Legal Advice Regarding Contract to Sell, Title Issue, and Eviction

Hello:

Let me first say that I understand how frustrating it is to be in your position, having invested time, money, and emotional attachment in building a home on land that is now being claimed by someone else.

Under Philippine law, particularly under the Civil Code and related jurisprudence, your situation raises several important legal points:

a.) Nature of Your Contract to Sell – A Contract to Sell means ownership is not yet transferred to you until the full payment of the price is made. However, since the seller failed to deliver the title because it was used as collateral, that failure is a form of breach of contract on his part. You were justified in withholding the final payment until he could comply with his obligation to deliver the title.

b.) Rights Against the Original Seller – The original seller remains legally liable for any loss or damage you suffer due to his failure to provide a clean and transferable title. You may file a civil action for rescission and damages under Article 1191 of the Civil Code or, alternatively, a specific performance case compelling the seller (or his estate) to deliver the title once the loan is settled.

c.) As to the New Owner – If the new owner truly acquired the land in good faith and for value and the title is already under his name, he may have the right to possession. However, your prior possession and good faith improvement (since you built your house believing you were the rightful buyer) gives you rights under Articles 448 and 546 of the Civil Code. This means you may:
- Retain possession of the property until you are reimbursed the value of the improvements you made, or
- Compel the new owner to sell the land to you if you are willing and able to pay its reasonable value.

d.) Right to Refund or Compensation – If you are forced to vacate, you may demand refund of all payments you made plus reimbursement for the house and improvements, either from the original seller (for breach of contract) or, depending on the facts, as an equitable claim against the new owner if he benefited from your construction.

e.) Next Legal Steps – I strongly recommend that you (1) secure a copy of the Transfer Certificate of Title (TCT) to verify ownership and any encumbrances, (2) gather all receipts, contracts, and photos of the house, and (3) consult a lawyer to file a case for specific performance, damages, or accion reivindicatoria (recovery of property) or at least to negotiate for compensation under Article 448.

Our law firm has handled similar property disputes and can help you evaluate whether there are grounds to assert ownership or, at the very least, recover your investment and improvements. We have offices in Luzon, Visayas, and Mindanao, and we can schedule an initial consultation via Google Meet, Zoom, or in person at our office. If this advice helps address your concern, I hope it’s not too much to ask to please like and share our pages below. It will surely inspire us to continue helping others who face the same challenges.

Sincerely,
ATTY. JOFRE B. RECOSOSA
Owner/Managing Partner
Recososa Law Firm