When one heir refuses to sign, the other heirs cannot lawfully sell the whole property or sign for the holdout. They may sell only their own shares, or ask a court to partition the estate or, if the property cannot be divided, to order its sale. Bypassing the holdout puts the entire deal at risk.
Why does one heir’s signature matter?
Rights to a succession pass to the heirs from the moment of death (Civil Code, Art. 777). With two or more heirs, the estate is owned in common before partition, subject to the decedent’s debts (Art. 1078). Each heir owns an undivided share, not a particular corner of the lot.
An extrajudicial settlement is the out-of-court way to divide an estate. Rule 74, Section 1 of the Rules of Court allows it only if the decedent left no will and no debts, and the heirs are all of age or the minors are duly represented. It is done by public instrument filed with the Registry of Deeds. The same section says no extrajudicial settlement binds anyone who did not participate in it or had no notice of it.
Can the other heirs sell without the holdout?
Only their own shares. A co-owner may sell her part, but the sale affects only the portion allotted to her when the co-ownership ends (Art. 493). In Neri v. Heirs of Uy (G.R. No. 194366, October 10, 2012), the Supreme Court held that the signing heirs could sell only their proportionate shares, and the buyers became co-owners with the heirs who were left out.
In our practice as licensed real estate brokers or accredited real estate salespersons, a share-only purchase is a hard market for buyers and lenders who want the entirety of the lot with a clean title.
If an heir sells his hereditary rights to a stranger before partition, the co-heirs, including the holdout, may take the buyer’s place by reimbursing the price within one month from written notice of the sale (Art. 1088).
What if the others sign anyway and leave the holdout out?
The extrajudicial settlement is void as to the preterited heir. Neri case, quoting Segura v. Segura (G.R. No. L-29320, September 19, 1988), calls an extrajudicial settlement that omits an heir a total nullity as to that preterited heir. The Court also held that the two-year period did not apply to heirs deprived of their lawful share. Remember, the general rule is that no one can give what he does not have.
Hence, even if the buyer purchased the entire lot by virtue of the extrajudicial settlement of estate signed by the heirs in agreement (less the excluded heir), the former became the owner of the portion that was validly sold to him. The rest of the property is still owned by the preterited heir.
In effect, the buyer became a pro indiviso co-owner with the excluded heirs, and holds the share of the excluded heir under an implied trust. Hence, an action for reconveyance of property held in implied trust does not prescribe.
However, this is true only as long as the trustee continues to acknowledge the title of the cestui que trust, or stated otherwise, provided she does not repudiate such title.
The moment she does so, the prescriptive period will begin to run and may eventually operate to divest the real owners of their right to the property after the lapse of the applicable statutory period. Hence, an action to recover the property held in trust (an obligation created by law) prescribes in ten years, counted from the actual date of repudiation (the registration of a new Torrens title under a new owner).
In plain terms: the excluded heir has the right to claim her share, provided she acts swiftly to force the seller to return the price for that share or portion of the property. But, in the hands of a buyer in good faith and for value, the excluded heir may not unravel the deal years later, if she slept on her rights.
What is the two-year period in Section 4, Rule 74?
If, within two years after settlement and distribution, an heir or other person appears to have been unduly deprived of her lawful share, she may compel the settlement of the estate in court. The heir’s bond and the real estate stay charged with liability for those two years, even after transfers. Section 5 gives a minor, an incapacitated person, or one in prison or outside the Philippines one more year after the disability ends.
What can the other heirs lawfully do?
Negotiate. Learn why the heir refuses: price, mistrust, or unpaid debts. A buy-out of her share can end many standoffs. This is opinion, not law.
File an ordinary action for partition. Rule 74, Section 1 provides that heirs who disagree may proceed this way, and Art. 494 lets any co-owner demand partition at any time as to his share. Partition is by agreement or by judicial proceedings (Art. 496).
Ask for a sale if the property cannot be divided. When it is essentially indivisible, and the co-owners cannot agree on who takes it and pays the others, it is sold and the proceeds distributed (Art. 498). Reyes v. Concepcion (G.R. No. 56550, October 1, 1990) upheld a public sale, and Aguilar v. Court of Appeals (G.R. No. 76351, October 29, 1993) held that either co-owner may demand a sale and the other cannot object. Both cases involved ordinary co-owners, not an estate. Hence, applying them to heirs, who are co-owners before partition under Art. 1078, is our interpretation.
Go to court if there is a will or a debt. Rule 74, Section 1 then does not apply, and an administrator may sell estate real property only with court authority (Rule 89).
A hypothetical case
Ana, Ben, and Carla inherited a titled parcel of land with no will and no debts. Ana and Ben have a buyer. Carla, who lives abroad, thinks the price is too low. If Ana and Ben sell without her, the settlement is void as to Carla. The legal and safer paths are: (1) to engage a licensed real estate appraiser to get the latest market value; (2) propose a buy-out of her share based on the appraised value; or (3) if this fails, file a court action for partition or sale.
For brokers and salespersons
Practice tip: Do not market or advertise the whole property nor collect earnest money for a co-owned property until every heir has signed or a court has ruled on the sale. Always secure the full and complete list of heirs, and refer the family to an attorney before lining up a buyer.
Frequently asked questions
Can the other heirs sign for the holdout? Not without his authority. A contract in another’s name without authority is unenforceable unless ratified (Arts. 1317 and 1403, as quoted in Neri).
Can one heir sell his share alone? Yes, but only his share (Art. 493), and the co-heirs may redeem within one month from written notice (Art. 1088).
Does the two-year period protect a buyer? Not against an excluded heir (Neri case).
Can a court force the holdout to sell? A court can order partition and, if the property cannot be divided and the heirs cannot agree, a sale with the proceeds distributed (Art. 498). The remedy is a judgment, not his signature.
Facing a holdout heir? Book a consultation with Realttorney at realttorney.com.
This article is for general information only and is not legal advice. Consult a lawyer about your specific situation.
About the Author
Atty. Jojo Perez is a real estate and estate planning attorney, a licensed real estate broker, and a PRC‑accredited lecturer and speaker on real estate topics. Through Realttorney®, he helps property owners, investors, and real estate professionals understand the legal principles and practical considerations involved in property ownership, foreclosure, and real estate transactions in the Philippines.
“A tax-free transfer of real properties to a One Person Corporation merits further study especially when there are several parcels of land to transfer that is meant to be preserved by the heirs or controlled by family for generations to come.”
– Ernesto C. Perez II, CTEP®, Real Estate & Estate Planning Attorney
By Realttorney®
In an era where entrepreneurship is thriving and business structures are evolving, the concept of a One-Person Corporation (OPC) has gained prominence. Introduced under the Revised Corporation Code of the Philippines, the OPC offers unique opportunities for individuals looking to establish a single-owner corporation.
In this article, we delve into the basics of an OPC, explore its advantages and disadvantages compared to an ordinary stock corporation, and examine the implications of the single stockholder’s demise. In addition, we shall explore the benefits of utilizing an OPC to hold various real properties, highlighting how it can effectively save estate taxes and avoid probate.
What is a One-Person Corporation?
A One-Person Corporation is a type of corporation where a single individual can establish and operate a business as a separate legal entity. Unlike a traditional stock corporation that requires a minimum of five shareholders, an OPC enables sole entrepreneurs to enjoy the benefits of limited liability protection and corporate structure without the need for additional shareholders. The OPC structure is governed by the rules and regulations outlined in the Revised Corporation Code of the Philippines.
Advantages of a One-Person Corporation
Limited Liability Protection: One of the key advantages of an OPC is the limited liability protection it offers to the sole owner. By establishing a separate legal entity, the personal assets of the owner are shielded from liabilities arising from the corporation’s activities. Therefore, in the event of lawsuits, creditors’ claims, or other unforeseen circumstances, the real properties held by the OPC are protected, safeguarding the individual’s or family’s wealth and ensuring financial security.
Simplified Management and Decision-Making: Unlike an ordinary stock corporation that requires multiple shareholders and a board of directors, an OPC places decision-making authority solely in the hands of the single stockholder. This streamlined management structure allows for quicker and more efficient decision-making, as well as increased flexibility and control over business operations.
Greater Privacy and Confidentiality: With an OPC, the single stockholder can maintain a greater degree of privacy and confidentiality compared to a stock corporation. As the sole owner, there is no need to disclose personal information or financial details related to other shareholders. This confidentiality can be advantageous for individuals who value privacy or operate in sensitive industries.
Consolidation and Management of Real Properties:The OPC allows a single individual to establish a corporation, thereby enabling the consolidation of diverse real properties under one legal entity. This feature is particularly advantageous for families with multiple real estate holdings, as it facilitates centralized control and management. By transferring ownership of these properties to the OPC, families can streamline administrative processes, simplify financial reporting, and enhance asset protection.
Disadvantages of a One-Person Corporation
Limited Access to Capital: Since an OPC is owned by a single individual, raising capital can be more challenging compared to a stock corporation with multiple shareholders. Access to financing options such as equity investments or loans may be limited. However, this disadvantage can be mitigated by the owner’s personal financial resources or alternative sources of funding.
Potential for Personal Liability: Although an OPC provides limited liability protection, there are situations where the single stockholder’s personal assets could be at risk. If the owner engages in fraudulent activities, commingles personal and business funds, or fails to observe corporate formalities, courts may “pierce the corporate veil” and hold the individual personally liable for the corporation’s obligations.
Succession Considerations for One Person Corporations
When the single stockholder of an OPC passes away, several scenarios may unfold:
Transfer through Succession Planning: Prior to the stockholder’s demise, a well-designed succession plan can be implemented. The owner can designate a successor or beneficiaries who will inherit the shares and assume control of the OPC. This ensures the continuity of business operations and facilitates a seamless transition of ownership.
Transfer through Intestate Succession: If the stockholder does not have a valid will or succession plan in place, the shares and assets of the OPC will be transferred according to the laws of intestate succession. The process may involve court proceedings and the appointment of an administrator to oversee the distribution of assets to the legal heirs.
Flexibility in Succession Planning: Estate planning is a critical consideration for individuals seeking to ensure the seamless transfer of assets to their heirs while minimizing the impact of taxes and probate. The OPC structure provides considerable flexibility in succession planning, making it an attractive tool for families with substantial real estate holdings. Through shareholding arrangements, the founder can easily transfer ownership of the OPC to family members or chosen beneficiaries while retaining control during their lifetime.
Estate Tax Efficiency: The use of an OPC as an estate planning tool can significantly reduce the burden of estate taxes. Under the Philippine Tax Code, the transfer of shares in a corporation through inheritance or bequest is subject to a lower tax rate compared to the transfer of real properties. By transferring ownership of real properties to the OPC, the founder can subsequently transfer the shares to the heirs, minimizing the estate tax liability. This strategy effectively capitalizes on the favorable tax treatment of corporate share transfers, resulting in substantial tax savings.
Probate Avoidance: Probate is a legal process that validates a will and facilitates the distribution of assets to the rightful heirs. However, probate proceedings can be time-consuming, costly, and potentially contentious. By holding real properties within an OPC, these assets are not subject to probate. Instead, the transfer of shares can be carried out through a simple and efficient process, bypassing the complexities and delays associated with probate. This allows for a smoother transition of ownership and ensures that the family’s real properties remain accessible and functional without disruption.
Conversion to a Stock Corporation: In certain cases, the OPC may be converted into an ordinary stock corporation upon the stockholder’s death. This conversion allows for the admission of new shareholders, enabling the business to continue with a broader ownership base. The conversion process would involve compliance with the necessary legal requirements and filing the appropriate documents with the relevant government agencies.
Dissolution of the OPC: If there are no successors or heirs willing or eligible to take over the OPC, the corporation may be dissolved. The assets of the OPC would then be liquidated, and the proceeds would be distributed according to the provisions of the Revised Corporation Code and other applicable laws.
Conclusion
The advent of the One Person Corporation has opened up new possibilities for entrepreneurs seeking to establish a business as a separate legal entity with limited liability protection. The OPC offers advantages such as streamlined decision-making, enhanced privacy, and simplified management. However, potential challenges include limited access to capital and the risk of personal liability if corporate formalities are not followed.
Be that as it may, the One Person Corporation (OPC) has gained notoriety among a wide range of Filipinos, not just entrepreneurs. This innovative legal framework also offers significant advantages for individuals seeking to consolidate and manage their family’s real properties, while also serving as a strategic estate planning tool.
When it comes to succession planning, the single stockholder of an OPC must consider the future of the corporation upon their passing. By implementing a well-thought-out succession plan, the owner can ensure a smooth transition of ownership and the continued operation of the business. Alternatively, the conversion to a stock corporation or the dissolution of the OPC may be appropriate depending on the specific circumstances.
Likewise, the One Person Corporation has brought about significant benefits for individuals seeking to consolidate and manage their family’s real properties. Additionally, it offers a unique opportunity to strategically utilize the OPC as an effective estate planning tool, allowing families to save on estate taxes and avoid probate. By taking advantage of the OPC structure, families can achieve enhanced asset protection, centralized management, and seamless succession planning while optimizing tax efficiency. As always, it is recommended to consult with legal and financial professionals to tailor these strategies to individual circumstances and ensure compliance with relevant laws and regulations.
As with any legal and financial matters, it is essential for individuals considering the establishment of a One Person Corporation or implementing succession and estate plans to seek advice from qualified professionals who can provide guidance tailored to their specific needs and circumstances. By doing so, entrepreneurs can maximize the benefits of an OPC while effectively addressing potential challenges and ensuring a secure future for their businesses and the well-being of their families.
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Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is a Chartered Trust and Estate Planning (CTEP®) professional who is committed to educating Filipinos about the value and importance of having an estate plan in their lives.
“…but in this world, nothing can be said to be certain, except death and taxes.”
– Benjamin Franklin, in a letter to Jean-Baptiste Leroy, 1789
By Realttorney®
This article was written for Filipino-Americans and other Filipinos who are dual citizens and have inheritance in the Philippines from deceased relatives. It is also for Filipino-Americans or non-resident Filipinos who own real estate in the Philippines. This is your guide to heirs, wills or no wills, and estate taxes in the Philippines.
So, let us begin.
Whether you own one or several real estates, or have an inheritance here in the Philippines, you’ve probably thought about what will happen to the parcel of land, house, or condominium unit when you or your close relative passes away. How can you secure your rights to the inheritance? How can you make sure that your properties in the Philippines end up in the right hands, without creating family conflict and needless litigation?
In all parts of the world, transferring real estate to the heirs of property owners is not as simple as writing their names on a piece of paper. There’s a legal process, documentary requirements need to be prepared, and yes, estate taxes must be paid before you or your loved ones can truly claim ownership.
Now let us start to detail everything you need to know about how to pass on property in the Philippines from the registered owner, especially if you’re living abroad. Whether you’re an heir who is a co-owner of properties in the motherland or a property owner planning for the inevitable, this guide will walk you through the process, clearly and confidently.
🧬 Who Can Inherit Property in the Philippines?
Let’s learn the basics first: Under Philippine law, real estate can pass to a select few, if the decedent passed away with or without a will.
✅ Compulsory Heirs Include: (1) Your legitimate children or descendants; (2) Your parents or ascendants, if you have no children; (3) In some cases, illegitimate children are also entitled; and (4) Your spouse.
✳️ These heirs are entitled to a “legitime”, a portion of your estate that the law reserves for them. You cannot freely dispose of this portion if a will has been executed by the testator. However, if you die without a will, your estate will be distributed based on intestate succession rules under the Civil Code. It is up to the property owner to make a last will and testament. But seek competent legal advice for this. And, if you get word that you have an inheritance from a relative in the Philippines, then you have to determine whether your relative passed with or without a will.
🪪 Step-by-Step: Legal Process for Transferring Property to Heirs
When a person passes away, the property does not automatically pass to the heirs. Here’s the process that must be followed:
Step 1: Determine If There’s a Will.
With a will (testate succession): The will must be probated in court. You need to contact the Executor of the will to determine what is to be bequeathed to you.
Without a will (intestate succession): The estate will be divided among the legal heirs as per the provisions of the law on intestate succession – the default estate plan of the State in the Philippines.
📌Note: Even if the will was executed abroad (e.g., in the U.S.), it must still be “probated” in a Philippine court if it involves property in the Philippines. The process involves the filing of a Petition for Recognition of Foreign Judgment in the trial court where the property is situated. The foreign judgment here is the Order of the Probate Court in the United States.
Step 2: Prepare and Settle the Estate.
What needs to be prepared? Before collating all the required documents for the processing of the settlement of the estate, whether via will or not, one must first identify all properties, both personal and/or real. Next is to determine the value of each property in the name of the registered owner.
After this, if the estate is liquid, then paying the debts and liabilities of the deceased person is in order. However, if the estate is illiquid, then the heirs should agree to sell the property to pay for all the debts and liabilities that are outstanding.
These steps will be hassle-free if all the heirs agree to be civil and amicably discuss anything and everything about settling the estate. However, disputes among the heirs are not uncommon, especially when the value of the estate is enormous, or there is an unresolved family issue from the past.
When all heirs are in unison, they can execute an Extrajudicial Settlement of Estate to be used as the transferring document at the settlement of the estate before various government agencies in the Philippines. Collate the documents that are needed for submission to the Bureau of Internal Revenue, the Local Government Unit, and the Registry of Deeds.
💡Tip: Engage an experienced estate attorney in the Philippines to guide you and avoid costly errors or delays.
Step 3: Pay the Estate Tax.
📉 In May 2025, I lectured on the settlement of estates (entitled “From Forebears to Heirs”), including the estate tax amnesty that was then still available. That amnesty expired on June 14, 2025. For estates settled now, the following points apply.
The estate tax rate is 6% based on the value of the net estate.
The standard deduction is PhP 5 million for citizens in the Philippines.
The standard deduction for a non-resident not a citizen of the Philippines is PhP 500,000.00.
The deduction on the market value of the decedent’s family home is now PhP 10 million.
The Estate Tax Return (BIR Form 1801) should be filed within 1 year from the date of death. Any filing passed this period will merit penalties, surcharges, and interest on the estate tax due.
The estate tax return showing a gross value exceeding PhP 5 million shall be supported with a statement duly certified by a CPA.
Payment by installment shall be allowed within 2 years from the statutory date of its payment without civil penalty and interest.
✅ Kindly note that the share of the decedent in the Family Home is only half of the total allowable amount since he or she is merely a co-owner of the house and lot that is identified as a conjugal or community property. And, finally, if the net value of the estate is under PhP 5 million and you claim the full standard deduction, you may not owe any estate tax.
Once the net estate has been determined based on the documentary requirements submitted to BIR, the payment of the estate tax is now in order at the Authorized Agent Banks (AABs) or the Revenue Collection Officer at the Revenue District Office (RDO).
Step 4: Transfer Title to Heirs. Once the estate tax is paid and the documents submitted at the BIR, the Certificate Authorizing Registration (CAR) shall be forthwith issued. Along with the (1) CAR, you need to prepare these documents: (2) the original copy of the transferring document – will or EJS – that was processed by the BIR; (3) original owner’s duplicate copy of the Torrens title; (4) certified electronic copy of the existing land title; (5) certified true copy of the tax declarations; (6) tax clearance; (7) Heir’s Bond and (8) the valid IDs of all the heirs, among others.
📌 These documents will be submitted to the Registry of Deeds in order to cancel the old land title and eventually issue a new Transfer of Certificate of Title. The registration fee for the transfer of the land title in the name of the new owner is the final expense that will be paid by the heirs.
⚠️ Only after this step can the property be legally owned by the heirs in the eyes of the Philippine government. Heirs cannot transfer, sell, or mortgage the property until the estate tax is paid.
🔑 Options for the Settlement of Estate. There are two primary ways to settle an estate in the Philippines:
1. Judicial Settlement. This is the option when there is a Last Will and Testament that was executed by the testator before his or her death. But, if there is no will and the Heirs are in conflict with each other, then there is no other option but to go to court to settle the dispute between the heirs.
Finally, if one or more heirs is a minor and the property belonging to the estate will be sold to a prospective buyer, then the portion of the minor to be sold should be confirmed by the Family Court to make it legal and valid.
The Court proceeds with the probate and oversees the distribution of the properties owned by the testator and the payment of all outstanding debts and liabilities to the creditors of the testator.
2. Extrajudicial Settlement (EJS) of Estate. This option is often used when the deceased left no will. It should be noted that the execution of the EJS is not under any provision of the law on succession. It is based on the Law on Contracts.
The EJS is a document where all the heirs of the deceased agree to adjudicate and partition among themselves the entire estate of the deceased relative. The heirs should be of legal age. But, if some are not of legal age or an incapacitated to sign a contract, then they should be adequately represented by an Attorney-in-Fact or a duly appointed Legal Guardian by a Family Court.
This document should be notarized and must be published in a newspaper of general circulation once a week for 3 consecutive weeks. An Affidavit of Publication will be given at the end of 3 weeks of publication. Then this Affidavit should be submitted to the Registry of Deeds, as part of the documentary requirement for the transfer of the Torrens title to the names of the Heirs.
💡 You can also opt to partition the estate via waiver of rights, donation, or sale among heirs simultaneously with the settlement of the estate of the deceased relative.
📄 Important Documents You Need to Prepare
Whether you’re in the U.S. or any country in the world, make sure to prepare the following for submission to the BIR:
Death certificate (issued by PSA or foreign equivalent).
Birth certificate (issued by PSA or foreign equivalent).
Marriage certificate (issued by PSA or foreign equivalent).
Deed of Extrajudicial Settlement or probate documents.
Original owner’s duplicate copy of the land title (OCT/TCT/CCT).
Tax Declaration from the local assessor’s office.
Tax Clearance for the current year.
Valid IDs of all heirs.
The BIR Certificate Authorizing Registration (CAR) is the proof of estate tax payment and any other taxes paid as a result of the settlement of the estate of the deceased.
🗺 What If the Heirs Are Overseas?
If heirs are in the U.S. or any other country in the world, here are some tips:
Sign SPAs abroad and have them authenticated by the Philippine Consulate, or an Apostille Certification has been issued by the foreign ministry of the host country, whichever is applicable.
Coordinate with an experienced estate lawyer in the Philippines to process probate, tax filing, and title transfer.
Ensure you have TINs (Tax Identification Numbers) issued by the BIR—required for all heirs, even if abroad.
Consider setting up a family corporation or trust to manage the property, especially for large estates or multiple heirs. For complex estate planning issues, it is best to consult an estate planning professional in the Philippines. Apart from setting up a family corporation or trust, consider other Estate Planning Tools like life insurance that can help preserve wealth and reduce tax exposure.
📣 Final Thoughts
Transferring property to your heirs in the Philippines can be smooth and rewarding, but only if you plan ahead. As a Filipino-American or overseas Filipino, you’re already navigating two legal systems—so don’t leave it to chance.
Get the documents ready, talk to a licensed estate lawyer, pay the necessary taxes, and, most importantly, make sure your wishes are clear and legally valid.
That way, when the time comes, your loved ones can focus on remembering you, not struggling through bureaucracy.
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Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.
“We should all be obliged to appear before a board every 5 years and justify our existence… on the pain of liquidation.”
– George Bernard Shaw, Irish Playwright and Political Activist
(Part 2 of 4)
By Realttorney®
In Part 1 of this series, we discussed how corporations in the Philippines may be dissolved and how their legal personality is extended for a limited period to allow for liquidation. We now turn to the practical steps for selling real estate still registered in the name of a corporation that has lost its corporate franchise, commonly referred to as a “dead” corporation.
Depending on whether the sale occurs within or beyond the three-year winding-up period provided by law, the procedure varies. Licensed real estate brokers, lawyers, and buyers alike need to know which rules apply.
Scenario A: Sale Within the 3-Year Liquidation Period
If the corporation is dissolved but the three-year liquidation period under Section 139 of the Revised Corporation Code has not yet expired, the corporation retains limited legal capacity to dispose of its property.
Here are the procedural steps:
1. Confirm the Dissolution Status. Obtain a Certificate of Dissolution from the Securities and Exchange Commission (SEC). Then, verify the effective date of dissolution and compute the expiration of the 3-year window.
2. Review the Articles of Dissolution. Check if liquidators or trustees have been designated. If not, the board of directors may continue to act for liquidation purposes as long as it is within the 3-year period.
3. Secure Corporate Authority to Sell. A board resolution must be issued by the board of liquidators or remaining directors, authorizing the sale of the specific property.
4. Conduct Legal Due Diligence. Verify that the Torrens title is clean and under the corporation’s name. Thereafter, check the tax declaration, ensure that real estate taxes are current, and identify any liens or encumbrances, if any.
5. Execute the Deed of Sale. The corporation, represented by its liquidator, signs the Deed of Absolute Sale. It is important to emphasize that the buyer must be informed that the seller is a dissolved corporation acting only within its winding-up capacity.
6. Comply with BIR Requirements. Pay Capital Gains Tax (CGT), Documentary Stamp Tax (DST), and Value-Added Tax (VAT) if applicable. After a few weeks, kindly secure the Certificate Authorizing Registration (CAR) from the Bureau of Internal Revenue (BIR). This is one requirement for the payment of transfer tax at the Local Treasurer’s Office.
7. Register the Sale. Submit the Deed (or transferring document), the CAR, and other required documents to the Registry of Deeds. Pay the registration fees and process the cancellation and issuance of the new title.
Scenario B: Sale After the 3-Year Liquidation Period
Once the three-year period lapses, the corporation loses its capacity to act, including the authority to sell property. However, the law provides remedies through trusteeship or court-supervised liquidation.
1. Check for Trust Assignment. Determine whether the corporation executed a trust assignment of its assets to named trustees before the 3-year period ended. If so, the trustees now have the authority to sell the property.
2. If No Trustees Were Appointed. Under some jurisprudence, the assets of the corporation are held in trust for the benefit of stockholders. This means that the stockholders now own the property pro indiviso (undivided) and must act collectively.
3. Initiate SEC or Court Action if Necessary. If disputes arise, the parties may petition the SEC or a Regional Trial Court to appoint a liquidator or approve a partition. This is common when there are missing or uncooperative shareholders.
4. Execute the Sale Through Trustees or Stockholders. On the first hand, the trustees may execute the sale through a Trust Deed. On the other hand, if stockholders are selling the property themselves, they must first agree on and execute a partition, either judicially or extrajudicially.
5. Process BIR and Title Transfer. The sale is subject to standard tax compliance (payment of CGT, DST, VAT, etc.). Kindly note that title transfer may require proof of succession or trust assignment, along with updated corporate or stockholder documentation.
Risk Management and Ethical Considerations
Practitioners should be mindful of the following risks:
1. The absence of designated liquidators may delay transactions.
2. Simulated sales or transactions without proper authority may be void.
3. Buyers must be fully informed of the dissolved status of the selling entity.
4. Brokers may face administrative or civil liability if they facilitate a legally defective transaction.
In conclusion, even a “dead” corporation can sell its real estate under Philippine law, but only under certain conditions and within certain timeframes. Whether within or beyond the 3-year liquidation period, strict compliance with legal procedures, BIR rules, and SEC documentation is essential.
In the third part of this series, we will examine key Supreme Court decisions that provide insight into the legal treatment of corporate liquidation and property disposition.
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Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.
— Seneca, Moral Letters to Lucilius, Letter 1, translated by Richard Mott Gummere
By Atty. Jojo Perez | Realttorney®
[Originally published March 2, 2024 | Substantive revision prepared November 1, 2026]
Can you sell property that is still in a deceased relative’s name?
Yes, heirs may arrange the sale of inherited property in the Philippines, but they must establish their rights and authority, use the correct estate-settlement documents, and comply with the applicable tax and registration requirements. Depending on the circumstances, settlement and sale may be documented together through an extrajudicial settlement of estate with sale. A separate title in the heirs’ names is not a universal prerequisite to executing the sale documents.
Death leaves families with more than grief. It also leaves practical questions. Who may sign for the property? What if one heir is abroad? Can the buyer’s payment help fund the taxes? What happens when the family cannot agree?
Before finding a buyer or accepting a deposit, understand what the family owns, who must participate, and which process applies. This guide focuses on an agreed extrajudicial settlement of an estate without a will. A will, unresolved debts, disputed heirship, or a proposed sale involving a minor’s share requires separate legal consideration.
What changes when the registered owner dies
The title may remain in the deceased person’s name, but that does not mean the heirs have no rights until a new title is issued. Under Article 777 of the Civil Code, successional rights pass at death. Where there are several heirs, the estate is generally held in common before partition, subject to payment of the deceased’s debts. Ownership rights, authority to sell the entire property, and registration of the buyer’s title are related but distinct issues. Civil Code, Articles 777 and 1078.
Never prepare a deed making it appear that the deceased owner is still alive and personally selling the property. The proper parties must sign in their actual capacities. A notarized document cannot cure a fabricated signature or missing authority.
Step 1: Identify the heirs and the deceased owner’s actual interest
Do not assume that the children are the only heirs. Establish the family relationships, whether a spouse survives, and whether an heir has also died. A later death may require examination of another estate and another set of successors.
Check whether the property was exclusively owned by the deceased, belonged to the spouses’ property regime, or was co-owned with someone else. A surviving spouse’s own interest must be distinguished from that spouse’s inheritance. The name printed on the title does not, by itself, answer every marital-property question.
Gather the death certificate, relevant birth and marriage records, title, tax declarations, and any documents affecting ownership. Investigate inconsistent names, missing records, annotations, mortgages, occupants, and pending disputes before drafting the settlement. The property due diligence checklist provides a useful starting point for buyers.
Step 2: Confirm that extrajudicial settlement is appropriate
Under Rule 74, Section 1, an agreed extrajudicial settlement is available when the deceased left no will, has no debts, and the heirs are all of age or minors are represented by judicial or legal representatives duly authorized for the purpose. If there is only one heir, the appropriate instrument may be an affidavit of self-adjudication. Ende v. Roman Catholic Prelate.
Every heir must be accounted for and properly participate in the agreed settlement, personally or through valid representation. The heirs must address existing liabilities and agree on a lawful settlement. A minor cannot simply sign an SPA, and a parent’s signature should not be assumed to supply every authority needed to dispose of the child’s property. Obtain advice about representation and any necessary court approval.
If there is a will, it must be dealt with through the applicable probate process. If heirship, ownership, debts, or the proposed division is disputed, a court proceeding, or another appropriate remedy may be needed. Do not conceal a will or omit a family member merely to make the paperwork easier.
Step 3: Agree on the sale terms and who may represent the heirs
One trusted representative can make negotiations manageable. Trust, however, should be supported by a clear written mandate or authority.
Before marketing the property, agree on the proposed price, payment terms, tax and expense allocation, brokerage commission, possession, and distribution of the net proceeds. Distinguish authority to negotiate from authority to sign a settlement or sale and authority to receive the purchase money.
If an heir cannot personally sign, obtain an appropriately worded Special Power of Attorney. It should identify the property and expressly cover the acts the representative is expected to perform. Verify that the authority remains effective before signing and closing. A family spokesperson cannot automatically bind the other heirs.
For an heir abroad, distinguish two usual routes: acknowledgment before an authorized Philippine consular officer, or execution before a foreign notary followed by the applicable apostille or authentication process. The correct route depends on the country and receiving office. Foreign notarization alone should not be assumed sufficient. DFA apostille and consular guidance.
Electronic notarization has separate requirements under the Supreme Court’s rules, including a limited route for principals at Philippine foreign posts. It is not an ordinary video call with any notary. Confirm that the proposed service and document comply with the rules and are accepted for the transaction. The Effects of Electronic Notarization in Real Estate Transactions.
Step 4: Choose the settlement and sale documents
There are two common structures to consider.
Settlement followed by a separate sale. The heirs first document and process the settlement, then convey the property through a separate deed of sale. The particular registration sequence should be established before the parties sign or commit funds.
Extrajudicial settlement of estate with sale. Where legally appropriate, the heirs settle the estate and convey the identified property in a combined instrument. The Land Registration Authority publishes a standard form for an extrajudicial settlement with absolute sale. This structure does not remove either the estate-transfer or sale-transfer requirements. LRA downloadable forms.
The choice is not determined solely by whether the deceased owned one property or several. Consider the entire estate, the property being sold, the heirs’ agreement, outstanding requirements, and the BIR and Registry of Deeds processing route. Do not omit other estate assets because the buyer wants only one parcel.
The settlement must comply with the applicable formalities. Rule 74 requires publication of the fact of the settlement once a week for three consecutive weeks in a newspaper of general circulation. Its requirements also include a bond concerning personal property, where applicable. Publication does not make an excluded heir’s rights disappear. Ende v. Roman Catholic Prelate.
Step 5: Settle the applicable taxes and obtain the BIR clearances
Estate tax and taxes arising from a later sale are separate matters. Do not assume that paying one settles the other.
For deaths on or after January 1, 2018, the regular estate tax is six percent (6%) of the net taxable estate after applicable deductions. For earlier deaths, apply the estate-tax law in force at the date of death, including its allowable deductions and any lawfully applicable amnesty or other relief. The estate-tax return is generally due within one year of death under the TRAIN law (Rep. Act No. 10963); a late settlement requires assessment of the relevant additions and available remedies. BIR Revenue Regulations 12-2018.
An estate may still need to file a return and secure the appropriate BIR clearance for registrable property even where deductions leave no estate tax payable. The electronic Certificate Authorizing Registration, or eCAR, is a tax clearance used in the registration process. It is not a certificate guaranteeing ownership or curing an invalid settlement.
For the sale, determine the property’s tax classification and applicable taxes rather than assuming capital gains tax applies to every transaction. Include documentary stamp tax where applicable, local transfer tax, registration charges, and any required real-property-tax clearance in the closing plan. Confirm the documents and eCAR requirements for each transfer with the relevant offices.
If sale proceeds are needed to fund the estate obligations, arrange the payment safeguards before signing. Indicate clearly who advances the money, where it goes, what proves payment, and what happens if the transfer cannot proceed. Do not promise a fixed processing period or automatic release of a particular number of eCARs without checking the actual transaction.
Is a new estate tax amnesty available?
Legislative update reviewed November 1, 2026. Do not treat a pending bill as an available tax amnesty. The latest Senate hearing update verified for this article is the October 23, 2026 statement issued through Senator Panfilo Lacson’s office. It describes proposals under consideration, rather than an enacted replacement program.
The previous amnesty and the 2026 BIR clarification
Republic Act No. 11956 extended the previous estate-tax-amnesty period until June 14, 2025 and covered qualifying estates of persons who died on or before May 31, 2022. The BIR subsequently referred to June 16, 2025, as the operative deadline. Those dates are historical and should not be advertised as a current invitation to apply. Republic Act No. 11956.
BIR Revenue Memorandum Circular No. 33-2026 clarified that failure to submit proof of estate settlement by that deadline does not invalidate an amnesty application, although the proof remains necessary for the eCAR. It also addresses approved installment arrangements and undeclared properties. This clarification should not be read as reopening the application period for everyone. Anyone who previously applied should have the return, payment records, and remaining requirements reviewed. BIR RMC 33-2026 official digest.
What the Senate was considering
At the October 23 hearing, Lacson’s office reported consideration of multiple estate-tax measures and a House proposal to extend the earlier amnesty. His Senate Bill No. 1889 instead proposes a new amnesty covering estates of persons who died on or before December 31, 2025, at 6 percent of the net estate. That proposed coverage is not an existing entitlement. Senate Bill 1889 proposal and explanatory statement.
The hearing raised concerns about proof of death, documentary delays, and payment deadlines. The same statement says Senate President Sherwin Gatchalian generally supports amnesty but questioned why taxpayers still struggle to pay after repeated opportunities, including whether the 6 percent rate is too expensive. It would therefore be inaccurate to describe his position simply as opposition to any new amnesty. October 23 hearing statement.
The practical advice is to prepare the documents now and have the present liability assessed. Do not assume that a proposed deadline, coverage date, rate, or waiver will survive the legislative process. Before relying on new relief, verify the enacted law, its effectivity, and the applicable BIR implementation. Estate tax amnesty must also be distinguished from local real-property-tax relief.
Step 6: Complete registration and the agreed turnover
Signing the documents and paying the taxes are not the final steps. Submit the proper instruments, BIR clearances, title documents, publication evidence, local tax documents, and other applicable requirements to the Registry of Deeds. Coordinate the local transfer-tax and registration deadlines rather than leaving them until the end.
Follow through on the resulting title and updated tax declaration. Separately document possession, keys, occupants, unpaid charges, and release of the purchase-price balance. A successful registration does not physically remove an occupant or resolve a boundary or access dispute.
A hypothetical case study involving an overseas heir
Assume a widower dies without a will, leaving a house and lot that he exclusively owned. His wife died earlier, her estate has already been properly dealt with, and records establish that his three adult children are his only heirs. Assume there are no outstanding debts. Two children live in Metro Manila; the third lives abroad.
The children agree to sell. They first verify the title and supporting records. The overseas child executes an appropriate SPA through the applicable consular or foreign-notarization route. The family and buyer obtain advice on using a combined settlement with sale or separate instruments, arrange publication and tax compliance, and agree in writing how any funds advanced for taxes will be protected. Registration and turnover follow once the requirements are met.
Change one fact and the solution may change. A disputed heir, an unresolved earlier estate, a minor, a will, or a defective SPA may prevent this straightforward route.
A buyer’s checklist before paying
Verify the title, annotations, actual possession, boundaries, access, and intended use.
Establish the deceased owner’s interest and identify every person whose participation or authority is needed.
Check the settlement route and independently verify the identities, signatures, and representative’s powers.
Obtain a written estimate and allocation of taxes and expenses, with safeguards for any advance payment.
Set clear document, registration, payment, and turnover milestones, including what happens if a condition fails.
Verify the buyer’s legal eligibility to acquire the property. Being a relative does not, by itself, make a foreign buyer qualified to own Philippine land.
Do not rely on a notarized SPA merely because someone says everyone signed it. If a supposed signatory has died or authority has changed, the transaction must be reviewed before it proceeds.
Frequently asked questions (FAQs)
Must the heirs get a new title before signing a sale?
Not in every case. A legally appropriate settlement with sale can combine the documentation. The estate and sale requirements still have to be satisfied before the buyer can complete registration.
Can one heir sell the entire property?
One heir’s signature ordinarily cannot bind all co-heirs without authority. Selling an undivided hereditary interest is a different transaction from selling the entire property; it can raise partition and redemption issues that need separate advice.
What if one heir refuses to sell?
The other heirs should not sign for that person without authority. Consider negotiation, partition, or the appropriate court remedy rather than misrepresenting consent.
How long does the process take?
There is no reliable universal timetable. Missing records, multiple estates, overseas execution, disputes, tax issues, and registration requirements can materially affect completion. Obtain a case-specific work plan.
Before you put the property on the market
The first useful step is to establish the estate’s legal and documentary position. Know the heirs, identify the proper settlement route, and work out the taxes and closing arrangements. A buyer should be able to see how the transaction will reach a valid, registrable transfer.
Do not let the process drift. Every deferred heir signature, missing record, and unpaid tax is a problem that grows while the family waits.
If you need help settling an estate or evaluating a proposed sale of inherited property, book a consultation with Realttorney®. Bring the available title, death, and civil registry records, tax declarations, and any settlement or amnesty documents already filed.
This article provides general information on Philippine estate settlement and property transactions. The appropriate documents, taxes, authority, and procedures depend on the entire estate and the circumstances of the parties.
Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is a Chartered Trust and Estate Planning (CTEP®) professional who is committed to educating Filipinos about the value and importance of having an estate plan in their lives.
