A Deed of Undertaking (DoU) is read alongside a Reservation Agreement when buying a new property from Real Estate Developers. It is an enforceable document to encourage the buyer to fulfill the purchase of the property.

While the Reservation Agreement requires the client to issue post-dated cheques to to cover monthly installments (or full payment) and closing fee/s, the Deed of Undertaking (DoU) is the buyer's promise to commit to the agreed payments stated in the Reservation Agreement. Should the buyer break the "promise" they signed in the DoU, the consequences could be significant. The Developer has the right to immediately take back the property and forfeit all payments made without need of any court action.

In DoU Type of Loan Application, the Property Developer and its project MUST be accredited with the bank that the loan is being submitted to. The approving bank may then release the loan proceeds to the Developer using the DoU as an interim collateral document when the TCT/CCT is yet to be transferred to the buyer's name.

Example scenario: A client (buyer) acquires a House and Lot from Filinvest (which is a top-tier developer). The client wants to apply for a 90% loan from the Filinvest's accrediting banks (such as BDO, BPI, SECB, UBOP, RCBC, etc). Because the developer and the project is accredited, Filinvest can submit the DoU, instead of TCT/CCT for the bank to facilitate the release of loan proceeds.

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