Dear Atty. Shalie,
My husband and I purchased a house and lot from our friends, Tony and Linda (not their real names), and executed a deed of sale which we were not able to register in the Registry of Deeds. The property was mortgaged to a bank, with Tony and Linda as borrowers. It was part of our agreement that, after paying a lump sum, as a downpayment, we would assume the payments of the monthly amortization to the bank, until the loan was paid in full.
We have been paying the amortizations for two years, and have established our residence in the property, when Tony suddenly died. The property, which was covered by mortgage redemption insurance, was considered paid in full. The original title was then released by the bank to Linda, who is now asking us to pay more than what was agreed upon, thus, increasing the contract price, based on the current market value. She also said that if we do not agree, she would just sell the property to another buyer. Can Linda ask us to pay more than what we agreed upon and validly resell the property to another?
The sale between you and your husband (as buyers) and Tony and Linda (as sellers), may already be considered valid, one between the parties. The complication, in this case, is the mortgage of the property with the bank acknowledging only the borrowers, Tony and Linda, thereby allowing Linda to secure the release of the original title upon the death of Tony. While Linda, has physical possession of the said title, she must be bound by the said contract of sale between you, despite the fact that you have not fully completed your obligations as buyers. While she could ask you for a higher price, tantamount to amending the terms of the contract, it is within your right to refuse and invoke the original agreement.
To protect your rights and interests in the property, you should be able to register an adverse claim, by virtue of the deed of sale. Even if Linda is able to resell the property, the one who buys from a registered owner is bound by the liens and encumbrances annotated thereon, and may take all the risks and consequent losses. In cases of double sale of real properties, as what may have transpired in your narration, the person who will be considered as the owner of the real property will be based on: 1. The first person to register the sale in good faith; 2. The first to possess the property, in good faith, and 3. The buyer in good faith who presents the oldest title. In the event that you (as first possessor and first buyer), have not been the first to register your right, under the law, you may still be able to present proof that you have a better right to own the property.
Atty. Shalie Lazatin-Obinque
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