Living in today’s current perpetually busy lifestyle can make some of us consider our residential arrangements. And for some of us, this is the perfect reason for finally investing on a residence that is in proximity to our workplaces, but at a more affordable price range compared to a residential housing—complete with the house and lot.
This is where condominium salesmen who are pre-selling condo units should make their warm salutations and introductions to you. But it seems like you have hit quite a bit of a snag: you may have been contemplating buying a new condominium unit but are unsure of the logistics that go with it. Well, putting all things aside, perhaps the most imperative thing you should consider when you are buying a condo is the most pivotal piece of it all: the contract. However, for those of us who have little to no background in the study of law, most of what we can see is colored in legal jargon and may give us quite a difficulty in dissecting the real meaning of clauses and sub-clauses. If this seems to be your predicament, well then read on as this article simplifies the contents of a contract and would expound on its anatomy. Although wise and much recommended, it would be still too early and impractical to enlist the services of an attorney when you are still glossing over the details of a contract so having said that, give yourself a brief background and read on below.
CONTRACT TO SELL
This is the formal agreement between you the home buyer and the seller in written form. Once signed, this paper would signify that both parties agree with all the contents written in the contract along with all the terms and conditions which would include but is not limited to the selling price, the payment schedule, and other expenses.
This legal document is executed when one is buying real estate in the Philippines. The broker or the developer issues this contract after the homebuyer has successfully paid the deposit and has agreed to pay the remaining balance to the seller through agreed financing terms. This is the standard protocol for issuing real estate contracts in the Philippine. Note that as a homebuyer, you can demand the contract to sell before signing a home financing agreement with a lender such as PAG-IBIG and the like (Some banks would require you to present a contract to sell to have your home loan processed). It is imperative that you are in possession of this legal document before you make your monthly mortgages. Seeing as this is one of the most expensive purchases you are going to make in your life, you need a security blanket to which you can refer to shall anything go awry.
Having the process of your home buying properly documented makes you less at risk of getting scammed and would ensure that the terms of the contract are met as legal penalties will ensue should there be a failure to keep in faith with the terms and conditions of the contract.
ANATOMY OF A CONTRACT TO SELL
Whenever you purchase property, they are all entitled as “Contract to Sell.”
This marks the date where the terms of the contract are already fully operative and applicable. Unless explicitly stated in the contract, the effective date is when both parties have signed the contract.
This section fully discloses the details of the property being sold to you and includes the conditions should you want to make any future upgrades and modifications to the original condominium unit.
This section discusses how the property will be paid as agreed by the parties in good faith. Payment terms, miscellaneous costs, schedule of payment and other pecuniary obligations are included here.
This section basically enlists the obligations of both the seller and buyer to avoid rendering the contract null and void. In essence, this is where it is explicitly stated that your responsibility as a buyer is to make sure you do not default on your scheduled payments until the balance has been fully paid. The seller, on the other hand, has to make sure that he has the legal right to sell and transfer the property to you without any restrictions apart from full payment.
Though reading various articles about condominium contract comprehension can never be commensurate to years of study in law school neither is it equal to acquiring the services of an attorney it would, at least, give you a brief idea of what to expect should you push through your condominium purchase. However, it is highly recommended that you avail of a legal counsel’s assistance by the time you are ready to ink the contract to sell.