Wednesday, July 22, 2015

Always Check for a License To Sell

For homebuyers and investors, due diligence is imperative when it comes to buying property. Aside from making sure that the property can fulfill your needs well within your financial capacity, one has to ascertain whether it is a legally recognized product. This means making sure it has the complete set of required certificates and permits to its name.

Among the most important of these permits is the License to Sell, or LTS. As per Philippine law, developers must be in possession of a valid LTS from the Housing Land Use and Regulatory Board (HLURB) before they can put a registered project on the market. 

Take note: even if the project has been duly registered, the developer is still required to secure the LTS. The certificate of registration cannot be a substitute for the LTS, and buyers mustn’t assume that a project has been cleared for sale based on its status as registered.

Section 5 of Presidential Decree No. 957 – known as the Subdivision and Condominium Buyer's Protective Decree – state the following: 

"Such owner or dealer to whom has been issued a registration certificate shall not, however, be authorized to sell any subdivision lot or condominium unit in the registered project unless he shall have first obtained a license to sell the project within two weeks from the registration of such project."

The LTS is issued by HLURB upon verification that the developer is a duly registered business capable of delivering the project according to approved zoning and building plans and safety standards. A project denied this license may point to something problematic or lacking with regard to the developer or the project itself.

To check for the LTS, buyers may inquire via the HLURB website or visit the regional office with jurisdiction over the property. 

A buyer who has purchased a property without a LTS can opt to rescind the contract and demand for a refund, but he may also push forward with the sale. The developer, in this case, will have to pay a fine to the HLURB for the unauthorized sale.


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