CONDOMINIUM CONCEPTS

Condominium housing was basically born out of the condition of limited land space.

In the Philippines, the concept of condominiums was formally recognized with the passage by Congress
on June 16, 1966 of Republic Act No. 4726 entitled "An Act to Define Condominium, Establish
Requirements for its Creation, and Govern its Incidence."

Although one normally thinks of a condominium in the form of a building, a condominium may take the
form of a subdivision, or what may be referred to as the “horizontal condominium” or also referred to as
a “townhouse project” vs. the traditional vertical condominium or condominium building.

MAJOR LAWS GOVERNING CONDOMINIUMS

A. ADVANTAGES OF CONDOMINIUMS

Affordability is Enhanced - It enhances affordability by fractionalizing the cost of land and building.

Maximizing Land Space - There is economy in land space. Families or parties holding title to contiguous
land may obtain adequate housing by consolidating their land and constructing a condominium thereon.

Facilities and Services cheap to build & maintain - This is because, unless otherwise provided in the
become cheaper Master Deed, their costs are distributed equally among and the unit owners.

Exclusive ownership of unit & Co-ownership of undivided common areas and facilities - concepts of a
family house through exclusive ownership of a unit while holding co-ownership rights in the undivided

common areas and facilities.

Closer neighborhood or community ties - Due to the physical closeness of each unit and the concept of
co-ownership of common areas and facilities, unit owners are bound to uphold the quality of their living

standards.
B. DEFINITION OF TERMS

CONDOMINIUM - This is an interest in real estate consisting of absolute ownership in a unit of

residential, commercial or industrial buildings and common ownership of the land and common areas of
the condominium project.

CONDOMINIUM PROJECT - It is the TOTALITY of the site (land), condominium units and common areas.

CONDOMINIUM UNIT - This is the SPACE encompassed by the interior surface of the floor, ceiling, walls,
and exterior doors and windows, which is susceptible of INDEPENDENT USE and OWNERSHIP.

COMMON AREAS - Refer to the weight bearing walls, columns and beams, stairways, halls, elevators,
etc. including the electrical, water and plumbing systems and amenities in a condominium project.

There are two kinds of common areas, namely:

(1) General (or undivided) common areas

(2) Limited (or divided) common areas.

C. TYPES OF COMMON AREAS

GENERAL OR UNDIVIDED - These refer to the parts of the condominium project which are not subject to
the exclusive use of any one or group of owners. Examples are: swimming pool, hallways, stairways,
elevators, etc.

LIMITED OR DIVIDED - Common areas which are allocated to the exclusive COMMON use of one or
group of unit owners.

D. EXTENT OF INTEREST IN COMMON AREAS

1. In the absence of any provision in the Master Deed, all unit owners shall have EQUAL SHARE in

the common areas.

2. The Master Deed may provide any of the following alternatives:

2.1 Equal Sharing

2.2 Sharing Based on VALUE

2.3 Sharing Based on UNIT AREA in relation to Total Area

E. IMPORTANT DOCUMENTS IN CONDOMINIUM SALES

1. MASTER DEED - This is the ENABLING ACT of any condominium project. This "enables" the
condominium to exist and governs its existence.

2. DEED OF RESTRICTIONS - The Deed of Restrictions lays down the provisions for insurance coverages,
the management body, maintenance costs and assessment basis and audit.

3. ARTICLES OF INCORPORATION AND BY-LAWS - This establishes the birth and guidelines of
condominium corporation.

4. RULES AND REGULATIONS - Determines what unit owners and tenants can and cannot do.

5. CONDOMINIUM CERTIFICATE OF TITLE ( CCT ) - This is the evidence or proof of one’s ownership of the
condominium unit.

6. TAX DECLARATION(S) - This document will determine to what extent the unit owners are liable with
regards to the tax obligation on the condominium project's land and common areas and the individual
units.

7. Certificate of Management - Document issued by the condominium corporation that the conveyance
is in accordance with the Master Deed / Restrictions
F. THE MASTER DEED

A condominium project's Master Deed includes the following:

1. Description of LAND(S) included in the condominium project.

2. Description of the BUILDING(S) like the numbers of storys, basements, number of units and their
attendant accessories.

3. Description of COMMON AREAS and FACILITIES which are part and parcel of the project.

4. Description of the INTEREST acquired by the unit owners in the common areas and land(s).

5. PURPOSE(S) for which the building and units are to be used.

6. CERTIFICATION BY REGISTERED OWNER OF THE PROPERTY if he is other than those executing the
Master Deed, that he consents to the registration of the Deed.

7. DEED OF RESTRICTIONS

8. ANNEXES, land survey plan and building diagrammatic floor plans.

G. THE Deed of Restrictions

Deeds of Restrictions indicate:

1. Management Body
2. Provision for Insurance Coverage
3. Provisions for the Maintenance of Common Areas and Facilities
4. Sharing of Realty Tax on Common Areas
5. Manner of Amending Restrictions
6. Independent Audit
7. Assessments and Dues
8. Project Partitioning and Dissolution of the Condominium Corporation.