Property Study Guide: Sample Exam Questions
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The Law Library carries a number of resources that test your knowledge of property law. This guide provides a listing of resources of practice essay exams as well as multiple choice questions. There are also links to online multiple choice questions as well as resources to help with law school exams. The multiple choice questions in property law can be a great way to track your progress. Review the description of each resource for more details.
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Assign is the act of transferring rights , property , or other benefits to another party (the assignee ) from the party who holds such benefits under contract (the assignor). This concept is used in both contract and property law .
Under contract law, when one party assigns a contract , the assignment represents both: (1) an assignment of rights; and (2) a delegation of duties .
- For example, if A contracts with B to teach B guitar for $50, A can assign this contract to C.
- Here, A has both: (1) assigned A’s rights under the contract to the $50; and (2) delegated A’s duty to teach guitar, to C.
- In this example, A is both the “assignor” and the “delegee” who delegates the duties to another (C), C is known as the “ obligor ” who must perform the obligations to the assignee , and B is the assignee who is owed duties and is liable to the obligor.
Assigning of Rights/Duties Under Contract Law
There are a few notable rules regarding assignments under contract law.
First, if an individual has not yet secured the contract to perform duties to another, they cannot assign their future right to an assignee.
- That is, if A has not yet contracted with B to teach B guitar, A cannot assign their rights to C.
Second, rights cannot be assigned when they materially change the obligor’s duty and rights.
Third, the obligor can sue the assignee directly if the assignee does not pay them.
- Following the previous example, this means that C ( obligor ) can sue B ( assignee ) if C teaches guitar to B, but B does not pay C $50 in return.
Delegation of Duties
If the promised performance requires a rare genius or skill, then the delegee cannot delegate it to the obligor. It can only be delegated if the promised performance is more commonplace. Further, an obligee can sue if the assignee does not perform. However, the delegee is secondarily liable unless there has been an express release of the delegee.
- Meaning if B does want C to teach guitar but C refuses to, then B can sue C. If C still refuses to perform, then B can compel A to fulfill the duties under secondary liability.
Lastly, a related concept is novation , which is when a new obligor substitutes and releases an old obligor. If novation occurs, then the original obligor’s duties are wiped out. Novation requires an original obligee’s consent .
Under property law , assignment typically arises in landlord-tenant situations.
- For example, A might be renting from landlord B but wants another party (C) to take over the property.
- In this scenario, A might choose between assigning and subleasing the property to C.
- If assigning , A would give C the entire balance of the term , with no reversion to anyone; whereas if subleasing , A would give C the property for a limited period of the remaining term.
- Under assignment, C would have privity of estate with the landlord while under a sublease, C would not.
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Assignment is a legal definition that refers to the transfer of rights, property, or other benefits between two parties. The party allocating the rights is known as the “assignor”, while the one receiving them is called the “assignee”. The other original party to the contract is known as the “ obligor ”.
A burden, duty, or detriment cannot be transferred as an assignment without the agreement of the assignee . Furthermore, the assignment can be carried out as a gift, or it may be paid for with a contractual consideration .
Keep reading to learn how this important legal term is used both in contract and property law and to see relevant examples.
- Assignment Examples
A common example of assignment within property law can be seen in rental agreements between landlords and tenants. For example, a tenant may be renting from a landlord but wants another party to take over the property . In this scenario, the tenant may be able to choose between assigning the lease to a new tenant or subleasing it.
If assigning it, the new tenant will be given the entire balance of the term, with no reversion to anyone else being possible. In other words, the new tenant would have a legal relationship with the landlord. On the other hand, if subleasing the property, the new tenant would be given a limited term and no legal responsibility towards the property owner, only towards the original tenant.
Another example of assignment can be seen within contract law . Let’s say that a school hires a piano teacher for a monthly employment contract with a salary of $2000 per month. As long as there is consent from all parties, the teacher could assign their contract to another qualified piano instructor.
This would be an assignment both of the piano teacher’s rights to receive $2000 per month, and a delegation of their duty to teach piano lessons. This illustrates the fact that under contract law, assignment always includes a transfer of both rights and duties between the parties. If a breach of contract is made by either party, for example for defective performance, then the new teacher or the school can sue each other accordingly.
- Legal Requirements for Assignment
For an assignment to be legally valid, it must meet certain requirements . If these are not met, a trial court can determine that the transfer of rights did not occur. The legal requirements for assignment are as follows:
- All parties must consent and be legally capable to carry out the assignment.
- The objects, rights, or benefits being transferred must be legal.
- The assignment is not against public policy or illegal.
- Some type of consideration is included if necessary.
- The contract in question must already be in place and doesn’t prohibit assignment.
- If a duty is being transferred, and it requires a rare genius or skill, then it cannot be delegated.
- The assignment doesn’t significantly change the expected outcome of a contract.
- Assignment Steps
To successfully assign a contract, certain steps must be followed to ensure the process is legally valid. The necessary assignment steps are listed below:
- Ensuring there is no anti-assignment clause in the contract.
- Executing the assignment by transferring the obligations and rights to a third party.
- Notifying the obligor of the transfer, which in turn relieves the assignor of any liability.
- Avoiding Assignment
In certain situations, one of the two parties may not want to allow their counterpart to assign the contract. This can be prevented by setting anti-assignment clauses in the original contract. An example of this is making it necessary for prior written consent to be attained from the other parties before the assignment is approved. Nevertheless, an anti-assignment clause cannot be included in an assignment that was issued or ordered by a court.
- Assignment vs. Novation
Novation occurs when a party would like to transfer both the benefits and burden of a contract to another party. This is similar to assignment in the sense that the benefits are transferred, but in this case, the burden is also passed on. When novation is finalized, the original contract is deleted and a new one is created, in which a third party becomes responsible for all the obligations and rights of the original contract.
- Assignment vs. Delegation
Although delegation and assignment are similar in purpose, they are two different concepts. Delegation refers to transferring the obligation to a third party without an assignment contract . While in assignment an entire contract and its rights and benefits can be passed on, in delegation only a particular contractual task or activity is transferred.
Let’s look at an example . Lisa is a homeowner that wants to hire Michael with an independent contractor agreement to remodel her garage. He plans to do all the work himself, but he’s not a painter, so he wants to delegate the painting work to his friend Valentina.
In this example, the contract is between Lisa, the obligor, and Michael, the delegator. Valentina would then be known as a delegatee, she doesn’t assume responsibility for the contract nor does she receive the contractual benefits, which in this case would be monetary compensation. However, Michael may have a separate agreement with Valentina to pay her in return for her work.
It’s also important to note that some duties are so specific in nature that it’s not possible to delegate them. In addition, if a party wants to avoid delegation , it’s recommended to add a clause to prevent the other party from delegating their duties.
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deed of assignment vs deed of donation
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Contract of Sale vs. Deed of Donation Which should you choose
Are you transferring property to a loved one? Or is a loved one transferring property to you? What is the best way to transfer property between relatives? In the Philippines, it's typical for parents to transfer properties to their children during their lifetime... either it's a gift as an advanced inheritance. Sometimes they do this so that the properties are already transferred before they pass away.
Our question comes from Ronald P. and he asks, Attorney,
My parents are old and they want to transfer their house and lot to me so that I won't have any more problems when they die. What's the best way for them to transfer the property to me? I heard from my friends that we can choose between a sale or a donation. Which do you think is better?
If you're in a similar position as Ronald? Stick around as we answer his question.
This video is brought to you by "Transferring Land in the Philippines" a workshop that teaches Filipinos the basic modes of transferring land and real properties in the Philippines. It provides the pros and cons of each mode, as well as the steps and procedures so that you eliminate your confusion and successfully navigate the whole process. Transfer with confidence. A transfer without fixers. Go to info.legalguide.ph to learn more.
Welcome to Legal Guide Philippines, where we simplify the law to help you make better choices. I'm Atty. Ramon Ramirez and I are with my partner, Atty. Erwin Zagala. So today we're talking about transferring properties to loved ones. Specifically, what's the best way to transfer property from one person to another, especially if it's to or from a loved one. Now, Atty. Ramon, we've seen a lot of these situations happening where parents will transfer their properties to their kids during their lifetime so that when they die, the kids no longer need to pay taxes. When they do that, what is the best way to transfer the property?
Do we document it as a sale or as a donation? Should we execute a deed of absolute sale or a DOAS, or a deed of donation? Okay, so you're correct Atty. Erwin, this happens a lot. This transfer is usually done by parents as some sort of "tax" planning strategy.
So, why? So that their children no longer need to bear the burden of a tax that we call, right now, we call it the estate tax. which is a tax that needs to be paid when a parent dies, and before the properties can be transferred to the children. Okay, so in effect, it's some sort of "tax planning" because it's already being done by the parents.
What is a sale and what is a donation
But before we answer that question, which is better? A sale or donation? I think I'd want to tackle three things first. So you need to understand these three? Yes. So that we can understand the answer. So we can understand the answer. The first thing we want to tackle is I think it would be helpful to explain what is a sale, and what is a donation and what is the difference? Let's start with the sale.
So under, of course, for lawyers, we have to give the definition under the civil code. Okay, Atty. Ramon, read. I am the Attorney. A sale is an agreement whereby one of the parties obligates himself to deliver something to the other, who on his part, binds himself to pay, therefore for a sum of money or its equivalent. The sale is very clear.
So let's break it down. So basically it's a contract whereby one party, says, okay, I'm going to deliver something to you. Like, let's say, I'm delivering this phone. Delivering something to you. On your part, you also bind yourself to pay for whatever it is that I delivered to you.
I deliver the payment? Yes. A sum of money or its equivalent. So elements of a sale, basically, like any contract, there's the meeting of minds. There's a definite agreement between the parties with respect to the thing, our object. And the cost or price of the thing. Let's say you're selling it, I'm selling it for 100 pesos. That is our cost.
Of course, it's important that both of us have legal capacity. So I think we look like we're of age. So we have legal capacity. We have the ability to enter into legal affairs or contracts. Okay, the second element is we should have an object or a subject matter which is a determinate thing to be sold.
So in our case, it's the cell phone. So it's the determinate thing. We agree that this is the thing that will be the subject of the sale. And last is the Cause or Consideration. As I said, it's 100 pesos. It's a price, certain in money. Very clear. Okay. Now, what is a donation Atty? Erwin?
It's better if we read it. Under Article 725, a donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another who accepts it. It's also clear. So basically, it's an act of liberality whereby, instead of involving money, I want to, because of my liberality, I will just give you my phone. So in Tagalog, give or bestow. Yes. But you also need to accept it.
It's a requirement. Because even if you give it, what if the other party doesn't want it? I think I saw a pattern, there's two B's. What's the first B attorney, "Buy", the other one is, "Bestow" Yes. Pick between the two Bs. Okay so, the sale buys a donation is bestow. B or B. Alright, so that is the difference of a sale between the sale and donation. I hope that's clear.
Okay, so it's actually even without the legal definitions, I think it's pretty clear in our heads. B or B. All right, now and then. Okay second, the second thing I want to discuss is now, how come you can "choose your own adventure", so to speak. In terms of how to transfer something to your loved one? Usually, people say "Ah land? Which is better? Sale or Donation?"
Why was there such a big fuss between sales or donations?
Now, why did this become popular? Well, well definitely under our laws parties are definitely free to contract in whatever manner they see fit, as long as they don't violate, of course, our laws, good morals, customs, etc. they can contract. But in my experience, the reason for this "choose your own adventure" kind of thing and why it became a thing was because well before the TRAIN law, the tax rates for these two kinds of contracts, the sale, and the donation were quite different.
Ah, there is an effect to the tax Atty. Ramon. So it was kind of a tax-driven decision. So on the one hand, for a sale of property or land or whatever. Usually, this will trigger a tax called the CGT or the Capital Gains Tax Remember that, CGT. That usually just means capital gains tax. Okay, which was 6% of the fair market value or gross selling price whichever is higher.
Just remember 6% as opposed to a donation before the train law, okay? Donations at that time, it was based on graduated rates ranging from 2% to 15%, so it changes. Yes. So depending on the value of what you will donate. So depending on how much you'll donate, it becomes more expensive Yes, you cap it around 15%.
And this is for relatives only. Okay, so it is a different topic when they are not your relatives. Like for example, we are not blood relatives, Even if we are "brotha from another motha" Even in that case, we are treated as strangers.
And at that time, if I donated something to you or you donated something to me, it was a whopping 30%. Yes. It's like they don't want us to give to each other. It's like getting a penalty when you give. Anyway, so that was why it became popular, so back in the day, people, what will they do?
They'll make computations on their Excel spreadsheets and determine which is cheaper. And then on top-line -- sale, bottom line -- donation, and you'll see which one is cheaper. It's like you are pulling from memory, it looks like you've had a lot of experience computing this. And then, of course, that's what you would base. If you're a service provider, you would base your advice on that.
"Guys this is much cheaper." So Atty. Ramon, basically the main consideration before is not the type of transaction, not it's not the B or B... It was because, "How much will I pay for it?" That's why it became a big issue before --- choosing between sale or donation. Which is better? Usually made that computation. The question has finally been answered. So in many ways, it made sense to regular people to do this.
Why? Because these CGTs or capital gains tax and donor's taxes were expenses of ordinary people. People like you and me who probably work jobs work really hard for our living. Why make waste money in our minds, unnecessarily on unnecessary taxes. As supposed to be a business expense, that the business pays. While this one comes from your own pocket. That's why this became rampant and of course, add to that some experts and advisors would advise them to pick and choose the transaction.
Atty. Ramon, you've mentioned before that, when the segment started, you said, "... before the train law" Yes. And now, the TRAIN law is in operation. So my big question is, and I'm that our viewers thought about this, is this still applicable considering the train law is now applicable? Thank you for that question Atty. Erwin. And that's exactly the third thing I want to talk about.
Is this still applicable now?
So the third thing I want to talk about is, is this still applicable now? Well, the answer is no. People have been doing this for years. Obviously, the BIR knows that people do this in sale versus donation. They're not stupid. The government knows this. No, they're not idiots. So they knew that this was being practiced. So they made important changes to our tax laws very recently through the train law.
Now with the new law, with the train law, this practice is no longer as prevalent. Why? Because now the rates are, remember CDT, what was the rate for CDT? six percent CGT then it's based on the fair market value or gross selling price. And then the donor's tax, you have your two to fifteen percent, or sometimes thirty percent. What is it now? Now they're both six percent.
Okay, so it's a pretty big leap. So I think that was a smart thing for the government, it is now equalized. Because it was just driving people to not tell the truth. And I would like to note, it's a very fair percentage. If you noticed, it's on the lower level. Not all of it was standardized at the top. We're at the bottom. Yeah. Thank you, legislators for that. Yeah. So, in fact, the donor's tax, before, you had to make a distinction.
Is it part of the family? Or stranger? Right? Now under new law, there's no such distinction that needs to be made. So that's pretty cool. Atty Ramon, you can now give me a piece of land. It's now possible at six percent. So now when you make a comparative computation, the values of the CGT and donor's tax, should generally not be too different. Okay, so of course, each tax is computed differently, so there may be differences, but generally they're not that different.
Okay, Atty. Ramon, I now understand that they're both the same now if you're gonna look at it from a tax perspective. So going back to our original question, Atty. Ramon, what's better, sale or donation? Okay, I said a lot already. We're gonna go back to the question. Okay. Which is better? I would say that the better option between a sale or donation is the contract that you really intended.
So if you intended to sale, you should execute a document that best reflects the intent of the parties for you guys. Okay. So if the party has intended a sale, then execute a deed of sale. If the party is intended a donation, then execute a deed of donation.
Don't simulate a contract, guys, that's just lying. Don't lie, please. Don't try to trick the others or the government just to save on some pesos. That's bad. We can do better than that. If you execute a deed of sale when you really secretly intended a donation, then that would be called a simulated sale.
And there are legal implications to that. Actually, a simulated sale may be invalidated, or it can be argued to be invalidated because there's really no consideration. For example, hey let's just execute this, let's execute this document as if it's a sale so that we can save on tax, but actually, it's a donation. So in truth, there's really one of the elements of a sale is a consideration.
Now, if there's no consideration, then it could be invalidated. In fact, during the time of BIR Commissioner Jacinto-Henares, it was really something that she wanted to crack down on. So she made it a point to really investigate the capacity to pay off so-called buyers. Okay, so if ever they find that there's no capacity, they assess additional taxes that need to be paid.
That's very useful Atty. Ramon, do you have any other tips for our viewers and listeners? Yes. Okay. So I hope I answered your question. So, sale or donation, the answer is, what's the truth? Go with that. You can never go wrong. It has the same tax rate. Okay. As a bonus tip.
Even this whole concept of transferring land to your kids to avoid paying so much estate taxes, later on, may no longer be such a good idea. Why? Because before, similar to the donor's tax, the estate tax rates would again be based on a graduated scale and the maximum, which would be around twenty percent. Okay. So it's a pretty big chunk that goes to taxes.
So and again, that was before. That's why a lot of people avoided it by "I'm gonna transfer it to my child so that there's no problem" but now under the train law, that is also six percent as well. So it's all the same level now: donation, sale, and estate are six percent. Same rate. Thank you. Thank you, legislators. Okay. And also another reason why I'd say probably doing that kind of tax planning is no longer as good as an idea as it was before is because we will be letting go of deductions.
Because the deductions have changed. Yes. It is much more beneficial now for the heirs. Yeah. So as opposed to CGT also and donor's tax where there's no deduction, the estate tax has deductions. Okay, so it might not be anymore that good of an idea. Again, you want to consult your lawyer on that. Or if you want a very quick intro on estate laws, you might want to consider info.legalguide.ph/estate to learn more. So that's it Atty. Ramon, thank you so much for all of those points.
And to recap guys, we've gone through a lot. First off, we talked about what is a sale and what is a donation. In its simplest terms, the two B's: "buy and bestow", choose which applies. Now, number two is we talked about why was there such a big fuss between sale or donation? Why was it like choose your own adventure for some people? And we went through the history that the tax rate was different before. So to take advantage, people chose the mode which was more beneficial to them.
Third, we talked about does it still apply today? Apparently not with the introduction of the train law, the tax rates are all equal. And as a result, if the tax is the same, have the contract reflect what is your original intent. Yes. And finally, we had a bonus tip. Pre-transferring your properties may no longer be such a good idea. Why? The allowable deductions changed under the estate law, it may be cheaper to pay estate tax instead of transferring it while you are alive.
Now, if you want to learn more about how to transfer land in the Philippines, please go to info.legalguide.ph/land to learn more. And if you want to use to tackle your question in our show, go to legalguide.ph and click the submit topic button. Next, we would like to know what's your biggest takeaway from today's video. Write it down in the comments and let's talk about it. And if you feel we've earned a good rating, please give us a like and a subscribe. It gives us feedback that we're doing a good job and encourages us to make more videos. One last thing guys, trying to trick the government by concealing or simulating contracts just to save on a few thousand, hundreds, or even millions is very often a short-sighted strategy that can definitely bite you in the ass later on.
Many times cheating the government of its taxes by simulating contracts, or whatnot stems from merely a lack of understanding or lack of preparation and lack of planning. We can always educate ourselves, research, discuss, or even consult someone. Now, let's give our country what it's due by paying the right taxes, let's influence our leaders in government by being honest in all our dealings and transactions.
So wasn't that simple? Now go make better choices.
Cebu House Finder
Which is better: to sell or to donate the property.
If you are planning to transfer ownership of land, house-and-lot or condo unit to your loved ones or relatives, this blog is for you. You have two options: to sale or to donate. Which is the better way to transfer property between relatives? Months ago, my cousin asked me which is the better option: Deed of Sale or Deed of Donation. She bought a house-and-lot through the Pag-Ibig Housing Loan Program. She asked her sister to apply for the said loan but she's the one who was paying for everything. After full payment, the title was released under her sister's name as the owner of the said property. Now, she wanted to transfer the property to her name. Which is better, to sale or to donate?
In this blog, let us discuss about the transfer of property through the Deed of Sale and the Deed of Donation. Which is better?
I. DEFINITION OF TERMS
CONTRACT OF SALE
Article 1458 of Republic Act 386, otherwise known as the “Civil Code of the Philippines,” defines a contract of sale as follows:
Article 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.
It is added: “A contract of sale may be absolute or conditional.” (read here for full discussion)
Based on the above definition of sale, there are 3 essential elements:
Consent - when there is a meeting of minds between the seller and the buyer to transfer the property in exchange of the price.
Object - the determinate thing to be delivered.
Cause - the price certain in money or its equivalent.
The 3 essential elements must be present and none is absent. Otherwise, the Contract of Sale is void. The contracting parties must have legal capacity to enter into a contract.
DEED OF DONATION
Article 725 of the “Civil Code of the Philippines" defines a donation as follows:
Article 725. Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it
An act of donation is a legal option for a person to voluntarily transfer his/her ownership over a property to his intended recipient who in turn accepts the donated property. They key words here are "liberality", "gratuitousness" and "acceptance". Unlike in the sale, there is no monetary requirement as the only basis for the gift is donor's love to the donee or the recipient of the donated property. The donee must accept in writing (either in the same document or another document) the said donation during the lifetime of the donor. In writing because the Deed of Donation must be a public instrument (and therefore, the need for notarization) in order to be valid.
Article 749. In order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy.
II. TAXATION ON SALE AND DONATION OF PROPERTY
The primary reason why people are asking about which is better, the Deed of Sale or Deed of Donation, is the tax payment to government in the transfer of property.
Prior to the TRAIN Law, the computation of Capital Gains Tax and Donor's Tax are quite different.
For the sale of the property, the tax rate is 6% Capital Gains Tax based on Fair Market Value (FMV) or Gross Selling Price (GSP) of the property whichever is higher. For the donation of the property, the tax rate is based on the graduated Donor's Tax Rate ranging from 2% to 15% for relatives and 30% for strangers based on the value of the property.
In other words, the bigger amount of the value of the property, the bigger tax you shall pay to the government. This is, prior to the TRAIN Law, people compute and compare the tax for sale and for donation. Whichever is lower between the Capital Gains Tax and Donor's Tax, the parties agree to execute the necessary document either the Deed of Sale or the Deed of Donation.
Now, under the TRAIN Law (RA 10963), the Donor's Tax Rate is reduced to 6% of the value of the property donated (P250,000 and up). Gifts not more than P250,000 are exempted. Under TRAIN Law, uniform donor's tax rate for relatives and strangers.
What does it mean? It means that the question which is better based on the tax payments is no longer applicable. You don't compute whichever is lower in order to decide which course of action to be pursued: to sale or to donate.
III. ISSUES AND CONCERNS
TAXATION RATES ON TRANSFER OF PROPERTIES
In view of the TRAIN law, people do not need to select between sale or donation based on the concern of "how much do I need to pay?". The taxation rate on the transfer of property is now fixed at 6%. This will encourage people to be honest: either they sell the property or they donate the property. So, in the execution of Deed of Sale or Deed of Donation is now based on the intention of the contracting parties and no longer how much taxes to be paid in the transfer of properties.
SIMULATED SALE IS VOID
Prior to TRAIN Law, parents transfer property ownership to their child through a simulated sale to save on taxes. Again because the taxation rates between the Capital Gains Tax and the Donor's Tax were different then. For parties to save on taxes, they will execute the Deed of Sale instead of the Deed of Donation which is the original intention of the transfer of property. Another case of a simulated sale is when the parents execute the Deed of Sale even if the child has no financial capacity to buy the property or the money comes from the parents themselves. In this case, the Contract to Sale can be voided. Any third party can question the sale, either other sibling or the state (BIR) itself. Under Article 1345 and 1346 of the New Civil Code of the Philippines, a simulated sale is voided:
Article 1345. Simulation of a contract may be absolute or relative. The former takes place when the parties do not intend to be bound at all; the latter, when the parties conceal their true agreement.
Article 1346. An absolutely simulated or fictitious contract is void. A relative simulation, when it does not prejudice a third person and is not intended for any purpose contrary to law, morals, good customs, public order or public policy binds the parties to their real agreement.
While the 3 essential elements of the contract of sale are present, the cause or consideration can be subjected to verification of the capacity to pay of the buyer. If the buyer has no capacity to pay to buy the property, the contract of sale is void.
The Supreme Court explained the simulated sale in the case of Rebusquillo and Orosco vs. Spouses Gualvez, et al. [G.R. No. 204029, June 4, 2014] as follows:
In absolute simulation, there is a colorable contract but it has no substance as the parties have no intention to be bound by it. The main characteristic of an absolute simulation is that the apparent contract is not really desired or intended to produce legal effect or in any way alter the juridical situation of the parties. As a result, an absolutely simulated or fictitious contract is void and the parties may recover from each other what they may have given under the contract.
However, if the parties state a false cause in the contract to conceal their real agreement, the contract is relatively simulated and the parties are still bound by their real agreement. Hence, where the essential requisites of a contract are present and the simulation refers only to the content or terms of the contract, the agreement is absolutely binding and enforceable between the parties and their successors in interest.
This practice is no longer applicable under the TRAIN Law where the tax rate is fixed at 6% in both sale or donation.
ESTATE TAX PLANNING
The idea of transferring property ownership (either sale or donation) from parents to children while the parents are still alive is done as tax planning or saving on the estate taxes. Like the Donor's Tax, the Estate Tax is computed, prior to TRAIN Law, based on the graduated estate tax rates ranging from 5% to 20% as shown in the table below.
So, the contracting parties (parents and child) will compute which of the options (estate tax, sale or donation) is the lowest.
Now, under the TRAIN Law, the Estate Tax Rate is also reduced to 6% of the Value of Net Estate. It means that because the computation of the estate tax of 6% is based on the value of net estate, the tax would be smaller compared to sale or to donation.
The Standard Deductions of medical and funeral expenses, for instance, is now raised up to P5 million pesos (from up to P1 million) and the deduction for Family Home is now raised up to P10 million (from up to 1 million).
There are other issues and concerns that we can discuss on this issue, but the article is already long. I will discuss some issues in a separate article. One thing that I wish to include here the limits of donation compare to sale.
Our discussion here is for educational purposes only. Always consult your lawyer for your specific case to assess your actual case and what proper legal course of action to take.
If you are looking for a residential lot, house-and-lot, or condo unit in Cebu, please contact us at 0920 207 6284 or email [email protected] for FREE assistance.
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Deed of Assignment: Everything You Need to Know
A deed of assignment refers to a legal document that records the transfer of ownership of a real estate property from one party to another. 3 min read
Updated October 8,2020:
A deed of assignment refers to a legal document that records the transfer of ownership of a real estate property from one party to another. It states that a specific piece of property will belong to the assignee and no longer belong to the assignor starting from a specified date. In order to be valid, a deed of assignment must contain certain types of information and meet a number of requirements.
What Is an Assignment?
An assignment is similar to an outright transfer, but it is slightly different. It takes place when one of two parties who have entered into a contract decides to transfer all of his or her rights and obligations to a third party and completely remove himself or herself from the contract.
Also called the assignee, the third party effectively replaces the former contracting party and consequently assumes all of his or her rights and obligations. Unless it is stated in the original contract, both parties to the initial contract are typically required to express approval of an assignment before it can occur. When you sell a piece of property, you are making an assignment of it to the buyer through the paperwork you sign at closing.
What Is a Deed of Assignment?
A deed of assignment refers to a legal document that facilitates the legal transfer of ownership of real estate property. It is an important document that must be securely stored at all times, especially in the case of real estate.
In general, this document can be described as a document that is drafted and signed to promise or guarantee the transfer of ownership of a real estate property on a specified date. In other words, it serves as the evidence of the transfer of ownership of the property, with the stipulation that there is a certain timeframe in which actual ownership will begin.
The deed of assignment is the main document between the seller and buyer that proves ownership in favor of the seller. The party who is transferring his or her rights to the property is known as the “assignor,” while the party who is receiving the rights is called the “assignee.”
A deed of assignment is required in many different situations, the most common of which is the transfer of ownership of a property. For example, a developer of a new house has to sign a deed of assignment with a buyer, stating that the house will belong to him or her on a certain date. Nevertheless, the buyer may want to sell the house to someone else in the future, which will also require the signing of a deed of assignment.
This document is necessary because it serves as a temporary title deed in the event that the actual title deed for the house has not been issued. For every piece of property that will be sold before the issuance of a title deed, a deed of assignment will be required.
Requirements for a Deed of Assignment
In order to be legally enforceable, an absolute sale deed must provide a clear description of the property being transferred, such as its address or other information that distinguishes it from other properties. In addition, it must clearly identify the buyer and seller and state the date when the transfer will become legally effective, the purchase price, and other relevant information.
In today's real estate transactions, contracting parties usually use an ancillary real estate sale contract in an attempt to cram all the required information into a deed. Nonetheless, the information found in the contract must be referenced by the deed.
Information to Include in a Deed of Assignment
- Names of parties to the agreement
- Addresses of the parties and how they are binding on the parties' successors, friends, and other people who represent them in any capacity
- History of the property being transferred, from the time it was first acquired to the time it is about to be sold
- Agreed price of the property
- Size and description of the property
- Promises or covenants the parties will undertake to execute the deed
- Signatures of the parties
- Section for the Governors Consent or Commissioner of Oaths to sign and verify the agreement
If you need help understanding, drafting, or signing a deed of assignment, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.
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Content Approved by UpCounsel
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In real property transactions, a deed of assignment is a legal document that transfers the interest of the owner of that interest to the person to whom it is assigned, the assignee. When ownership is transferred, the deed of assignment show...
A personal representative’s deed is a deed signed by an individual who is looking after the sale of real estate on behalf of another party. The personal representative may be the executor of the estate of a deceased person or the administra...
Free property deed records are available from state offices that are in charge of maintaining such records. According to Public Records Online Searches, offices that are in charge of public records vary by name according to state.
TRANSFER OR ASSIGNMENT OF RIGHTS | THE RISKS OF BUYING AN UNTITLED ... DEED OF SALE vs. DEED OF DONATION | CAPITAL GAINS TAX, DONOR'S TAX
When they do that, what is the best way to transfer the property? Do we document it as a sale or as a donation? Should we execute a deed of
A deed of assignment refers to a legal document that records the transfer of ownership of a real estate property from one party to another.
This means the donation may be factored into the donor's estate to calculate the legitime or compulsory share of other heirs. Considerations: A
A real deed of assignment speaks about one thing: the transfer of interest and legal title on land from the owner called (The Assignor) to
The deed of assignment transfers or "assigns" the seller's rights in the property to another lender. Customer. no the property is in the philippines. img.
The Deed of Assignment is just one of the many legal documents you need to sign if you're buying or selling a property.
A Deed of Donation is a contract given as a gift to a recipient. This document is used for the transfer of a real estate or other personal properties. It's
or as a consequence of the TRUSTEE's holding on the Share in trust for the
pleAse note. › please seek specialist legal advice if there is more than one beneficiary or assignee to receive the benefit of the policy. › Any trust to which
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Home > Faculty Publications > Faculty Scholarship > 1153
The tragedy of the anticommons: property in the transition from marx to markets.
Michael Heller , Columbia Law School
Why are many storefronts in Moscow empty while street kiosks in front are full of goods? This article develops a theory of anticommons property to help explain the puzzle of empty storefronts and full kiosks. Anticommons property can be understood as the mirror image of commons property. By definition, in a commons, multiple owners are each endowed with the privilege to use a given resource, and no one has the right to exclude another. When too many owners hold such privileges of use, the resource is prone to overuse – a tragedy of the commons. Depleted fisheries and overgrazed fields are canonical examples of this familiar tragedy. In an anticommons, multiple owners are each endowed with the right to exclude others from a scarce resource, and no one has an effective privilege of use. When too many owners hold such rights of exclusion, the resource is prone to underuse – a tragedy of the anticommons. Empty Moscow storefronts are a canonical example of the tragedy of underuse. Anticommons property may appear whenever governments define new property rights in both post-socialist and developed market economies. Once an anticommons emerges, collecting rights into usable private property bundles can be brutal and slow. The difficulties of overcoming a tragedy of the anticommons suggest that policymakers should pay more attention to the content of property bundles, rather than focusing just on the clarity of rights.
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family law essays
Family law essay.
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To what extent has law reform been effective in achieving just outcomes for family members and society? Intro: Law reform has been of mixed effectiveness in achieving just outcomes for family members and society. Law reform has allowed for familial disputes to be resolved with greater ease such as divorce, however the separation of de facto families still remains an issue. Law reform has also achieved greater recognition of alternative families, however same-sex relationships have still not recieved absolute equality. Law reform has also increased awareness of domestic violence, yet it is still a prevalent issue in Australian society. Law reform has been moderately effective in achieving just outcomes for family members and society.
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Family Law on the Multistate Essay Exam: Highly Tested Topics and Tips
Family Law is regularly tested on the MEE. Here, we give you an overview of Family Law on the MEE. We will reveal some of the highly tested topics and give you tips for approaching a Family Law MEE question.
Family Law on the Multistate Essay Exam
1. first, be aware of how family law is tested.
Family Law is tested about once a year. Family Law generally is tested on its own. However, occasionally it will appear with a Conflict of Laws issue.
2. Be aware of the highly tested Family Law issues
The examiners tend to test several of the same issues in Family Law MEE questions. You can maximize your score by being aware of these highly tested issues. (We have a nice summary of these in our MEE One-Sheets if you want to see all of them and have them all in one place.)
Many commercial bar review courses spend a lot of time on topics that are not highly tested (e.g., general requirements of marriage, defenses to fault-based divorce, intra-family tort immunity, marital rape, family privacy, donor eggs, gestational agreements, etc.). As a result, some examinees spend a lot of time on topics that they are unlikely to see on the exam.
We recommend that you focus instead on the highly tested Family Law MEE topics.
Some of the highly tested Family Law Multistate Essay Exam issues include:
Child custody and support.
Child custody and child support are regularly tested on the MEE. Here are a few subtopics that have been tested:
- Custody: custody is determined by looking at the best interests of the child .
- Child support: All states employ numerical guidelines and establish a rebuttable presumption that the award that results from applying the guidelines is correct. The guidelines must be applied in all cases, regardless of the parents’ marital status. The court will look at factors like income and earnings of the parents, the number of children and their ages, and any special needs of the children.
- Modification: custody or support can be modified if there is a substantial change in circumstances.
- Rights of the biological father: Biological fathers generally have rights . However, the state may make the biological father exercise his rights within a specific time (e.g., two years).
Property division and alimony
- Marital vs. separate property: Marital property is property acquired during the marriage and is subject to division . Separate property includes (mnemonic = BIG ): property acquired b efore the marriage, an i nheritance , or a g ift to one party. Most states do not count professional degrees earned during the marriage as marital property. Separate property is generally not subject to division.
- Premarital agreement: A court will enforce a premarital agreement so long as it is voluntarily made, substantively fair , and if full disclosure of assets and obligations was made. A court will not, however, enforce a premarital agreement regarding child custody or support if it is not in the best interest of the child .
- Alimony: Alimony can be permanent , temporary , or granted in a lump sum . States consider many factors, including the parties’ financial resources and needs , marital contributions , and marital duration . Alimony awards are not final and can be modified if there has been a substantial change in circumstances .
Other Family Law issues
In Family Law MEE questions, both the Uniform Interstate Family Support Act (UIFSA) and the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA) generally are applied.
- The UIFSA governs child support. Once a child support order is registered, it may be enforced by any state. The state that originally issued a child support order has exclusive jurisdiction to modify the order if the state remains the residence of the obligee, the child, or the obligor, and at least one of the parties does not consent to the use of another forum.
- The UCCJEA governs child custody orders . This statute incorporates various tests. Under the home state test, the “home state” has exclusive jurisdiction to modify a decree. A home state is a state where the child has lived with a parent or person acting as a parent for at least six consecutive months immediately before the commencement of the child custody proceeding . A home state continues to have exclusive jurisdiction to issue a custody order for six months after a child leaves the state, so long as a parent (or person acting as a parent) still lives in the state. The significant connections test applies if a child has no home state. Under this test, a state may exercise jurisdiction based on (1) significant connections with the child and at least one parent and (2) the existence of substantial evidence relating to child custody in the forum jurisdiction.
3. Be aware of how certain Family Law topics are tested
Certain Family Law topics tend to be tested in specific ways. For example:
- Retroactive modification of child support has been tested regularly. If you remember that federal law forbids retroactive modification of child support (absent circumstances like fraud), you will answer this question correctly. The outcome has always been the same on the MEE!
- When the UCCJEA is tested , generally the Parental Kidnapping Prevention Act (PKPA) is also mentioned. The PKPA is very similar to the UCCJEA, and the result is virtually always the same. However, it does not hurt to mention that “the result would be the same under the PKPA” if you see a UCCJEA issue tested.
These are just some examples of how specific topics are tested. The best way to master these topics is to practice past MEEs!
Practice is critical if you want to master Family Law on the MEE. You will get exposed to the kinds of issues the examiners like to test as well as how they tend to be tested.
Here, we have provided you with some links to free Family Law MEE questions and NCBE point sheets. (If you would like to purchase a book of Family Law MEE questions and NCBE point sheets from 2000 to the most recent administration, check out our MEE books here. You can also see some additional exams on the NCBE website for free here .)
- July 2021 Family Law MEE: this MEE covers personal jurisdiction, PKPA, UCCJEA, UIFSA.
- October 2020 Family Law MEE: this MEE covers UIFSA; Reduce child support award when material/substantial change in circumstances; and spousal support modifiable—substantial change in circumstances (alimony).
- July 2020 Family Law MEE: this MEE covers a state may grant divorce if person is domiciled; state may grant custody even if no PJ over other respondent parent; state may not grant property because need PJ over respondent; fault basis may be established for divorce; and best interest of the child factors.
- July 2019 Family Law MEE: this MEE covers marriage support obligations; nonintervention doctrine; parental decisions including medical decisions are subject to limitations; UCCJEA, PKPA; custody dispute of a party who is not a parent; and wishes of a child in custody determination.
- February 2016 Family Law MEE: this MEE covers premarital agreements and division of marital vs. separate property assets.
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