Crebaland – Due Diligence of Property Acquisition

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here’s an old article taken from Crebaland pertaining to Due Diligence on Property Acquisition in the Philippines :

Title Investigation

Fake or fraudulent land titles have plagued the Philippine economy for years. Over the decades, corruption and the dismal state of the country’s land and titling records have provided a fertile ground for fake titles syndicates to thrive.

This has severely eroded the public’s faith in a Torrens title which, under the law, is supposed to be the best evidence of land ownership.

Victims of fake titles have suffered losses amounting to billions of pesos. Not even the seasoned real estate industry players have been spared. Courts are clogged with cases and controversies involving land titles or claims.

Many legitimate landowners have either lost their lands to land grabbers with spurious titles, or collectively spent hundreds of millions over the decades in costly litigations just to defend their titles in court. In the Maysilo Estate controversy, for instance, the MWSS lost a portion of its lands in 1992, and the long-held titles of the Manotoks and Aranetas were annulled in a controversial Supreme Court decision in 2005.

Even underprivileged beneficiaries of housing projects have lost their government awarded titles, through no fault of theirs.

Did you know…..? Quezon City, Tagaytay, Cavite, Caloocan, and Bulacan are the “hottest spots”, being the favorite territories of fake titles syndicates. Other critical areas are the entire National Capital Region (NCR), Rizal, Baguio, Pampanga, Zambales, Palawan, Cebu, Negros Occidental, and Davao.

Clearly, fake titles proliferate in areas where the land market is active due to developmental trends.

The syndicates’ favorite targets of attack are titles emanating from the vast friar lands known as Haciendas or Estates ~ among others the Diliman, Piedad and Tala Estates in the Quezon City-Caloocan area, Sta. Maria Estate in Bulacan, and Calamba Estate in Laguna. There are 23 such estates throughout the country, totaling some 158,414 hectares.

One of the modus operandi of these syndicates is scouting around for vacant lands, obtaining a copy of the certificate of title covering the land, copying the textual information in that certificate onto a stolen or counterfeit blank form (but indicating a different registered owner), undertaking “saksak-bunot” in connivance with Register of Deeds personnel, then peddling the spurious but seemingly genuine certificate to unsuspecting buyers or lenders.

Another common practice is to pose as the owner of the vacant land and apply for title reconstitution using fraudulent supporting documents.

Generally, a fake title is one that was simply manufactured out of nowhere. The form used for the certificate may either be counterfeit (printed by unauthorized parties) or a stolen/pilfered genuine form. In either case the contents are fictitious.

A fraudulent title is one where, for instance, the form used may be genuine and registration was effected, but prior to the registration the approved survey plan may have been surreptitiously altered to increase the size of the land. Or registration was obtained using a spurious or falsified deed of conveyance.

An irregular title is one which may not be fake or fraudulent, but where, for instance, capital gains taxes were not paid, or some formalities or requirements for registration and issuance were not complied with. The irregularities may or not be curable, depending on the applicable provisions of law.

A defective title is one in which, for instance, when plotted or projected against an official map, the land is shown to be floating at sea. Or when the title says the land is located in Lipa, but when plotted, it is shown to be within Calamba. Or the land encroaches on another titled property. Depending on an analysis of the records, a defective title may, or may not, turn out to be fake or fraudulent.

There are many other instances or indicia of spuriousness, fraudulence, irregularities or defects. The question is: Would you know where to look?

Are banks immune to fake titles?Many Supreme Court cases reveal that banks, despite their vaunted “due diligence”, have not been immune to fake titles. The various disclaimers in the auction of bank ROPOA’s indicate the banks’ uncertainty as to the integrity of the titles in their inventories.

The frightening question is: How much of the banking system’s collateral inventory is covered by fake/fraudulent titles? Equally frightening is the question: if banks are not immune to fake titles, what of the ordinary buyer or investor who is not as well versed in title verification?

Interviews with bank officers revealed the following:

  • Title verification by banks is conducted by appraisers and/or credit investigators (CIs) who are neither lawyers nor geodetic engineers;
  • Such verification normally involves only (a) a trace-back at the Register of Deeds (RD), (b) obtaining a tax clearance, and (c) conducting ocular inspection;
  • Banks lack technical capability to undertake accurate technical analysis of land titles and survey plans and
  • Instances of collusion between the borrower and the appraiser/CI have been discovered.

The limited title verification process used to suffice under the jurisprudential doctrine of buyer or mortgagee in good faith. However, from a study of decided cases in the last 2 decades, the Supreme Court ~ perhaps due to increased incidence of land grabbing and title faking ~ appears to have been veering towards requiring a much greater degree of caution.

In-depth studies also reveal that the limited verification by banks, stringent though it may be compared to that of an ordinary buyer or other entities, is largely insufficient in determining the following

  • Is the certificate of title genuine?
  • Are the titles traced at the RD the result of “saksak-bunot” or not? The records in the entire history of the title cannot be found in the RD alone, but are dispersed in various agencies and regional offices involved in the entire titling process. But since the usual verification process is focused on the RD, this is also the frontline of “saksak-bunot operations”
  • Is the land subjected to ocular inspection really the land described in the title, or did the loan applicant point the appraiser to a different land? Is the land really part of an originally decreed/titled land? Were the subdivisions/consolidations throughout its history technically accurate and validly effected?
  • Was the OCT that emanated either from an administrative patent or judicial decree validly issued? Were the transfers down the line validly or regularly effected? Are all the title records consistent with each other, and consistent with historical land records, laws and regulations?
  • Is the title free of encroachment or overlapping, closure error or other technical defects, double titling, falsification, fraud, or tampering?
  • Is the borrower really the registered owner, or merely an impostor?
  • Can the title withstand judicial scrutiny when attacked?

Land is a primary economic resource. Practically all human activity ~ economic, social or otherwise ~ is land-based, and land development for various economic activities is the number one economic pump primer.

However, the flow of investment capital into land development activities is dependent on the integrity of a Torrens title, and the stability of an economic enterprise anchored on land largely depends on the absence of land ownership controversy. The attainment of Government’s priority developmental goals ~ mass housing, agricultural infrastructure development, tourism, manufacturing, and others ~ primarily hinges on the direction, pace and level of land development activity.

Prior to undertaking all these activities, first, a suitable parcel of land must be identified; and second, the integrity of title to that land must be established so that ownership issues that may destabilize the investment may be resolved beforehand.

This is why a Lot Plan and the certified true copy of the Torrens title for the lot are both required in the application for a development permit or building construction permit.

The malignant impact of fake titles over the entire economic spectrum should thus be readily apparent. Their proliferation has made it difficult to market real property, whether to investors, buyers or lenders. Land transactions ~ and consequently, land development activities ~ proceed at a snail’s pace due to lack of knowledge and extreme difficulty in verifying the reliability of titles.

Widely publicized land scams have made the market cynical, even when presented a certified true copy of the title to the property.

The specter of fake titles also seriously impairs credit availment, to the detriment of otherwise productive enterprises largely dependent on bank financing. The risk factor is perceived to be one of the main reasons for the high loan loss provision requirement imposed by the Bangko Sentral upon banks, which affects the credit supply.

It also appears to be the reason for the abnormally low appraisal and loan values given to real estate collateral particularly in the case of non-prime borrowers, which defeats the purpose of banking. And the increased costs of title verification on the part of banks translate to higher lending rates and bank charges, which many SMEs find unaffordable and thus a deterrent to business formation and expansion that the economy badly needs.

Thus, all told, the bane of fake titles severely retards the pace of economic growth at both national and local levels.

Governmental Palsy

In an attempt to arrest the problem and help the public guard against fake titles, the government created several task forces, among them the Land Title Verification Task Force under the Land Registration Authority (LRA).

Sadly for the public, however, in a 2000 report, the LRA itself discredited its own task force with the statement that this “became some sort of a ‘validation/authentication’ of the so-called ‘saksak-bunot operations’ of a syndicate dealing with fake and spurious titles”.

The computerization principle of “garbage-in, garbage out” gives rise to the question: how much of the LRA or Registers of Deeds records have already been compromised by “saksak-bunot” operations and what is the assurance that these compromised records will not find themselves into the computerized databases

If and when the LRA project does succeed, the information it could later provide the public may be largely inadequate for purposes of determining title integrity. This is because the LRA, not being the only agency involved in the entire titling process, does not have in its custody the complete set of records documenting a title’s entire history as it is passed on down the line from the very original title

For instance, the official land records are with the Lands Management Bureau (LMB) and the various offices of the Department of Environment and Natural Resources (DENR), while titles issued under the CARP [i.e. emancipation patents (EP) or certificate of land ownership award (CLOA)] are with the Department of Agrarian Reform (DAR).

Sometime in 2000, the LMB under the auspices of the DENR initiated moves to shore up the compromised Torrens System through reforms in land and titling records management. This effort blossomed into the inter-agency and multi-sectoral LAMP project funded by AusAid and World Bank. The LAMP 1 came up with comprehensive studies and policy recommendations on all aspects of land administration and titling, culminating in the legislative proposals submitted to Congress in 2003.

The DENR estimated a time frame of some 20 years from enactment of the proposed measures for the reforms to show meaningful results. Again, sadly, the reform proposals have been stymied by what the private sector has perceived to be a petty battle for turf among the agencies involved.

One can almost hear the fake titles syndicates chuckling as they ravage the economy more brazenly than ever before.

CREBA hits back at fake titles syndicates where it would hurt them most, by exposing to their potential victims what their commodity really is ~ a mere scrap of paper

Aimed towards strengthening the Torrens system and eventually eradicating fake titles, the pioneering CREBALAND title research and investigation systems and methodologies were designed to thoroughly verify/evaluate land titles and provide assurance as to their integrity and reliability.

Helmed by CREBA’s leading lights who are widely recognized as land experts by both the government and private sectors; backed by a board of expert consultants who have distinguished themselves in government service in the fields of law, geodetic engineering and land registration/titling; manned by a pool of legal and geosciences specialists and professionals; and linked to its regional network of title researchers through fully computerized operations and mobile computing technology; ~ the CREBALAND systems are widely acknowledged as one-of-a-kind in the country today.

An integral component of this system is CREBA’s cutting-edge Geographic Information System (GIS) parcellary mapping, uniquely designed not only for the speedy technical analysis of land titles, but also as a potent tool in evaluating the investment and developmental potentials of any land parcel anywhere in the country.

Together, these systems enable anyone claiming ownership of a piece of land to fully satisfy the fundamental jurisprudential requirements of (1) proving the identity and origin of his claimed land with absolute certainty, and (2) proving the strength and legitimacy of his ownership claim.

Through A Microscope

A title applied for a CREBALAND Title Warranty is subjected to a most rigorous and exhaustive set of examination, research, verification, investigation and analysis processes which were so designed as to render it virtually impossible for any title defect or signs of fraud or spuriousness to escape detection.

With these processes, a tampered certificate of title, or a record inserted into the files of the Register of Deeds through “saksak-bunot”, or a fraudulent entry in the official registries, or a “doctored” survey plan, or a fictitious or legally flawed transfer, and a host of other irregularities that may impact on the validity of the title, will invariably be exposed when each record is analyzed and matched with every other record obtained from all the agencies concerned.

A land title may contain the following technical errors, which under existing jurisprudence would seriously impair ~ if not totally vitiate or invalidate ~ the ownership claim:

  • Locational error ~ such as when the land is actually located in a place different from what the title states, or when it cannot be located at all. A seller or loan applicant may show you a land, but it may not be the same land covered by the title.
  • Boundary error ~ such as, for instance, when the title describes the land as being bounded by a national road or a river when in fact it is not, or when it straddles part of inalienable land.
  • Closure error ~ which, in layman’s terms, simply means a gap between the land parcel’s corners or points. This gap means that the land’s bounding lines do not close to form a polygon, such that when you fence it, you end up with a gap in the fence.
  • Overlap, encroachment or duplicate title/claim ~ such as when plotted or mapped, the titled land is shown to be straddling another property, or covered by another claim or title.
  • Inconsistency with the reference survey plans, and/or predecessor titles, and/or official land records/maps

One would not be able to tell whether a title contains these errors just by reading it, or even by an ocular inspection of the land itself.

Traditionally, accurately detecting these errors required an actual ground survey using geodetic engineering equipment. The results of the survey were then drawn (or plotted) either manually, or through computer-aided design (CAD) software introduced locally some 25 years ago.

Even as this process is as time-consuming as it is costly, it is wholly insufficient to determine technical consistency among all titling records as against official maps, unless advanced mapping software is used in conjunction with geo-referenced official data.

Who and What is Crebaland ?


CREBALAND is a 100% Filipino-owned close corporation registered with the Securities and Exchange Commission (SEC), with paid up capital stock of P50 Million.

It was initially established in 2004 as CREBA Land Systems Specialists Inc. (CLSSI) upon the initiative of the prestigious 38-years-old Chamber of Real Estate and Builders’ Associations (CREBA) led by its Founder Manuel M. Serrano, to develop spatial technology systems that will provide speedy access to comprehensive land information vital to the land sector.

CREBALAND devoted its first 5 years of existence to intensive research, aggregation, processing/conversion and integration of a comprehensive set of geographic data – the goal being to enable visualization of location information essential to wise investment-decision making, developmental planning, asset valuation and management, territorial governance, and compliance with various laws and regulations impacting on ownership, use and maintenance of the country’s resources.

Its efforts culminated in its being the only entity, to date, that possesses the most extensive, fully-built GIS database covering the entire country, as well as the fully-automated web parcellary mapping facility at which has received critical acclaim from government leaders, private sector organizations and international land information systems (LIMS) experts.

It has also expended considerable resources in developing expertise on all matters relating to land surveys and titling, and establishing fool-proof methodologies for title research, investigation and analysis.

Focusing on the quintessential needs for GIS technology – to locate, evaluate and disseminate – CREBALAND now specializes in providing other entities with GIS databases and integrative systems similar to its own. It also develops customized GIS-based applications that automate various location-critical or location-specific workflow processes and provide location-intelligence to various enterprise datasets.