What are the usual documents involved in such transactions?
- Agreement to sale and purchase, containing all necessary business terms for the transaction, including the description of the land, purchase price, deposit (if any), the closing date and any other special terms (conditions for the benefit of the buyer and representations and warranties by the seller are usually contained therein).
- Sale and purchase agreement, which is required to be executed in an official form and registered with the competent registry land office
- Due diligence report usually conducted by the buyer, through the buyer’s lawyer with respect to the property being acquired
What are the warranties given by a seller to a buyer?
A seller usually gives warranties that he or she is the owner and is entitled to sell the property. Other warranties shall depend on negotiations.
When is the sale legally binding?
A sale of real property is legally binding only when it is made in writing and registered by a competent official. An agreement that is not executed in the prescribed form shall be invalid.
When is title transferred?
The land title will be transferred at the time of registration with the competent official.
What are the costs usually shouldered by the parties?
The buyer usually pays:
- Legal costs
- Due diligence costs for consultants who have prepared building condition reports, environmental assessments, valuation appraisals and real estate surveys
- Half of the transfer registration fees
The seller usually pays for:
- Legal costs
- Withholding income tax on any profit made in the sale of the real estate
- Half of the transfer registration fees
- Specific business tax or stamp tax