This is a guest post from Braulio Giron Jr. of Lamudi Philippines
The process of selling real estate is not always cut and dry, especially when the property being sold remains under the name of a deceased owner.
Yet, it continues to occur. Many real properties remain titled to a deceased parent, grandparent, or next of kin. This often occurs when an estate consists of solitary property that the heirs use and/or maintain together, and don’t feel the need to divide and transfer in an official capacity.
The non-transfers eventually prove to be cumbersome, particularly when the heirs finally wish to sell the property or receive their rightful share of an estate. Conventional thinking would suggest settling ownership through judicial proceedings, but the lengthier process can actually be foregone in favor of an extra-judicial settlement of estate instead.
What is an extrajudicial settlement of estate?
“Extrajudicial” means “outside of court”; hence, an extrajudicial settlement of estate means heirs do not need go to court to partition the properties left by a deceased decedent.
It is settling an estate by drafting a contract where the properties are divided among the heirs as they see fit. Enumerated in the contract are the properties left by the deceased, which is collectively recognized as the “estate.”
What are the requirements of an extrajudicial settlement of estate?
An extrajudicial settlement of estate is only possible if the decedent had left no will. In the event that there is one, extrajudicial settlement is only applicable to the properties not addressed in the will. The decedent’s estate must also not have any existing debts. Should there, these must first be satisfactorily paid, with the remainder being what is subject to division among heirs.
Speaking of heirs…
When heirs are not able to reach an agreement on the division of the properties, they are relegated to having to filing a standard action for partition instead.
All heirs must also be of legal age. Should one be a minor, he or she must be duly represented by judicial or legal representative.
Solitary heirs may adjudicate the entire estate to him or herself by means of an affidavit. Called an “Affidavit of Self Adjudication,” this is filed in the Register of Deeds of the locale where the decedent resided.
A group of heirs, on the other hand, must reach an agreement and subsequently divide the estate among themselves by way of a “Deed of Extrajudicial Settlement of Estate and Adjudication of Estate.” This must be signed by all heirs, notarized before a Notary Public, and contain the following information:
- The decedent left no will and no debt
- Each heir’s relationship to the decedent
- That they are the decedent’s only surviving heirs
- An inventory with individual descriptions of the decedent’s properties, both real and personal, that the heirs have agreed to divide among themselves
- The exact manner which the properties are to be divided
The heirs then secure a bond from a reputable bonding company recognized by the Register of Deeds, and file it simultaneously with the registration of the notarized “Deed of Extrajudicial Settlement and Adjudication of Estate.”
Upon successful completion of notarized extrajudicial settlement of estate, legal owners can readily put their real estate properties up for sale with minimal difficulties, whether it be featuring it on a real estate listings website, having it attached to a particular broker, or transferring it to its eventual buyer.
About the author
Braulio Giron Jr. is a Content Writer for Lamudi, the Philippines’ largest and fastest growing online real estate platform. Braulio also writes for the blog The Pinoy Fighter, which publishes latest news about the local mixed martial arts scene.
My father inhereted property from his parents. He passed away without leaving a will. Now my father married twice. In the first family he had three children. And in his second wife he had three children also.
Hi Ann,
Thanks for sharing. That is really a very complicated situation. Hope you guys will sort it out.
Hi Anne,
My sincerest condolence.
With or without a will, you can transfer/settle the estate of your late father. For a more detailed discussion of the estate settlement, you can email me at [email protected]
Thank you for the valuable Information, we needed it at this time. Our property is in the name of both our parents but my father just died a year ago, and we are making a decision to sell the only property we have; of course, with the permission of our mother.
So, do we really need this Extrajudicial settlement even though mother is still alive?
Thanks for that valuable information. Father died a year ago, while Mom is still alive. The property is in their names, so that leaves my mother, my siblings and me as the survivors/heirs.
Do we really have to execute this ESE even when one of the owner is still alive?
We will appreciate it if you would advice us on this.
God the Father bless!
Hi Teresa,
Just a disclaimer: I am not a lawyer and I might be giving the wrong advice. Please seek the advice of a lawyer. In your case I think, since your mother is still alive technically she owns the property now. “Mana” usually can only be given to heirs once the owner passes. Thereby your mother is the owner and I believe she has the sole power to decide what to do with the property. Unless there are issues that might affect how the law views the ownership pof the property that will include what is the property regime when you parents were married(that is Conjugal partnership of gains, Absolute Community, or would it be with Pre-nuptial agreements), if your father has other heirs(could be your half sibling, former wife, etc.), and many other issues that would questions your mothers role as the survivng administrator of the property/owner.
Not sure if this help but in case better asks a lawyer to enlighten you on this. If you intend to divide it among of you and as the article mention, you can go to ESE as long as the requirements are met.
Hope this helps Teresa.
How about in cases of motor vehicles left by a deceased person? Is the process still the same?
my father buy a parcel of land which not yet divided yet and no extra judicial partition, but the one who sell their share on my father thier name what included on my mother title. upon buying those share both parties execute and secure deed of sale. my question is thus buying those share of my father was legal?
Hi Hermogenes,
The best advise on your issue is to seek legal help from an attorney/lawyer. The way it looks, there are issues that needs clarity since what was sold is their share.
Hope this helps.
My father died leaving a piece of property that is still to be divided among us siblings.
Since the property had space for improvement I invested by building several pads for rent.
Question: My siblings are demanding a share of the income of the pads, is this allowed by law?
Hi Roland,
First of all I am not a lawyer and my opinion will be my personal view in relation to the post I wrote.
The fact that you mentioned that you and your siblings have not agreed to divide the property out of court automatically says that you have no right to do or take over even the space available for improvement. Personally, you over step in doing such. You should have consulted them and have agreed on sharing any profit from any improvement that may result into a profit. You might argue ” ako na nga naginvest at wala nga silang contribution” remember the property where the improvement you made sits is also theirs. That is their contribution… if you have just consulted them about it first before building something on it might have made things clearer and easier. Now as to legality again you need to consult a lawyer so that you can talk this out with our siblings.
That is why this post is called Extrajudicial meaning out of court because settling disputes on properties without a will is to costly and too tedious. The court allows such if the siblings or the heirs agree on dividing it.
I hope this helps Roland.
On June 28, 2017 we signed an Extra Judicial Partition. I have contacted a Geodetic Engineer to divide the property.
Question: Do I get to
choose the area where I have built pads? Or who has the right over the selection?
Hi Roland,
Apologies for the delayed response. What have you agreed upon? Where you build the pads should be in your agreement. If it is not part then you can’t unless they agree to it once you brought it up to them. I believe that is the purpose of the EJP, to have all heirs agree so that there will be no need to go to court to say who owns or who has right over the other. If it was not part of your agreement, then no one has right to just put up something. After measuring the lot better ask them all again and layout your plan and there have them agree to it otherwise there is no EJP. You all have to go to court and argue who has rights over the other.
Hope this helps Roland.
Thank you so much🙂!
I’m so enlightened..