Best Posts in Thread: should i use a damme for land and 50 year lease?

You should be very careful about making out to be having fun with this. He may not be able to afford an attorney to fight a case against a foreigner but he can most certainly afford a hitman from the mountains.

 

A foreigner cannot purchase land in the Philippines. On the other hand there are ways for a foreigner to exert control of land.

The leasing of the property for 25 + 25 years is a more realistic scenario. Here the foreigner would lease the property from a Philippine citizen. An irrevocable SPA could be drafted to cover the interests of the lessee (tenant) where they have the ability to represent the owner on issues relating to the use of the land during the lease. For example, the lessee (tenant) would be able to bring a case evicting a squatter. This should work as long as any action aligns with the interests of the owner and the lease.

The lease would protect the foreigner (lessee/tenant) from the Filipino owner. The SPA would protect the foreigner (lessee/tenant) from everyone else. (Squatters, etc.)

The foreigner would NOT have the right to sell the property they did not own and keep the proceeds. (This would be a crime against the owner.)

Below is a reference as the the irrevocability of a SPA:
An agency, however, cannot be revoked in any of the following instances: 1) if a bilateral contract depends upon it;

The lease would be the bilateral contract that would depend on the SPA.

In the below reference, the SPA would not be irrevocable because the friend was not the lessee (tenant). The lease contract did not depend on the SPA.
https://www.manilatimes.net/instances-power-attorney-cant-revoked/137683/

In this way the foreigner could live out their life (50 years) on the property. (Assuming they do not get shot.) Then the Filipina owner gets to have it. Or the children if you put it in their names.

Things get a bit more complicated if they are living together and the relationship becomes troubled. Who throws who out? During the time they were living together they were both tenants on the property. So who should the court favor? The foreigner lessee/tenant over the Filipina owner/tenant? The lease should be written to address this. Many relationships may not survive this discussion.

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There are other more complicated options:

Not all corporations in the Philippines have to be majority owned by Philippine citizens. Only corporations that own land or engage in specific portions of the economy have to be majority owned (60%) by Philippine citizens.

In considering these other options please realize they all involve a Philippine citizen owning the property or at least 60% of the corporation or trust that owns the property. There are opportunities to adjust who exerts control.

Below is a link to an opinion from the Philippines Securities and Exchange Commission regarding the ownership of a corporation. This opinion relates to the ownership requirements of an airline corporation in the Philippines. An airline is a public utility and therefore under the constitution falls under similar ownership requirements as land.

In this case, the corporation is 40% owned by foreigners. (30% “foreigner father”, 10% “foreigner friend”). But 51% of the corporation is controlled by foreigners because as legal guardian of his Filipina daughter the “foreigner father” is able to exert control over her shares too.

These legal concepts can be extended through the use of irrevocable trusts.

In my opinion, this scenario is way too complicated for a residence. If you feel the need to protect your assets, for a residence, consider placing ownership in the name of the children and create a lease between you and the children. This may also skip estate taxes. On the other hand your financial situation may be such that you can take the hit. In this case just let her have it.

Here is the link: (@Rye83 will like this one. It is a real mind twister.)
https://www.sec.gov.ph/wp-content/uploads/2015/11/Opinion-No.-12-13.pdf

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Often the administrative and management issues are moot compared to facts “on the ground”.

@IggyPop pointed out the fact that hit men were less costly than attorneys. This would surely make the legal administration moot.

@furriner failed to follow the unwritten “one island away from family” rule. Not only was the property not one island away it sounds like it was in the same Barangay as the disgruntled family member. The disgruntled family member was close enough to notice that banana trees had been cut down. Being in the same Barangay causes additional issues as there may be relationships with the family members and the Barangay leadership:
"Worse, the Barangay captain did not know how to deal with the court order and such and scheduled a formal lupong hearing. At that point we were on the hook for trespass, possibly criminal trespass and destruction of property, he wasn’t sure!"

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So, @yogavnture already purchased the land for 1.6 million pesos and is considering to “put her family to live on the land at my cost”.

This is not something I would do. There are two challenges. First being how the extended family influences your spouse during the time that you are living there. The extend family influences add a lot of challenges to the relationship (understated).
Second, what happens if the relationship sours? Are you going to live there amongst a clan that is unhappy with you? What happens when you show up with your new girlfriend to live in "your" home?

 

As it appears you have already bought the property, to start your recovery from this situation, you should contact a lawyer (recommended in this forum - certainly not recommended by the family) and seek to get your 1.6m registered as a loan against the property. I am highlighting that you should do that - not your girlfriend. If she bucks at agreeing to making this a registered loan - you will certainly have your answer for the future relationship and for any future expenditure.

As has been repeated many times here, we foreigners can not own property (other than condominiums) in the Philippines but certainly, having already provided the funds you can seek to partially recover from the situation and then in the longer term seek a more controllable future.

Best of luck.

 

no sir,
don't do it like that,
2 months a year and you are willing to loose 1.6m ? (always remember every investment i a loosed one to start...)
either way you are rich or don't care about money, 1.6m is small for us but for your 2 months-love-a-year is very big,
don't sign any papers on her name, check many lawyers, make a corporation with 1 of your close friend and 3 locals that don't know each other. this is the safest way and if your 2 month a year love react violently to my last suggestion you have your answer .

 

This may have been pointed out in a later post but just be mindful under the Family Code spouses cannot lease to one another. I leased the house and land 25 + 25 from my live in filipina back in 2003 but when we eventually married the lease became null and void.

 

And would you believe that people send their entire life savings, sometimes hundreds of thousands of USD, to a person who told them online they would receive back millions? ANYTHING is possible.