1. How does Bank dispose of properties it acquires, whether by way of foreclosure or by way of dacion?

   • Bank disposes of the properties it acquires by either of two means, negotiated sale or by way of property auctions.

     1. In negotiated sales, offers to buy are solicited from potential buyers. These offers are then evaluated (by Asset Recovery Officers of Asset Recovery Group), and, where warranted, favorable recommendations are submitted for approval by the appropriate approving authorities.

        • Offers to buy are submitted using the standard ARG form. Note that it is clearly spelled out in the form that:

          1. In the event the offer is accepted, transaction fees in connection with the transfer of title into the offeror’s name are to be shouldered by the offeror.

     2. In property auctions, minimum selling prices are already pre-set for specific properties. This minimum selling price is then used as the starting point/floor price during auctions. Provided a bid is equal or above the minimum selling price, and provided further that there are no other competing bidders, the property for auction gets awarded to the highest bidder.

        • How often does Bank hold property auctions?

          1. For properties located in Metro Manila and Luzon, and for high-value properties, auctions are held monthly. These monthly auctions are usually held on the last Saturday of each month.

          2. For properties located in Visayas and Mindanao, UnionBank conducts quarterly auctions. To make it convenient for bidders/auction participants, auction venues are held where there is the greatest concentration of properties to be auctioned off. As such, VisMin auctions have been held in Bacolod, Cebu, Davao, and Cagayan de Oro.

        • How does one get to participate in Bank’s property auctions?

          1. Those looking for properties to acquire may simply drop by at any Bank branch and obtain a copy of the list of properties (updated monthly) to be auctioned off. 

          2. If a buyer finds a property interesting:

             1. He/she should (and is expected to/assumed to) conduct due diligence on the property. Due diligence simply means that the buyer finds out as much about the property as should be necessary before making a decision to buy.

                • Physical due diligence means visiting the property itself to see first-hand what the condition of the property is, i.e., whether or not the property has a structure erected on the land, whether or not the property has squatters, whether or not the property is fenced, among others.

                • Legal due diligence means determining whether or not there are annotations on the title to the property which indicate that there may be other parties claiming ownership of the property (e.g., adverse claim), or whether the property is currently involved in litigation (i.e., notice of lis pendens), or whether the property is mortgaged.

                  • As a principal means of conducting legal due diligence, a buyer should obtain directly from the appropriate Register of Deeds a certified true copy of the title to the property, and examine whether or not there are annotations registered on the title. If there are annotations on the title, consultations with lawyers may be necessary to fully understand the nature of the annotation found.

                  • If everything seems to be in order, the buyer should register himself as a bidder with Asset Recovery Group through phone, so that a seat may be reserved for him/her during the actual auction

        • How is the process of negotiated sales carried out?

          2. 1. Buyer submits a formal offer to buy using the standard form of Asset Recovery Group.

          3. If the offeror is a corporation, the offer should be accompanied by a Secretary’s Certificate of a Board Resolution authorizing the offer, and identifying the authorized company signatories to sign the offer to buy.

          4. If the offeror is a partnership, the offer should be accompanied by a Partnership Resolution authorizing the offer, and identifying the authorized signatory to sign the offer to buy.

          5. Asset Recovery Officers of ARG then evaluate the submitted offer.

          6. The handling Asset Recovery Officer then prepares his recommendation to be acted upon by the appropriate approving authority.

          7. The offeror is then formally advised as to whether his offer was accepted (THROUGH A Notice of Approval) or denied.

1. • 2. • How is the process of property auctions carried out?

          1. After registering with ARG via phone, interested auction participants are requested to be at the auction venue at least an hour before the start of the auction proper. This is to allow time for formal registration and to be provided a copy of the rules and regulations for the auction.

          2. The auction participant will then be required to deposit with the registration officer(s) the required show money of P20,000.00 (in cash or manager’s check) per property.

          3. After a clarification of the auction rules and regulations are carried out, the auction proper starts. UnionBank auctions are conducted on an open cry basis, which means a bidder who wishes to make a bid does so with every other bidder present during the auction knowing how much one’s bid is.

          4. Pictures of each property to be bid out are then flashed on the video screen. Bidding starts at the published minimum bid price for the property. The minimum bid price is the same as the floor price and is also the same as the minimum bid price per the advertisement published in newspapers.

             1. At the floor price, if there are two or more bidders for a property, the bid price will be subsequently increased by P20,000.00 per round of bidding, for the next five rounds.

             2. By the sixth round of bidding, if there are still two or more bidders for a property, the bid price will then be increased by P50,000.00 per round of bidding.

             3. By the eleventh round of bidding, if there are still two or more bidders for a property, the bid price will then be increased by P100,000.00 per round of bidding, until the fifteenth round.

             4. Beyond the fifteenth round of bidding, the auctioneer is given sole discretion to increase the bid price by any amount.

             5. Bidding continues until such time that there is only one bidder for the property being bid out.

        • After a winning/highest bidder emerges, the property being bid out is declared sold.

        • An award certificate is then issued in the name of the winning bidder.

        • On the basis of this award certificate, the winning bidder will then be required:

          1. Within five working days after the auction:

             1. For cash purchases:

                • To pay the 10% down payment in full;

             2. For installment purchases:

                • To pay the first installment of the required 10% down payment;

                • To sign the Contract to Sell (“CTS”);

                • To submit such number of post-dated checks corresponding to the installment payments for the down payment, as well as the first two years of monthly amortizations;

                • Whether the winning bidder pays in cash or installments, the P20,000.00 show money deposited upon registration will be credited as part of the down payment. Accordingly, this show money may no longer be withdrawn.

                  • Only the show money of non-winning bidders will be returned to auction participants right after the auction.

                  • In contrast, in the event the winning bidder fails to pay the full down payment or installment on the down payment within the timeframe specified, the P20,000.00 show money will be forfeited.

For sales on the installment basis, what happens after the CTS is signed and all documentary requirements are complied with, including the submission of all required post-dated checks?

1. • 2. • After the down payment portion has been fully paid off, the property buyer gains the right to take possession of the sold property. Property turn-over to the buyer is normally done through the caretaker agency for those properties where there are caretakers assigned, or through ARG personnel if there is no caretaker for the sold property.

        • As soon as all installment payments have been completed, the property buyer should coordinate with ARG personnel for the preparation and release of the Deed of Absolute Sale.

        • Deed of Absolute Sale (“DOAS”), plus owner’s duplicate of title to the sold property, plus all related documents such as real estate tax receipts, tax declarations, etc. are then to be released to the buyer.

        • The Secretary’s Certificate of a Board Resolution of Bank giving authority to the signatories of the Bank to the Deed of Absolute Sale will only be released to the buyer upon buyer’s submission of proof of payment of Creditable Withholding Tax and Documentary Stamps Tax.

          2. 1. The buyer needs to coordinate with ARG personnel (the same personnel they coordinated with for the release of the Deed of Absolute Sale) for the BIR forms needed when paying for CWT and DST. ARG personnel will provide the buyer these forms.

             2. ARG personnel will also provide the computation of CWT and DST due, and provide the name of the payee for the manager’s checks which must be submitted by the buyer for payment of CWT and DST. CWT and DST may only be payable by way of MC or cash. Since UBP takes care of the legwork of paying, it is preferred that payment is by way of MC.

             3. Upon submission of the manager’s checks for payment of CWT and DST, ARG personnel will then arrange for payment of CWT and DST with the appropriate Revenue District Office.

             4. The original official receipts evidencing payment of CWT and DST will then be released to the buyer, together with the Secretary’s Certificate of a Board Resolution of Bank giving authority to the signatories of the Bank to the Deed of Absolute Sale.

             5. In turn, the buyer then submits the following documents to the Revenue District Office for the issuance/release of the Certificate Authorizing Registration (“CAR”):

                • • Deed of Absolute Sale (“DOAS”) issued by UnionBank in favor of buyer;

                  • Secretary’s Certificate of Board Resolution giving authority to the Bank reps in the DOAS to sign the document;

                  • Proof of payment of CWT and DST;

                  • Photocopy of owner’s copy of the title to property bought;

                  • Original and latest tax declarations to property bought (there are separate tax declarations for land and buildings/houses)

                  • Proof of payment of real estate taxes up to the current year (In cases where the sale is made at beginning of the year, the buyer needs to pay/advance real estate taxes for the full year).

                  • In some cases, the old CAR authorizing the transfer of title from the old owner’s name to Bank (as the foreclosing entity, or recipient of a property via dacion) is required by the Registry of Deeds or Revenue District Office. Where possible, Bank provides this old CAR to the buyer.

                  • The result of the above submission should be the CAR

     3. After the CAR is obtained from the BIR-Revenue District Office, the following are then to be submitted to the Registry of Deeds for issuance of a new title in the buyer’s name:

        • 1. The CAR itself, new and, in some cases, previous.

          2. Deed of Absolute Sale (“DOAS”) issued by Bank in favor of buyer;

          3. Secretary’s Certificate of a Board Resolution giving authority to the Bank representatives in the DOAS to sign the document;

          4. Original owner’s copy of the title to property bought;

          5. Original and latest tax declarations to property bought (there are separate tax declarations for land and buildings/houses)

          6. Proof of payment of real estate taxes up to the current year (In cases where the sale is made at beginning of the year, a buyer needs to pay/advance real estate taxes for the full year); in cases where the real estate tax receipts are not available, an original tax clearance issued by the Local Government Unit/City/Municipal Assessor’s Office, should suffice;

          7. Certificate of Management issued by the condominium corporation (in cases only when the property bought is part of a building, such as a condominium); such a document is not necessary when the property bought is stand-alone, or part of a subdivision

          8. Payment of transfer tax and registration fees;

          9. The result of the above submissions should now be the new title in the buyer’s name. This new title will explicitly state that the previous title (in the name of Bank) has been canceled.
             
             

        • DISCLAIMER :
          The above procedures and documentary requirements are based on ARG’s first-hand experience in dealing with the BIR. In the future, whether immediate or far future, the procedures may change, or the documentary requirements may change. Given that this is a matter which is beyond the control of the Bank, buyers need to make themselves aware of any such changes as they happen.

For sales on a cash basis, what happens after full payment is made?

1. • As soon as full payment is made, the property buyer should coordinate with ARG personnel for the preparation and release of the Deed of Absolute Sale.

   • Deed of Absolute Sale, plus owner’s duplicate of title to the sold property, plus all related documents such as real estate tax receipts, tax declarations, etc. are then to be released to the buyer.

   • The Secretary’s Certificate of a Board Resolution of Bank giving authority to the signatories of the Bank to the Deed of Absolute Sale will only be released to the buyer upon buyer’s submission of proof of payment of Creditable Withholding Tax and Documentary Stamps Tax.

     1. The buyer needs to coordinate with ARG personnel (the same personnel they coordinated with for the release of the Deed of Absolute Sale) for the BIR forms needed when paying for CWT and DST. ARG personnel will provide the buyer these forms.

     2. ARG personnel will also provide the computation of CWT and DST due, and provide the name of the payee for the manager’s checks which must be submitted by the buyer for payment of CWT and DST. CWT and DST may only be payable by way of MC or cash. Since UBP takes care of the legwork of paying, it is preferred that payment is by way of MC.

     3. Upon submission of the manager’s checks for payment of CWT and DST, ARG personnel will then arrange for payment of CWT and DST with the appropriate Revenue District Office.

     4. The original official receipts evidencing payment of CWT and DST will then be released to the buyer, together with the Secretary’s Certificate of a Board Resolution of UnionBank giving authority to the signatories of the Bank to the Deed of Absolute Sale.

     5. In turn, the buyer then submits the following documents to the Revenue District Office for the issuance/release of the Certificate Authorizing Registration (“CAR”):

        • Original of the Deed of Absolute Sale (“DOAS”) issued by Bank in favor of buyer;

        • Secretary’s Certificate of Board Resolution giving authority to the Bank reps in the DOAS to sign the document;

        • Proof of payment of CWT and DST;

        • Photocopy of owner’s copy of the title to the property bought;

        • Original and latest tax declarations to property bought (there are separate tax declarations for land and buildings/houses)

        • Proof of payment of real estate taxes up to the current year (In cases where a sale is made at beginning of the year, a buyer needs to pay/advance real estate taxes for the full year)

        • In some cases, the old CAR authorizing the transfer of title from the old owner’s name to Bank (as the foreclosing entity, or recipient of a property via dacion) is required by the Registry of Deeds or Revenue District Office. Where possible, Bank provides this old CAR to the buyer.

        • The result of the above submission should be the CAR

After the CAR is obtained from the BIR-Revenue District Office, the following are then to be submitted to the Registry of Deeds for issuance of a new title in the buyer’s name:

1. • 5. • Deed of Absolute Sale (“DOAS”) issued by Bank in favor of buyer;

        • Secretary’s Certificate of Board Resolution giving authority to the UnionBank reps in the DOAS to sign the document;

        • Original owner’s copy of the title to the property bought;

        • Original and latest tax declarations to property bought (there are separate tax declarations for land and buildings/houses)

        • Proof of payment of real estate taxes up to the current year (In cases where a sale is made at beginning of the year, a buyer needs to pay/advance real estate taxes for the full year); in cases where the real estate tax receipts are not available, an original tax clearance issued by the RDO should suffice;

        • Certificate of Management to be issued by the condominium corporation (in cases only when the property bought is part of a building, such as a condominium); such a document is not necessary when the property bought is stand-alone, or part of a subdivision

        • Payment of transfer tax and registration fees;

        • The result of the above submissions should now be the new title in the buyer’s name. This new title will explicitly state that the previous title (in the name of Bank) has been canceled.

For the issuance of a new tax declaration in the name of the buyer, whether it be for land or building, the same submissions as above are required, which documents are to be submitted to the Assessor’s Office.

DISCLAIMER:

The above procedures and documentary requirements, whether they be for cash or installment purchases, are based on ARG’s first-hand experience in dealing with the BIR. In the future, whether immediate or far future, the procedures may change, or the documentary requirements may change. Given that this is a matter which is beyond the control of UnionBank, buyers need to make themselves aware of any such changes as they happen.

IMPORTANT NOTE: There are specific provisions in the CTS which states that real estate taxes (whether for land or building) after the signing of the CTS are for the account of the buyer. This is carried out by incorporating the real estate tax payments into the buyer’s monthly amortizations.

In the case of fire insurance premiums, the same principle for real estate taxes holds. Unless and until the buyer submits a new appraisal report which shows a lower figure for the value of the building (or house), last year’s premium is assumed to stay the same. In any case, the buyer is required to take out renewal fire insurance policies only through the Bank. Insurance is not required for vacant lots.