Contract valid even if it is not notarized

3
Persida Acosta

Persida Acosta

Dear PAO,
I purchased a parcel of land. I was working abroad at that time, so the transaction was facilitated through my sister. I just returned to our country, and I noticed that the deed of sale was not notarized.

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Is it really necessary to have the contract notarized? I was informed that there is a law which states that the deed of sale should be notarized so I fear that the contract I am holding might be invalid.
Prim

Dear Prim,
As a rule, the notarization of a contract is not required for its validity. Article 1356 of the Civil Code clearly states that contracts are obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present. Further, Article 1318 of the same code which enumerates the requisites of a contract does not mention notarization. It only requires (1) consent of the contracting parties; (2) object certain which is the subject matter of the contract; and (3) cause of the obligation which is established.

Now, Article 1358 of the Civil Code requires acts and contracts that create, transmit, modify or extinguish real rights over immovable property should appear in public document, which is achieved through notarization, suggesting that contracts involving land must be notarized. However, the said provision does not go into the validity of a contract, but rather ordered for the convenience of the contracting parties. As the Supreme Court declared in the case of Tigno v. Aquino, “we have even affirmed that a sale of real property though not consigned in a public instrument or formal writing, is nevertheless valid and binding among the parties, for the time-honored rule is that even a verbal contract of sale or real estate produces effects between the parties” (444 SCRA 61). Thus, even a deed of sale of land is valid between the parties even if it is not notarized.

Nevertheless, it becomes necessary to have the deed of sale notarized for registration purposes. Section 112 of the Property Registration Decree states that deeds, conveyances, encumbrances, discharges, powers of attorney and other voluntary instruments, whether affecting registered or unregistered land, executed in accordance with law in the form of public instruments shall be registerable implying that the contract must be notarized. Applying this provision of law, our Supreme Court in the case of Gallardo vs. Intermediate Appellate Court ruled that an unnotarized private deed of sale of land is definitely not registerable under the Land Registration Act (155 SCRA 248).

In sum, a private deed of sale involving land is valid and binding between the parties. Its validity is not affected by the lack of notarization. Yet, the contract should still be notarized so that it may be registered with the appropriate register of deeds as required by the Property Registration Decree.

We hope we were able to sufficiently address your concerns. Please bear in mind that this opinion is based on the facts you narrated and our appreciation of the same. Our opinion may vary if facts are changed or elaborated.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

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3 Comments

  1. Rosete Nacional on

    In the year 1964, my grandmother, sister of my grandfather, sell her property, with lot # 7045, It was sold to my Uncle Salvo Naga. My grandmother has executed a deed of sale with extrajudicial settlement in favor of Salvo Naga,but instead of indicating lot #7045 on the deed of sale,lot # 7047 was written/indicated on the deed of sale. In 1977, Salvo Naga sell the property into 3 different people using the same lot # 7047. On the reference documents, the indicated lot # is 7047, but the actual land to where three people build their homes is in lot # 7045 which is the original property that they have bought. The lot # 7047 was never sold to anybody.

    We made a trace back in the Provincial Capitol, where all records are kept., we have found out that there was a typographic error on the tax declaration of lot #7045..that the number 5 becomes 7..This could be the reason that lot #7047 was indicated on the deed of sale.

    Due to this error, Heirs of Salvo Naga is now claiming both the lot # 7045 and lot # 7047.. The surviving heirs of lot #7047 is now being kicked off from their original property..

    Question is, what is the most legal move that we can do to correct the error on lot # indicated on the deed of sale executed in 1964? Do we have the right to execute deed of exchange? who will be the signatory? Can it be the people who bought the property and the surviving heirs of the lot #7047?

    Please advise.

    Thank you!

    God Bless

  2. Dear PAO,

    We mortgaged a parcel of land since April 2015 but until now we were not able to collect / be given any share with the produce of the said track of land. Initially the said property was offered to us for mortgage for 300k in order for the owner to return back the amount of the previous mortgaged which is less than 300k. After a month, we asked the owner if they already returned the money of the current mortgagee but unfortunately it is not because the mortgagee demanded to get back all the amount he had mortgaged including other parcel of land of land. which is equivalent to 140k. Even if it is not included in our contract, we burden to give the amount because of our interest to the property. We gave the additional 140k with the hope that they will comply with the agreement. As time passed by,we learned that the owner did not return the money of the mortgagee keep on promising to something but until now they did not return our money.

    Can we file a recovery suit and damages against them? If we can, what is the appropriate case are. going to file.

    Zan

  3. Dear Pao,
    How does this relate to private rental agreements between owner and tenant? Our Condominium management insist we have to have our two month private rental agreement notarised,which is difficult as the tenant is overseas and can only meet us for an exchange of keys etc next Sunday. It’s unlikely that we can both be present for notarisation prior to occupancy.