Ways to avoid being a victim of property scams

Government agencies such as the Pag-Ibig Fund, the Housing and Land Use Regulatory Board (HLURB) and the Register of Deeds (RD) have adopted strict measures to ferret out unscrupulous land developers to avoid scams.

The 3 government institutions buy housing units to developers for pre-approved clients. Some developers keep this money and then sold these same units to another client (mostly OFW) who cannot see and evaluate the property themselves : One house Two owners, developers earn double ?????

The biggest lesson to be learned from this grand scam is that buyers themselves must exercise due diligence in  acquiring properties, and not leave the background checking entirely on the government.

Here are 12 prudent measures that every prospective buyer should take to avoid falling victim to property frauds.

1 Check if the particular development you are eyeing has a License to Sell with the HLURB. A developer may undertake multiple projects, but each project must have a distinct HLURB License to Sell. Ask the seller or broker/agent of the developer for a copy of this License to Sell for the particular project. You can also verify this in the HLURB website (www.hlurb.gov.ph).

2 Verify if the broker/agent is registered with the HLURB, and make sure that the property being eyed has not been sold to other buyers.

3 Visit the project site. One way of checking if the the stated address of the project corresponds to the location of the project site is to Google Map the address.

4 Standards of the structure. Check if the materials used to build the residential unit conforms with the development standards and approved construction specifications submitted to HLURB. Also check which party would have to shoulder the cost of the water and electric meters, the subdivision perimeter fence, etc. and who would eventually operate the subdivision/condominium building’s water system.

5 Do not sign blank Contract To Sell forms. “Overseas Filipinos are vulnerable to this method. Avoid signing any blank forms or housing contracts. Read thoroughly all the contents of the CTS, especially the terms and conditions in fine print. Secure a copy of the CTS and all other documents that you signed.

Make sure also that the CTS would be registered by the owner/developer to the RD.

6 Consult a trusted lawyer to guide you in the legal jargon and paperwork before you sign any contract.

7 Buy or invest from reputable developers who have had a long and solid history of delivering quality properties on time. “if it’s a start-up developer, make sure the company is known in the community.”

8 If the Pag-Ibig Fund is the window of financing of the developer, buyers can check if the property they wish to acquire has already been mortgaged with the Fund.

Before developers can be approved for Pag-Ibig financing, the agency verifies documents of developers insofar as the project is concerned. Accrediting of development projects through the Pag-Ibig is pursuant to the agency’s loan processes only.

9 Find time to verify with the RD if the title to the property you intend to buy has encumbrances.

10 If the project has a License to Sell, you may already enter into a contract to sell with the owner/developer. Things which must be checked before signing are:

• The date of completion of the project as indicated in the License to Sell;

• If the property has been mortgaged from the HLURB;

• The facilities and amenities represented in the advertisement flyers/brochures are in accordance with the approved subdivision and condominium plan on file with the HLURB.

11 Get the services of an organic seller or licensed broker to guide you in the process of buying a property, especially for preselling projects. Before you complete the purchase, make sure you transact directly at the developer’s head office.

12 Transact directly to the owner/developer or the marketing agent authorized by said owner/developer, and ask for official receipts on all payments, and keep these in your file.

Excerpts from: http://business.inquirer.net/173716/ways-to-avoid-being-a-victim-of-property-scams

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Posted : July 8, 2014