Dear PAO,
My friends and I jointly purchased a condominium unit with the intention of converting it into an Airbnb investment. Unfortunately, one of our co-owners passed away in a car accident. He was not married and had been abandoned by his family; his only known relative is an estranged father whose whereabouts are unknown. Due to delays in the construction of the condominium, we have decided to request a refund of our payments. However, one of the requirements is that the claim should be filed by all buyers. This presents a problem since our co-owner has already passed away. How should we proceed in this situation, particularly with respect to an extrajudicial settlement?
Rhett
Dear Rhett,
You generally cannot validly undertake an extrajudicial settlement (EJS) of your deceased co-buyer’s estate unless all his legal heirs and/or a duly authorized representative of his estate are able to participate. Where the father — who may be a compulsory heir — is unknown or cannot be located, the more practical course is to (a) exert efforts to identify and locate the heirs and secure proper authority, or (b) if unsuccessful, initiate judicial estate proceedings so that a court-appointed administrator may execute the developer’s refund documents on behalf of the estate.
Rule 74 of the Rules of Court allows extrajudicial settlement only when the decedent left no will and no debts, and the heirs are all of age (or minors duly represented), and it is done via public instrument or affidavit of self-adjudication, if there is only one heir, with publication and a bond (for personal property) as a condition precedent.
“Section 1. Extrajudicial settlement by agreement between heirs.— If the decedent left no will and no debts and the heirs are all of age, or the minors are represented by their judicial or legal representatives duly authorized for the purpose, the parties may, without securing letters of administration, divide the estate among themselves as they see fit by means of a public instrument filed in the office of the register of deeds, and should they disagree, they may do so in an ordinary action of partition. If there is only one heir, he may adjudicate to himself the entire estate by means of an affidavit filed in the office of the register of deeds. xxx The fact of the extrajudicial settlement or administration shall be published in a newspaper of general circulation in the manner provided in the next succeeding section; but no extrajudicial settlement shall be binding upon any person who has not participated therein or had no notice thereof.” (Underscoring supplied)
Accordingly, where the father’s whereabouts are unknown or heirship is uncertain, the most practical and reliable remedy is to initiate judicial estate proceedings to appoint an administrator. An extrajudicial settlement is only viable if all heirs can be clearly identified and their participation secured.
You may proceed by securing a legally authorized signatory for your deceased co-owner’s share — either (1) the heir/s through an extrajudicial settlement, if they can be properly identified and are able to validly act, or (2) a court-appointed administrator through judicial settlement, if the father or other heirs cannot be located or are unwilling to cooperate.
We hope that we were able to answer your queries. This advice was based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Thank you for your continued trust and support.
