5/4/2021

WHAT YOU NEED TO KNOW ABOUT THE

CONDOMINIUM ACT

REPUBLIC ACT NO 4726, AS AMENDED BY RA 7899

 “The Condominium Act” is an act to define condominium, establish

requirements for its creation, and govern its incidents.

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WHAT IS A CONDOMINIUM?
 As defined in the Condominium Act, a condominium is “an interest in real property
consisting of a 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 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.

WHAT IS A CONDOMINIUM UNIT?

 A unit means a part of the condominium project intended for any type of
independent use or ownership, including one or more rooms or spaces
located in one or more floors (or part or parts of floors) in a building or
buildings and such accessories as may be appended thereto.

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WHO CAN OWN CONDOMINIUMS?

 Filipino citizens and corporations can own condominiums. However,

foreigners are restricted to owning no more than 40% of the total and
outstanding capital stock of a corporation. At least 60% should be
Filipino-owned and controlled. In addition to that restriction, foreigners
and foreign corporations are, by law, prohibited to own land.

EXCEPTIONS

 Acquisition before the 1935 constitution.

 Acquisition through hereditary succession if the foreign acquire is a legal or natural heir. This
means that when you are married to a Filipino citizen and your husband/wife dies, you as the
natural heir will become the legal owner of his/her property. The same is true for
the children. Every natural child (legitimate or illegitimate) can inherit the property of his/her
Filipino father/mother even if he/she is not a Filipino citizen.
 Purchase of not more than 40% interest in a condominium project.
 Purchase by a former natural-born Filipino citizen subject to the limitations prescribed by
law. (natural born Filipinos who acquired foreign citizenship is entitled to own up to 1,000
square meter of residential land, and 1 hectare of agricultural or farm land)
 Filipinos who are married to aliens who retain their Filipino citizenship, unless by
their act or omission they have renounced their Filipino citizenship.

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WHAT FORMS PART OF A CONDOMINIUM UNIT?

 The boundary of the unit granted are the interior surfaces of the
perimeter walls, floors, ceilings, windows and doors thereof, unless the
master deed or the declaration of restrictions prescribed by the
condominium corporation or the administration stipulate otherwise.

WHAT DO NOT FORM PART OF THE CONDOMINIUM UNIT?

 Areas that are not found inside the unit are excluded from the unit.
According to the Condominium Act, “bearing walls, columns, floors,
roofs, foundations, and other common structural elements (e.g., lobbies,
stairways, hallways, and other common areas), elevator equipment and
shafts, central heating, central refrigeration, and central air-conditioning
equipment, reservoirs, tanks, pumps, and other central services and
facilities, pipes, ducts, flutes, chutes, conduits, wires, and other utility
installations, wherever located.” An exception to the list are those
outlets that are located within the unit.

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WHO OWNS THE COMMON AREAS IN A CONDOMINIUM?

 Common areas, which comprise of the entire project except all units
separately granted or held or reserved. Generally, titles to the common
areas are held by a corporation formed for the purpose. However,
RA 4726 also states that the common areas are held in common by the
holders of units, in equal share for each unit.

WHAT IS MY STAKE IN A CONDOMINIUM?

 As a unit owner, you are essentially a co-owner of the condominium,

entitled to such privileges and limited by such restrictions that may
follow the title.

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CAN I MORTGAGE MY UNIT FOR A LOAN?

 Yes. The condominium act states that “each condominium owner shall
have the exclusive right to mortgage, pledge, or encumber his
condominium and to have the same appraised independently of the
other condominium owner is personal to him.”

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CAN I SELL MY CONDOMINIUM UNIT?

 Yes. When you sell your unit, however, you are not just selling the unit
itself, you are also selling your interest in the common areas as well as
your membership and shareholdings in the condominium corporation.

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CAN THE CONDOMINIUM CORPORATION SELL THE

CONDOMINIUM WITHOUT MY CONSENT?
 Generally, yes. However, if the master deed contains a requirement that the
property should first be offered to the other condominium owners within a
reasonable time before offering it to third parties, then it may not.
 Another restriction is one that has been amended to the Corporation Code by
Republic Act No. 7899, which states that, as an owner, you shall not sell,
exchange, lease, or otherwise dispose of the common areas of a condominium
without the approval of the simple majority of the registered owners, subject
as well, to the approval of the Housing and Land Use Regulatory Board
(HLURB).

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WHAT WILL HAPPEN TO A CONDOMINIUM INVESTMENT

AFTER 50 YEARS?

 When a condominium project is fully turned over to the unit owners, it

becomes just like a corporation, and you become one of the owners of
that corporation.This means that as a condominium unit owner, you will
have a “say” in the decision making as to what to do with the whole
building. If it has been decided that the property is going to be sold, you
will get your appropriate share of the proceeds of the sale.

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WHAT ARE MY RIGHTS AS A CONDOMINIUM UNIT

OWNER?

 Absolute ownership of your unit

 Co-ownership of land and common areas
 Exclusive easement of the space of your unit
 Non-exclusive easement to common areas for ingress or egress
 Right to sell, lease, or mortgage your unit
 Right to repair, paint, decorate the interior surface of your unit
 Right to participate and vote in condominium corporation meetings

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WHAT ARE MY OBLIGATIONS AS A CONDOMINIUM UNIT

OWNER?
 Pay the realty tax on your condominium unit.
 Share the realty tax on the land and common areas.
 Pay the insurance on your unit.
 Share the insurance on the common areas.
 Comply with use restrictions.
 Pay dues and assessments.
 Give other unit owners the priority right to buy your unit (right of first
refusal) if so required by the master deed.

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DEVELOPING CONDOMINIUM PROJECTS

 An owner/developer of a condominium project is required to apply for

Development Permit, Certificate of Registration and License To Sell with
the HLURB prior to actual development and selling of units therein.

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DEVELOPING CONDOMINIUM PROJECTS

 Residential Condominium Project

 Minimum Design Standards (Rule I, PD 957 IRR)
 Requirements (Rule III, PD 957 IRR)
 Downloadable Forms
 Process (flowchart)

 Commercial Condominium Project

 Minimum Design Standards (Rule I, PD 957 IRR)
 Requirements (Rule III, PD 957 IRR)
 Downloadable Forms
 Process (flowchart)

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HLURB ADMINISTRATIVE ORDER NO. 11, S. 2018

Socialized Condominium Projects (Price Standards)

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