Due Diligence !

Today I met with my client who owned a property that a well known franchise in interested to lease.  I haven't checked any documents nor seen the place however, because of the relationship i have with my client, i was given a favored authority to lease the property.  So we met and discussed the terms and conditions of the lease.  As we progressed with the conversation, documents started being showed by the administrator of the owner and just a few notes i had to advise both owner and interested lessee :

1) The Title has an annotation of a previous lease which lasted for 15 years which is still in the title and hasn't been cancelled ... this has to be cancelled

2) The Title has an annotation transferring the Title from my clients individual name to his Corporation sometime 2002 ... where is the Certificate Authorizing Registration 

3) The Tax Declaration on the Land but no Tax Declaration on the Improvement  ... this will be an issue if it's not existing as back taxes for the improvements will be assessed by the Assessor's Office, this would be a sizeable amount as the lease lasted for 15 years  ...  as stipulated in the contract, the lessee will pay for any improvement on the existing structure and the real estate tax on the land will be for the Owner's account.

4) The lessee prefers to lease the property with the existing structure ... if they lease the property as is, they would need to renovate, to renovate would mean getting a renovation permit, a renovation permit would then need a tax declaration on the improvement which doesn't exist ( this is an assumption for now as my liason will check with the assessor's office tomorrow ) .... assuming there is no  tax delclaration, then back taxes need to be addressed ... how then did the prior tenant deal with their taxes as they were supposed to pay for the improvements on the structure ... in addition, how did the previous tenant go about BIR's tax mapping which is done yearly.

5) If there is no Tax Declaration on the improvement and there is an annotation on the Title that a lease did occur for 15 years on the structure ... then that has to be corrected.

These issues lead to several other factors that need to be resolved before a clear lease is finalized which is required by this international franchise and from my angle as a professional licensed broker, i too am very particular in having a transaction that is clear of any liens and encumbrances, all angles must be smooth and covered to avoid any unpleasant surprises in the future.  Just sharing some thoughts that went through as i was reviewing the documents of my client who owned the property during and after the discussion with the interested lessee  ...  

Being a Licensed Real Estate Broker in the Philippines requires so much perception, knowledge and experience, Thanks to All networks who I continue to learn from and the CPDs that is required from All of us.  But of course, there is nothing like learning from experience by others and personal ones !

A Great Day to All ....

Visit www.robertgsarmiento.org for blogs, news, case studies and property listings which you may find informative.

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Finally, should you have a property for SALE or LEASE, let me know if our office could be of assistance.

Thank you.

robert



Robert G. Sarmiento Properties



Professional Affiliation :



Philippine Association of Real Estate Boards



Member, City of Taguig Real Estate Board 2016, 2017



Real Estate Broker’s Association of the Philippines 2000 - 2015



President, Greenhills Chapter 2008, 2009



Philippine Association of Real Estate Brokers



San Juan Mandaluyong Chapter 1998, 1999



PRC # 6569



PRC Lecturer’s License # 0294



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+ 632 5536051 ( trunkline )



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Email : roberts@surfshop.net.ph



Website : www.robertgsarmiento.com



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Website: http://philippinetownhouse.wordpress.com

 

 

robert
Robert G. Sarmiento Properties

Professional Affiliation :

Philippine Association of Real Estate Boards

Member, City of Taguig Real Estate Board 2016, 2017

Real Estate Broker’s Association of the Philippines

President, Greenhills Chapter 2008, 2009

Philippine Association of Real Estate Boards 2000-2015

San Juan Mandaluyong Chapter 1998, 1999

PRC # 6569

Lecturer’s License # 0294

02 5148481 ( direct line )

+ 632 5536051 ( trunkline )

+ 632 4781316 ( telefax )

+ 632 8561365 ( line 3 )

+ 632 8041701 ( line 4 )

+ 63 917 5364829 ( globe )

Email : roberts@surfshop.net.ph

Website : 
www.robertgsarmiento.com

Website: http://condosphil.wordpress.com

Website: www.philippinecommercialproperties.com

Website: http://philippinewarehouses.wordpress.com

Website: http://philippineoffices.wordpress.com

Website: http://philippinetownhouse.wordpress.com
 

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