Proper due diligence is the difference between a good investment and a nightmare. This guide covers everything you need to check before signing any contract for a subdivision lot.
1. Why Due Diligence Matters
I've seen buyers lose millions on properties with:
- Titles with hidden liens or adverse claims
- Lots in subdivisions that were never completed
- HOAs that mismanaged funds and can't maintain amenities
- Properties in flood zones that weren't disclosed
- Developers who went bankrupt mid-project
Every issue above could have been caught with proper due diligence. The few thousand pesos and few days you spend on verification can save you millions.
Warning: Never rely solely on the seller's or agent's assurances. Always verify independently. Even honest people can be misinformed.
2. Title Verification
The most critical step. Go to the Registry of Deeds (RD) in person.
What to Check:
- Authenticity: Is the title real? Compare serial numbers, watermarks, signatures
- Ownership: Does the seller's name match the title exactly?
- Encumbrances: Any mortgages, liens, lis pendens (pending lawsuits)?
- Technical description: Does the lot number and area match?
- Tax declaration: Does it align with the TCT?
Registry of Deeds Locations:
- Cavite: Trece Martires (Silang, Alfonso, Tagaytay) or Imus (Imus, Bacoor)
- Laguna: Sta. Cruz (general) or Calamba (Calamba, Los Banos)
- Batangas: Batangas City
Cost: Certified True Copy of Title: PHP 100-200. Annotation check: PHP 50-100. Worth every peso.
3. Developer Background
For pre-selling or developer-sold lots, research the developer thoroughly.
What to Verify:
- HLURB/DHSUD License: Is the project registered? Check the License to Sell number
- Track record: What other projects have they completed? On time?
- Financial stability: Any news about financial troubles?
- Buyer feedback: Search Facebook groups, forums for buyer experiences
- Site progress: Is construction progressing? Visit the site
Where to Check:
- DHSUD website for License to Sell verification
- SEC for company registration and standing
- Facebook groups: "Ayala Land Property Owners", "Nuvali Homeowners", etc.
- Property forums: Skyscraper City Philippines, PropertyAsia
4. HOA Investigation
A bad HOA can ruin your property experience and value.
What to Check:
- SEC Registration: Is the HOA properly registered?
- Financial statements: Request the latest audited financials
- Monthly dues history: Have dues increased dramatically? Why?
- Reserve fund: Is there money for major repairs/emergencies?
- Rules and regulations: Any deal-breakers? (No Airbnb, pet restrictions, etc.)
- Pending assessments: Any special assessments coming?
Questions to Ask Residents:
- Is security actually 24/7?
- How responsive is management to issues?
- Any ongoing disputes or problems?
- Would you buy here again?
5. Physical Inspection
Visit the property multiple times, in different conditions.
What to Check:
- Actual lot boundaries: Are corner pins/monuments visible? Match the plan?
- Terrain: Slope, elevation, potential drainage issues
- Flood history: Ask neighbors, check barangay records
- Road access: Paved? Who maintains it? Any disputes?
- Utilities: Water, electricity, internet availability and reliability
- Surrounding development: What's next to you? What's planned?
When to Visit:
- Weekday morning: Normal traffic, neighbor activity
- Weekend: Recreation noise, visitor traffic
- Rainy day: Drainage, flooding, road condition
- Night: Security presence, lighting, noise
6. Financial Verification
Ensure the numbers add up and there are no hidden surprises.
What to Verify:
- Real Property Tax: Is it current? Get tax clearance
- Association dues: Any unpaid dues from current owner?
- Capital gains tax: Who pays? (Usually seller, but verify)
- Transfer costs: Understand your total acquisition cost
- Payment terms: Get everything in writing
Tool: Use our Total Cost Calculator to estimate all transfer costs.
7. Red Flags
Walk away or investigate deeper if you encounter:
8. Quick Checklist
Use this as a starting point. Our interactive checklist tool has more detail.
Essential Checks
- Verified title at Registry of Deeds
- Checked for encumbrances/liens
- Confirmed tax payments are current
- Verified developer License to Sell
- Checked HOA registration and finances
- Visited property multiple times
- Talked to existing residents
- Checked flood history
- Verified road access rights
- Understood all costs (not just price)