contract validity

gud afternoon ulit atty.

i have another issue po, regards po sa kontrata.Ang friend ko po kasi ay may sinasanlang bahay skin for 2 years ang napagkasunduan po ay after two years na hindi nya matubos ang bahay ay akin na.tanung ko po valid po ba yung contrak na aming npagkasunduan kahit na kaming dalawa lng ang nagkapirmahan wlang witness or hindi notarized? pwde nya po bng itangi ito kung magkaproblema pagdating ng araw? Kailangan po bng sa presence ng atty. kami magpirmahan?

thank you po sa wala nyong sawang pagsagot.

no, your contract is not valid. when real estate property is used as collateral, it is not proper that failure to pay the loan will automatically result in ownership of the property by the creditor.

the proper agreement, is a mortgage contract which should be annotated on the title and registered with the registrar of deeds. it means more expenses and longer procedure because if he defaults, there has to be foreclosure and an auction. but it is the proper procedure.

if he does not pay, the loan still subsists and the property will be considered mortgaged to you. but if he transfers it to someone else, you will not have cause against the new owner.

thanks atty for the response. linawin ko lng po.Pwede nya po bang isanla or ibenta ang bahay kahit n nkasanla pa ito sakin? at wala ako habol sa new creditor or owner? if in this case po anu po ba ang dapt gawin ko?

you can ask that the title be deposited with you as security. even better if you have the mortgage annotated on the title; that way even if it is sold or mortgaged, you will be protected.