SPA to Sell Property Philippines: 7 Essential Rules

An SPA to sell property in the Philippines can authorize an agent to sell real property on behalf of the owner, but the authority must be in writing and clearly stated.

Under the Civil Code, selling real property requires specific authority. A general power to administer or manage property is ordinarily insufficient when the agent is being authorized to sell or convey ownership.

SPA to Sell Property Philippines: What Must It Contain?

Under Article 1874 of the Civil Code, when land or an interest in land is sold through an agent, the agent’s authority must be in writing. Otherwise, the sale is void.

Article 1878 likewise requires special authority for contracts that transfer ownership of immovable property.

The SPA should therefore expressly authorize the agent to sell, transfer, or convey the specific property. It is advisable to identify the property’s title number, location, area, and any conditions or limitations on the agent’s authority.

Can a General Power of Attorney Authorize a Sale?

The title of the document is not controlling.

Even a document called a “General Power of Attorney” may be sufficient if it contains a clear and specific authority to sell the property. Conversely, a document labeled “Special Power of Attorney” will not necessarily authorize a sale if its language only permits administration or management.

In Bautista-Spille v. Nicorp Management and Development Corporation G.R. No. 214057, October 19, 2015, the Supreme Court emphasized that an agent’s authority to sell real property must be clear and unmistakable.

Similarly, Bravo-Guerrero v. Bravo (G.R. No. 152658. July 29, 2005 demonstrates that the substance of the authority, rather than merely the document’s title, is controlling.

What Should an SPA to Sell Property Contain?

For an SPA to sell property in the Philippines, the authority should clearly identify:

1. The principal or property owner;
2. The authorized agent;
3. The specific property to be sold;
4. The agent’s authority to sell, transfer, or convey the property;
5. Any price, conditions, or limitations imposed by the principal; and
6. The authority to execute the necessary Deed of Absolute Sale and related documents, when intended.

The more specific the authority, the less room there is for disputes concerning the agent’s powers.

Should a Buyer Verify the SPA?

Yes. A buyer should not rely solely on the existence of an SPA.

The buyer should verify the principal’s ownership, the SPA’s authenticity, the scope of the agent’s authority, whether the SPA remains effective, and whether it has been revoked.

In Sarili v. Lagrosa G.R. No. 193517, January 15, 2014 the Supreme Court highlighted the importance of diligence when dealing with an agent who is not the registered owner of the property.

What Happens If the Agent Has No Valid Authority?

If an agent sells real property without the required written authority, the transaction may be void or otherwise legally ineffective, depending on the circumstances and the applicable provisions of law.

The Supreme Court in Pineda v. Court of Appeals G.R. No. 127094 February 6, 2002 addressed the consequences of an unauthorized sale and the importance of complying with the Civil Code’s requirements concerning agency and authority.

Bottom Line

An SPA can be used to sell property in the Philippines, but it must contain a clear, written, and specific authority to sell.

A general power to administer property is ordinarily insufficient. Before purchasing property through an agent, the buyer should carefully examine the SPA, the property’s title, the principal’s ownership, and whether the agent’s authority remains valid.

Because a defective authority can create serious problems concerning the validity of the sale and transfer of ownership, both the seller and buyer should have the SPA and proposed Deed of Sale reviewed by a Philippine lawyer before signing.

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This article was prepared by Romualdez Law Offices, a Philippine law firm providing legal services in criminal law, family law, corporate law, civil, property, and dispute resolution.