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RA No. 4726 PD No.

957
Definition of Terms (Sec 3) Sec 2
Condominium project - shall mean the entire parcel of real
Condominium an interest in real property consisting of property divided or to be divided primarily for residential
absolute ownership in a unit in a residential, industrial and purposes into condominium units, including all structures
commercial building and common ownership in the land on thereon.
which its located and in common areas of the condominium Condominium unit- shall mean a part of the condominium
project. project intended for any type of independent use or
Condominium Unit the space bounded by the interior ownership, including one or more rooms or spaces located
surface of those intended for independent use or absolute in one or more floors (or part of parts of floors) in a building
ownership. or buildings and such accessories as may be appended
Common areas the entire project, such as the land, thereto.
building structures, hallways, elevators, stairways, electrical, Owner- shall refer to the registered owner of the land
water and plumbing system, and all amenities in a subject of a subdivision or a condominium project.
condominium project, the exception is the inside of the Developer- shall mean the person who develops or
individual condominium unit. improves the subdivision
Condominium corporation a non-stock and non-profit Buy and purchase- shall include any contract to buy,
corporation consisting of condominium unit owners which is purchase, or otherwise acquire for a valuable consideration
the management body of the condominium project and a subdivision lot, including the building and other
owner of its common areas. This is synonymous in function improvements, if any, in a subdivision project or a
and nature to the homeowners association in subdivisions condominium unit in a condominium project.
except that it is taking the form of a corporation. Take note
therefore that it is the reason why a condominium unit can Sec 4 Registration of Projects
be personally owned by possession and title by foreigners In case registered owner of land wishes to convert such land
but only up to 40% of the total number of units of the whole to a condominium project, he/she must register project to the
condominium project. National Housing Authority now HLRUB.
Condominium project the entire parcel of land including
all the structures thereon. Authority to publish the notice of the filing of the registration
Master deed the enabling act which creates the statement at the expense of the applicant-owner or dealer, in
condominium and contains the description of the land, 2 newspapers of general circulation, one published in
building, common areas facilities use of the building, English and another in Pilipino, once a week for two
declaration of restrictions and plans of the land and consecutive weeks.
buildings and annotated on the certificate of title.
Declaration of restrictions refers to the set of rules, The fact of such registration shall be evidenced by a
procedures, policies and limitations as to the management registration certificate to be issued to the applicant-owner or
and usage of units and common areas in a condominium dealer.
project which constitutes a lien upon the project and each
unit and building upon all unit owners, occupants, and Sec 5 After two weeks of obtaining a registration certificate,
others holding any right or interest in the project, pursuant to the applicant-owner dealer can now apply for a license to
the provisions of the Condominium Act and other related sell the project, and after payment of performance bond (Sec
laws. 6).

STEPS IN FORMING CONDOMINIUM Effect of absence of certificate of registration or license


1. 1. Preparation of a Master Deed with Declaration of to sell by the HLURB
Restrictions and registration with the Registry of Deeds for In Sps. Co Chien v. Sta. Lucia Realty & Dev., Inc., et
annotation in the title. al., G.R. No. 162090, January 31, 2007
2. 2. Organization of a condominium corporation with the There was a sale of a realty but there was a contention that
project owners as incorporators. the sale is void for lack of prior certificate of registration and
3. 3. Causing issuance of individual tax declarations and license to sell by the HLURB. Is the contention correct?
condominium titles for the units and common areas from the Why?
Assessors Office and the Registry of Deeds respectively. Held: No. P.D. 957 is a law that seeks to regulate the sale
4. 4. Execution of Deed of Conveyance on the land and of subdivision lots and condominiums in view of the
common areas in favor of the condominium corporation. increasing number of incidents wherein real estate
5. 5. Application for registrations with the Housing and Land subdivision owners, developers, operators, and/or sellers
Use Regulatory Board (HLURB). have reneged on their representations and obligations to
6. prove and maintain properly the basic requirements and
CONTENTS OF A CONDOMINIUM MASTER DEED amenities, as well as reports of alarming magnitude of
1. 1. Description of the land including survey plan swindling and fraudulent manipulations perpetrated by
2. 2. Description of the building/s, enclosing technical and unscrupulous subdivision and condominium sellers and
diagrammatic plans. operators. As such, P.D. 957 requires the registration not
3. 3. Description of the common areas and facilities just of the developers, seller, brokers and/or owners of the
4. 4. Deed of registration project but also of the project itself. Upon the registration of
5. 5. Certification of the registered owner of the property if it is the project, a license to sell must be obtained prior to the
other than the one executing the Master Deed, that he sale of the subdivision lots or condominium units therein.
consents of the registration of the deed. The law also provides for the suspension and revocation of
6. the registration and license in certain instances, as well as
Note: The enabling or master deed may be amended or the procedure to be observed in the event thereof.
revoked upon registration of an instrument executed by a
simple majority of the registered owners of the property. (RA Effect of failure develop subdivision within one year
7899 Amending Secs 4 and 16 of RA 4726) from the issuance of license.
Under PD 957, the seller is obliged to develop the
subdivision, otherwise, the buyer has the right to suspend
Sec. 19. Where the enabling or master deed provides that payment and the only requirement under the law is to give
the land included within a condominium project are to be due notice to the owner or developer of the buyers intention
owned in common by the condominium owners therein the to suspend payment.
Register of Deeds may at the request of all the
condominium owner and upon surrender of all their Option to suspend payment or demand for
condominium owners copies, cancel the certificate of title of reimbursement given to buyer
the property and issue a new one in the name of said In case the developer of a subdivision or condominium fails
condominium owners as pro-indiviso co-owners thereof. in its obligation under Section 20 of P.D. No, 957, Section 23
of the law gives the buyer the option to demand
CONTENTS OF A DECLARATION OF RESTRICTION reimbursement of the total amount paid, or to wait for further
1. 1. Formation of the condominium corporation, the projects development of the subdivision, and when the buyer opts for
management body. the latter alternative, he may suspend payment of
2. 2. Procedures and guidelines on maintenance of units and installments until such time that the owner or developer had
common areas. fulfilled its obligation to him. (Tamayo v. Huang).
3. 3. Rules and restrictions on the occupancy and usage of
units and common areas. It is thus clear that the law provides two remedies in case of
4. 4. Provision for insurance coverage. incomplete development of the subdivision project: (1)
5. 5. Realty taxes and assessments on units and common reimbursement of the total amount paid, including
areas. amortization interest but excluding delinquency interests,
6. 6. Right of assignees, mortgagees, tenants and occupants with interest thereon at the legal rate; or (2) for the buyer to
of the units. suspend amortization payments until the completion of the
7. 7. Provision for assessments and fees. project. These remedies are available to the prospective
8. 8. Penalty provisions. buyer to give effect to the laws intent to protect the buyers
9. 9. Procedures in amending restrictions. from abusive owners/developers of subdivisions. In cases of
incomplete development, it is the developer who is the one
RIGHTS OF A CONDOMINIUM OWNER (Sec 6) at fault, as it would then have violated its promise to the
1. 1. Absolute ownership of his unit. prospective buyers to provide the necessary facilities in the
2. 2. Limited ownership of walls, ceilings and floor subdivision. The aggrieved party, therefore, is the
3. 3. Co-ownership of the land and common areas in prospective buyer because of the non-fulfillment of the
proportion to the unit/s owned. developers commitment. As such, it is but logical that the
4. 4. Exclusive easement of the air space within his unit. option is given to the prospective buyer, not to the
5. 5. Non-exclusive easement to common areas for ingress developer.
and egress.
6. 6. Repair, decorate the inner surfaces of his unit as he
pleases.
7. 7. Sell, lease, mortgage his unit.
8. 8. Vote and be voted upon during meetings of the
condominium corporation.

CONVEYANCE (Sec 18)


Requisites:
1. A copy of the description of land
2. Brief description of condominium conveyed
3. Name and personal circumstances of the condominium
owner

Upon registration and payment of fees of an instrument


conveying a condominium, the Register of Deeds shall enter
and annotate the conveyance on the certificate of title
covering the land included within the project. Transferee is
then issued a condominium owners copy of the pertinent
portion of such certificate of title.

In case of condominium project registered under the


provisions of the Spanish Mortgage Law or Act 3344 as
amended, the registration of the deed of conveyance of a
condominium is sufficient if the Register of Deed has the
original or signed copy, together with the certificate of the
management body of the project. A copy of said deed of
conveyance will be given to the condominium owner duly
acknowledged and stamped by the Register of Deeds in the
same manner as in the case of registration of conveyance in
accordance with the provisions of the declaration of
restrictions of such project.

DISSOLUTION OF A CONDOMINIUM PROJECT


1. Term of corporation the life of the condominium
corporation shall be co-terminus with the existence of the
condominium project and the registration and regulation of
the condominium corporation shall be vested to the Housing
and Land Use Regulatory Board (Sec 11).

2. As per Building Code, a building has a life of 50 years


subject to an extension of another 25 years upon issuance
of the soundness of its structure.

Note: A condominium corporation shall not, during its


existence, sell, exchange, lease or otherwise dispose of the
common areas owned or held by it in the condominium
project unless authorized by the affirmative vote of a simple
majority of the
registered owners (RA 7899 Amending Secs 4 and 16 of RA
4726)

3. Effects of Voluntary Dissolution: (Sec 12)


a. The corporation shall be deemed to hold a power-of-
attorney from all unit owners/ members to sell their separate
interests in the project. (Sec 15)
b. Liquidation of the corporation shall be effected by the sale
of the entire project subject to the rights of the corporation
and individual creditors. (Sec 15)
c. The common areas held by the corporation shall be
transferred to the unit owners in the proportion to their
interests. (Sec 19)

EXCEPT as provided by Sec 13

3. Effects of Involuntary Dissolution:


The transfer shall be deemed full liquidation of the interest of
the members in the corporation.

SOME ADVANTAGES OF CONDOMINIUM OWNERSHIP


1. - Enhances affordability
2. - Accessibility to the amenities of the metropolis.
3. - Better security
4. - Maximizes land efficiency
5. - Lesser cost of facilities, services and maintenance
6. - Privacy

References:
RA 4726
PD 957
RA 7899
Housing and land Use Regulatory Board- /hlrub.gov.ph/
Board of Investments- /boi.gov.ph/
Real Estate Brokers of the Philippines - /rebap.com.ph/
Chamber of Real Estate and Builders Assn. Inc /creba.ph/