By Carla Calleja, MBA, REB
A question I get a lot, especially around Undas: “Broker Carla, my relatives are fighting over the property Lola left. How do we get our rightful shares?”
The story
Let me tell it the way it usually happens. (This is a dramatization; names are fictional.) Lola Ising passed away without a will. She left a lot and an old house in Batangas. Tito Ben, who stayed in the house and took care of her, felt the property was his. A few years later he found a buyer. He had some of his siblings sign an “extrajudicial settlement with sale”, and the buyer paid.
The twist: Aling Rosa, the eldest daughter who works abroad, was never told and never signed. When she came home for Undas, there was already a fence around the lot. Now the family is not talking. Can the buyer keep the whole property?
The short answer
No, not the whole property. An extrajudicial settlement does not bind an heir who did not take part in it. The sale is valid only for the shares of the heirs who signed. Aling Rosa keeps her share, and the buyer becomes a co-owner with her.
What the law says
- Heirs own the property from the moment of death. The rights to the succession are transmitted from the moment of death (Civil Code, Art. 777). Nobody needs to “give” you your share.
- Children inherit equally. Legitimate children inherit from their parents in equal shares, in their own right (Arts. 979 and 980). A surviving spouse gets a share equal to that of each legitimate child (Art. 996). Who inherits changes depending on who survived, so list the family carefully.
- Until partition, you are co-owners. Each co-owner may sell only his or her own undivided share, and the buyer gets only that share once the property is divided (Art. 493). Any co-owner may ask for partition at any time (Art. 494).
- Extrajudicial settlement is allowed only if there is no will and no unpaid debts, and all heirs are of age or represented. It must be in a public instrument filed with the Registry of Deeds and published in a newspaper of general circulation once a week for three consecutive weeks. And it is not binding on anyone who did not participate (Rule 74, Sec. 1, Rules of Court).
What the Supreme Court said
In Neri v. Heirs of Hadji Yusop Uy, G.R. No. 194366, October 10, 2012, a mother died without a will, leaving seven children and homestead lands in Samal, Davao del Norte. In 1979 the father, some children, and the father on behalf of two minor children signed an extrajudicial settlement with absolute deed of sale and sold the lands. Two children from the mother’s first marriage were left out entirely.
The Supreme Court (Second Division) ruled that the settlement could not bind the excluded heirs, citing Rule 74, Section 1. A parent also could not sell a minor child’s share without court authority, so the sale was unenforceable as to one minor (the other minor later ratified it). The sale stood only for the shares of those who signed or ratified, so the buyers became co-owners with the excluded heirs. The Court also held that the excluded heirs’ action was not barred: the two-year period under Rule 74 does not apply to heirs who were left out, and an action to recover property held in implied trust prescribes in ten years.
Step by step: how to settle Lola’s property
- List every heir. Include children from earlier marriages and the heirs of any child who already died.
- Gather the documents: PSA death certificate, certified true copy of the title from the Registry of Deeds, tax declaration and real property tax receipts, and birth and marriage certificates proving each heir’s relationship.
- Talk first. If you agree, sign an extrajudicial settlement (with or without partition or sale) before a notary, with all heirs signing or represented, then publish it for three consecutive weeks.
- Pay the estate tax with the BIR. The regular rate is 6% of the net estate. The BIR issues the eCAR once taxes are settled. (A new estate tax amnesty is being heard in the Senate. See my Government Update article.)
- Transfer the title at the Registry of Deeds using the eCAR and the settlement, then update the tax declaration at the assessor’s office.
- If you cannot agree, family members living in the same city or municipality generally go through barangay conciliation first (Katarungang Pambarangay). If that fails, any heir may file for judicial partition in court under Rule 69 of the Rules of Court.
Costs depend on the property’s value, the number of heirs, lawyer’s and notarial fees and newspaper publication rates, so I am not giving a single figure here. Ask for written quotes before you start.
What this means for you
- If you were left out of a settlement, you did not lose your share. Act quickly and talk to a lawyer.
- If you are an heir who wants to sell, get every heir to sign. A sale without them can come back to haunt the buyer and the family.
- If you are buying inherited property, check the settlement, the publication and the list of heirs before you pay.
FAQ
Can one heir sell the whole inherited property?
No. A co-owner can sell only his or her own share (Civil Code, Art. 493). The other heirs keep theirs.
Does the one who took care of Lola get a bigger share?
Not automatically. Without a will, the law sets the shares. Children inherit equally. The family can agree otherwise in a settlement, but everyone must consent.
Can we do an extrajudicial settlement if one sibling refuses to sign?
No. Without all the heirs, the settlement will not bind the one who did not sign. The remedy is barangay conciliation and, if needed, judicial partition.
How long do excluded heirs have to go to court?
In Neri, the Supreme Court applied a ten-year period for an action to recover property held in implied trust. Timelines depend on the facts, so consult a lawyer early.
Ask Broker Carla
May tanong ka rin? Send me your own “Broker Carla, …” question. Comment HATIAN on my Facebook page at facebook.com/carlacallejabrokerphilippines or email buyrentph@gmail.com. Licensed brokers help with all property concerns, including settling and selling inherited property.
This article is for general information only and is not legal or tax advice. For your specific situation, consult a lawyer or a licensed professional.
Cover image: AI-generated illustration / dramatization. Names in the story are fictional.
Sources
- Supreme Court E-Library: Neri v. Heirs of Hadji Yusop Uy, G.R. No. 194366, Oct. 10, 2012
- Civil Code of the Philippines, Arts. 493, 494, 777, 979, 980, 996
- Rules of Court, Rule 74, Sec. 1 and Rule 69
- Local Government Code (RA 7160), Katarungang Pambarangay provisions
