Signing Deed Restriction

by Armela yanson

Visitor Question: Does the new owner of certain property especially in a subdivision need to sign the Deed of Restriction for it to be enforceable? I am a member of the board of directors of a subdivision and new owners claim that they weren't able to sign the Deed of Restriction so they are claiming that they are not obliged to follow it. Please enlighten me.

Editors Reply: Please notice right away that we are not attorneys, and that our practice as planners has been limited to the U.S. This means that our comments are just that--a way for you and others to start thinking about this question, but in no way a definite answer for you. To get specific advice, you will need to ask an attorney in the Philippines, or whatever profession actually writes the Deed of Restriction.

Here it is common for condominiums, townhouses, and subdivisions to have a set of deed restrictions that apply to all pieces of property in the development.

These deed restrictions apply whether or not a new owner even knows about the restrictions. Certainly in the U.S. the signature of a new owner is not required for that new owner to be bound by the restriction. Otherwise the restriction itself would be pointless.

The reason for a deed restriction is that an owner wants to restrict or regulate future owners in some respect, and that is not subject to whether that subsequent owner likes the regulation or not.

In the U.S. it is fairly common for new owners not to see a copy of the deed restrictions until perhaps the day before the final closing of the sale on the property. Often there is so much paperwork at that point that the new owner does not even pay attention to this document. Even in that circumstance, the new owner still is bound by the deed restriction.

In fact, in the U.S. there are several entities that could and should provide the new owner with the fact that the deed restriction exists. Those would include the real estate agent(s) involved in the transaction, any attorneys used during the transaction, and the title company.

Even then, there is no set penalty for not providing this information in most states. A new owner who genuinely was not given this information might have to sue to obtain any kind of concession or adjustment from those professionals who should have known better, and usually it is just not worth it.

So given that we are culture-bound by what is customary in the U.S., we cannot see what failure to sign a Deed of Restriction would mean.

If you find that Filipino experts think similarly, you still have a problem, because you have some residents who apparently do not want to live by your restrictions. Rather than getting locked into some kind of confrontation with them, it may be more important for your board of directors to start to engage the new owners about what types of rules seem fair and appropriate to them.

If you all can agree on a compromise, it might be feasible to amend your Deed of Restriction. As we have had to detail in answer to many of these deed restriction questions, the process of changing deed restrictions can range from relatively easy (where you can locate the person who originally imposed the restriction and that person or corporation is willing to change them) to very difficult (where the original author of the deed restriction is dead or cannot be located, and where you have to deal with that situation). That is something for you to investigate with an attorney as well.

If it is not possible to modify your Deed of Restriction, then you need to try to educate whoever sold these new owners their property without helping them understand the implications.

Also in that event, you will need to be thinking ahead about what can be done to keep the new owners in conformity with the standards your board of directors desires to enforce.

We hope this will be helpful.

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