We learned to read after our mastery of our ABCs. Before you get to own your new home, you need to master a series and combination of letters, and what they mean: LOI, RA, CTS, DOS, TD, and TCT.
L.O.I. – Letter of Intent
It’s a letter written by the buyer signifying interest in the purchase of a home. It should contain the price, amount of deposit, timetable, and other details about the product and future sale transaction. It is usually written at a time, when details could still change, thus it is non-binding. Actually, one can skip this step, and proceed straight. When everything is set in order, when the project already has completed all the permits and clearances—to the signing of the R.A..
R.A. – Reservation Agreement
It is the agreement that spells out the terms and conditions with regards to the payment of the R.F. (Reservation Fee). It stipulates that the RF will be forfeited when the buyer does not proceed to sign the contract to sell, or for whatever reason does not pursue with the purchase. It also serve as the basis for the Contract to Sell. The R.F. is also known as “earnest money” for most. It is a token amount in terms of percentage to the total selling price, typically from P5K to P50K, depending really on how expensive the product is.
By signing the R.A. and paying the R.F., the buyer is assured that the particular unit or home he/she has chosen is reserved to him/her only; but only for a limited time. Typically, the deadline is one month before one proceeds to next vital step (C.T.S.). But it varies from project to project.
C.T.S. – Contract to Sell
It is a document where the seller or developer promises to transfer to the buyer the ownership and physical possession of the housing unit. It’s stated that this can happen once the buyer fulfills the terms of the sale, and the buyer obligates himself to pay the total contract price, and continue to abide with all the other terms and conditions of the sale. It will be used as the legal basis on the right of the buyer to demand a D.O.S. (Deed of Sale) when the property is fully paid.
Take note, though, that the C.T.S. is not enough basis for the transfer of title to buyer’s name. It is merely the legal document that to compel the seller or developer to execute the D.O.S. once the property has been fully paid and/or once all conditions in the C.T.S. have been complied with.
D.O.S. – Deed of Sale
It is the final contract that is required by the R.D. (Register of Deeds) for the legal transfer of ownership. A precondition to this is full payment of the T.C.P. (Total Contract Price), thus, if it’s installment, this shall happen only after several months or years. The D.O.S. is the basis for the issuance of the Transfer Certificate of Title (TCT) if it’s a lot purchase or Condominium Certificate of title (CCT) if it’s a Condominium unit purchase. This, by the way, is subject to compliance to the project’s Deed of Restrictions or Master Deed with Declaration of Restrictions.
T.C.T. – Transfer Certificate of Title
It is the final and strongest proof of ownership. Ownership of a subdivision lot is evidenced by a T.C.T. that is issued by the R.D. or the Register of Deeds of a particular city or municipality where the subdivision project is located. For a condominium unit, ownership is evidenced by a condominium certificate of title (CCT). Upon the payment of the relevant taxes and fees to the government units and agencies, and obtaining the necessary clearances to register the property from the BIR and the local government unit concerned. The TCT or CCT shall be transferred from the name of the developer to the buyer by the appropriate Register of Deeds.
T.D. – Tax Declaration
It is also known as the Declaration of Real Property. The Tax Declaration, is a property record, which is a traditional assessment document maintained by the municipal, provincial, or city assessors. Indicating, among others the market values and assessed values of the property. These serve as the basis for the collection of the R.P.T. or Real Property Taxes.
The TD covering the lot and/or dwelling unit or condominium unit shall be transferred by the appropriate City Assessor from the seller or developer to the buyer after the submission of the D.O.S. and the BIR tax C.A.R. (Clearance Authorizing the Registration) of the property in the name of the buyer.
There are more acronyms you’d; come across along the way; but these are the key ones you have to know on your journey to your newly bought home.
- AV – Appraised Value
- ATS – Authority to Sell
- BIR – Bureau of Internal Revenue
- BLLM – Bureau of Lands Location Monument
- CAR – Certificate Authorizing Registration
- BR – Bedroom
- CWT – Creditable Withholding Tax
- DP – Down Payment
- DST – Documentary Stamps Tax
- FA – Floor Area
- RF- Registration Fees
- VAT – Value Added Tax
- RH – Row House
- SQM – SQuare Meters
- GF – Ground Floor
- HL – House and Lot
- MC – Manager’s Check
- RE – Real Estate
- TB or T&B – Toilet and Bath
- REM – Real Estate Mortgage
- TH – Town House
- REB – Real Estate Broker
- HOA – Home Owners Association
- LA – Lot Area
- SPA – Special Power of Attorney
- RFO – Ready For Occupancy
- LOG – Letter Of Guarantee
- TT – Transfer Tax
- LRA – Land Registration Authority
- TCP – Total Contract Price
- LTV – Loan To Value
- RD – Registry of Deeds
- MA – Monthly Amortization
- RPT – Real Property Tax
- SA – Service Area, Single Attached
- ZV – Zonal Value