Due Diligence - Contract to Sell

CAVEAT :  

A couple of days ago, i saw a post  thru a viber group and got me thinking on three matters all dealing with a Contract to Sell used by a Developer on a pre-selling project.  Our main business comes from the secondary market, both lease and sale so i really don't have any idea nor familiarity to these kind of transactions.  I've always believed that contracts should be always be fair to both parties concerned.  In short, a Win Win situation is ideal !  

Anyway, I was amazed at a certain section of this particular Contract to Sell, check on Section 8.1 below :

For your information, most Contract to Sell used by Developers specifies that Buyer's obligation starts upon " Turnover of Unit ", the unusual clause in Section 8.1 is why should the Buyer pay ( TAXES in particular ) for something that is normally for the Developer's Account ?  It's pretty much like a turnover of a property whether it be a house, warehouse, building, etc.   The Taxes and other related expenses after signing the Deed of Absolute Sale are for the Buyer's account.  I wonder if other Developer's Contract to Sell has this particular clause which definitely adds to the purchase cost of the property being bought ?

 

Now, my concerns are : 

1)  Isn't there a standard CONTRACT TO SELL for Developers particulary on pre-selling projects that come from a Governing Body, in this case, i assume that it should be the Housing and Land Use Regulatory Board ( HLURB ).  Certain stardards / checklist  have to be in place to protect both parties. 

2)  Of course, it's the Buyer's look out to read the fine prints of the Contract to Sell, can't blame the Developer.  That's why we emphasize the word, CAVEAT !

3) Finally, when all is said and done, one can assess the quality, visions and integrity of a Developer.  I don't think this is the kind of Developer investors / buyers should deal with.  I can see paying for the Capital Gains Tax upon a sale and other legitimate tax involved but just that thought of passing the Expenses a Developer ought to pay, this Developer passes it on the the Buyer's account. Unethical, don't you think so ?  What kind market are they after ?   Is this their bread and butter business or something they are testing waters on ? Or, is that really how they do business ?

The market will continue to be active and more areas will get opportunities, CAVEAT on the Developer you are dealing with.  Check their track record. The personalities involved.  How are their projects maintained ?  Who manages the Condominium ?  What capital appreciation has the property given to the Owner ?  Is there a demand for a resale unit ?  

With the market moving in all sectors thus creating more and more LEASE / SALE contracts for both SELLER / LANDLORD or BUYER / LESSEE, please take the time to read the "fine lines" to prevent unpleasant surprises. 

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Thank you.

robert

Robert G. Sarmiento Properties

Professional Affiliation :

Philippine Association of Real Estate Boards

Member, City of Taguig Real Estate Board 2016 - 2018

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

President, Greenhills Chapter 2008, 2009

Philippine Association of Real Estate Boards

San Juan Mandaluyong Chapter 1998 -1999

PRC # 6569

PRC Lecturer’s License # 0294

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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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