Marcos signs Real Property Valuation and Assessment Reform Act

President Marcos on Thursday signed a law he had proposed when he was still a senator to improve the country’s tax collection by streamlining and digitalizing what he called an “outdated” real property valuation and assessment system.

Marcos expressed optimism that Republic Act No. 12001, or Real Property Valuation and Assessment Reform Act (RPVara), will “change our real estate landscape” and raise bureaucratic efficiency through transparency, digitalization and innovation.

“This new law is borne out of necessity and the realization that there is a need to enhance the country’s tax collection system so we can generate revenues, generate jobs and investments all over the country. No longer will we rely on the outdated valuation system,” he said in a speech in Malacañang.

Multiple benefits

Marcos said the law “streamlines and enhances the real property valuation and assessment system through a uniform real property appraisal that is compliant with international standards.”

“It also adopts the prevailing market value as the single real property valuation base for the assessment of real property tax. Furthermore, the law complements our efforts to modernize the services in our local government units (LGUs) through the creation of a Real Property Information System—a comprehensive, digitalized real property tax administration,” he added.

RA 12001 will also “instill and encourage long-term and consistent tax compliance by providing a two-year amnesty on interests and penalties for taxpayers with unpaid real property tax” as a strategy toward efficient tax collection.

Standardizing valuations, plugging tax leaks, and ensuring transparency are among the biggest expected benefits of the newly enacted RPVara, according to industry stakeholders.

In a statement, the Chamber of Real Estate and Builders’ Associations Inc. (Creba) said the new law would hopefully “introduce the needed reforms in real property valuation and assessment.”

“It is a timely opportunity to overhaul the current system of Schedule of Market Values (SMV) formulation which has, for many years, been prone to compromise and corruption and wanting of direct participation by the private sector and professionals with the requisite technical know-how and training,” Creba said.

For real estate investment management firm Colliers Philippines, it will provide “much-needed transparency” in a volatile industry on a post pandemic rebound.

Paul Vincent Ramirez, senior director and head of valuation at Colliers, said that while the law would likely raise acquisition and disposal costs, as well as the real property taxes of all property players across the spectrum, from developers to investors and end-users, “we see its implementation as providing much-needed transparency to the current opacity of the Philippine real estate market.”

IRR up for scrutiny

“The game-changing details will be in the law’s yet-to-be finalized and published implementing rules and regulations (IRR) which all property players need to prudently scrutinize,” he added.

Ovialand Inc. president Pammy Olivares-Vital welcomed the passage of the RPVara, saying it would lead to a balanced property assessment across areas and regions.

“We have seen progressive local city assessors adjust their recent methods in assessing which was beneficial for the municipality or city. Standardizing this method, I believe, will benefit areas that are not yet practicing this,” Olivares-Vital said.

Sharon Saclolo, associate director and head of Research at Leechiu Property Consultants Inc., added that the RPVara would improve the ease of doing business and enhance the country’s appeal to investors.

In July 2013, then Senator Marcos introduced Senate Bill No. 415 to revamp what was considered a flawed land valuation system.

High cost to gov’t

He then noted that with 23 national government agencies, almost 1,300 LGUs and private appraisers performing valuation using different methods and standards, the property sector had been riddled with inconsistent real property values.

As a result, many government-led projects and investments were delayed due to compensation issues and lengthy court litigations, particularly on right-of-way issues.“Such condition has crippled the government, both at the local and the national levels, to fully tap the potential of the land sector, and resulted in foregone revenues from national and local real property-related taxes,” Marcos said.

He also noted that the valuations used for governmental purposes were outdated.

A later version of Marcos’ bill noted that as of 2018, only 38.8 percent of LGUs had updated SMVs, with 93 noncompliant cities and 46 provinces, while only 50.4 percent of Revenue District Offices (RDOs) had updated zonal values, with 65 RDOs still in the process of revising.

Single system for all

According to a briefer from the Bureau of Local Government Finance that was released prior to the signing of the law, the RPVara will provide a single system of valuation to be used by all LGUs and other government agencies for taxation and other purposes.

The new law also transferred the approval of the SMVs from the local government council to the finance secretary, hence insulating the technical function of valuation by local assessors from the political function of setting assessment levels and tax rates by LGUs.

It also mandated the creation of an electronic and comprehensive Real Property Information System which will serve as a database of all real property transactions with the Registry of Deeds, Bureau of Internal Revenue, notaries public, and other agencies.

2-year amnesty program

The new law also provides for a real property tax amnesty lasting two years and will cover penalties, surcharges, and interests from all unpaid real property taxes.

Delinquent owners may settle their dues through a one-time payment or installment payment.

The amnesty does not cover delinquent real properties already disposed of through a public auction, real properties with tax delinquencies being paid under a compromise agreement, and those that have pending court cases on tax delinquencies.

For the first year of effectivity of the approved SMVs, increases in real property taxes will be capped at 6 percent of the real property taxes assessed on such properties prior to the effectivity of the law.

Source: Inquirer

Defaulting buyer's rights in the first two years - Maceda Law

While the developer may cancel your contract in case you fail to pay your installments, they may only do so under the strict provisions of Republic Act (RA) 6552, otherwise known as the "Realty Installment Buyer Act" or the "Maceda Law." This law was created to protect buyers of real estate on an installment basis against onerous and oppressive conditions. More specifically, Section 4 of the said law provides that:

"Section 4. In case where less than two years of installments were paid, the seller shall give the buyer a grace period of not less than sixty days from the date the installment became due.

"If the buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel the contract after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act."

Corollary thereto, in Priscilla Zafra Orbe vs. Filinvest Land, Inc., GR 208185, Sept. 6, 2017, through Associate Justice Marvic M.V.F. Leonen, the Supreme Court discussed the following:

"For cancellations under Section 4 to be valid, three (3) requisites must concur. First, the buyer must have been given a 60-day grace period but failed to utilize it. Second, the seller must have sent a notice of cancellation or demand for rescission by notarial act. And third, the cancellation shall take effect only after 30 days of the buyer's receipt of the notice of cancellation:

"Essentially, the said provision provides for three (3) requisites before the seller may actually cancel the subject contract: first, the seller shall give the buyer a 60-day grace period to be reckoned from the date the installment became due; second, the seller must give the buyer a notice of cancellation/demand for rescission by notarial act if the buyer fails to pay the installments due at the expiration of the said grace period; and third, the seller may actually cancel the contract only after thirty (30) days from the buyer's receipt of the said notice of cancellation/demand for rescission by notarial act."

In the instance, since you have paid installments for less than two years, for the seller to cancel your contract validly, you must first be given a 60-day grace period from the date the installment became due. If you fail to utilize this period to update your payment, the seller should send a notice of cancellation or demand for rescission by notarial act. Likewise, the seller may only cancel your contract only after 30 days from your receipt of the said notice/demand. In other words, the developer-seller cannot immediately cancel your contract unless it complies with the foregoing requisites. These are your rights under the law.

Source: Manila Times

Effects of legal separation

1. Do we have divorce in the Philippines?

Divorce may be classified into two — Absolute and Relative. In our jurisdiction, only relative divorce or legal separation is allowed, which involves nothing more than the bed-and-board separation of the spouses (Lapuz Sy vs. Eufemio, G.R. No. L-30977, January 31, 1972). A decree of legal separation shall entitle the spouses to live separately from each other, without severing their marriage bonds (Article 62, Family Code).

2. What are the grounds for Legal Separation?

The following are the grounds for legal separation which may or may not exist at the time of the marriage ceremony:

(1) Repeated physical violence or grossly abusive conduct directed against the petitioner, a common child, or a child of the petitioner; 

(2) Physical violence or moral pressure to compel the petitioner to change religious or political affiliation;

(3) Attempt of respondent to corrupt or induce the petitioner, a common child, or a child of the petitioner, to engage in prostitution, or connivance in such corruption or inducement;

(4) Final judgment sentencing the respondent to imprisonment of more than six years, even if pardoned;

(5) Drug addiction or habitual alcoholism of the respondent;

(6) Lesbianism or homosexuality of the respondent;

(7) Contracting by the respondent of a subsequent bigamous marriage, whether in the Philippines or abroad;

(8) Sexual infidelity or perversion;

(9) Attempt by the respondent against the life of the petitioner; or

(10) Abandonment of petitioner by respondent without justifiable cause for more than one year (Article 55, Family Code).

3. Within what period must a Petition for Legal Separation be filed?

As a general rule, an action for legal separation shall be filed within five years from the time of the occurrence of the cause (Article 57, Family Code).

4. If I file an action for Legal Separation, will I still be entitled to receive support from my spouse during the pendency of the case?

Yes, you shall be entitled to receive support from your spouse, which shall be in accordance with adequate provisions of the written agreement with your spouse. In the absence of an agreement, the Court will provide for support during the pendency of the case (Article 49 in relation to Article 62, Family Code).

5. Can I remarry after my Legal Separation is granted?

No, legal separation is merely the separation of spouses as to their bed and board. While it permits the partial suspension of marital relations, the marriage bond still exists as the marital bonds are not severed (Lapuz Sy vs. Eufemio, G.R. No. L-30977, January 31, 1972).

6. Who can have custody of the child once a petition for legal separation is granted?

The custody of the minor children shall be awarded to the innocent spouse, subject to the choice of the child over seven (7) years of age, unless the parent chosen is unfit. No child under seven years of age shall be separated from the mother unless the court finds compelling reasons to order otherwise (Article 63 in relation to Article 213, Family Code of the Philippines). Similarly, Section 6 of Rule 99 of the Rules of Court permits a child over ten (10) years of age to choose which parent he prefers to live with, unless the parent chosen is unfit to take care of the child by reason of moral depravity, habitual drunkenness, incapacity or poverty.  The choice of a child over seven (7) years of age and over ten (10) years of age shall be considered in custody disputes only between married parents because they are, pursuant to Article 211 of the Family Code, accorded joint parental authority over the persons of their common children (Masbate vs. Relucio, G.R. No. 235498, 30 July 2018).

7. Can I file for Legal Separation for being punched by my spouse every time we argue?

Yes, repeated physical violence is one of the provided grounds for legal separation (Article 55, Family Code). 

8. Can I file for Legal Separation after catching my spouse for the first time having sexual intercourse with another person?

Yes, sexual infidelity or perversion is a ground for filing a petition for legal separation (Article 55[8], Family Code). Adultery, punishable under Article 333 of the Revised Penal Code, is not a continuing crime; it is consummated at every moment of carnal knowledge. Hence, every sexual act is a ground for legal separation (People vs. Zapata, G.R. No. L-3047, 16 May 1951). 

9. What are the instances wherein the court could deny a petition for legal separation?

The court shall deny the petition for legal separation on any of the following grounds:

(1) The aggrieved party has condoned the offense or act complained of;

(2) The aggrieved party has consented to the commission of the offense or act complained of;

(3) There is connivance between the parties  in committing the offense or act constituting the ground for legal separation;

(4) Both parties have given ground for legal separation

(5) There is collusion between the parties to obtain the decree of legal separation; or 

(6) The action is barred by prescription (Article 56, Family Code).

10. Can I revoke the designation of my guilty spouse as my beneficiary in my insurance policy upon the grant of my petition for legal separation?

After the issuance of the Decree of Legal Separation, the innocent spouse may revoke the designation of the offending spouse as a beneficiary in any insurance policy even if such designation be stipulated as irrevocable. The revocation or change shall take effect upon written notification to the insurer (Section 22, A.M. No. 02-11-11-SC).

11. Can I still recover property donated to my guilty spouse upon the grant of our petition for legal separation?

Yes, within five (5) years from the date the decree of legal separation has become final, the innocent spouse may file a petition under oath in the same proceeding for legal separation to revoke the donations he/she made in favor of the offending spouse.  If such donations involve property, such revocations should be recorded in the Register of Deeds in the places where the properties are located. (Article 64, Family Code; Section 22, A.M. No. 02-11-11-SC)

12. Do I have to use my husband’s surname after the decree for legal separation?

The Civil Code of the Philippines, Article 372, mandates that when the legal separation has been granted, the wife shall continue using her name and surname employed before the legal separation. (Laperal vs. Republic, G.R. No. L-18008, 30 October 1962). You may still use of your husband’s surname even after you are legally separated, if the same was your customary surname prior to issuance of the decree.

13. What will be the effect of our reconciliation to the legal separation proceeding? 

If the legal separation is still pending, it shall be terminated at whatever stage it is. If the spouses reconciled after the issuance of the decree of legal separation, the final decree of legal separation shall be set aside, but the separation of property and forfeiture of any of the share of the guilty spouse already effected shall subsist, unless the spouses agree to revive their former property regime (Article 66, Family Code). 

Source: Manila Times