CONDOMINIUM DEVELOPMENT
RA #4726:
THE CONDOMINIUM ACT
An act to define condominium, establish the
requirements for its creation and govern its
incidents
What is a condominium?
CONDOMINIUM:
An interest in a real property consisting of:
a separate interest in a unit in a residential,
commercial or industrial building and
an undivided interest in common areas, in the
land it is built upon and other common areas in
the building.
The condominium is not a type of structure
but rather, a concept of development and of
ownership!!
When you buy a condominium
unit, you are actually buying:
1. Absolute ownership in a condominium
unit
2. Co-ownership on the land on which the
condominium building is constructed
3. Co-ownership of all common areas
4. Shares of stocks in a condominium
corporation
DEFINITION of TERMS
UNIT:
A part of the condominium project intended for any type
of independent use or ownership.
PROJECT:
The entire parcel of real property divided or to be
divided into condominiums, including all structures
thereon.
COMMON AREA:
The entire project excepting all units separately granted,
held or reserved. These shall remain undivided and
there shall be no judicial partition thereof.
INCIDENTS of a CONDOMINIUM GRANT
1. The boundaries of the unit granted are the interior
spaces of the perimeter walls, floors, ceilings,
windows & doors.
2. The following are not part of the unit:
load bearing walls, columns, floors, roofs $
foundations
lobbies, hallways & stairways
Elevator equipment & shafts
Central heating & air conditioning equipment
Reservoirs, tanks & pumps
Pipes, ducts, flues, chutes, conduits & wires
except outlets located in the unit
3. The common areas shall be held in common by
the unit owners
4. A non-exclusive easement for ingress, egress &
support through the common areas
5. Each condominium unit owner shall have the
exclusive right to paint, repaint, tile, wax or
refinish & decorate the inner surface of the
unit
6. Each unit owner shall have the exclusive right to
mortgage, pledge or encumber his condominium
unit & to have the same appraised independently
of other units
7. Each condominium owner also has the absolute
right to sell or dispose of his unit unless the
master deed contains a requirement that the
property be first offered to other condominium
owners within a reasonable period of time before
the same is offered to outside parties
THE MASTER DEED
This should be registered with the Register of Deeds
of the province or the city & shall contain the
following:
1. Description of the land
2. Description of the building(s), stating the
number of storeys, the number of units & their
accessories
3. Description of the common areas & facilities
4. Statement of the exact nature of the acquired
units & the common areas of the condominium
project.
5. A certificate of the registered owner of the
property as well as other registered holders of any
lien or encumbrance with their consent to the
registration of the deed
6. The following shall be appended to the deed as an
integral part thereof:
a survey plan of the land
A diagramatic floor plan of the building(s),
each unit, its relative location & approximate
dimensions
A reasonable restriction not contrary to law,
morals or public policy regarding the right of
any condominium owner to alienate or dispose
of his condominium
THE DEED of RESTRICTIONS
The owner of the condominium project, prior
to conveyance of any unit shall register this &
this will constitute a lien upon the unit owners.
This may be enforced by either the
condominium owners or the management
body
This should be annotated at the back of the
title.
Contents of the Deed of Restrictions
1. As to the management body:
Power to enforce the deed of restrictions
Maintenance of all insurance policies
Provisions for maintenance, utility, gardening
& other service benefitting the common areas
For the purchase of materials, supplies and the
like for the common areas
For the payment of taxes & special assessments
For the manner of the delegation of its powers
For the reconstruction of any portion damaged
or destroyed
For the entry by its officers & agents into
the unit when necessary for maintenance &
construction
For a Power of Attorney for the
management body to sell the entire project
for the benefit of all owners
2. The manner & procedure for amending the
restrictions, provided the vote of the majority
is obtained
3. For the independent audit of the accounts of the
management body
4. For reasonable assessments to meet authorized
expenditures in proportion to each unit owner’s
fractional interest in the common areas
THE CONDOMINIUM CORPORATION
Must be formed and registered with the Securities
& Exchange Commission in lieu of a Homeowners’
Association
Will hold the title to the land and all common
areas
All holders of separate interests (unit owners) are
automatically shareholders
Individual shareholding is equal to:
(Floor area of unit/Total gross saleable area)(100%)
Membership in the condominium corporation
shall not be transferable separately from the
condominium unit of which it is an
appurtenance
When a shareholder ceases to own the unit, he
shall automatically cease to also be a shareholder
of the condominium corporation
LIFE OF THE CONDOMINIUM CORPORATION:
Co-terminus with the duration of the condominium
project, the provisions of the corporation law
notwithstanding.
TRANSFER or CONVEYANCE of the TITLE
Any transfer or conveyance of the unit shall
include the transfer & conveyance of the
undivided interest in the common areas and in
the land
The transfer also includes the undivided interest
in the shareholdings in the condominium
corporation
No condominium unit shall conveyed or
transferred to persons other than Filipino citizens
or corporations at least 60% of the capital stock of
which belongs to Filipino citizens
OTHER PROVISIONS
ASSESSMENT:
Shall be an obligation of the unit owner
PROPERTY TAX:
Each condominium unit will be separately for
property tax purposes & such tax shall be a lien
solely on the unit
No transfer or conveyance to foreigners will be
valid if this will cause total foreign ownership to
exceed 40%
THE TITLE:
The Condominium Certificate of Title (CCT)
This will be on top of the new TCT covering the
land which shall now be in the name of the
condominium corporation
Unit owner will receive a “Condominium
Owner’s Copy” (COC)
When unit owners can sell the entire project:
1. After three years of damage on the project, it
has not been repaired or rebuilt
2. Damage of destruction has rendered one-half or
more of the units untenantable & at least 30% of
all unit owners are opposed to repair or
restoration
3. The project has been in existence for over 50
years, is obsolete & uneconomic and more than
50% of all unit owners are opposed to repair,
restoration, remodelling or modernizing the
project
4. The project or a material part thereof has been
condemned or expropriated, it is no longer
viable or 70% of the unit owners are opposed to
the continuation of the condominium regime
thereafter
DISPOSITION OF COMMON AREAS:
The condominium corporation shall not sell,
exchange, lease or dispose of the common areas
without the majority vote of the unit owners.
TYPE of TRADITIONAL CONDOMINIUM
OWNERSHIP
As to title OCT or TCT CCT
As to extent of Absolute Absolute ownership
ownership limited to the
condominium unit; co-
ownership of all common
areas and the land
As to foreign Not allowed Up to 40% of the gross
ownership saleable area
Homeowners’ Homeowners’ Condominium
organization association corporation
