REPUBLIC ACT No. 4726 - "The Condominium Act".

A condominium is an interest in real property consisting of separate interest in a unit in a residential,

industrial or commercial building and an undivided interest in common, directly or indirectly, in the land
on which it is located and in other common areas of the building. A condominium may include, in
addition, a separate interest in other portions of such real property. Title to the common areas,
including the land, or the appurtenant interests in such areas, may be held by a corporation specially
formed for the purpose (hereinafter known as the "condominium corporation") in which the holders of
separate interest shall automatically be members or shareholders, to the exclusion of others, in
proportion to the appurtenant interest of their respective units in the common areas.

1. Condominium Project - means the entire parcel of real property divided or to be divided primarily for
residential purposes into condo units, including structures.
2. Condominium Unit - means a part of condominium project intended for any type of independent use
or ownership, including one or more rooms or spaces located in one or more floors.
3. Condominium Act of 1996 - consisting of a separate interest in a unit in residential, industrial, or
commercial building and an undivided interest in common area, directly or indirectly, in the land on
which it is located and in other common areas of the building.
4. Common Area - bearing walls, columns, floors, roofs, foundations, and other common architectural
elements of the building including lobbies, stairways, hallways, and other areas of common use, elevator
equipment and shafts, central heating, central refrigeration etc.

Advantages of Condominium Concept

1. Enhances affordability by fractionalizing cost of land and building
2. Facilitates, utilities, amenities and services will cost less to maintain 3. Economy in land space
4. Multiple saleable or rentable floor areas based on no. of floors
5. Enhances marketability since foreigners can buy
6. Minimizes the chores in common areas such as daily maintenance, security, and garbage collection (as
compared to single-detached house)

Condominium Concept of Ownership

Condominium Certificate of Title (CCT) – the CCT is a form of legal document that certifies a person's
ownership of the unit they bought from a developer. This is the person’s evidence of ownership of the
unit.
Foreign ownership – as defined in the law on Real Estate Ownership and Registration, foreigners are not
allowed to own lands except in the case of condominiums, wherein they can own up to forty-percent
(40%) of a condominium project.
Extent of Ownership – exclusive ownership of a condominium unit only extends within the walls of the
condominium unit. Thus, for common areas, co-ownership is applicable.

The rights of a condominium unit owner are the following:

1. Right of absolute ownership over his unit
2. Right of exclusive easement of the space of his unit
3. Right to repair, paint, decorate the interior of his unit
4. Right to sell, mortgage, or lease his unit
5. Right of co-ownership of land and common areas
6. Right of non-exclusive easement to common areas for ingress or egress
7. Right to participate and vote in condominium corporation meetings
 The freehold ownership of a condominium is evidenced by the Condominium Certificate of Title (short
for CCT). It is a document that proves you own the condo unit. It contains information about the unit’s
location, its floor number and unit number, how big it is, and who owns it.

WHAT ARE THE MAJOR DOCUMENTS FOR A CONDOMINIUM PROJECT?

1.) Condominium Certificate of Title (CCT)

It is a document that certifies a person's ownership of the unit they bought from a developer. A
document known as the contract to sell will also serve as documentation of the acquisition of the
condominium unit.
In short, it is a proof that you are the owner of the condominium unit.

2.) Tax Declaration

It is a reference document that specifies the scope of the unit owners' tax liability for
the property, common facilities, and individual units of the condominium complex.

3.) Master Deed

It pertains to any condominium project's enabling act. This "permits" the condominium
to exist and controls its operations.
Master Deed includes the information on the land or lands that are a part of the condominium project.
It also provides information on the structure or buildings, such as its height, number of floors, number of
apartments, and the accompanying fixtures and the description of the facilities and common areas that
make up the condominium project.

4.) Certificate of Management

It is a statement made by the condominium organization that the transaction complies

with the Master Deed and the restrictions.

5.) Deed of Restriction

This lays forth the rules for the management body, insurance protection, upkeep costs,
evaluation criteria, and audit.
Deed of Restrictions indicates the management body, provision of insurance coverages, provision for the
maintenance of the common area and facilities, the sharing of realty tax on common areas, the manner
of amending restrictions, independent audit, the assessment and dues, and the project partitioning and
dissolution of the condominium corporation.

6.) Rules and Regulations

It defines what tenants and unit owners are permitted to conduct.

7.) Articles of Incorporation
It defines the foundation and rules for the condominium organization. Upon project establishment,
states the project's name, objective, location, incorporators, capital stock, and duration.

8.) Reservation Agreement

It is used when a buyer pays a fee to reserve the right to purchase the property for a set amount of time
(the reservation period) in the sale of new houses or condominiums.
Additionally, the builder or developer promises that during the designated reservation time, it will not
sell the property to a third party.

9.) Contract to Sell

A conditional contract and a written contract wherein a person, business, etc. agrees to
sell something to a buyer at a later date and the buyer agrees to purchase it.

10.)Deed of Absolute Sale

A legal document that, upon full payment, transfers ownership of property to one
party, including ownership rights.

Contents of the Master Deed

1. Description of the land on which the building or buildings and improvements are or are to be
located.

2. Description of the building or buildings, stating the number of stories and basements, the
number of units and their accessories, if any;

3. Description of the common areas and facilities;

4. A statement of the exact nature of the interest acquired or to be acquired by the purchaser in
the separate units and in the common areas of the condominium project. Where title to or the
appurtenant interests in the common areas is or is to be held by a condominium corporation, a
statement to this effect shall be included.

5. Statement of the purposes for which the building or buildings and each of the units are intended
or restricted as to use;

6. A certificate of the registered owner of the property, if he is other than those executing the
master deed, as well as of all registered holders of any lien or encumbrance on the property,
that they consent to the registration of the deed;

7. The following plans shall be appended to the deed as integral parts thereof:

a.) A survey plan of the land included in the project, unless a survey plan of the same property
had previously be filed in said office
b.) A diagrammatic floor plan of the building or buildings in the project, in sufficient detail to
identify each unit, its relative location and approximate dimensions;
8. Any reasonable restriction not contrary to law, morals or public policy regarding the right of any
condominium owner to alienate or dispose of his condominium.

WHAT ARE THE OBLIGATIONS OF UNIT OWNERS?

 Remit real estate tax on his/her apartment
 Participate in the real estate tax on land and shared areas. § Pay for his/her unit's insurance
 Share the cost of shared area insurance
 Respect usage limitations
 Pay the condo dues and/or assessments
 It is necessary to grant "right of first refusal."

“Condominium Lifespan”

According to Republic Ac 4726, these are the conditions to dispose or dissolve a condominium project:

1. It is more than 50 years old

2. It is obsolete and uneconomical
3. More than 50% of the shareholders do not agree in restoring the project
It is important to note, however, that dissolution of condominium can also occur if:
a.) there’s substantial damage and it has not been rebuilt for three years.
b.)If 1/2 or more of the condo units are not livable and more than 30% want to stop its
restoration.
c.) If the government has condemned the condo and 70% are opposed to its continuation.
d.) the conditions about dissolution in the declaration of restrictions are met.

If this happens, then the Condominium Corporation will hold a power of attorney to sell or dispose the
entire project for the benefit of all owners.

Condominium Corporation

1. Option and Mandatory Requirement: The Condominium Corporation is optional if no units will
be sold to foreigners. However, the corporation is mandatory if some units, not exceeding 40%
interest in the project will be sold to foreigners, in which case Title to the land will be
transferred in the name of the Condo Corp and thus comply with the constitutional mandate
that corporation may acquire private land provided that at least 60% of its capital or
membership if Filipino.

2. Principal purposes: To hold Title of the land and to act as the management body of the
Condominium Project.

3. Conflict with Master Deed: In case of conflict between the articles of incorporation of the Condo
Corp and the Master Deed of the Condo Project, the latter should always prevail, because:
• It is the Master Deed that gives birth to the Condominium Project. The project cannot
exist without the Master Deed.
• The condominium law specifically provides that the articles of incorporation and by-
laws of the Condominium Corporation shall not conflict with the Master Deed.
4. Term of Corporation: The life of the Condo Corp shall be co-terminus with the life of the
condominium project unless the corporation is earlier dissolved.

5. Effects of Voluntary Dissolution, unless otherwise provided in the Deed of Restriction:

• The corporation shall be deemed to hold a power of attorney from all the members to sell
their separate interest in the project
• Liquidation of the corporation shall be affected by the sale of the entire project, subject to the
rights of individual creditors.

6. Effects of Involuntary Dissolution:

• The common areas held by the corporation shall be transferred to the members of the
corporation pro-indiviso (jointly) and in proportion to their respective interest.
• The transfer shall be deemed full liquidation of the interest of the members in the corporation.