First, we must define what is an encumbrance. An encumbrance is a claim, lien, or liability attached to a property that can affect its transferability or diminish its value. Encumbrances are often annotated on the certificate of title to notify the public of any claims or interests over the property. These annotations can be made voluntarily or involuntarily by parties who have a legitimate interest in the property. Common types of encumbrances include property tax liens, mortgages, easements, and restrictive covenants. The details of these encumbrances are usually found on the back of the certificate of title.
What then is Guardianship? Is it considered as an Encumbrance?
Rule on Guardianship of minors or incompetent
Guardianship refers to a legal relationship where a court appoints a person (the guardian) to care for and manage the personal and/or financial affairs of another person (the ward) who is unable to manage their own affairs due to age, incapacity, or disability. Under Section 1, Rule 93 of the Rules of Court on appointment of guardians, it provides that, “any relative, friend, or other person on behalf of a resident minor or incompetent who has no parent or lawful guardian, or the minor himself if fourteen years of age or over, may petition the court having jurisdiction for the appointment of a general guardian for the person or estate, or both, of such minor or incompetent. An officer xxx in the Philippines may also file a petition in favor of a ward thereof, and the Director of Health, in favor of an insane person who should be hospitalized, or in favor of an isolated leper.”
The actions taken by a guardian concerning the ward’s estate can create encumbrances. Under Rule 95 of the Rules of Court, a guardian may be authorized by the court to mortgage, sell or encumber, the ward’s real property if the income of the estate is insufficient to maintain the ward or if it is deemed beneficial for the ward.
Moreover, Rule 96 of the Rules of Court presents the general powers and duties of guardians. Under this Rule, Section 1 provides that “a guardian appointed shall have the care and custody of the person of his ward, and the management of his estate, or the management of the estate only, as the case may be. The guardian of the estate of a non-resident shall have the management of all the estate of the ward within the Philippines, and no court other than that in which such guardian was appointed shall have jurisdiction over the guardianship.” Other duties of the guardian are to pay debts of ward, to settle accounts, collect debts, and appear in actions for ward, estate to be managed frugally, and proceeds applied to maintenance of ward, authorized to join in partition after hearing, and the rendering of inventories and accounts of guardians, and appraisement of estates.
These encumbrances remain in effect until the guardianship is dissolved, which occurs when the minor comes of age, the incapacitated person regains competence, or the ward passes away. At this point, the court may issue an order for the removal of the guardianship encumbrance from the title.
Dissolution of Guardianship
The termination of guardianship marks the end of the guardian’s powers and duties. Upon the dissolution of the guardianship, the court shall issue an order that serves as a basis for the removal of any encumbrances related to the guardianship from the property title. This process restores the property’s title to its prior state, free of any claims related to the guardianship.
Sounds Overwhelming? It doesn’t have to be!
Given the complexities associated with encumbrances, it’s advisable to seek professional assistance. Here at Filedocsphil, in coordination with Duran & Duran-Schulze Law, our experienced team of lawyers and professionals is here to make it seamless and hassle-free. We provide invaluable support in identifying and resolving encumbrances.
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Need further information and assistance regarding encumbrance? Talk to our team at FILEDOCSPHIL to know more about the requirements and process. Call us today at (+63) 917 149 2337 or send an email to info@filedocsphil.com or simply message us through the live chat for more information.