Tuesday, April 9, 2019

Can a Foreigner Own Real Property in the Philippines?

Believe me, the question is not answerable by yes or no, since I intentionally worded the title to cover two types of properties that may or may not be owned by a foreigner (not including a natural-born citizen of the Philippines who lost his/her citizenship by naturalization in a foreign country but later reacquired the same through the Dual Citizenship law). For foreign nationals the answer to this question is not a hard and fast rule.

Understanding What is Considered Real Property

Under the Philippine Civil Code, real property includes not only the land but all the accessions rooted to it, i.e. buildings, trees and their crops.  Consequently, a foreigner may not be able to own the land, they can however own the building (and condo units in it) because the Philippine Constitution specifically prohibits ownership of the land by foreign nationals.

Ownership of Condominium Units

When I used to work in a government office, this scenario became even more significant by an American national who came to our office to complain about Philippine government employees who he says refused to act on his complaints regarding a condominium unit he bought.  Well, it wasn't my personal case, but it was the case of one of my investigators.  Since everyone at the office knew I am married to a foreigner, and since he is my staff anyway, I conducted the interview.  To make a long story short, during the course of the interview, I learned of a significant flaw in his case.  He bought the condominium unit and put it under the name of his significant other (not his wife).  Now that is wrong in so many levels, one of which is that on paper he is NOT the OWNER.  Consequently, he cannot execute acts of ownership on the property, like complaining on the substandard materials used on "his property".  I do not even understand why he did not put it under his name, when he could have put it UNDER his NAME all along.  We are talking of a condominium unit after all, NOT land! Consequently, there should have been no legal deterrent to his full ownership of the condominium unit.  Even on matters of succession, he would have to make a case in court to show he is actually the owner of the condominium unit and not his "significant other."

Foreigners Cannot Own Land Even By Succession

Laws are presumed to be consistent with existing laws including the Constitution.  Thus, although the rules on succession may provide that the spouse (who may be a foreign national) would inherit property (including land) from his spouse (Filipino), it cannot inherit in a manner such that he/she (a Foreign national) would have title to the land.  At most, what would happen is that the land may be sold to a Filipino and the proceeds from the sale shall constitute the inheritance of the foreign national. 

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