where are your credentials and if you have/hold them are they relevant to PH or simple readings/opinions)?While appearing to sit on a high horse? I some time ago, after some public and private conversations  provided you with personal and detailed information including emailed copies of contracts, leases and detailed personal information with regards to our particular predicament and our purchase and lease arrangement as a gay couple,,,,, third person, that you in a PM asked me to provide and nada, you sir never bothered nor had the decency to reply to after asking for those specific details, an insult again? Surely take it as it is but an insult intended. You my friend throwing up all this "what appears to be great advice" slowly reveals itself to be backed only from readings and what is a less or even the lessor (pardon the pun) understandings of Filipino law and the inability to substantiate your claims or simply offer advice to serious questions  with well written words nor personal experience/s that could baffle those of lesser thinking/nothing in concrete. What is your Game here, you offer little but advise plenty.

Moderators, readers "and I'm sure" Calif will slap me dearly for offering facts to this post and prior contributions. Calif, it's your time to shine.

Hey OMO.

Cheers, Steve.

Moderators, readers "and I'm sure" Calif will slap me dearly for offering facts to this post and prior contributions. Calif, it's your time to shine.

Hey OMO.

Cheers, Steve.

Too bad this personal disagreement had to go public.  Helps no one.

Regards.

I try very hard to reply to all persons and with respect.  When expats share their personal experiences and clearly state they are not offering legal advice it should be noted as such, yet when a few decide it is a form of legal advice, there seems to be a need to fabricate words for an alternate reality. 

Hmmm a failure to reply???   How and why did I receive this response from an expat identified as "bigpearl" 11 months ago identified as:   21:40:48 Report #27, after my long and detailed reply to said person?

"Hi Gary,
Thanks for your positive and quick reply.
We are a Gay couple, me Aussie and my better half Bengie a Filipino national that holds permanent residency in Australia. ATM looking at citizenship for Ben in Oz, before I retire to the mentioned problem property that we purchased in April 2017."

Nor sure where this is coming from but the records here in expat do speak for themselves. 

as a second thought...  I made the decision to post what I did tell in our correspondence along with my comments (not legal advice) after which there was no significant followup on your end...

"Wow Steve,

A very interesting and yet not so such a strange twist for the PI.  I will give you my short answer first.

1.  Since the PI does not allow same-sex marriage, you and your partner actually had a much better chance of securing the properties the way you intended.

2.  I am attorney adverse and never recommend or trust an attorney here.  It sounds like they failed to disclose what they were up or to advise on a rather different but legal way.

3.  It should have been explained to you both about how to secure the building/structures within the absolute deed of sale executed at the same time as the lease between you to only.

4. It is/would be a very big mistake to have your name placed on the purchase document for the land, that is illegal and can cause the entire process to be voidable in court.  We as foreigners are not allowed to even indicate that we "purchased Land" here.

How to try to move forward?

By law, the Phil citizen must be he owner of the land so since it is 100% legal by the same law to have a legal owner lease the land to a foreigner (except if they are married), you must do a special lease just between the two of you.  So here goes my comments;

1.  You should have been placed in the Deed of Sale as the "Interested Third Party - Land Leassee, House/Structure(s) Owner" (this is what I did for another expat friend and even with the seller having a son as a local attorney, the son had never seen it done this way and they were shocked, it is legal and it worked).  Since I was the creator of all of his documents, his path was very smooth, despite the process and very detailed documents I created being "new" to most officials.

2.  Once 1 above was accomplished, your full name and nationality must be placed on the carefully worded lease with key wording that includes your home/structure ownership. 

3.  The lease terms you state are concerning when you say "25+25" since you can't have a lease that covers 50 years from the beginning of the signing.  The lease needs to cover such terms as when the lease would be renewed as it related to being in effect, say 24.5 years.  There can be no automatic lease renewal clause or words that can be considered as the owner giving up ANY rights to the land or its is again voidable.   

3.  Once you both have the above 100% resolved, starting with the two TD's (Tax declarations), confirm the one for the house is separate from the land and note the TD annotations on the TCT (extremely important).

4. With the new TCT, TD's and correctly worded lease in hand, you need to go to the Tax office and declare the structures are yours and that you need to be placed on the TD as the owner for the structures only. 

I can not tell you for sure this will be accepted 100% or that you will get some strange feedback since you were not entered on the Deed of Sale as I structured above.

By the end of next year, my lady and I are planning on purchasing raw land and this will be the exact plan I will follow.  We are not married yet and will make exact plans once my U.S. Veteran's claims and benefits are completed.  I can relate on many levels what you both must feel and Steve, I am more than ready for the "male cow manure" some will try to deposit at my feet.   I have to remind some locals that when I stepped onto the airplane at LAX (Los Angeles) to come to MNL (Manila), I brought my common sense along with my two Master's degrees on that flight.

In summary, I'm not sure if I have helped you any here.  I do not believe you will ever receive such thinking or a plan from an attorney here, but that is not for me to decide.  Was this a very detailed process with special attention to current laws embedded into the docs I prepared?  Of course, but I have given you what I know works and it is legal. 

Best wishes,"

This will be my last response to you ever ..... Best wishes again.....

Hi Steve,
Feel free to send to either of my emails as follows:  gary[at]s*******r.com or info[at]s*******r.com

I will look and give you my opinion for sure.

Gary


This PM from you was in response to me asking your permission and if you would entertain looking at some relevant documents in regards to our situation.
In post no. 29 you detailed correctly a PM and as you said rightly so this forum holds records and there were 2 more PM's one of which I posted above, our last and prior, me asking if I could forward doc's for your perusal.

So perhaps you did or did not receive 4 emails from myself to the first address supplied, 3 containing 10 scanned documents (spread over 3 to share the load) and a followup a week or so later asking if you had received and would care to offer an opinion. I never heard back though I continued to read great input from you with regard to other posters situations.

Perhaps my bad for not following this up with a PM here instead of relying on the offered addy.
If you did not receive my personal emails and attachments (why as they never bounced back?) then I can fully understand your annoyance with my previous post and have to take it on the chin.

Cheers, Steve.

Dennis52 :

Has anyone had experience in seeking a 25 year lease agreement. My friend purchased a property here in his fiancé’s name and needs to protect himself. Thanks

Honesty is the best policy. Don´t do it!

New topic