LEGAL ASPECT
Q: What procedural task you need to accomplish for us while we are waiting for the Medico Company to reply? Pls be explicit so these can siblings can understand better what’s going on.
- While waiting for Medicus to respond with their terms or possible counter-offer, the lawyers need to accomplish the Transfer of the Title RT-405 from Co-Heirs of Ramiro and Nenita Apolonio – to a single owner, Mariquita A Gribben. The purpose of this is to expedite the transfer of title from Seller to Buyer, should the sale proceed accordingly.
- The transfer of title from all co-heirs to only Mariquita A Gribben is also necessary regardless of who buys the property (not necessarily Medicus).
- Why? It expedites transfer of title from seller to buyer and is more attractive to buyers and their legal representatives.
- We are currently processing these with the Registry of Deeds (ROD) Kalibo.
- Upon our due diligence, we found that the title of RT-405 in the ROD is a cancelled title and that there are annotations (liens) in the title.
- We did our research and spoke to Alexys, and confirmed that there was indeed a case for reconstitution of lost title filed by Nenita Apolonio and a decision was ordered by the court in 1984. It was also found out from Alexys that after a new title was issued, the old title was found somewhere in the house. Now, we have to clarify with the ROD the new title that is binding.
- ULTIMATELY, THE GOAL IS TO HAVE A CLEAN TITLE WITH ZERO ANNOTATIONS BEFORE THE SALE PROCEEDS.
- Additionally, before the sale proceeds, we have to resolve the BIR ECAR. This document is issued upon payment of proper estate taxes and donor’s taxes.
- Since you already paid the proper taxes, you have it, but the copy transmitted to us was only 3 out of 3 certifications. We need to find the first two because they probably contain the Original Extrajudicial Settlement (EJS) with BIR Stamp.
- There are many original copies of the EJS, but only one with the BIR stamp --- we tried to obtain another copy from BIR Quezon City, but apparently, it is only issued once.
- This BIR stamp is usually given on the first instance this property is transacted, so that EJS with BIR Stamp was probably used or in the custody of someone involved in your previous sale transactions with the other properties.
- SO WE ARE ALSO TRYING TO LOCATE THE ORIGINAL EJS WITH BIR STAMP (AND REGISTER IT WITH THE ROD) SO WE CAN PROCEED WITH ALL SUBSEQUENT TRANSFERS OF TITLE RT-405 WHEN THE SALE PROCEEDS.
BUSINESS ASPECT
Q: Let us know what strategy we would use to convince the Medico buyer has a good deal to acquire our Lot even at the price of 18k?
- Quite frankly, it will be hard to sell to Medicus for 18k because word got out to them that the lot is priced at 15k/sqm. You can try your luck better with other buyers.
- Even if you sell for 18-20k/sqm, price is still quite high and we will have difficulty selling it at that. But then…..
- There is a document you can show to justify selling at price 18k-20k/sqm. This is called the BIR ZONAL VALUATION (CERTIFICATION FROM THE BIR).
- Take note, however, that when this document comes out, this will be the basis of the BIR to compute the CAPITAL GAINS TAX, which is 7.5% of the selling price. For example, if you sell for 20k/sqm a 1,404-sqm of land, that is Php 2,106,000.00 on capital gains taxes! Not attractive to buyers who will shoulder it.
- How is capital gains tax computed? The law has 3 basis, either: (1) BIR Zonal Valuation; (2) Actual Selling Price; or (3) Fair Market Value reflected in your Tax Declaration). Ofc, they usually base it on which one is the highest.
- That is why there are ways to bring down the capital gains tax, either execute a Deed of Sale with a lower actual selling price (usually done when buyers are individuals and smaller, faster entities; not for big corporations), OR reflect the Fair Market Value indicated in your tax declaration.
- Note that your property in RT-405, though by location is commercial (and everyone can see it), is still reflected as part Agricultural and Residential on paper (your tax declaration) --- therefore, we can still hang on to it to bring the taxes and expenses down.
- These are the sort of things we have to balance as we sell the property --- MAXIMIZING PROFIT, but MINIMIZING EXPENSES.
- Your property, while located in a commercial booming area, but agricultural and residential on paper, will have a valuation of between 6,000-20,000/sqm.
Q: As I said before, if we have a couple of documents of sold properties within the vicinity, that would justify that our price is quite a reasonable one! Verbal is not sufficient to justify that our lot has great potential for future growth for the buyer since they can resell it for much higher price! Tell me if we can get some documents/info from whichever Govt agency that would make our selling offer subtle and attractive.
- This document is the BIR Zonal Valuation of the location of RT-405 title. We can have it printed and have it certified by the BIR Office.
- Alternatively, you can have an appraiser examine the lot and certify too that it is a prime commercial lot with a value of 20,000 sqm.. (but then again, taxes… BIR has its eyes on you)
FINAL REMARKS:
While waiting out on Medicus to respond, I suggest being open to other buyers. If there are other buyers (as I know some are talking to Alexys) with better, more straightforward deals and better agents, great!
There is some sort of delay on the part of Medicus. Aside from the red tape with corporate procedures and deliberations among directors, I suspect maybe the bank they are loaning from granted a smaller amount, etc. No word from them yet. Better be open with other buyers.
Meanwhile, Atty. Roni and I will just continue to clean up the title and other paper requirements to ease up the future sale coming up.
Also note that all these taxes and expenses, as well as agents' fees etc. will be deducted from payments made by buyers, so you don't shell out anything in the process and can sit back and relax while waiting for your profit 🙂