THE BUNDLE OF RIGHTS ON PROPERTY OWNERSHIP - Sorry but these rights are NOT absolute.

Updated: Oct 8, 2021


If you are a titled owner of a real property, like land, you have this bundle of rights that include the right to possess the property, to control it, to exclude others from it, and to dispose of it.


Titled Real Property Owners have a long established "bundle of legal rights" that carries over to them along with the property that was acquired by them either gratuitously or onerously.


Under the BUNDLE OF RIGHTS doctrine, a titled real property owner:


1. Owns the property – meaning, the property is owned by whoever holds title


2. Has the right of exclusive possession of the property – meaning, others can be excluded from using or entering the property


3. Has the right of exclusive enjoyment of the property – meaning, the owner can enjoy the use of the property exclusively.


4. Has the right to recovery – meaning, in case his property is unlawfully taken or possessed by another, the owner can recover ownership and/or possession through legal action.


5. Has the right to dispose – meaning, the titled owner can sell, transfer ownership, rent, or mortgage the property


THE BUNDLE OF RIGHTS ON PROPERTY OWNERSHIP, HOWEVER, ARE NOT ABSOLUTE!


These rights are subject to restrictions imposed by the state, by law or private persons.


LIMITATIONS IMPOSED BY THE STATE

(The Inherent Powers of the State)


1. POLICE POWER


The first inherent power of the state



This is a power vested with Congress to enact laws to promote the health, morals, education, good order or safety and the general welfare of the people. The enforcement of which may be delegated to the Executive Department of the Government, headed by the President of the Philippines.


We have the maxim: Salus Populi Est Suprema Lex - The Welfare of the people is the Supreme Law.

Therefore, a LAW enacted by Congress that restricts any property rights only means that the said law was created to benefit the welfare of all the people and not to benefit only one or a few.



In the case of THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY and BAYANI FERNANDO as Chairman of the Metropolitan Manila Development Authority, VIRON TRANSPORTATION CO., INC., G.R. No. 170656 decided by the Supreme Court En banc on August 15, 2007, the Highest Tribunal said:


"Police power is the plenary power vested in the legislature to make, ordain, and establish wholesome and reasonable laws, statutes and ordinances, not repugnant to the Constitution, for the good and welfare of the people. This power to prescribe regulations to promote the health, morals, education, good order or safety, and general welfare of the people flows from the recognition that salus populi est suprema lex ─ the welfare of the people is the supreme law. While police power rests primarily with the legislature, such power may be delegated, as it is in fact increasingly being delegated. By virtue of a valid delegation, the power may be exercised by the President and administrative boards as well as by the lawmaking bodies of municipal corporations or local governments under an express delegation by the Local Government Code of 1991. xxx"


An example of a law that restricts your right as an owner is Presidential Decree no. 957. The executive arm that implements this law is the Department of Human Settlements and Urban Development [DHSUD] formerly HLURB.










This law regulates the right of a landowner to subdivide his property into several lots or subdivision project for purposes of lot selling.

If you are that landowner, you must comply with all the necessary and stringent requirements required by the DHSUD so that a license to sell will be issued in your favor. Otherwise, you cannot sell subdivided lots.


If you proceed with the subdivision, and thereafter sell those subdivided lots without the required LICENSE TO SELL, it will be considered an illegal act and you will be ordered by the DHSUD to cease and desist in the selling of the lots. You can also be charged in court.


Subdivided lots without any license are called “RAW LOTS” and “LOTE – LOTE” in vernacular. In most cases, these subdivided raw lots for sale ventured by a lot owner or in conjunction with a developer without any license to sell, will more often than not, offer problematic situations only, albeit occurring at a later time, to the buyers including the general populace as well.


To mention some of the usual violations:


× The area is not located in a residential zone (oftentimes it is an agricultural area where the land is vast and thus, plenty of subdivided lots usually at 100 sqm to 150 sqm meters)


× The area is not a suitable site for housing (there are instances that the raw lots are located inside a hazard prone and protected area, and sometimes in a critical area that are subject to flooding, landslides, and unstable soil)


× The area is not accessible to public transportation lines or there is no road right of way


× Lack of drainage system that would cause flood in the area during a heavy rain downpour.


× Lack of garbage disposal system and many more.


PD 957 was enacted to protect not only the buyers of residential lots but the general community and the public as well.


2. POWER OF EMINENT DOMAIN


The second inherent power of the state.


Do you wonder why the government may just easily intrude on your property for road widening, transmission lines, bypass roads and the like?


Well, it can do so, and you cannot do anything about it. This is the Power of Eminent Domain - The taking of private property by the government for public use and the payment by just compensation to the affected property owner.


The road widening projects of the present administration under its BUILD-BUILD program is a good example. If your property is one of those affected by the road widening, then that the Power of Eminent Domain is the one doing its work.


While you could not stop it, you will, of course, be paid Just Compensation by the government. In most cases, what reaches the courts is no longer the issue of eminent domain or "taking", but the determination of whether the payment offered by the government for the affected property owner is just.



3. POWER OF TAXATION


The third inherent power of the state.


Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.— Benjamin Franklin, in a letter to Jean-Baptiste Le Roy, 1789


True indeed that, for the use of your property, you pay real property taxes, for every sale, you pay capital gain tax, for every donation, you pay donor’s tax, for every transfer through succession, you pay estate tax and so, on.


Taxes are the lifeblood of the government, and without the power to tax, no government may exist.


LIMITATIONS IMPOSED BY LAW or ORDINANCES

Technically, the limitations imposed by law or ordinances are part of the exercise of police power. Because the ultimate purpose of the regulations on your property rights is for the promotion and/or protection of the general welfare.


Take for example the Zoning Ordinances enacted by a Local Government Unit (LGU) which prescribes the areas for industrial purposes, commercial purposes, agricultural and residential purposes. It means that you cannot put up a factory on an area zoned as residential. You better find an industrial area. That is a clear example of a limitation on your property rights. In Davao City nowadays, poultry growers, either the tunnel vent or traditional type, are having difficulty in finding an agricultural area for their poultry business. Oftentimes, they go to the remotest area in the city where no residential land owners will complain and where the Punong Barangay therein is most willing to issue a Barangay Certification allowing the establishment of a poultry.

Another example of a limitation is the requirement of a Building Permit before constructing a structure on your property under Presidential Decree no. 1096 or the National Building Code. If you have no building permit, your construction will be considered illegal and may be demolished.



LIMITATIONS IMPOSED BY PRIVATE PERSONS


Yes, another person may impose restrictions on your property rights!


An example is a Homeowner’s Deed of Restrictions. Before buying a Condominium Unit or a real property in a gated subdivision imposed by the homeowner’s association. It is important that you should check on the Deed of Restrictions.

If your purpose is to build a clinic, office, or grocery store inside a subdivision, better think twice. The usual deed of restriction prohibits usage of properties inside the subdivision for commercial purposes. It is only for residential purposes.


It will defeat the very purpose of your purchase as you will be prohibited to carry out the purpose for which you intend to do on the property.


Now you know your rights as property owner and the restrictions, it is prudent of you to exercise these rights within the purview of the regulating laws and rules to avoid a problematic situation that is oftentimes defined as burdensome and litigious.



DISCLAIMER
The opinion of the creator of this post is based on Civil Code of the Philippines, SC Decisions, various laws, the Rules of Court and issuances, Rules and regulations of various administrative agencies and compilation of his lectures as former Real Estate Lecturer accredited by the Professional Regulations Commission [PRC].
This is intended to reach out and educate all who are engaged in real estate activities and not to promote or advertise the author’s profession as a Practicing Lawyer and Licensed Real Estate Broker. 
The author does not claim responsibility for the wrong interpretation by the readers or viewers of this post. This is only intended to guide and protect everyone, especially the laypeople in the real estate transactions. 
Any comments, reactions and arguments are most welcome and may be posted under the comment section. 

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