Gapo and the Sanlang Tira Phenomenon

Hayyyy!!! I was so frazzled the last couple of days but then finally, I now have the luxury to at least relax and update Pinkoy after a long week of stress, exhaustion and not having the time to access the internet.

We just moved into a new place just a few blocks away from the one we once occupied. We were able to get our new home through what they call here as "Sanlang Tira." It's a real estate phenomenon practiced only in Olongapo City (I think). I don't know how this Sanlang Tira thing started but maybe its onset came when, after the Americans left the former Subic Naval Base, a lot of locals relocated to the U.S. and "mortgaged" their property they left here (possibly to raise quick funds) to private individuals.


It came to be known as Sanlang Tira because the buyer/lender/mortgagee is allowed by the property owner/borrower/mortagor to occupy the property rent-free as payment of interest of the loan. The principle behind Sanlang Tira is the same as borrowing money from a private individual using property as collateral to the loan.

Important conditions in a Sanlang Tira Contract are:
(1) That the first party (or borrower) should be the absolute owner of the property free from all liens and encumbrances;
(2) The amount being loaned by the first party and, in consideration of said amount, shall allow to, or let the second party (lender) reside/stay in the property for free as interest of said loan for a certain period of time (usually one to two years with the option to renew);
(3) That it was agreed upon that the first party shall return/pay back the amount loaned from the second party within the agreed period if the contract is not renewed; and
(4) That while occupying said property, the second party shall take care of the premises and is obligated to pay for the consumption of water and electricity.

To some (including maybe myself), I found the Sanlang Tira practice to be quite favorable. You get a home for say, two or three hundred thousand pesos, live in it rent-free for two years or more, and get all your money back once you don't want to renew your contract anymore. But there are risks involved because, even if both parties are bounded by a contract, there are actually no known laws governing this practice of Sanlang Tira. Some of these risks include the following:

(1) If the property owner/borrower has difficulty raising the money to pay back his loan once the contract expires. There is this thing they call "Balik Sanlang Tira" wherein the borrower looks for another buyer whom he could again mortgage his property to so he could pay back the first buyer whose contract will soon or has expired. Once the borrower pays off his debt with the first buyer, the latter can now vacate the property so that the second buyer can occupy said property. In cases like this, the original buyer sometimes would wait for months for the owner to raise money out of contracting a second buyer.

(2) The practice of Sanlang Tira is not specifically governed by any law, not even the rent law. Buyers who have already been paid due to their expired contracts are most often forced to vacate even if they haven't found any place to move into yet. Under the rent law, lessees are given a grace period of at least a week or two months at most before they can even be thrown out of the property.

This is most frazzling especially if you rely entirely on the money you paid for your first Sanlang Tira. If you prefer to get another Sanlang Tira but your money is still tied up because the owner has not paid you yet, then you can't really buy another property and move out.

Imagine waiting for months (with your contract having expired already) for the owner to acquire a new buyer and you can't move unless your money is already in your hands. You can't get a new place for you. And then here now comes the owner paying you what he owes you and advised you to immediately vacate because the second buyer will immediately occupy the place. You get all stressed because the owner only gave you a day or two to vacate, and you still do not have a place yet. The only thing you can do is plead to the owner to have a heart and give you more time. And then...he said no. This, even if it's a fact that he owed you in the first place. Ang saya, di ba?

(3) You have acquired a property that is problematic. Some owners wouldn't want to tell you the honest truth that their property is prone to flooding, or that the neighborhood isn't that safe, or worst, is subject of a lawsuit. The first two can still be bearable, but the last one could be a huge headache. This, so they can market and mortgage it to a new buyer just to be able to pay off their debt to the first occupants.

This is now my second time at getting a place through Sanlang Tira and believe me, I've personally experienced these risks that I just mentioned. I don't want to think that I was unlucky in my first try (not to mention that one property I got as an investment...waaahhh!!!), but at least I learned my lesson.

It all boils down to just one important precautionary measure so that you won't get into a lot of problems if you really want to get a place here in Gapo through Sanlang Tira... do a character check on the property owner just to make sure that you don't end up giving your hard-earned money to an asshole.