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R.A. 4726 - THE CONDOMINIUM ACT OF THE PHILIPPINES

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Salient Features of Republic Act 4726 – The Condominium Act of 1966

1. What is a condominium?

A condominium, according to the law, is an “interest in a 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 in which it is
located and in other common areas of the building.”

In other words, a condominium is a building where sections of which can be owned

individually by a person or, in some cases, a corporation. This can be for either a
residential, industrial, or commercial purpose.

2. Who can own condominiums?

Filipino citizens and corporations can own condominiums. Foreigners however are
restricted to own not exceeding 40% of the total and outstanding capital stock of a
corporation, which must be Filipino-owned and controlled. In addition to that
restriction, foreigners and foreign corporations are, by law, prohibited to own land.

3. Who can own condominium units?

Again, Filipino citizens and corporations can own condominium units. This time,
however, foreigners, by virtue of the Condominium Act, are allowed to purchase and
acquire condominium units.

4. What is my stake in a condominium?

As a unit owner, you are, in essence, a co-owner of the condominium, entitled to

such privileges and limited by such restrictions that may follow the title.
5. What forms part of a condominium unit?

Everything within the boundaries of your unit forms part of the same. According to
the law, the interior surfaces of the perimeter walls, floors, ceilings, windows, and
doors form the boundary of your unit. That is, of course, unless the master deed or
the declaration of restrictions prescribed by the condominium corporation or the
administration stipulate otherwise.

6. Am I allowed to alter anything beyond the boundaries of my unit?

Generally, no. However, if the administration allows such alteration or does not
prohibit the same, then you may be allowed to. A thorough read of the house rules
or the contract would be a good idea.

7. What does not form part of the condominium unit?

In most cases, areas that are not found inside the unit are deemed to be excluded
from the unit but the condominium law itself lists aspects of properties that generally
do not form part of the unit. To wit: “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.

8. Can I freely sell my unit?

Yes. That is not prohibited in the condominium law. 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.
 9. Can I freely sell my condominium?

Not exactly. Selling a unit may be simple, but selling a condominium is restricted by
certain rules under the Condominium Act. One of such restrictions is the ownership
requirement. For condominiums where the common areas are co-owned by the
owners of the units, the law requires that the purchaser be either a Filipino citizen or
corporation—a corporation that is at least 60 percent owned and controlled by
Filipinos. For condominiums owned by corporations, the sale will be deemed invalid
if such a sale would result in the foreign interest in the corporation exceeding the
limits prescribed by law, which in this case, is 40 percent. In other words, in both
cases, the foreign ownership in the purchasing corporation cannot exceed 40
percent, otherwise, the sale would be invalid.

10. Can I mortgage my unit for a loan?

Yes. The condominium law 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.”

11. Can the condominium corporation sell the condominium without my

consent?

As a general rule, it can. 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, however, 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).
12. The Condominium Actstipulates that the owners can sell the condominium
after 50 years. Does that mean that I will not have any say in the sale?

No, that is not the case. Upon turnover of the unit to you, you become a member of
the corporation that owns the condominium. Hence, your concurrence or dissent on
the matter will count. If, however, it has been decided that the building shall be sold,
then you will be compensated for your appropriate share from the proceeds of the
sale.

13. Who owns the common areas in a condominium?

Generally, titles to the common areas are held by a corporation formed for the
purpose. However, the condominium law also states that the common areas are
held in common by the unitholders, in equal share for each unit.

14. What are my rights as a condominium unit owner?

Aside from those already mentioned, the only other right you have as a unit owner
is the right to renovate your unit, for as long as all renovations are done within the
boundaries of your unit. All restrictions on your rights and activities are those that
are stipulated in the declaration of restrictions or on the contract you signed upon
the turnover of the unit to you.

15. I own a condominium building, and I want to amend or revoke the master
deed. May I do so without reservation?

No. The Condominium Act states that you can only do this upon the registration of
an instrument (a formal legal document) executed by a simple majority of the
registered owners of the property. In this case, a simple majority could mean either
of the two: a majority based on per-unit ownership or a majority based on the floor
area of ownership.

For condominiums used for either residential or commercial purposes, the former
would apply, while if it is for a mix of both purposes, it is the latter. This requirement
 also stipulates that the registered owners must be notified in advance. Evidence of
a vote of a simple majority must also be submitted to the HLURB.

Credits: Lamudi.com.ph - December 2018

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