29/03/2023

LEGAL ASPECTS OF SALE,

MORTGAGE AND LEASE
FLORENDO M. RALLANG, JR., PhD, JD, MBA
REC, EnP, REA, REB, LPT

Labor Arbiter, Regional Arbitration Branch IV,

National Labor Relations Commission

Contract of Sale

 A contract whereby one of the parties (vendor) obligates himself to deliver

something to the other (vendee) who, on his part, binds himself to pay
therefor a sum of money or its equivalent.
 Essential requisites of a contract of sale
 Consent or meeting of the minds
 Object or subject matter
 Cause or consideration
 It may be absolute or conditional (Art. 1458 NCC)

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REB 2004

 Essential Elements of a contract of sale:

A. Consent or meeting of the minds of buyer and seller

B. Object or subject matter
C. Cause or consideration
D. All of the above
E. None of the above

Characteristics of a contract of sale

 consensual – perfected by mere consent without any further act

 bilateral – both parties bound to fulfill obligations toward each other
 onerous – thing sold is with a consideration
 commutative – the thing sold is considered the equivalent of the price
paid and vice-versa
 nominate – a name is given
 principal – does not depend for its existence/validity upon another
contract
 The kinds of contract of sale are absolute and conditional.

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Sales which must be in writing:

 sale of personal property at a price not less than P500.00

 sale of real property or interest therein regardless of the price involved
 sale of property not to be performed within a year from the date thereof
regardless of the nature of the property and price involved

Sale distinguished from contract to sell

Contract of Sale Contract to Sell (CTS)

1. Failure to pay is a 1. Failure to pay is a
resolutory condition positive suspensive
which puts an end to the condition
transaction 2. Ownership is retained by
2. Title passes to the the seller
vendee after compliance 3. Delivery does not affect
with his obligation loss of ownership
3. After delivery, ownership
is lost, unless it is
rescinded.

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REB 2008

 A contract which is merely an executor contract or a mere promise to sell

with no transfer of ownership
A. Contract of sale
B. Conditional contract of sale
C. Deed of Sale with Pacto de retro
D. Contract of Sell
E. Deed of absolute sale

REB 2001

 If contract of sale is to deed of sale; Contract to sell is to:

A. Pacto de retro sale
B. Deed of conditional sale
C. Deed of sale with mortgage
D. Dacion en Pago

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Obligations of the Vendor

 To transfer the ownership of the determinate thing

 To deliver the thing
 To warrant against eviction and hidden defects
 To take care of thing, pending delivery, with proper
diligence
 To pay for the expenses for the execution and
registration of the deed of sale, unless there is a
stipulation to the contrary.

Obligations of the Vendee

 To accept delivery; and

 To pay the price of thing sold

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Relevant Terms

 Policitacion – an unaccepted unilateral promise to buy or sell. Even if

accepted by the other party, it is not binding upon the promissor and
maybe withdrawn at anytime.

 Right of First Refusal – an innovative juridical relation. If such right is

incorporated in a contract, it is enforceable by specific performance.
Otherwise, the injured party can only sue for damages. (Equatorial Realty,
Inc. vs. Carmelo, et al)

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Relevant Terms

 Option Contract – an unaccepted unilateral promise to buy or sell a

determinate thing for a price certain supported by a consideration distinct
from the price. The offeror is bound to comply with his obligation or he
may sue for damages only, but he cannot sue for specific performance.
(Asuncion vs. CA)

 Earnest Money – a partial payment of the purchase price and considered

as proof of the perfection of a sale. An option money may become
earnest money if the parties agree.

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Earnest Money vs Option Money

Earnest Money Option Money

1. earnest money is part of the
purchase price
2. There is already a perfected
contract of sale when earnest
money is paid
3. since there is already a
perfected contract of a sale,
the buyer is bound to pay the
balance after payment of the
earnest money
1. option money is separate and
distinct from the purchase
price
2. sale is not yet perfected even if
option money is paid
3. optioner is not required to pay
the balance after payment of
the option money

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Pactum Reservati Domini (PRD)

 Pactum reservati dominii - a stipulation where parties agree that despite

delivery, the ownership of the thing shall remain with the seller until the
purchaser has fully paid the price.

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Elements of Contract of Sale:

 Consent

 Object

 Price in money or its equivalent

A seller need not be the owner at the time of perfection; but he must be the
owner at the time of delivery because it is only when the object is delivered
that the vendee acquires ownership. It is sufficient that he be the owner at
the time the obligation to deliver arises.

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Objects of a contract of sale:

 things having a potential existence

 thing that are existing or to be manufactured, raised or acquired in the
future, or “future goods”
 those whose acquisition by the seller depends upon a contingency which
may or may not happen
 things subject to a resolutory condition.

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Gross inadequacy of price

 Gross inadequacy of price does not affect a contract of sale, except:

 it may indicate a defect in the consent or that the parties really

intended a donation or some other act or contract. It is not material
when the law gives the owner the right to redeem the property sold at
the auction sale.

 A contract of sale is perfected at the moment there is a meeting of

minds upon the thing which is the object of the contract and upon the
price.

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“Unpaid seller”

 A seller is an “unpaid seller”

 when the whole price has not been paid or tendered;
 when a check is issued and then refused payment by the dishonor of
the instrument

 Rights of an “unpaid seller”

 a lien on the goods or right to retain them for the price while he is in
possession of them;
 in case of insolvency of the buyer, a right of stopping the goods in
transit after he has parted with the possession of them;
 a right of resale
 a right to rescind the sale

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“Purchaser in good faith”

 Purchaser in good faith is one who buys the property of another without
notice that some other person has a right to or interest in such property
and pays a full and fair price for the same at the time of purchase or before
he has notice of the claim or interest of some other person in the property.

 The Right of Innocent Purchases for Value must be respected and

protected notwithstanding the fraud employed by the seller in securing
his title. That’s why a forged or fraudulent document can vest title.

Reliance on Torrens Certificate of Title

 A person dealing with a registered land has a right to rely on the Torrens
Certificate of title and to dispense with the need of inquiring further except
 when the party has actual knowledge of facts and circumstances that would
impel a reasonably cautious man to make such inquiry or
 when the purchaser has knowledge of a defect or the lack of title in his
vendor or of sufficient fact to induce a reasonably prudent man to inquire
into the status of the title of the property in litigation.

 The presence of anything which excites or arouses suspicion should then

prompt the vendee to look beyond the certificate and investigate the title of the
vendor appearing on the face of said certificate.
 One who falls within the exception can neither be denominated and
innocent purchaser for value or a purchaser in good faith; hence does not
merit the protection of the law.

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Rule on Double Sale & “Caveat Emptor”

 “The rule on double sale giving better right to the buyer in good faith
who registered his sale does not apply to unregistered land.”

 The rule of “caveat emptor” is applicable to execution sales. The sheriff

does not warrant the title to the property sold by him, and it is not
incumbent upon him to place the purchaser in possession of such
property. The buyer has to exercise due diligence.

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REB 2004

 When a property is sold to 2 or more buyers, the property goes to:

A. buyer in good faith and who first registered with Register of Deeds
B. buyer who pays the highest price
C. buyer who was the firs in possession
D. None of the above

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Right to Repurchase

 “Conventional redemption” – takes place when the vendor reserves the

right to repurchase the thing sold with the obligation to return the price
delivered as well as the expenses of the contract and necessary and useful
expenses made on the thing.

 The right to repurchase must be reserved in the same deed of sale. If it is

reserved in a separate instrument, then the document is not a sale with
right to repurchase. The same is merely a promise to sell which is
discretionary on the vendee a retro.

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Right to repurchase (contd.)

 The essence of a sale with right to repurchase – is that the tile and
ownership of the property sold is immediately vested in the vendee a retro
subject to the resolutory condition of repurchase by the vendor a retro
within the period stipulated. Failure to perform said resolutory condition
vests upon the vendee by operation of law absolute title or ownership
over the property sold.

 The exercise of the right to repurchase is right, not an obligation.

Therefore, the tender of a check is sufficient to compel redemptions, but it
is not in itself a payment that relieves the redemptioner from his liability to
pay the redemption price. In fact, there is no prescribed form for an offer
to redeem. It may be done by a formal offer to redeem or the filing of an
action in court.

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Instances that a contract is presumed to be

an equitable mortgage:
 when the price of a sale with right to repurchase is unusually inadequate;
 when the vendor remains in possession as lessee or otherwise;
 when upon or after the expiration of the right to repurchase, another
instrument extending the period of redemption or granting a new period
is executed;
 when the purchaser retains himself a part of the purchase price;
 when the vendor binds himself to pay the taxes on the thing sold;
 in any other case where it may be fairly inferred that the real intention of
the parties is that the transaction shall secure the payment of a debt or the
performance of any other obligation.

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Equitable mortgage & pacto de retro sale

 The execution of a contract extending a contract of sale with right to

repurchase can be construed as indicative of an equitable mortgage.

 The mere fact that the price in a pacto de retro sale is not the true value of
the property does not justify the conclusion that the contract is one of
equitable mortgage. When the terms of the contract clearly show that it is
one of sale with right to repurchase, it must be interpreted according to its
literal sense and held to be such a contract.

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Redemption

 In the absence of an agreement, the repurchase by the vendor a retro

must be done within four (4) years from the date of contract. If there is an
agreement, the period cannot exceed ten (10) years.

 In case of failure to redeem, there shall be consolidation of ownership in

the vendee a retro. Consolidation is a matter of law. Such failure results in
the loss of the right to repurchase. Registration of the consolidated
ownership requires a judicial order after the vendor shall have been
notified. The seller – a retro should be notified in order to comply with the
due process clause.

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Redemption (contd.)

 The vendor cannot avail himself of the right to repurchase without

returning to the vendee the price of the sale, and in addition:
 the expenses of the contract, and any other legitimate payments made
by reason of the sale;
 the necessary and useful expenses made on the thing sold.

 “Legal redemption” – is the right to be subrogated, upon the same terms

and conditions stipulated in the contract, in the place of one who acquires
a thing by purchase or dation in payment, or by any other transaction
whereby ownership is transmitted by onerous title.

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Persons who cannot acquire by purchase

1. the guardian, with regards to the property of the person

under his guardianship;
2. agent, with respect to the property whose administration or
sale have been entrusted to him, unless the principal was
informed before the purchase.
3. executor and administrator, with respect to the property
under their administration;
 The sale by persons named above, if made, is only voidable because
only private interest is affected and the defect can be cured by
ratification of the seller

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Persons who cannot acquire by purchase

(contd.)
4. public officers and employees, with respect to government properties
entrusted to them. It shall apply to judges and government experts who
take part in the sale;
5. justices, judges, prosecuting attorneys, clerks of superior courts and other
officers and employees connected with the administration of justice, with
respect to the properties in litigation before the court with their
jurisdiction. This prohibition shall apply to lawyers, with respect to
property under litigation which they handle by virtue of their profession;
6. other persons disqualified by law.
 the sale is null and void because public interest is involved.

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Sale between Husband & Wife

 The husband and wife cannot sell property to each other, except:
 when a separation of property was agreed upon in the marriage
settlements; or
 when there has been a judicial separation of property

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When the same immovable thing is sold to

different purchasers
 Ownership shall be transferred:
 to the person acquiring it who in good faith recorded it in the Registry
of property;
 in default thereof, to the person who in good faith was first in
possession
 in default thereof, to the person who present the oldest title, provided
there is good faith (Art. 1544 NCC)

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Actions by Vendee

 “Accion redhibitoria” – an action instituted by the vendee against the

vendor to avoid a sale on account of some vice or defect in the thing sold
which renders it unfit for the use intended or which will diminish its fitness
for such use to such an extent that, had the vendee been aware thereof, he
would not have acquired it.

 “Accion quanti minoris” – an action to procure the return of a part of the

purchase price paid by the vendee to the vendor by reason of such defect.

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LEGAL ASPECTS OF LEASE

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Definition of Terms

 Lease is a consensual, bilateral, onerous and commutative contract by

virtue of which one person binds himself to grant temporarily the use of a
thing or to render some service to another who undertakes to pay some
rent, compensation or price.

 Lease of thing – one of the parties binds himself to give to another the
enjoyment or use of a thing for a price certain, and for a period which
maybe definite or indefinite. However, no lease for more than 99 years
shall be valid.

 Lease of work or service – one of the parties binds himself to execute a

piece of work or to render to the other some service for a price certain,
but the relation of principal and agent does not exist between them.
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Lease of Thing vs Lease of Work or Service

Lease of Thing Lease of Work or Service

 the object of the contract is a
thing,
 the principal obligation of the
lessor is to deliver the thing
leased to the lessee, where in
the second,
 the remedies available in case
of breach are actions for
specific performance or for
damages
 the object is some work or
service
 the principal obligation of the
lessor is to perform some work
or service for the lessee
 the only remedy available is, as
a general rule, an action for
damages.

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Lease vs Rent

 Lease – it is a consensual, bilateral, onerous, and commutative contract by

which one person binds himself to grant temporary the use of a thing or
the rendering of some service to another who undertakes to pay some
rent, compensation, or price.

 Rent – is the compensation either in money, provisions, chattels, or labor,

received by the lessor from the lessee.

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Lease vs Sale

LEASE
 Only use or enjoyment is
transferred
 Transfer is temporary
 Lessor need not be the owner
 The price of the object,
distinguished from the rent, is
usually not mentioned.
SALE
 Ownership is transferred
 Transfer is permanent
 Seller must be the owner at the
time the property is supposed
to be delivered
 Usually, the selling price is
mentioned

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Obligations of the lessor

 to deliver the thing which is the object of the contract in such a

condition as to render it fit for the use intended;
 to make on the same during lease all the necessary repairs in
order to keep it suitable for the use to which it has been
devoted, unless there is a stipulation to the contrary;
 to maintain the lessee in the peaceful and adequate enjoyment
of the lease for the entire duration of the contract
 Lease fee estate - The right of an owner-lessor to receive the
contract rent and reversion of the property at the end of the lease

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Obligations of the lessee

 to pay the price of the lease according to the terms

stipulated
 to use the thing leased as a diligent father of a family,
devoting it to the use stipulated; and in the absence of
stipulation, to that which maybe inferred from the
nature of the thing leased, according to the customs of
the place;
 to pay the expenses for the deed of lease
 If the lessor or lessee should not comply with their
respective obligations, the aggrieved party may ask for
the rescission of the contract and indemnification for
damages, or only the latter, allowing the contract to
remain in force.

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Tacit renewal of a contract of lease (Tacita

reconduccion)

 it refers to the new contract of lease which is implicitly

created or established if at the end of the old contract
the lessee should continue enjoying the thing leased for
15 days with the acquiescence of the lessor, provided
that a notice to the contrary had not been previously
given by either party.
 The period of the implied new lease in such case shall
be the legal period established but the other terms of
the original contract shall be revived.

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Grounds for which the lessor may judicially

eject the lessee

 when the period agreed upon, or that which is fixed

for the duration of lease has expired;
 lack of payment of the price stipulated;
 violation of any of its conditions agreed upon in the
contract
 when the lessee devotes the thing lease to any use
or serve not stipulated which causes the
deterioration thereof; or if he does not observe the
requirement as regards the use thereof;

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Limitations Imposed upon the Lessor in order to

protect the Lessee (PD 20)

 no lessor shall increase the rental as agreed upon

 no lessor may demand a deposit for any purposed of
any amount in excess of 2 month’s rental in advance,
and
 no lessor may judicially eject the lessee when the
period which is fixed for the duration of leases has
expired.
 the only effect of the said decree upon provision of
Article 1673 (NCC) is to suspend partially the provision
of par. (1) of Art. 1683 xxxx insofar as they refer to
dwelling units or land on which another’s dwelling is
located shall be suspended until otherwise provided.

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Requisites for Ejectment of Tenant

 Under the Rental Law – (BP Blg. 25; BP Blg. 877 as amended
by RA nos. 6643 and 8437), to warrant ejectment of a tenant
on the ground of need for personal use of the owner or the
immediate member of his family, the requisites are:
 the owner or lessor needs the property for his own use of for
the use of any immediate member of the family;
 such owner or immediate member of the family is not the
owner of any available residential unit;
 the period of lease has expired; and
 the lessor has given the lessee notice 3 months in advance of
lessor’s intention to repossess the property.

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Ejectment if lessor/lessee owns another

residential unit
 Even if the lessor/lessee owns another residential unit, if the same is
occupied, or it is not suitable for dwelling purposes, it is no obstacle to the
ejectment of a tenant on the ground that the premises is needed for the
use of the owner or the immediate member of his family.

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Ejectment (contd).
 If the tenants have not paid the rentals for no reason at all except
that the case is still pending in court, or the tenant was subleasing
the property without the knowledge or consent of the
owners/lessors, the court, in the interest of justice, should not
hesitate to suspend the rules by ordering the ejectment of such
tenants although such non payment of rentals is not one of the
stated grounds for the litigation.
 While it is the benign policy of the State to give all possible assistance
to tenants, particularly those coming from the low income group and
to help the landless acquire their own homes, this should not be
applied to the extent of oppressing the landowners/lessors by
enabling such tenants to occupy the premises when the landowner or
the immediate member of his family needs the premises for his own
use, or when the tenants have not paid the rentals due pending
litigation, or otherwise subleased the premises without the knowledge
nor consent of the owner/lessor. The court should step in to see that
the scales of justice are equitably tipped the relieve the owner/lessor
from his unfortunate plight.
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Instances where the purchaser of the thing leased cannot

terminate the lease

 where the lease is recorded in the registry of

property
 where there is stipulation in the contract of sale
that the purchaser shall respect the lease;
 where the purchaser knows of the existence of
the lease;
 where the sale is fictitious; and
 where the sale is made with right of repurchase

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Period if Duration of Lease is Not Fixed

 As regards rural land

 understood to have been made for the time necessary for the gathering of
the fruits which the whole estate may yield in one year, or which it may
yield once, although 2 or more years may have elapsed for the purpose
 As regards urban property –
 understood to be from year to year, if the rent agreed upon is annual; from
month to month, if it is monthly; from week to week, if the rent is weekly,
and from day to day, if the rent is to be paid daily
 the court may fix a longer term for the lease after lessee has occupied the
premises for over one year even though a monthly rent is paid, and no
period for the lease has been set
 the courts may likewise determine a longer period after lessee has been in
possession for over 6 months if the rent is weekly
 the court may also fix a longer period after the lessee has stayed in place
for over one month in case of daily rent

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Subleasing vs assignment of lease

Contract of Sublease Assignment of Lease

1. lessee does not transmit absolutely
his right and obligations to the sub
lessee.
2. the personality of the lessee does not
disappear
3. there are 2 leases and 2 distinct
juridical relationships although
intimately connected and related to
each other
4. the sub lessee, generally, does not
have any direct action against the
owner of the premises as lessor, to
require the compliance of the
obligations contracted with the
plaintiff as lessee or vice versa.
1. lessee transmits absolutely his right
and
2. the personality of the lessee who
assigns the lease disappears
3. there only remains in the juridical
relation two persons: the lessor and
the assignee, who is converted into a
lessee.
4. the lessee (assignee) has direct action
against the owner of the premises as
lessor, to require the compliance of
the obligations contracted with the
plaintiff as lessee or vice versa.

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Consent of Lessor

 Consent of the lessor is necessary in an assignment of lease because it

involves the transfer not only of rights but also of obligations. It
constitutes a substitution of one of the parties, lessee.
 In case of sublease, the sub lessee maybe liabe to the lessor in the
following instances:
 all acts which refer to the use and preservation of the thing leased in the
manner stipulated between the lessor and the lessee;
 the sub lessee is subsidiarily liable to the lessor for any rent due from the
lessee. However, sub lessee shall not be responsible beyond the amount of
rent due from him, in accordance with the terms of the sublease, at the time of
the extrajudicial demand by the lessor.

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Repairs of Leased Property

 As a rule, the lessor is under obligation to make necessary repairs in

order to make the premises suitable for the purpose it is intended,
unless there is a stipulation to the contrary. If there is a stipulation
that the lessee shall be responsible for the necessary repairs, then,
he must not rely upon the lessor to make such repairs because that
is a binding contract.
 If the contract of lease is silent as to who shall bear the expenses for
repairs, as to necessary or major repairs, the same shall be borne by
the lessor. Minor repairs shall be borne by the lessee.
 If the lessor does not make the major or necessary repairs, the
lessee may ask for the rescission of the contract and
indemnification for damages, or only the latter, allowing the
contract to remain in force.

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Peaceful & Adequate Enjoyment of Lease

 The law requires the lessor “to maintain the lessee in the peaceful
and adequate enjoyment of the lease for the entire duration of the
contract”.
 He must see to it that the enjoyment is not interrupted or
disturbed, either by other’s acts or by his own.
 Case:
 The act of the lessor in padlocking the office of the lessee and of
enclosing with barbed wire the leased land violated the lessor’s third
obligation mandated by par. 3, Art. 1654 of NCC.
 When the lessor padlocked and fenced the leased land after 4 years
from the inception of the contract of lease, and 6 more years to go in
the life of the lease contract, the lessee become the aggrieved party
and is entitled to file a complaint for “damages and preliminary
injunction”.

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Non-Payment of Rentals

 Even if the contract of lease does not provide for rescission in case
of non-payment of rentals, the law itself grants the lessor such right.
(Article 1381 and 1659 NCC). It must be recalled that the right of
rescission is implied in reciprocal obligations.
 A payment to the lessor by the sub lessee is not payment to the
sub lessor. The lessor is a stranger to the sublease agreement.
 If the lessor refuses to accept the rentals, the remedy of the lessee
is make a proper tender of payment and consignation in order to
extinguish the debt. Failure to comply with the requirements is a
ground for ejectment. Delayed consignation or deposit will not
extinguish the obligation of the lessee.
 Willingness to pay is not payment. There must be consignation.

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Boarders in Leased Premises

 The taking in of boarders by the lessee in the leased premises

without the consent of the lessor did not violate the lease
agreement, for a prohibition against subleasing may not
embrace the taking in of boarders and assigning rooms or
bedspaces for them in the leased premises, did not relinquish
or surrender his lease to them.
 He did not cease to become the actual occupant and possessor of the
leased premises.
 He did not surrender the possession and control of the leased
premises or a part thereof.
 By accepting boarders in the apartment, the lessee did not sublease
portion of the apartment to the boarders but only agreed to provide
them with meals and/or lodging for a price.

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Lease to Aliens

 Under the NCC, the period of lease is allowed up to

99 years.
 PD 471 (Fixing a Maximum Period for the Duration of
Leases of Private Lands To Aliens, 1974) , however,
has limited the period to 25 years only, renewable for
another 25 years.

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Extinguishment of Lease

 If a building is totally destroyed, the lease is

extinguished.
 If there is only partial destruction, the lessee can
choose between reduction of the rent and rescission.
 If the building and the land are leased and the
building is burned, the lease is extinguished, unless
the lease on the land is separate from the building.

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LEGAL
ASPECTS OF
MORTGAGE

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Real Estate Mortgage

 Real Estate Mortgage (REM)– it is a contract in which

debtor guarantees to the creditor the fulfillment of
the principal obligation, subjecting for the faithful
compliance therewith a real property in case of non-
fulfillment of said obligation at the time stipulated
☺ The word “mortgage” is derived from the French words “mort”
and “gage”. “Mort” means “dead” and “gage” means pledge.
Thus it means a dead pledge or unproductive pledge.

58

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Essential requisites of Real Estate Mortgage

 it must be constituted to secure the performance of the

principal obligation;
 the subject matter of the contract must be immovable
property or alienable real rights upon immovables
 the mortgagor must be the absolute owner of the
property mortgages;
 the mortgagor should have the free disposal of the
property mortgaged, and in the absence thereof, he
should be legally authorized for the purpose

59

Essential Requisites of REM (contd)

 when the principal obligation becomes due, the

property mortgaged may be alienated for the
payment of such obligation
 registration in the Registry of Property is not
necessary for the validity of the contract. However, it
is necessary for the purpose binding third persons.
Consequently, whether registered or not, the
contract is binding upon the properties.

60

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Different kinds of real estate mortgages

 voluntary or conventional mortgages - those agreed

to between the parties, or constituted by the will of the
owner of the property in which they are created
 legal mortgages - those constituted by operation of
law
 equitable mortgages - those which lack one or some
of those formalities or other requisites prescribed by
law, but show the intention of the parties to charge real
property or real rights as security for the payment of a
debt and contains nothing which is impossible or
contrary to law
 judicial mortgage – those resulting from a judgment of
the court

61

Contract of real estate mortgage vs contract of sale

with right to repurchase

contract of real estate mortgage (REM) contract of sale with right to

a REM is an accessory contract
1. there is no transfer of title and
possession of the property
2. the creditor has no right to the fruits
of the property during the pendency
of the mortgage
3. if the debtor fails to pay his debt, the
creditor cannot appropriate the
property mortgaged nor dispose of it
4. if the debtor fail to pay within the time
agreed upon the mortgage does not
acquire the property mortgaged
repurchase (SRTR) or pacto de retro
sale
1. SRTR is a principal and independent
contract
2. there is a transfer of title and
possession of the property, although
conditional;
3. the vendee a retro is entitled to the
fruits even during the period of
redemption
4. as soon as there is a consolidation of
title in the vendee a retro, he may
dispose of it as absolute owner
5. if the vendor a retro does not redeem
the property within the time agreed
upon, the vendee a retro irrevocably
acquires absolute ownership thereof

62

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Real Mortgage vs Chattel Mortage

REAL MORTGAGE CHATTEL MORTGAGE

a) Constituted on immovables a) Constituted on movables
b) May guaranty future b) Cannot guarantee future
obligations obligations

63

Similarity of mortgage and pledge

 both subjects the property to the fulfillment of the

obligation as security
 both guarantee the performance of a principal
obligation
 in both cases, the creditor cannot appropriate the
property to himself
 when the obligation is not paid, the property must be
sold and the proceeds applied to the payment of the
debt

64

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Real Estate Mortgage vs Pledge

Real Estate Mortgage (REM) Pledge

1. real estate mortgage is a
consensual contract;
2. the subject of real estate
mortgage is real property;
3. the possession of the thing
mortgage remains with the
debtor;
4. the mortgagee does not posses
the right to receive the fruits of
the thing pledged;
5. the foreclosure of the thing
mortgaged may either be judicial
or extrajudicial.
1. pledge is a real contract
2. the subject of pledge is personal
3. the possession of the thing
pledged is vested in the creditor
4. the pledgee has the right to
receive the fruits of the thing
pledged, with the obligation of
applying the same to the interest
of the debt, if owing, and the
balance, if any, to the principal
5. the sale at public auction of the
thing pledged is always
extrajudicial

65

Relevant Terms

 Pending fruits or those which are not yet harvested

when the obligation becomes due are covered by the
contract of real estate mortgage, but not those which
are already harvested.
 “Pactum de non alienado” – a stipulation in a contract
of real estate mortgage prohibiting the owner of the
mortgaged property from alienating the property
during the pendency of the mortgage
 “Tipo” or “up set price” – stipulation in a mortgage of
real property fixing a minimum price at which the
property shall be sold, to become operative in the event
of a foreclosure sale at public auction. It is, however,
void for the property must be sold to the highest
bidder.

66

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Redemption

 Redemption of foreclosed property – a transaction by which the

mortgagor reacquires or buys back the property which may have
passed under the mortgage or diverts the property of the lien
which the mortgage may have created. It is allowed in case of
foreclosures in favor of banking and credit institutions and in
extrajudicial foreclosures.
 Equity of redemption – a right of the mortgagor to redeem the
mortgaged after his default in the performance of the conditions of
the mortgage but before the sale of the mortgaged property or
confirmation of the sale
 Right of redemption – a right of the mortgagor to redeem the
mortgaged property within a certain period after it was sold for the
satisfaction of the mortgage debt. It is supposed to be exercised
within one (1) year from registration of the sale.

67

Requisites for valid redemption

 the redemption must be made within 12 months from the

time of the registration of the sale;
 payment of the purchase price of the property plus 1%
interest per month together with the taxes thereon, if any,
paid by the purchases with the same rate of interest
computed from the date of registration of the sale
 written notice of the redemption must be served on the
officer who made the sale and a duplicate filed with the
proper Register of Deeds.

68

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Possession and Ownership

 Mortgagee in possession – one who has lawfully acquired actual

or constructive possession of the premises mortgaged to him,
standing upon his rights as mortgagee and not claiming under
another title, for the purpose of enforcing his security upon such
property or making its income help to pay his debt
 “Pactum commissorium” – a stipulation in a contract of mortgage
that the mortgagee shall become the owner of the thing
mortgaged if the mortgagor cannot pay his obligation. Under the
law, “the creditor cannot appropriate the things given by way of
mortgage, or dispose of them. Any stipulation to the contrary is
void.” (Article 2088) The remedy of the creditor in order that his
credit may be satisfied is to alienate the thing mortgaged to satisfy
the payment of the obligation.

69

Defeasance Clause

 The provision in a mortgage contract that ends the mortgage when all
payments are made, transferring title to the property back to the
mortgagor or terminating the lender's interest in the property

70

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Antichresis

 Antichresis is a contract whereby a person borrowing money of another,

hands over his property to the creditor, allowing the use and occupation
thereof, for the interest on the money lent.

71

Mortgage vs antichresis

Real Estate Mortgage Antichresis

 a mortgagor retains
possession of the
property as to fruits
 a creditor does not
receive the fruits
 the debtor-mortgagor
usually pays the property
taxes
 the debtor surrenders
possession of the
property to the creditor
 the creditor generally
receives fruits
 the creditor is obliged to
pay the property taxes

72

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MACEDA LAW
RA 6552
(Realty Installment Buyer
Protection Law)

73

 Maceda Law is the law that provides

protection to buyers of real estate on
installment payment. It is also known as
Realty Installment Buyer Protection Law.
 Coverage
 All transactionsor contracts involving the sale or
financing of real estate on installment basis,
including residential condominium apartments
where the buyer has paid at least two (2) years
installments.

74

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Types of sale which are not covered by

Maceda Law

 Sale of Commercial buildings;

 Sale of Industrial lots;
 Sale to tenants under RA#3844; and
 Installment sales covered by Sale with Mortgage and not by
Contract to Sell.

75

Rights of the buyers in case of default in payments

of the succeeding installments

 To pay without additional interest the unpaid installment due within

the total grace period earned;
 In case of contract cancellation, to be refunded with at least fifty
percent (50%) of the cash surrender value of the installment
payments made with an additional five percent (5%) thereof if
installment payments are made after five years but not more than
ninety percent (90%) of the total payments made;
 To sell or assign the rights to another person;
 To reinstate the contract by updating the accounts during the grace
period and before the actual cancellation of the contract;
 To pay in advance any installment;
 To pay anytime the full the balance of the purchase price without any
interest; and
 To have the full payment annotated in the Certificate of Title of the
property.

76

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Allowable grace period

 The unpaid installment payments which are due and demandable

shall have a grace period of one (1) month for every one (1) year of
installment payments made.

77

Buyers who paid installments of less than two

(2) years

 They are also protected by the Maceda Law. The buyers are
entitled to a grace period of sixty (60) days to pay their
amortization from the date the installment became due and
demandable.

78

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Cancellation of Contract

 In case of cancellation of the contract, buyers under the

Maceda Law (RA#6552) are entitled to receive refund of
the cash surrender value equivalent to fifty percent (50%)
of the installments made but not to exceed ninety percent
(90%) of total payments made.
 If the contract is under Maceda Law (RA#6552), buyer
who has paid two (2) years installments shall be refunded
an amount equivalent to fifty percent (50%)of the total
payments made and shall also be entitled to a grace
period of 60 days.

79

SAMPLE BOARD EXAM

QUESTIONS

80

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 In all cases, a deed of sale titled in the name of “Juan married to

Maria” has to be signed by both spouses.
 TRUE  FALSE

FALSE (not in all cases; property is exclusive property if

inherited or donated.)

 All Filipinos who are of the age of majority can enter into a
contract of sale.
 TRUE  FALSE
FALSE (there are exemptions)

 A unilateral deed of sale may only be signed by the vendor.

 TRUE  FALSE
TRUE

81

 In all kinds of foreclosure of mortgage, the mortgagor has always

the right to redeem the property within a period of a one year.
 TRUE  FALSE
FALSE
 An alien cannot accept a real mortgage because in case of
foreclosure, he cannot participate in the public auction sale.
 TRUE  FALSE
FALSE
 Under the Maceda Law, a buyer who paid more than two years of
installment is entitled to a refund of all payments in case of
cancellation of contract.
 TRUE  FALSE
FALSE (50 % after 5th year additional 5% per year provided total
will not exceed 90%)

82

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 The expenses for the execution and the registration of the sale
of real estate shall always be borne by the vendor.
 TRUE  FALSE
FALSE (depends on agreement)
 A deed of sale with mortgage is covered by Maceda Law
because it is in essence still an installment sale.
 TRUE  FALSE
FALSE
 A real estate mortgage can only secure financial obligations.
 TRUE  FALSE
FALSE (can secure all kinds of obligations)
 Parents have the exclusive right to be appointed guardian of
the property of their minor child.
 TRUE  FALSE
FALSE

83

 In a judicial foreclosure of mortgage, the mortgagor has a

right of redemption.
 TRUE  FALSE
FALSE (equity of redemption)
 Title to real estate can be transferred to another person
without the consent of the registered owner.
 TRUE  FALSE
TRUE (in case of involuntary conveyance such as foreclosure
sale)
 A notice of adverse claim annotated on a title is valid only for
twenty days.
 TRUE  FALSE
FALSE (30 days)

84

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 In extrajudicial foreclosure of mortgage of real estate

acquired through homestead, the redemption period is one
(1) year from auction sale.
 TRUE  FALSE
FALSE (5 years)
 Open mortgage is a kind of mortgage which can be paid
even before maturity.
 TRUE  FALSE
TRUE
 A conditional sale is a sale of a thing having a potential
existence.
 TRUE  FALSE
TRUE

85

 Property foreclosed judicial can no longer be redeemed by

the owner after the auction sale has been confirmed by the
court, except when the mortgage is a bank where redemption
may still be made within one year from auction sale. –
 TRUE  FALSE
TRUE
 Under the law, the acceptance of earnest money by the seller
from the buyer is not a proof of the perfection of the contract.
 TRUE  FALSE
FALSE
 Act 6552 is the law-governing sale of real estate on installment
basis.
 TRUE  FALSE
FALSE (not Act 6552 but Republic Act 6552)

86

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 Under R. A. 6552, the seller can refuse to accept accelerated

payment in case of sale on installment basis.
 TRUE  FALSE
FALSE
 Earnest money shall be considered as part of the purchase price.
 TRUE  FALSE
TRUE
 A court action to remove cloud on the title is called Petition to quit
Title.
 TRUE  FALSE
TRUE
 Lis Pendens is a notice that the property is subject to pending court
litigation.
 TRUE  FALSE
TRUE

87

 A contract is a meeting of minds between two parties where by one

binds himself with respect to the other to give something or render
service.
 TRUE  FALSE
TRUE

 A unilateral promise to sell a parcel of land for a certain price that has
been accepted can still be withdrawn. –
 TRUE  FALSE
TRUE (accepted unilateral promise to sell is binding on the
promissory, if promise is supported by consideration distinct from
price. Question does not state that option money was paid)

 “A” bought the house of “B” a retro. There was an unrecorded lease on
the house in favor of “C”/”A” can immediately terminate the lease.
 TRUE  FALSE
FALSE (Buyer a retro is not yet owner while period to repurchase has
not yet expired)

88

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 The de facto separation of the spouses shall not affect the regime of
absolute community, except when there is a formal agreement to the
contrary.
 TRUE  FALSE
FALSE (agreement must be made before marriage)

 The Statute of Fraud is applicable when by virtue of an oral contract of sale,

the seller delivered to the buyer a parcel of land which was only partially
paid.
 TRUE  FALSE
FALSE (Statute of Fraud does not apply when there is partial performance)

 Both Pactum commission and Pactum de non aliendo are valid if stipulated
in the mortgage contract.
 TRUE  FALSE
FALSE

89

 A mortgage on real estate is a real property by analogy.

 TRUE  FALSE
Answer: TRUE

 In co-ownership, a co-owner can dispose of his share without the

consent of the other co-owners.
 TRUE  FALSE
Answer: TRUE

 A Torrens Title issued on the basis of a homestead which was

obtained thru fraud is as indefeasible as one which is judicially
secured.
 TRUE  FALSE
Answer: FALSE

90

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 An unrecorded sale a retro is preferred than a subsequent

registered mortgage.
 TRUE  FALSE
Answer: FALSE

 In conjugal partnership, a house intended for family use which was

acquired through the use of exclusive funds remains an exclusive
property. Hence, in case of sale thereof, marital consent is not
necessary.
 TRUE  FALSE
Answer: FALSE (Dissolution of family home requires consent of all
beneficiaries even though with exclusive funds)

 As a general rule, husband and wife can sell to each other.

 TRUE  FALSE
Answer: FALSE

91

 The property relation between the spouses may be governed by

stipulation in a contract freely and voluntarily entered into after the
solemnization of marriage. –
 TRUE  FALSE
Answer: FALSE (agreement must been made before marriage)

 Forfeiture is a process wherein a property used as collateral for a

loan is sold to pay the loan in case of default by the borrower.
 TRUE  FALSE
Answer: FALSE (foreclosure)

 The right to foreclose a mortgage prescribes in ten years.

 TRUE  FALSE
Answer: TRUE

92

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 A TCT is null and void if the foreigner’s name who is married to a

Filipina appears on the title.
 TRUE  FALSE
Answer: FALSE

 Consent is one of the elements of conveyance. Therefore, a deed

of sale must always be signed by both the seller and buyer in
order to be valid.
 TRUE  FALSE
Answer: FALSE (not in unilateral deed of sale)

 Open mortgage is a kind of mortgage which can be paid even

before maturity.
 TRUE  FALSE
Answer: TRUE

93

 In a sublease, the personality of the original lessee is extinguished.

 TRUE  FALSE
Answer: FALSE

 A real estate mortgage cannot be executed in favor of a foreigner

except when he can show proof that he is a former natural born
Filipino citizen.
 TRUE  FALSE
Answer: FALSE ( foreigners, even not former natural born Filipinos
can be mortgagee.)

 A contract purporting to be an absolute sale is presumed to be

equitable mortgage when the seller binds to pay taxes on the thing
sold.
 TRUE  FALSE
Answer: TRUE

94

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 A promise to buy sell a determine thing of price certain is

reciprocally demandable.
 TRUE  FALSE
Answer: TRUE

 The contract of lease provides expiration of lease of May 1, 2001. On

the said date, the lessor can legally order the lessee to vacate the
premises even without a prior demand to vacate.
 TRUE  FALSE
Answer: TRUE

 An undersigned mortgage is binding only to the mortgagor and

mortgagee.
 TRUE  FALSE
Answer: TRUE

95

 In interstate succession, the estate of the deceased person is divided among the
heirs in accordance with the last will he has executed.
 TRUE  FALSE
Answer: FALSE (in interstate succession, the decedent has no will)

 A notice of adverse claim annotated on the title is valid only for 30 days.
 TRUE  FALSE
Answer: TRUE

 Usufruct is a contract where property is hypothecated to secure an obligation

where the creditor is given the right to possess the property and collect the fruits
thereof. –
 TRUE  FALSE
Answer: FALSE

96

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 Under R. A. 6552, a buyer who has paid less than two years of installment is
entitled to grace period of no less than 30 days.
 TRUE  FALSE
Answer: FALSE (60 days)

 Extrajudicial foreclosure is undertaken in accordance with the provisions of Rule

68 of the Rule of Court.
 TRUE  FALSE
Answer: FALSE (Rule 68 of the Rules of Court applies to judicial foreclosure)

 Ferdinand Lopez, son of Filipino migrants in California, acquired American

citizenship by virtue of his being born in USA. As such, his rights to acquire real
properties in the Philippines are restricted by the prevailing laws on ownership by
an alien.
 TRUE  FALSE
Answer: FALSE (not natural born Filipino citizen)

97

 The lessor of an apartment in Malabon can legally increase the monthly rental
from P5, 000 to P6, 000 starting January 2002 consistent with the 5-year lease
contract expiring 31 December 2005.
 TRUE  FALSE
Answer: FALSE (answer is based on rent control law which expired December
31, 2005 underwhich maximum annual increase is only 10 %)

 A lessor is entitled to eject the lease upon the ground that the leased premises
had been sold to a third person, if the sale is registered.
 TRUE  FALSE
Answer: FALSE (problem does not state that lease registered, or buyer has
knowledge of lease, or sales contract provides buyer should recognized the
leasehold problem does not state that lease registered, or buyer has knowledge
of lease, or sales contract provides buyer should recognized the leasehold)

98

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 There cannot be conventional redemption unless it has been

stipulated in the Contract of Sale.
 TRUE  FALSE
Answer: TRUE

 Chika married Chiko in 1980. On 1987, Chika’s surviving parent

dies and she inherited a two hectare lot in Makati. After the
settlement of estate, chika sold the property without consent
and over the objection of Chico. The sale is not valid. –
 TRUE  FALSE
Answer: FALSE (Property is peripheral because inherited)

99

 An illegitimate child is also a compulsory heir and entitled to one-third the

share of a legitimate child.
 TRUE  FALSE
Answer: FALSE (1/2 share of legitimate child)

 In case area is different from that stated in the contract, if the sale is for a lump
sum there shall be no increase or decrease in the price.
 TRUE  FALSE
Answer: TRUE

 Lease of lands and building within ECOZONE to entities owned by aliens shall
not exceed fifty (50) years extendible once for a period of not more than 25
years.
 TRUE  FALSE
Answer: TRUE

100

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 Forfeiture is the seizure of a property by a Court order, usually

done to have it available in the event of adverse judgment of
appending case.
 TRUE  FALSE
Answer: FALSE (refer to attachments)

 Pactum de non aliendo is a stipulation which prohibits the

mortgage from alienating the property during the period of the
mortgage.
 TRUE  FALSE
Answer: TRUE

101

MULTIPLE CHOICE
 A buyer of real estate has already paid in 8 years of installment a
total amount of P520, 000.00 inclusive of P20, 000.00 penalty
interest. The cash surrender value of the property based on
Maceda Law is:
a. P200,000.00
b. P250,000.00 Computation

c. P325,000.00 50% x P500,000 = P250,000

d. None of the above ADD 5% per year after 5 yrs
5% x 3 yrs x P500,000 = 75,000
c. P325,000.00 TOTAL = P325,000

102

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 A stipulation in a mortgage contract where the

mortgagee is authorized to appropriate the
property upon default or non-payment of debt is:
a. Dacion en Pago
b. Tacita Reconducta
c. Pactum Commissorium
d. Pactum de non Aliendo
e. None of the above

c, Pactum Commissorium

103

 A contract where the property is hypotheticated to

secure an obligation where the creditor is given the
right to possess the property and collect the fruits
thereof is:
a. Real estate mortgage
b. Blanket mortgage
c. Equitable mortgage
d. Antichresis

e. None of the above

d. Antichresis

104

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 The conveyance of real estate in payment of an

obligation is:
a. Pacto en retro sale
b. Quit claim Deed
c. Dacion en pago
d. Deed of waiver
e. Cession of ownership

c. Dacion en pago

105

 The voluntary transfer of title to real estate is:

a. Adverse possession
b. Quit claim
c. Alienation
d. Surrender
e. None of the Above

c. Alienation

106

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 A provision in the blanket mortgage that

property whose loan value has been fully
paid shall be released from the mortgage:
a. Defeasance clause
b. Termination clause
c. Automatic redemption clause
d. Acceleration clause

c. Automatic redemption clause

107

 In the absence of a pre-nuptial agreement, the

following are excluded from the community
property, except:
a. Property acquired during the marriage by gratuitous title by
either spouse unless otherwise provided by the donor.
b. Fruits as well as income of property mentioned in letter (a),
unless otherwise provided by the donor.
c. Property acquired before the marriage by either spouse
who has legitimate descendants by a former marriage and
the fruits as well as the income, if any, of such property.
d. Jewelry for personal and exclusive use of either spouse
e. Property acquired before the marriage by either spouse
who has legitimate descendants by a former marriage and
the fruits as income, if any, of such property.

d. Jewelry for personal and exclusive use of either spouse

108

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 Title to an inherited property may be

transferred to the sole heir upon payment of
estate tax and execution and registration of a
legal document:
a. Extra-judicial Settlement of Estate
b. Extra- judicial Partition of Estate
c. Affidavit of Consolidation
d. Affidavit of adjudication
e. None of the above

d. Affidavit of adjudication

109

 X, owner of a 10- door apartment rented a unit to Y for a

period of one year. Under the law on lease, Y, without the
consent of X, may perform any of the following acts, except:
a. Sublease the unit
b. Assign his rights
c. Suspend payment if X fails to make the necessary repairs.
d. Demand payment reimbursement constituting one half of
the value of the usual improvements introduced in good
faith.

b. Assign his rights

110

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 A special power of attorney to sell a realty carries with it all the

following, except:
a. Power to find a purchaser
b. Power to sell directly
c. Power to sell only for cash
d. Power to fix the term of sale
e. None of the above

b. Power to sell directly

111

 The following liens can be found at the back of the title except:
a. Real estate tax liens
b. Mechanic’s liens
c. Mortgage lien
d. Judgment liens
e. None of the above

b. Mechanic’s liens

112

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 It means that short of foreclosure, the mortgagor agrees to

transfer ownership of the mortgaged property to the
mortgagee:
a. Dacion en pago
b. Redemption
c. Pacto de retro
d. Auction
e. None of the above

 a. Dacion en pago

113

 The right of an owner-lessor to receive the contract rent and

reversion of the property at the end of the lease is called:
a. Fee simple
b. Leasehold
c. Lease fee estate
d. Net lease
e. None of the above

 c. Lease fee estate

114

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 A mortgage which covers two or more properties is called:

a. Open mortgage
b. Close mortgage
c. Equitable mortgage
d. Blanket mortgage
e. Conventional mortgage

 d. Blanket mortgage

115

 A legal provision which requires agreement for

the sale of real estate to be in writing and
subscribed to by the parties to be enforceable
by action:
a. Defeasance clause
b. Parole clause
c. Statute of Fraud
d. Enforceability clause
e. Evidentiary clause

 c. Statute of Fraud

116

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 In the absence of any stipulation on the period, the

vendor in a pacto de retro sale may repurchase the
property within:
a. 4 years
b. 6 years
c. 8 years
d. 10 years
e. None of the above

 a. 4 years

117

 The maximum period that a foreigner may lease land in the

Philippines is:
a. Fifty years
b. Sixty years
c. Seventy-five years
d. Ninety years

 a. Seventy-five years

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 If a contract of sale is to deed of sale, contract to sell is to:

a. Pacto de retro sale
b. Deed of conditional sale
c. Deed of sale with mortgage
d. Daction en pago

 b. Deed of conditional sale

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 Registration of a real estate instrument can be given due

course even without the presentation of the owner’s duplicate
certification of title when the document is:
a. Notice of Adverse claim
b. Notice of Lis Pendens
c. Writ of attachment
d. All of the above
e. None of the above

 d. All of the above

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 Special power of attorney is necessary in the following cases,

except:
a. To perform acts of administration
b. To lease real property for more than one year
c. To convey real rights on immovable property
d. To cancel any obligation gratuitously

 a. To perform acts of administration

121

 In a sale retro where it is stipulated that the vendor

has the right to repurchase the property “when he
has the means”, he has ___________to redeem it.
a. 3 years
b. 4 years
c. 10 years
d. 20 years
e. None of the above

 c. 10 years

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 Seizure of a property by court order, usually done

to have it available in the event of adverse
judgment in a pending suit, is:
a. Escheat
b. Forfeiture
c. Foreclosure
d. Attachments
e. Conveyance

 d. Attachments

123

 In the absence of a valid pre-nuptial agreement, the governing

property relations of a married couple is:
 a. Conjugal property
b. Absolute community of property
 c. complete separation of property
 d. regime of separation of property

 b. Absolute community of property

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 Under the Rent Control Law, the lessor may ask for a deposit
rental not exceeding:
a. 1 month
b. 2 months
c. 3 months

 b. 2 months
 Note: Answer is base on rent control law which expired
December 31, 2004.

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 Conjugal partnership can be dissolved by:

a. Legal separation
b. Annulment of marriage
c. Judicial separation of property
d. Any of the above

 Any of the above

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 A provision in a mortgage contract which releases the

property from the encumbrance when the obligation is fully
paid:
a. Automatic redemption clause
b. Non-liability clause
c. Defeasance clause
d. Exculpatory clause

 c. Defeasance clause

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 A TCT has an annotation that says” subject to sec.4, Rule 74

of the Rules of Court. It means that the property is subject to
claim by any heir unduly deprived of lawful participation in
the settlement of the decedent’s estate within”
a. 2 years
b. 4 years
c. 6 years
d. 10 years
e. None of the above

 a. 2 years

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 The following are types of property descriptions ordinarily

used in deeds, contracts, offer to sell, except:
a. Rectangular survey
b. Lot number
c. Monuments
d. Metes and bounds

 a. Rectangular survey

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 In case of refusal of the lessor to accept payment of the rental

agreed upon, the lessee may either deposit by way of
consignation, the amount in:
a. Court
b. City/ Municipal treasurer
c. Bank in the name of and with notice of the lessor
d. Any of the above
e. None of the above

 d. Any of the above

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 The sale of a piece of land which was made

through an agent whose authority is verbal is:
a. Voidable
b. Unenforceable
c. Rescindable
d. Void
e. None of the above

d. Unenforceable

131

 Husband and wife can sell property to each other in the following
circumstances, except when:
a. A separation of property was agreed upon in the
prenuptial agreement
b. There has been a judicial separation of property
c. There has been a legal separation
d. Spouses have been separated for more than 10 years.

 d. Spouses have been separated for more than 10 years.

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 Essential requirements of a contract to sale:

a. Consent or meeting of minds of buyer and seller
b. Object or subject matter
c. Cause of consideration
d. All of the above
e. None of the above

d. All of the above

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