Forfeiture of Earnest Money

I'm an OFW and I have entered into an agreement for the purchase of a house & lot in my hometown, Cagayan. The property is worth 2M and I have put up P200K as earnest money. The property is in the name of the deceased husband and the widow is the Seller. I have applied a bank loan and had been approved, however, I was required to submit the TCT already in my name. The Seller initially agreed to do the deed of absolute sale but then when my mother, my atty-in-fact, went to the Register of Deeds, they said that the property is in the name of the deceased husband and therefore must be transferred first in the name of the widow, that a extrajudicial settlement needs to be done with publication plus to pay the Inheritance Tax. My mother went to the Seller but the seller is refusing to do the extrajudicial settlement and pay the Inheritance tax and was telling me that I should pay for it. The Seller is threatening to forfeit the earnest money but in our initial agreement where I paid the earnest money was that the Seller is the legal owner of the property. Can I recover my earnest money since the Seller is not the legal owner at the time we signed the Agreement?

It is the obligation of the seller to transfer the title of the property in her name. If the seller refuses to do so, you have the right to cancel whatever contract has been entered into between you and the seller.

The earnest money forms part of the purchase price. Generally, it is forfeited in case the buyer cancels the contract or otherwise fails to pay the purchase price in full. But since you are cancelling the contract due to the fault of the seller, you have the right to recover the earnest money you have paid.

You can send a demand letter to the seller. If she refuses to pay despite receipt of the demand letter, you can file a civil action to recover the earnest money.

You may also want to consider the option of filing a criminal case for estafa, in case there is deceipt on the part of the seller.

Thank you, attybutterbean! I'm glad that a site like this is available to help co-Filipinos who require fast and professional legal advice. More power to you!