Ending the Co-ownership: Partition of Real Estate

Property
We, by nature, are instinctively connected to each other. This sense of connectedness extends even up to
ownership of properties, whether real or personal. Certainly, joint or common ownership of properties has its
own perks and privileges. This includes, among others, shared pecuniary and tax liabilities, mutual
administration, and sufficient personnel and logistical support over the property.

Pursuant to Article 484 of the New Civil Code, “[t]here is co-ownership whenever the ownership of an
undivided thing or right belongs to different persons. This state of mutual ownership may either be due to
contracts or successions and wills.” Thus, co-ownership may either be through contracts (i.e, deed of sale,
donation) or through inheritance, whether testamentary or intestate.

However, co-ownership is not always permanent. Owners are allowed to walk away from the mutual ownership
and resort to partition.
Partition is the separation and division of a thing held in common among the co-owners or co-heirs. Its
objective is to designate to each party their respective shares and their portion of the property owned in
common. Upon partition, titles will be transferred to the party where it rightfully belongs.

How to partition a real estate property? Partition may either be Judicial or Extrajudicial. Likewise, if the
property is commonly owned through inheritance, partition may be made through Judicial or Extrajudicial
Settlement of the Estate.

I. Judicial Partition

Judicial Partition of property involves the intervention of the courts and is initiated by filing a complaint for
partition of real estate.

Under the Rules of Court, a person having the right to compel the partition of real estate may do so by setting
forth in his complaint the nature and extent of his title and an adequate description of the real estate of which
partition is demanded and joining as defendants all other persons interested in the property.

As such, the complaint for partition must provide and be supported by the following:

A. Name of the co-owners;

B. Source of ownership (i.e. deed of sale, donation, assignment);
C. Description of the Property;
D. Lot Plan/ Subdivision Plan;
E. Transfer Certificates of Title (“TCT”), if any;
F. Tax Declarations, if any; and
G. Other relevant documents proving ownership.

Once filed, the action for partition will comprise two phases:

A. The trial court will determine if co-ownership exists and if found proper, will issue an order of partition; and
B. The trial court will promulgate a decision confirming the sketch and subdivision of the properties submitted
by the parties (if the parties reach an agreement) or by the appointed commissioners (if the parties fail to agree),
as the case may be.

The judgment of partition will state the metes and bounds, the adequate description, and the particular portion
of the real property assigned to each party. This judgment and the appropriate instruments of conveyance
executed by the parties (if they agreed to the partition) shall then be recorded in the Registry of Deeds of the
place where the property is situated.

II. Partition Arising from Judicial Settlement of Estate

Partition may be the result of a Judicial Settlement of Estate. Judicial Settlement of Estate applies in two cases:

A. If the deceased property owner has left a valid last will; or

B. The deceased property owner did not execute a last will but there are disagreements or conflict among the
heirs as to the distribution of the estate.

A. In case there is a last will and testament

If there is a will, the heir or any interested person may file a petition for the probate of the will in the Regional
Trial Court where the deceased was residing at the time of his death. Transfer of property or partition for this
matter, will not be allowed unless the will has already been subject to probate proceedings.

In general, the petition for probate must among other things should state:

1. The fact of death of the decedent (place and time);

2. The fact that the decedent left a will;
3. The fact that the will was executed in accordance with the legal requirements;
4. Names, ages, and addresses of the executor and all interested parties;
5. The probable value and character of the property of the estate;
6. The name of the individual whose appointment as executor is being asked for; and
7. If the will has not been delivered to the court, the name of the person who is supposed to have the will in his
custody.

B. If there is no will but the heirs cannot agree on the distribution of the estate

In the absence of a will and the heirs cannot agree on the distribution of the estate, a petition for intestate
settlement of estate shall be filed with the Regional Trial Court where the deceased was residing at the time of
his death or where he had properties, if the deceased is a resident of a foreign country.

Once filed, the court will appoint an administrator over the estate who will be in charge of the estate
administration. As part of his functions, the administrator may submit to the court a Project of Partition
specifying how the properties of the decedent will be divided and distributed among the heirs.

If approved by the court, the Project of Partition shall be binding among the heirs and will be the basis of
division and distribution of the estate. The court order approving the Project of Partition, together with the
Certificate Authorizing Registration (“CAR”) (certifying that all relevant taxes are paid, i.e., estate tax, donor’s
tax, or capital gains tax, if applicable) issued by the Bureau of Internal Revenue (“BIR”) will be submitted to
the Registry of Deeds where the properties are located to authorize the heirs to issue a new title under their
respective names.

III. Extrajudicial Partition and Extrajudicial Settlement of Estate

Co-owners and co-heirs are not always required to go to trial to implement property partition. In fact,
extrajudicial partition and extrajudicial settlement of estate are preferred over judicial proceedings because the
process is simpler, faster, and more convenient to the parties. Of course, provided that parties are all in
agreement as regards the distribution and sharing portions over the co-owned property. If this is the case, they
may divide it among themselves and settle it outside the courts, through execution of documents evidencing
partition and deed of extrajudicial settlement with partition, if the property involved is acquired by the parties
through inheritance from a decedent who died without a will.

A. Extrajudicial partition, in general

Co-owners may simply execute a Partition Agreement containing the following: (a) a declaration that the parties
are the legal owners of the property owned in common; (b) an adequate description of the property to be divided
including the TCT number or tax declarations, technical description, location, and the lot size; and (3) the
division of the property or the portion allotted to each co-owner.

This Partition Agreement shall then be filed with the Register of Deeds (“RD”) where the property is located
and upon verification and payment of registration fees, the RD will then issue new and separate TCTs for the
co-owners for their respective shares.

B. Extrajudicial settlement of estate

In cases involving extrajudicial settlement of estate, the following are required:

1. Decedent dies without a last will and testament;

2. No outstanding debts at the time of extrajudicial settlement;
3. Heirs are all of legal age or minors represented by judicial guardians or legal representatives;
4. Settlement made in public instrument (i.e., deed of extrajudicial settlement of estate with partition) duly filed
with the Register of Deeds;
5. Payment of applicable taxes (i.e., estate tax, donor’s tax, and/or capital gains tax);
6. Processing of the application for the issuance of CAR with the BIR which has jurisdiction over the estate;
7. Publication of the fact of extrajudicial settlement in a newspaper of general circulation in the province once a
week for three (3) consecutive weeks (note that publication does not constitute constructive notice to the heirs
who had no knowledge or did not participate in the settlement, hence, extrajudicial settlement is not binding on
them); and
8. Bond to be posted with the Register of Deeds if the estate includes personal property.

Prohibitions on Partition

An agreement prohibiting partition is valid only for a period not exceeding ten years. On the other hand, a donor
or testator may prohibit partition for a period not exceeding twenty tears.

While the procedure appears to be simple and straightforward, going through partition is actually complex
especially in cases where court proceedings are required. It is therefore important that co-owners are assisted by
a competent real estate lawyer in facilitating the partition of commonly owned properties.

IV. Subdividing a land covered by one property title

More often than not, the land subject of partition is covered by one title (i.e., TCT or original certificate of title)
or a mother title. Generally, co-owners subdivide a land into smaller lots to effect partition. If this is the case,
the services of a licensed and professional geodetic engineer may be required. The purpose of land surveying
and mapping is to subdivide large parcels of land into smaller ones for titling.
In order to implement subdivision of land covered by only one title, the following should be complied with:

A. Secure the services of a geodetic engineer to conduct a land survey;

B. The geodetic engineer shall draft a subdivision plan containing the new technical descriptions of the
partitioned property;
C. The subdivision plan and its supporting documents (i.e., Certified copy of the title, complete survey returns,
cadastral map, previous approved plan and partition agreement) shall be submitted to the Land Registration
Authority or the Department of Environment Natural Resources Land Management Bureau for approval. After
which, an approved subdivision plan will be issued;
D. The approved subdivision plan shall then be submitted to the RD where the property is located along with
the following: (i) letter request for partition and issuance of new TCT’s for the partitioned properties; and (ii)
the partition agreement executed by the co-owners.

For a more detailed discussion on the process of extra-judicial settlement of estate, see
https://www.arceotandoc.com/single-post/the-process-of-extrajudicial-settlement-of-estate-in-the-philippines

*Arceo & Tandoc Law Firm is a property and estate law office in Quezon City that serves clients anywhere in
the Philippines. Its estate and tax lawyers have an extensive experience in facilitating judicial and extrajudicial
settlement of estates. Our property and CPA lawyers have successfully advised and represented clients in estate
matters. Should you wish to learn how to partition a land or real estate property, or how to subdivide a land
or title, you may contact us at lawfirm@arceotandoc.com to get in touch with any of our property lawyers.