Oral sale

Dear Atty. Joji,

I verbally agreed to purchase a parcel of land from a relative. We did not immediately execute a written Deed of Sale because we trusted each other. I paid the agreed purchase price, and the seller allowed me to take possession of the property. I have since made improvements on the land. The seller is now claiming that there was never a valid sale because our agreement was not in writing. Is a sale of land automatically invalid if there is no written contract?

Cairo

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Dear Cairo,

A common misconception is that an oral sale involving real property is automatically void. The Civil Code, however, makes an important distinction between the validity of a contract and its enforceability under the Statute of Frauds.

Under Article 1403 of the Civil Code, an agreement for the sale of real property or an interest therein is generally required to be in writing to be enforceable. However, the Statute of Frauds applies principally to executory contracts, or agreements whose essential obligations have yet to be performed.

Further, in Benedicto Batara Ocampo and Daisy Garcia-Ocampo v. Noblesa Batara-Sapad and Ernesto C. Batara, 2 April 2025, the Supreme Court (SC) has ruled that a land sale made through a verbal, unwritten agreement can be considered valid and binding — as long as it has been partly or fully carried out.

Thus, when the buyer has already paid all or part of the purchase price and has been placed in possession of the property pursuant to the agreement, these acts may constitute partial performance that takes the transaction outside the operation of the Statute of Frauds. Actual performance by the parties may itself provide reliable evidence that an agreement existed, thereby reducing the danger of fraud that the requirement of a written instrument was intended to prevent. This does not mean, however, that every person who claims to have verbally purchased land automatically becomes its owner. The alleged buyer must still prove the existence and terms of the agreement through competent evidence. Moreover, the absence of a proper written instrument may create additional problems concerning registration and the rights of third persons.

Therefore, while reducing a sale of real property into writing remains extremely important, the absence of a written Deed of Sale does not necessarily mean that the agreement was void from the beginning. Where the oral agreement has already been partially or completely performed, the Statute of Frauds generally cannot be invoked simply to disregard the transaction.

Hope this helps.

Atty. Joji Alonso