Subject 15.1 Due Diligence & Role of The Office of The Assessor (Tax Mapping / Tax Declaration)

Subject 15.
1 DUE DILIGENCE & ROLE OF THE OFFICE OF THE ASSESSOR ( TAX

MAPPING / TAX DECLARATION)
DUE DILIGENCE
Definition
• A proper and careful research and analysis in preparation for a transaction;

• Before buying, it is sometimes called “caveat emptor” or let the buyer beware.
STEPS IN CONDUCTING DUE DILIGENCE
1. Determine the kind and purpose of transaction

• Property acquisition
• Rent or lease
• Right-of-way
2. Site Inspection
• Property location
• Property condition
• Street and neighbourhood scene
• Notable developments in the area
• Accessibility
3. Secure necessary documents
• Title – Register of Deeds
• Other legal documents – Register of Deeds
• Tax maps and tax declaration – Assessor’s office
• Tax Assessment – Treasurer’s Office
• Cadastral Maps – Bureau of Land Management
• Subdivision Plans – Land Registration Authority
4. Verify ownership
• Request for RDs
• Check if the owner is still alive
5. Legal information (zoning, land use, restrictions, etc.)
6. Site physical information (survey and soil tests)
7. Site financial (appraisal, taxes, etc.)
8. Verify easements and ROWs
9. Repair quotation
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HOW TO DETECT FAKE TITLES
1. Compare the original copy in the custody of the Register of Deeds concerned and
with the owner’s duplicate copy in the custody of the title holder, to find out if the
latter is an exact replica of the former. A genuine owner’s duplicate of a certificate of
title should be a carbon original copy of the title. If both are carbon originals, as in
the case of the Original Certificate of title (OCT(, they should have been together,
hence coincide in every way. In case of Transfer Certificate of Title (TCT), the
originals and the owner’s duplicate therefore, should in all respect be similar.
2. Check the initials and signatures appearing on the original and owner’s duplicate
copies as well as the manner in which the entries, and the technical descriptions
were typewritten. All the foregoing details must be the same on both the original
and owner’s duplicate thereof. Any variance therefore is a ground for suspicion.
3. Find out if serial number of the judicial form used in accomplishing the title
conforms with the serial number of the judicial form forwarded by the DAR, LMB or
by the DENR, PENRO, respectively, that appear to have issued the title to the
particular Registry of Deeds.
4. Check if the Registry of Deeds/the DENR Secretary/RED/PENRO/DAR Official

who purportedly signed the title is the real Registry of Deeds, DENR Secretary,
RED/PENRO or DAR Official of the province or city where the land is situated at
the time of the purported signing.
In case of titles based on patents, verification should be made with the LMB,
DENR-Secretary/RED/PENRO and DAR Office concerned.
In case of titles based on patents, check if the date when the patent was signed by
the DENR, PENRO/RED, Secretary or DAR Official corresponds with his term of
office.
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5. Find out whether or not the document that supports the transfer or conveyance of
the property is authentic or whether the title is supported with a Deed.
6. Check the date of revision of the Judicial Form used and see whether the certificate
of title was issued after the revision date.
7. Trace if the title purportedly transferred from one Registry to another actually came
from and was actually issued by the registry of origin.
8. Test by wetting, whether the red seal on the owner’s duplicate and the red printed
words “OWNER’S DUPLICATE” blot and stain when wet.
9. In case of titles based on patents, check if the areas covered thereby do not exceed
the maximum areas provided by law and existing regulation.
10. Check if the land covered by the patent falls within the territorial jurisdiction of the
DENT and DAR Field Office issuing the same. If the municipality\y where the land
covered by the patent is situated not under the jurisdiction of the issuing DENR or
DAR Field Office, the patent is null and void.
11. Check whether the area covered by the patent is within the limit prescribed for
different modes of disposition under the Constitution and other existing laws.
12. A tracing-back of the title in the Office of the Register of Deeds (ROD) is the best
recourse.
13. Ascertain if it is a reconstituted title (indicated with the prefix “RT”, or with a set of
figures enclosed in parenthesis, and a set outside thereof).
14. Ascertain if there are blanks not filled-up or are indicated with the initials N.A.
meaning NOT AVAILABLE on the historical data of the title.
15. Check whether the title duly certified true and correct by the Chief, Surveys
Division, or any authorized official.
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16. Check whether the Judicial Form used is the correct Judicial Form.
• For Homestead Patent, the Judicial Form is Form No. 67,
• Free Patent Application (FPA) – Form No. 54,
• Misc. Sales Application (MSA) – Form No. 167,
• Sales Application (SA) – Form No. 11
17. In cases of special Patents, check whether the form issued is in accordance with the
prescribed form and containing all the material facts especially the enabling law.
18. Check the last two digits of title number and page number. They should be the
same.
A. TITLE VERIFICATION
1. Documents needed to be verified in selling/buying real estate.

a. Owner’s copy of the Title
b. Certified True Copy of the title (Registry of Deed copy)
c. Owner’s copy of Tax Declaration
d. Certified true copy of the Tax Declaration (Assessor’s Office)
e. Sectional Tax Map (Assessor’s office)
f. Latest copies of the original Official Receipt of Real Property Tax - Owner
g. Tax Assessment - Treasurer’s Office
2. Indications that the title is fake or illegally issued (Torres case)

a. Inconsistent information between owner’s copy and RD’s copy
Ex. Serial number (SN), name of owner, survey no., signatory, tampered
b. No security marks in owner’s copy
c. Supporting docs of title transfer are not authentic or w/o Deed
d. Inconsistent with that issued by DAR
e. Trace-back shows inconsistencies
f. Pending cases or adverse claim or double / triple issuance
3. Seller’s Due Diligence/ documents needed

a. Buyer’s profile ( employment, source of income, address,
b. Buyer’s professional references
c. Buyer’s credit report ( bankable?, credit card delinquent, )
d. Amount of downpayment the buyer is willing to pay ( show money!!
e. Background Investigation on criminal record
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f. Identification Cards
B. LOT VERIFICATION
1. Documents needed in selling /buying real estate

a. Owner’s copy of the title
b. Tax maps -- Assessor’s Office
c. Survey plan or Lot plan - LMB
d. Cadastral maps -- LMB
2. Info needed to be verified during the Lot inspection

a. Property condition
b. Property location vs tax map (lot no. & block no.)
c. Street and neighbourhood scene vs cadastral map/subdivision map
d. Notable developments in the area
e. Accessibility vs subd. Or cadastral map
f. Actual use (commercial, residential, agricultural..) vs Tax Decl. Info
g. Verify easements and Right of Way (ROW)
3. Other consideration in buying real estate
a. Legal information (zoning, land use, restrictions, etc.)
b. Site Financial (appraisal, taxes, etc. )
c. Site Physical info ( survey and soil tests)
d. Repair Quotes
ROLE OF THE ASSESSOR
A. BASIS OF EXISTENCE of the OFFICE OF THE ASSESSOR:

Local Governement Code – RA 7160
Real Property Tax Code – PD 464, May 20, 1974,
B. FUNCTIONS of the Assessor

Take charge of the discovery, classification, appraisal, assessment and valuation
of all real properties within his territorial jurisdiction which shall be used as the
basis for taxation
C. DUTIES of the Assessor

1. Preparation, Installation and maintenance of a system of tax mapping
2. Records Management
3. Preparation of a schedule of fair market values of the different classes of real
property within his territory (Assessment & Tax Declaration)
D. Tax Map or Property Identification Map, single most important tool in real property
assessment process, is defined as
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1. Graphic representation of a portion of land drawn to scale on standard size
material
2. Having property lines and boundaries delineated showing all parcels of real
property identifying each separate real property ownership by a unique
number
E. Objectives of Tax Mapping

1. Establish complete inventory of all real properties
2. Provide a permanent link between real properties and office records
3. Identifying ownership of every piece of real property
4. Account for the total land Area of provinces, cities or municipalities
F. 3 PHASES OF TAX MAPPING AND TYPES OF MAP
1. PRE-FIELD OPERATIONS
• Use of Base maps, Engineering controlled land surveys
• Preparation of Field Appraisal and Assessment Sheet (FAAS)
• Assign Property Identification Number
• Prepare Pre-Tax map Control Roll
2. Field Operations
• Standard Tax map
3. Post Field Operations Documents
• Complete FAAS, Property Record Form, Property Ownership Card
• Tax Map Control Roll
• Tax Declaration
• Real Property Tax order of Payment
G. Assessment/Appraisal Approaches
1. Cost Approach (Reproduction Cost New RCN or Cost of Replacement (COR)
2. Market Data Approach
3. Income Approach
H. Assessment Levels
1. On Lands:
Class Assessment levels

Residential 20%
Agricultural 40%
Commercial 50%
Industrial 50%
Mineral 50%
Timberland 20%
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2. On Buildings and other structures
a. Residential
Fair Market Value Assessment Level

Over not Over
P175k 0%
P175k P300k 10%
300k 500k 20%
500k 750k 25%
750k 1,000k 30%
1,000k 2,000k 35%
2,000k 5,000k 40%
5,000k 10,000k 50%
10,000k 60%
3. Special Classes: all Lands, buildings, machineries, other improvements
Actual Use Assessment Level

Cultural 15%
Scientific 15%
Hospital 15%
Local Water Districts 10%
Gov’t owned or controlled
Corp. Engaged in supply of
Electric power 10%
I. Classification of Real Property (RACIMTS)

1. Residential – R
2. Agricultural –A
3. Commercial - C
4. Industrial -- I
5. Mineral -- M
6. Timberland/Forest – T
Special
7. Hospital - SH
8. Cultural - SC
9. Scientific – SS
10. Local Water District - SW
11. Corp. Engaged in supply of electric power – SG
J. Sub-Classification – from highest value, most developed to least value, least developed
1. Commercial: First Class, Second Class, Third Class, Fourth Class
2. Residential: First, Second, Third, Fourth, Fifth, Residential Subdivisions
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3. Industrial: First Class, Second class, Third Class
K. Rules in Assessment of Real Property, Lands

1. Appraised at the current and FMV, prepared by the Assessor in the SFMV
2. Assessed based on the predominant use of the building
L. Before a new Tax Declaration, the owner should submit Sworn Statement of the True
and Fair Market Value of Real Properties, as required under Section 202/203 of RA
no. 7160
M. Tax Declaration shall be prepared for every real property unit when
1. A general revision of assessments is conducted
2. Property is newly discovered or declared for the first time
3. There is change in area
4. Change in classification
5. Change in ownership
6. Physical change in the property
7. Change in location, in cases of machinery
N. Number of TD copies to be prepared

1. Original -- Assessor’s office (within MMA and cities) and Duplicate –owner
2. Original – Prov’l Assessor, Duplicate – owner, triplicate – Mun. Assessor outside
MMA
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Subject 15.

1 DUE DILIGENCE & ROLE OF THE OFFICE OF THE ASSESSOR ( TAX

• A proper and careful research and analysis in preparation for a transaction;

STEPS IN CONDUCTING DUE DILIGENCE

1. Determine the kind and purpose of transaction

4. Check if the Registry of Deeds/the DENR Secretary/RED/PENRO/DAR Official

1. Documents needed to be verified in selling/buying real estate.

2. Indications that the title is fake or illegally issued (Torres case)

3. Seller’s Due Diligence/ documents needed

1. Documents needed in selling /buying real estate

2. Info needed to be verified during the Lot inspection

ROLE OF THE ASSESSOR

A. BASIS OF EXISTENCE of the OFFICE OF THE ASSESSOR:

B. FUNCTIONS of the Assessor

C. DUTIES of the Assessor

E. Objectives of Tax Mapping

F. 3 PHASES OF TAX MAPPING AND TYPES OF MAP

Class Assessment levels

Fair Market Value Assessment Level

3. Special Classes: all Lands, buildings, machineries, other improvements

Actual Use Assessment Level

I. Classification of Real Property (RACIMTS)

K. Rules in Assessment of Real Property, Lands

N. Number of TD copies to be prepared

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