Mar 10, 20By Sam Morales

Real estate properties are a great financial investment. But it can be a source of headache if in the future for your surviving heirs. It can get more troublesome too if the properties come with a mortgage balance or if there is no will to indicate your wishes in managing your real estate investments.


Then what should you consider now to make sure that such problems would not happen when it comes to your properties as a future inheritance? Here are X tips on how to manage your real estate should the inevitable happens:


1. Start early.

If in case it happens, to whom will you entrust your hard-earned investments? Deciding on who will take accountability and responsibility is important, especially if you have just started mortgage on your real estate properties. 


This is because there are holding costs incurred every day a property is held onto. In some cases, real estate properties might lose their market value if the heirs haven’t been settled.


2. Provide your intended heir proper ownership documentation.

If you intend to pass on your real estate to a chosen heir, you can do so under Art. 725, 618a, which states that you can donate your property to your heir on paper via Donation Inter Vivos or legal donation. Have the necessary documents prepared, signed and notarized with a lawyer or legal representation on board. In some cases, you can also put in extra terms and conditions that your heir will also agree. 


Moreover, work with your broker on getting copies of the following ownership documents on hand. You can work with your lawyer in providing authenticated copies of the following documents should the time comes:

  • Condominium Certificate of Title (CCT) for condo units, or 

  • Transfer Certificate of Title (TCT) for single houses and raw land donated, or

  • Original Certificate of Title (OCT)


The Deed of Donation your heir should have a copy of should also contain the following terms:

  • Both your and the heir’s complete names;

  • A detailed description of the donated property; 

  • Your intention and purpose why you are donating the property;

  • Both your and the heir’s signatures; and

  • The notarial acknowledgment.

3. Get your property’s market value assessed periodically.

When we say periodically, we say at a time when you think your property has increased its market value. For example, get your property’s valuation assessed whenever a fixed home improvement like an additional bedroom or if a city infrastructure is underway to be developed. Contact your local city assessor to get this done.


4. Pay the real estate taxes on time.

One of the most common blockers to settling real estate inheritance among families is the unsettled real estate property taxes. Settling them on time and without incurring any penalties will help reduce the burden should you pass on unexpectedly. Some people even set up an emergency fund to cover those expenses well after.


Get your property’s latest Tax Declaration from the City Assessor’s office. To process your request, present proper documentation such as your valid ID and an old Tax Declaration or any proof of verification.


If you intend to donate your property to your heir instead, make sure you also pay the donor’s taxes. According to Republic Act 8424, donors need to pay a minimum of 2% of the excess over P100,000.


Once you paid them, you will be issued a Certificate Authorizing Registration (CAR) and Tax Clearance (TCL). These two documents are required in order for the Registry of Deeds to process the property transfer. 


5. Consider selling ahead.

If you are not planning to keep some of the properties, selling it at a premium higher than the property’s current market value is a much more favorable option. You may not be able to take advantage of the next economic trend favorable to real estate in the future, but you can certainly take advantage of the time you decide on selling your property and making your investment more liquid and easy to manage.


Still looking for the next real estate project to invest in? Check out properties for sale here at www.signetproperties.ph