the condominium act report

7/25/2019 The Condominium Act Report

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The Condominium ActLOPEZ UY


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REPUBLIC ACT NO. 4726June 18, 1966

AN ACT TO DEFINE CONDOMINIUM, ESTABLISHREQUIREMENTS FOR ITS CREATION, AND GOVERN

ITS INCIDENTS.


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The short title of this Act shall be

"The Condominium Act".

SECTION 1


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SECTION 2

A condominium is an interest in real propert

consisting of separate interest in a unit in

residential, industrial or commercial building an

an undivided interest in common, directly oindirectly, in the land on which it is located an

in other common areas of the building.


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SECTION 2

A condominium may include, in addition, a separate interest other portions of such real property. Title to the common areaincluding the land, or the appurtenant interests in such areas, mabe held by a corporation specially formed for the purpos(hereinafter known as the"condominium corporation") in which th

holders of separate interest shall automatically be members shareholders, to the exclusion of others, in proportion to th

appurtenant interest of their respective units in the common areas.

The real right in condominiums may be ownership or any othinterest in real property recognized by law, on property in the CivCode and other pertinent laws.


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SECTION 3

Definition

of Terms

Unit means a part of the condominium project intended forof independent use or ownership, including one or more room

spaces located in one or more floors (or part or parts of floors)building or buildings.

"Project" means the entire parcel of real property divided or todivided in condominiums, including all structures thereon,

"Common areas" means the entire project excepting all units

granted or held or reserved.

"To divide" real property means to divide the ownership thereointerest therein by conveying one or more condominiums thethan the whole thereof.


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Unit


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Project


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Common Areas


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SECTION 4

The provisions of this Act shall apply to property divideor to be divided into condominiums only if thereshall brecorded in the Register of Deeds of the province or citin which the property lies and duly annotated in thcorresponding certificate of title of the land, if the lattehad been patented or registered under either the LanRegistration or Cadastral Acts, an enabling or mastedeed which shall contain, among others, the following:


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SECTION 4

a) Description of the land on which the building obuildings and improvements are or are to be located;

b) Description of the building or buildings, stating thnumber of stories and basements, the number of units antheir accessories, if any;

c) Description of thecommon areas and facilities;


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SECTION 4

d) Astatement of the exact nature of the interest acquireor to be acquired by the purchaser in the separate uniand in the common areas of the condominium projecWhere title to or the appurtenant interests in the commoareas is or is to be held by a condominium corporation, statement to this effect shall be included;

e) Statement of the purposes for which the building obuildings and each of the units are intended or restricteas to use;


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SECTION 4

f) A certificate of the registered owner of the property, if h

is other than those executing the master deed, as well asof all registered holders of any lien or encumbrance on theproperty, that they consent to the registration of the deed

g) The following plans shall be appended to the deed asintegral parts thereof:

A survey plan of the land included in the project,unless a surveyplan of the same property had previously bee filed in said office

A diagrammatic floor plan of the building or buildings in theproject, in sufficient detail to identify each unit, its relativelocation and approximate dimensions;


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SECTION 4

Any reasonable restriction not contrary to law, morals or pubpolicy regarding the right of any condominium owner to alienate odispose of his condominium.

Theenabling or master deed may be amended or revoked uporegistration of an instrument executed by the registered owner

owners of the property and consented to by all registered holders any line or encumbrance on the land or building or portion thereof

The term"registered owner" shall include the registered owners condominiums in the project.Until registration of a revocation, thprovisions of this Act shall continue to apply to such property.


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SECTION 5

Any transfer or conveyance of a unit or aapartment, office or store or other spacetherein

shall include the transfer or conveyance of th

undivided interests in the common areas or, in proper case, the membership or shareholdings i

the condominium corporation:


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SECTION 5

Provided, however, That where the common areas in thcondominium project are owned by the owners of separate units aco-owners thereof,no condominium unit therein shall be conveyeor transferred to persons other than Filipino citizens, or corporationat least sixty percent (60%) of the capital stock of which belong tFilipino citizens, except in cases of hereditary succession.

Where the common areas in a condominium project are held by corporation,no transfer or conveyance of a unit shall be validif thconcomitant transfer of the appurtenant membership

stockholding in the corporation will cause thealien interest in succorporation to exceed the limits imposed by existing laws.


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SECTION 6

Unless otherwise expressly provided in thenabling or master deed or the declaration o

restrictions, the incidents of a condominium

grant are as follows:

a) Theboundary of the unit grantedare the interio

surfaces of the perimeter walls, floors, ceiling

windows and doors thereof.


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SECTION 6

The following are not part of the unit: bearing walcolumns, floors, roofs, foundations and other commostructural elements of the building; lobbies, stairwayhallways, and other areas of common use, elevatoequipment and shafts, central heating, centrarefrigeration and central air-conditioning equipmen

reservoirs, tanks, pumps and other central services anfacilities, pipes, ducts, flues, chutes, conduits, wires another utility installations, wherever located, except thoutlets thereof when located within the unit.


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SECTION 6

b) There shall pass with the unit, as an appurtenance thereof, aexclusive easement for the use of the air space encompassed by thboundaries of the unitas it exists at any particular time and as the unmay lawfully be altered or reconstructed from time to time.

Such easement shall be automatically terminated in any air spacupon destruction of the unit as to render ituntenantable.

c) Unless otherwise, provided, thecommon areas are held in commoby the holders of units, in equal shares, one for each unit.

d) Anon-exclusive easement for ingress, egress and support througthe common areas is appurtenant to each unit and the commoareas are subject to such easements.


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SECTION 6

e) Each condominium owner shall have the exclusive right to painrepaint, tile, wax, paper or otherwise refinish and decoratethe innsurfaces of the walls, ceilings, floors, windows and doors bounding hown unit.

f) Each condominium owner shall have the exclusive right mortgage, pledge or encumber his condominium and to have thsame appraised independently of the other condominiums but an

obligation incurred by such condominium owner is personal to him.g) Each condominium owner has also the absolute right to sell odispose of his condominium unless the master deed contains requirement that the property be first offered to the condominiuowners within a reasonable period of time before the same is offereto outside parties;


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SECTION 7

Except as provided in the followingsection, the common areas sharemain undivided,and there shall beno judicial partition thereof.


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SECTION 8

Where several persons own condominiums in a condominium projecan action may be brought by one or more such persons for partitiothereof by sale of the entire project, as if the owners of all of thcondominiums in such project wereco-owners of the entire project the same proportion as their interests in the common areas;

Provided, however, That a partition shall be made only upon showing:


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SECTION 8

A) Thatthree years after damage or destructionto the project whicrenders material part thereof unit for its use prior thereto, the projechas not been rebuilt or repaired substantially to its state prior to damage or destruction, or

B) That damage or destruction to the project hasrendered one-haor more of the units therein untenantable and that condominiuowners holding in aggregate more than thirty percent interest in thcommon areas are opposed to repair or restoration of the projecor


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SECTION 8

C) That the project has been in existence in excess of fifty yearthat it is obsolete and uneconomic, and that condominium owneholding in aggregate more than fifty percent interest in thcommon areas are opposed to repair or restoration or remodelinor modernizing of the project; or

D) That theproject or a material part thereof has been condemneor expropriatedand that the project is no longer viable, or that thcondominium owners holding in aggregate more than sevenpercent interest in the common areas are opposed to continuatioof the condominium regime after expropriation or condemnation a material portion thereof; or


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QUIZ TIME!PLEASE RAISE YOUR HAND IF YOU KNOW THE ANSWER


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Give 2 examples of common arein a condominium.


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State (1) right a condominiumowner can have.


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SECTION 9

The owner of a project shall, prior to the conveyance of ancondominium therein,register a declaration of restrictionsrelating such project, which restrictions shall constitute a lien upon eaccondominium in the project,

shallinsure to and bind all condominium owners in the project.Suclaws, unless otherwise provided, may be enforced by ancondominium owner in the project or by the management body o

such project.


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SECTION 9

TheRegister of Deedsshall enter and annotatthe declaration of restrictions upon th

certificate of title covering the land include

within the project, if the land is patented oregistered under the Land Registration o

Cadastral Acts.


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SECTION 10

Whenever the common areas in a condominium project are heby a condominium corporation, such corporation shall constitutthe management body of the project.

The corporate purposes of such a corporation shall be limited to thholding of the common areas, either in ownership or any othinterest in real property recognized by law, to the management the project, and to such other purposes as may be necessar

incidental or convenient to the accomplishment of said purposeThe articles of incorporation or by-laws of the corporation shall nocontain any provision contrary to or inconsistent with the provisionof this Act, the enabling or master deed, or the declaration restrictions of the project.


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SECTION 10

Membership in a condominium corporation, shall not btransferable separately from the condominium unit . When member or stockholderceases to own a unit in the project in whicthe condominium corporation owns or holds the common areas, hshall automatically cease to be a member or stockholder of thcondominium corporation.


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SECTION 11

The term of a condominium corporatioshall be co-terminus with the duration othe condominium project, the provisions othe Corporation Law to the contrar

notwithstanding.


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SECTION 13

Until theenabling or the master deed of the project in which thcondominium corporation owns or holds the common area revoked, the corporation shall not be voluntarily dissolved througan action for dissolution under Rule 104 of the Rules of Court excepupon a showing:

A) That three years after damage or destruction to the project which the corporation owns or holds the common areas, whic

damage or destruction renders a material part thereof unfit for iuse prior thereto, the project has not been rebuilt or repairesubstantially to its state prior to its damage or destruction; or


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SECTION 13

B) Thatdamage or destruction to the project has rendered one-haor more of the units therein untenantable and thatmore than thirpercentof the members of the corporation, if non-stock, or thshareholders representing more than thirty percent of the capitstock entitled to vote, if a stock corporation, are opposed to threpair or reconstruction of the project,or

C) That theproject has been in existence in excess of fifty year

that it is obsolete and uneconomical, and that more than fifpercent of the members of the corporation, if non-stock, or thstockholders representing more than fifty percent of the capitstock entitled to vote, if a stock corporation, are opposed to threpair or restoration or remodeling or modernizing of the project; or


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SECTION 13

D) That the project or amaterial part thereof has been condemneor expropriatedand that the project is no longer viable, or that thmembers holding in aggregate more than seventy percent interein the corporation, if non-stock, or the stockholders representinmore than seventy percent of the capital stock entitled to vote, if stock corporation, are opposed to the continuation of th

condominium regime after expropriation or condemnation of material portion thereof; or

E) That the conditions for such a dissolution set forth in thdeclaration of restrictions of the project in which the corporatioowns of holds the common areas, have been met.


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SECTION 16

A condominium corporation shallnot, selexchange, lease or otherwise dispose of thecommon areas owned or held by it in thecondominium project unless authorized b

the affirmative vote of all the stockholders omembers.


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SECTION 17

Astockholder or member shall not be entitled tdemand payment of his shares or interestunlessh

consents to sell his separate interest. Th

corporation shall have two years within which tpay for the shares or furnish a purchaser of i

choice from the time of award. All expenseincurred in the liquidation of the interest of th

dissenting member or stockholder shall be bornby him.

SECTION 19


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SECTION 19

The Register of Deeds may, at the request of athe condominium owners and upon surrender o

all their "condominium owner's" copies, cancel th

certificates of title of the property andissue a new

one in the name of said condominium owners a

pro-indiviso co-owners thereof.

SECTION 21


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SECTION 21

No labor performed or services or materials furnishewith the consent of or at the request of a condominiumowner or his agent or his contractor or subcontractoshall be the basis of a lien against the condominium oany other condominium owner,unless such other ownehave expressly consented to or requested thperformance of such labor or furnishing of such materiaor services.

SECTION 21


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SECTION 21

Labor performed or services/materials furnishefor the common areas, if duly authorized, sha

be deemed to be performed or furnishedwit

the express consent of each condominiumowner.

SECTION 24


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SECTION 24

Any deed, declaration or plan for a condominiumproject shall be liberally construed to facilitate thoperation of the project, and its provisions shall bpresumed to be independent and severable.


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QUIZ TIME!PLEASE RAISE YOUR HAND IF YOU KNOW THE ANSWER


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TRUE OR FALSE.

The condominium development

has a strictly fixed lifespan of 50

years.

FALSE


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FALSE

Section 11 of the Condominium Act of the Philippines directly statethat the term of a condominium corporation shall be co-terminuswith the duration of the condominium project, which means that acondominium development does not have a fixed life span of 50years.

The 50 year rule came from the Corporation Code of the Philippinestating that the life of a corporation (regardless of industry or if its a

condominium corporation or not) is initially 50 years.

AS LONG AS IT IS LIVABLE AND SAFE, A CONDOMINIUMDEVELOPMENTS TERM MAY BE RENEWED AND SURPASSTHE 50 YEAR CORPORATION LIFESPAN.


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TRUE OR FALSE.Foreigners may acquire condominiumunits and shares in condominiumcorporations up to not more than 40% ofthe total and outstanding capital stock of a

Filipino-owned or controlled corporation.

TRUE


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TRUE

As long as 60%of the members of thisCondominium Corporation are Filipino,the remaining members can beforeigners.


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For Supplementary ReadingSECTIONS REGARDING ADMINISTRATIVE MATTERS, ETC.

SECTION 9


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SECTION 9

Thedeclaration of restrictionsshall provide for the management o

the project by anyone of the following management bodies: a condominium corporation, an association of the condominium

owners, a board of governors elected by condominium owners, or amanagement agent elected by the owners or by the board namedin the declaration.

Such declaration of restrictions, among other things, may alsprovide:

SECTION 9


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SECTION 9

As to any suchmanagement body;

For the powers thereof, including power to enforce the provisions of the declarations of restriction

For maintenance of insurance policies, insuring condominium owners against loss by fire, casualiability, workmen's compensation and other insurable risks, and for bonding of the members of amanagement body;

Provisions for maintenance, utility, gardening and other services benefiting the common areas, the employment of personnel necessary for the operation of the building, and legal, accountand other professional and technical services;

For purchase of materials, supplies and the like needed by the common areas;

For payment of taxes and special assessments which would be a lien upon the entire projectcommon areas, and for discharge of any lien or encumbrance levied against the entire projectthe common areas;

For reconstruction of any portion or portions of any damage to or destruction of the project;

The manner for delegation of its powers;

For entry by its officers and agents into any unit when necessary in connection with tmaintenance or construction for which such body is responsible;

For apower of attorney to the management body to sell the entire project for the benefit of althe owners thereof when partition of the project may be authorized under Section 8 of this Awhich said power shall be binding upon all of the condominium owners regardless of whether thassume the obligations of the restrictions or not.

SECTION 9


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SECTION 9

The manner and procedure for amending such restrictions: Provided, That thvote of not less than a majority in interest of the owners is obtained.

For independent audit of the accounts of the management body;

For reasonable assessments to meet authorized expenditures, eaccondominium unit to be assessed separately for its share of such expenses proportion (unless otherwise provided) to its owners fractional interest in acommon areas;

For the subordination of the liens securing such assessments to other liens eith

generally or specifically described; For conditions, other than those provided for in Sections eight and thirteen of t

Act, upon which partition of the project and dissolution of the condominiucorporation may be made. Such right to partition or dissolution may bconditioned upon failure of the condominium owners to rebuild within a certaperiod or upon specified inadequacy of insurance proceeds, or upon specifiepercentage of damage to the building, or upon a decision of an arbitrator.

SECTION 12


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SECTION 12

Sec. 12. In case of involuntary dissolution of a condominiucorporationfor any of the causes provided by law, the commoareas owned or held by the corporation shall, by way of liquidatiobe transferred pro-indiviso and in proportion to their interest in thcorporation to the members or stockholders thereof, subject to thsuperior rights of the corporation creditors.

Such transfer or conveyance shall be deemed to be a fu

liquidation of the interest of such members or stockholders in thcorporation. After such transfer or conveyance, the provisions of thAct governing undivided co-ownership of, or undivided interest ithe common areas in condominium projects shall fully apply.

SECTION 14 & 15


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SECTION 14 & 15

Sec. 14.Thecondominium corporation may also be dissolved by thaffirmative vote of all the stockholders or members thereof at general or special meeting duly called for the purpose: ProvideThat all the requirements of Section sixty-two of theCorporation Laare complied with.

Sec. 15. The corporation shall be deemed to hold a power attorneyfrom all the members or stockholdersto sell and dispose

their separate interests in the project and liquidation of thcorporation shall be effected by a sale of the entire projectas if thcorporation owned the whole thereof, subject to the rights of thcorporate and of individual condominium creditors.

SECTION 18


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SECTION 18

Upon registration of an instrument conveying a condominium, the Register

Deeds shall, upon payment of the proper fees, enter and annotate thconveyance on the certificate of title covering the land included within thproject and the transfereeshall be entitled to the issuance of a "condominiuowner's" copy of the pertinent portion of such certificate of title. A copy of thdescription of the land, a brief description of the condominium conveyed, namand personal circumstances of the condominium owner would be sufficient fpurposes of the "condominium owner's" copy of the certificate of title. Nconveyance of condominiums or part thereof, subsequent to the originconveyance, shall be registered unless accompanied by a certificate of thmanagement body of the project.

In cases of condominium projects registered under the provisions of the SpaniMortgage Law or Act 3344, as amended, the registration of the deed conveyance of a condominium shall be sufficient if the Register of Deeds shakeep the original or signed copy thereof, together with the certificate of thmanagement body of the project, and return a copy of the deed conveyance to the condominium owner duly acknowledge and stamped bthe Register of Deeds.

SECTION 20


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SECTION 20

An assessment upon any condominium made in accordance with

duly registered declaration of restrictions shall be an obligation of thowner thereof at the time the assessment is made. The amount of ansuch assessment plus any other charges thereon, such as interest, cos(including attorney's fees) and penalties, as such may be provided for the declaration of restrictions, shall be and become a lien upon thcondominium assessed when the management body causes a noticof assessment to be registered with the Register of Deeds of the city oprovince where such condominium project is located. The notice shstate the amount of such assessment and such other charges thereon

may be authorized by the declaration of restrictions, a description the condominium, unit against which same has been assessed, and thname of the registered owner thereof. Such notice shall be signed ban authorized representative of the management body or as otherwisprovided in the declaration of restrictions. Upon payment of saassessment and charges or other satisfaction thereof, the managemebody shall cause to be registered a release of the lien.

SECTION 20


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SECTION 20

Such lien shall be superior to all other liens registered subsequent the registration of said notice of assessment except real property taliens and except that the declaration of restrictions may provide fothe subordination thereof to any other liens and encumbrances.

Such liens may be enforced in the same manner provided for blaw for the judicial or extra-judicial foreclosure of mortgages of reproperty. Unless otherwise provided for in the declaration

restrictions, the management body shall have power to bid aforeclosure sale. The condominium owner shall have the same rigof redemption as in cases of judicial or extra-judicial foreclosure omortgages.

SECTION 22


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SECTION 22

The management body, may acquire and hold, tangible anintangible personal property and may dispose of the same; and thbeneficial interest in such personal property shall be owned by thcondominium owners in the same proportion as their respectivinterests in the common areas. A transfer of a condominium shatransfer to the transferee beneficial ownership of the transferointerestin such personal property.

SECTION 23


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SECTION 23

Where, the Court finds that the conditions provided for in this Act in the declaration of restrictions have not been met, The Court madecree a reorganization of the project, declaring which portion portions of the project shall continue as a condominium project, thowners thereof, and the respective rights of said remaining owneand the just compensation, if any, that a condominium owner mabe entitled to due to deprivation of his property.

SECTION 25


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SECTION 25

Each condominium separately owned shall be separately assessedfor purposes of real property taxation.


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