The Hidden Dangers of Buying Real Estate Without a License to Sell (LTS)

Buying real estate—whether a house and lot, a condominium unit, or a farm lot—is a major investment. But before you sign any contracts or hand over your hard-earned money, there’s one crucial thing you need to check: Does the seller have a License to Sell (LTS)?

Skipping this step could lead to financial loss, legal troubles, and a future filled with uncertainty. Here’s why an LTS is a must and why you should stay away from sellers who don’t have one.

What Is a License to Sell (LTS)?

The License to Sell (LTS) is an official document issued by the Department of Human Settlements and Urban Development (DHSUD). It ensures that a developer has met all legal and financial requirements before selling any subdivision lot, house and lot, or condominium unit. Without this license, a property sale is not legally valid and could expose buyers to scams, fraud, and incomplete projects.

The Law: Presidential Decree No. 957

Under Presidential Decree No. 957, also known as the Subdivision and Condominium Buyers’ Protective Decree, it is illegal for developers to sell real estate properties without first securing an LTS.

• Section 5 of the decree explicitly states: “No owner or developer shall sell any subdivision lot or condominium unit in the Philippines unless he has obtained a License to Sell the project within which the lot or unit belongs.”
• Section 11 gives the authorities the power to suspend or revoke a subdivision or condominium project’s registration and License to Sell if there is fraud, misrepresentation, or failure to develop the project according to approved plans.

These laws were put in place to protect buyers from dishonest developers who might sell properties without the means or intention to complete them.

The Dangers of Buying Property Without an LTS

Despite these laws, some sellers and developers still sell properties without securing an LTS. Here’s why that’s a huge risk:

1. You Could Be Scammed

Without an LTS, there’s no guarantee that a real estate project is legitimate. Many buyers have lost their money to fraudulent sellers who disappear after collecting payments, leaving them with nothing but broken promises.

2. The Property Might Never Be Completed

An LTS ensures that a developer has the financial and technical capability to finish a project. Without it, there’s a higher risk of unfinished roads, missing amenities, and substandard housing.

3. You Might Face Legal Issues

Properties sold without an LTS often have title problems, which can make it difficult—or even impossible—for buyers to legally own the property. Even if you’ve fully paid for the property, the title transfer might be invalid.

4. Poor Construction Quality

Developers without an LTS might cut corners on construction quality, leading to structural weaknesses, poor plumbing, and inadequate facilities. This can compromise your safety and comfort as a homeowner.

5. No Bank Financing

Banks and financial institutions require an LTS before approving home loans. If you buy a property without one, you might struggle to secure financing, which could leave you unable to complete your purchase.

Be Extra Careful When Buying Farm Lots

Farm lots are becoming a popular investment, but many sellers of farm lots operate without an LTS. While these properties may seem like a good deal, buying one without the necessary license can lead to serious problems such as:

• Ownership disputes – The land might not legally belong to the seller.
• Zoning issues – The lot may not be approved for residential or commercial use.
• Title transfer problems – You might never legally own the land, even after full payment.

To avoid these risks, only buy from reputable developers with a valid LTS.

How to Protect Yourself as a Buyer

Before purchasing any property, follow these simple steps: ✅ Verify the LTS – Ask the seller for a copy of their License to Sell and verify it with DHSUD. ✅ Check the Developer’s Reputation – Research online, read reviews, and look for past projects. ✅ Consult a Lawyer – A real estate lawyer can help review contracts and ensure everything is legal. ✅ Avoid Rush Sales – If a seller is pressuring you to buy immediately without showing an LTS, that’s a red flag.

Final Thoughts

Huwag magpapaloko! Before buying a house and lot, condominium unit, or farm lot, always check if the developer has the proper License to Sell. Napakaraming nagbebenta ng real estate na walang tamang dokumento, lalo na sa farm lots—kaya mag-ingat! Ang tamang kaalaman at desisyon ang susi sa isang ligtas at matagumpay na pagbili ng property. Protektahan ang iyong investment para sa isang matiwasay na kinabukasan!

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