Inadequacies in Contracts

$S8.1 PATALINJUG, AKS 12-6-18

When the terms of an agreement are expressed clearly and comprehensively, the fact of contract formation and the extent of each party’s commitment can be ascertained with relative ease by the interpretation of the language in the written contract. However, problems arise in cases where the parties fail to express their assent adequately, leave a material aspect of their agreement vague or ambiguous, or fail to resolve or provide for a material aspect at all. Obviously, such problems can arise when insufficient attention to detail is given in drafting the contract; similarly, poor drafting can result in the contract not clearly reflecting the parties’ expectations. Inadequacies can thus result from vagueness, ambiguity, omission or irresolution.

It is common knowledge that sale deed is an important legal document that transfers the ownership of the property from the buyer to the seller. Though prepared by an efficient lawyer with utmost care, errors may occur in a sale deed at times. Some of the common errors made in a sale deed are:

Incorrect description of the property such as its area and dimensions
Incorrect description of the parties such as their names and addresses
Incorrect location, address and survey number of the property
Incorrect description of revenue records
Incorrect information about prior title deeds
Incorrect details about ownership or power of attorney
Typographical errors

Any errors in sale deed, however minute or unintentional it may be, can lead to litigation and may result in the cancellation of the transaction. A sale deed is executed on a stamp paper of considerable value and it is not possible to execute different sale deeds when errors are detected. In such cases, a rectification deed can be executed to make the necessary corrections without affecting the transaction.

As a rule, after the issuance of the certificate of title covering a parcel of land, the title can no longer be altered, modified or cancelled except in a direct proceeding in accordance with law (Sec. 48, Presidential Decree [P.D.] No. 1529). This rule is intended to preserve the integrity and indefeasibility of the title once the claim of ownership is established and recognized, and to give the public the right to rely on what is stated on the face of the title without need of conducting further inquiry (Casimiro Development Corporation v. Mateo, 654 SCRA 676).

Consistent with Section 108 of P.D. No. 1529, As declared by our Supreme Court, this remedy authorizes an interested person to ask the court for any erasure, alteration, or amendment of a certificate of title or of any memorandum appearing therein. Yet, it involves a summary proceeding in court and contemplates corrections or insertions of mistakes which are only clerical but certainly not controversial issues, meaning there is unanimity among the parties involved, or there is no adverse claim or serious objection on the part of any party in interest (Heirs of Miguel Franco v. CA, 463 Phil. 417). To avail of this remedy, the person asking for change or correction, which the law states may either be the registered owner, other person having an interest in the property, or the concerned register of deed, must file a petition in court.

Specifically, the remedy prescribed above may be availed of in seven instances, to wit: a) when registered interests of any description, whether vested, contingent, expectant, or inchoate, have terminated and ceased; (b) when new interests have arisen or been created which do not appear upon the certificate; (c) when any error, omission or mistake was made in entering a certificate or any memorandum thereon or on any duplicate certificate; (d) when the name of any person on the certificate has been changed; (e) when the registered owner has been married, or, registered as married, the marriage has been terminated and no right or interest of heirs or creditors will thereby be affected; (f) when a corporation, which owned registered land and has been dissolved, has not conveyed the same within three years after its dissolution; and (g) when there is reasonable ground for the amendment or alteration of title (Paz v.Republic, 661 SCRA 74).

Any type of deed mistake could lead to utter disaster in the chain of title for real estate deals, sales and transactions for the owner or potential buyer. Unfortunately, closing a real estate sale does not stop any possible problems that may arise with the title, and it is crucial to resolve any of these issues with all due haste before the buyer loses it all.

One particular error that occurs with frequency is the mistake in the legal description of the deed itself. This is a post-closing problem that could occur. With a property conveyed for purchase, it is with little difficulty that a deed may sustain a mistake in the description in the documentation. This issue creates a defective deed and will impact the chain of title negatively. A wrong call in the metes and bounds or a lot number mistake could lead to problems. When unchecked, this creates a serious issue for those involved, however, there are ways to correct this.

When an improper legal description leads to deed issues, it is not possible to just record the information anew. Those involved are not able to just correct the description attached to the property or even add to the details after the execution happens. If the real estate agency or others connected to the deed purchase or transfer do not complete this process correctly, the courts involved may rule the legal description as insufficient. This constitutes a defective deed. Even if omissions included in the description are not correct, the deed cannot sustain a change without the appropriate procedures.

It is vital that legal descriptions and other errors and mistakes with deeds have the appropriate corrections. Without the proper changes, the deed may remain defective with all accompanying complications this poses to the buyer and other involved parties. This is possible through certain actions. The original grantor and those witnessing the notarized deed need to take part in re-executing the document through the state laws. This corrective deed then needs recording with the appropriate office. This is the only manner that the legal description may correct the defective deed. The witnesses are usually the same, but the process may have new witnesses observing the action.
Corrective Deed for Defective Issues

When drafting a corrective deed, the participants should have a cross reference within the newly corrected deed which references the details of the original defective deed itself. This is possible through a notation in the new deed that states the previous paperwork had errors in the legal description or other areas. The usual and standard wording is generally part of the new document to include the office, person recording the deed and witnesses. While these notations are not necessary, they help in the chain of title and issues regarding these matters. Transactions related to chain of title may suffer fewer problems when notations are part of the new document.
Other Mistakes

While the most important errors need correcting by creating a new deed document, other mistakes could lead to similar processes. The chain of title has issues affecting the possession of property in real estate deals when there is another person with legal interest in the land or building. The deed may have been created at some point without his or her name attached. Then, the document sale may pass the ownership of the property to another after the purchase. Similar mistakes occur when a person has a special interest in the land through mineral deposits. Without the names attached to the paperwork, the deed may progress to a new buyer without any inclusion of other parties. Original documentation may provide the corrective action so that heirs may inherit the interest or property even if someone else unrelated to this person or group buys the land or building.
Deed Mistake Resolution

So that any mistake with a deed begins the resolution process, the included parties may need a real estate lawyer, agent and someone to research the document and paper trail. It is difficult to resolve a property matter if someone else already owns the land or buildings.

Legal support is available through real estate lawyers for deed mistakes. To adjust paperwork through corrective action, the owner of the property may need to consult with a lawyer to determine where the issue lies. Then, it is usually possible for a remedy to correct and resolve the matter more easily.



References;

(n.d.). Retrieved from https://www.hg.org/legal-articles/deed-mistakes-the-impact-on-a-chain-of-title-46689

PRESIDENTIAL DECREES. (n.d.). Retrieved from http://www.chanrobles.com/presidentialdecrees/presidentialdecreeno1529.html#.XAk_NIbXeEc

Consult & Hire Top Rated Lawyers in India. (n.d.). Retrieved from https://lawrato.com/property-legal-advice/amendment-to-an-existing-sale-deed-27495