ASALI, DE FIESTA, FERRER, FLORES

THE CONDOMINIUM ACT

R.A. No. 4726
June 18, 1966

CONDOMINIUM
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. The real right in condominium may be ownership
or any other interest in real property recognized by law, on property in the Civil Code and other pertinent laws (R.A. No. 4726, Sec. 2)

UNIT
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
(R.A. No. 4726, Sec. 3).

PROJECT
The entire parcel of real property divided or to be divided in condominiums, including all structures thereon (R.A. No. 4726, Sec. 3).

CONDOMINIUM CORPORATION
A corporation which holds title to the common areas, including the land, or the appurtenant interests in such areas, 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 (R.A. No. 4726, Sec. 2).

SEC. 5 – Conveyance and Transfer of Unit

- 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.

- 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.

- 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.”

- 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).
 - The Condominium Act stipulates 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.

DOCUMENTS TO CONSIDER:
The provisions of this Act shall apply to property divided or to be divided into condominiums only if there shall be recorded
in the Register of Deeds of the province or city in which the property lies and duly annotated in the corresponding certificate of title
of the land, if the latter had been patented or registered under either the Land Registration or Cadastral Acts,
(1) Enabling or master deed which shall contain, among others, the following:
(a) Description of the land on which the building or buildings and improvements are or are to be located;
(b) Description of the building or buildings, stating the number of stories and basements, the number of units and their
accessories, if any;
(c) Description of the common areas and facilities;
(d) 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;
(e) Statement of the purposes for which the building or buildings and each of the units are intended or restricted as to use;
(f) 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;
(g) The following plans shall be appended to the deed as integral parts thereof:
(1) A survey plan of the land included in the project, unless a survey plan of the same property had previously been
filed in said office;
(2) 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;
(h) 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. (R.A. No. 4726, Sec. 4).

Note: The enabling or master deed may be amended or revoked upon registration of an instrument executed by the registered
owner or owners of the property and consented to by all registered holders of any lien or encumbrance on the land or building
or portion thereof. The term "registered owner" shall include the registered owners of condominiums in the project. Until
registration of a revocation, the provisions of this Act shall continue to apply to such property (R.A. No. 4726, Sec. 4).

(2) Declaration of restrictions (R.A. No. 4726, Sec. 6); and

(3) Articles and By Laws of the Condominium Corporation or the association where applicable.

RIGHTS AND OBLIGATIONS OF CONDOMINIUM OWNERS

(1) The boundary of the unit granted are the interior surfaces of the perimeter walls, floors, ceilings, windows and doors thereof. The
following are not part of the unit bearing walls, columns, floors, roofs, foundations and other common structural elements of the
building; lobbies, stairways, hallways, and other areas of common use, elevator equipment and shafts, central heating, central
refrigeration and central air-conditioning equipment, reservoirs, tanks, pumps and other central services and facilities, pipes,
ducts, flues, chutes, conduits, wires and other utility installations, wherever located, except the outlets thereof when located
within the unit.
(2) There shall pass with the unit, as an appurtenance thereof, an exclusive easement for the use of the air space encompassed by
the boundaries of the unit as it exists at any particular time and as the unit may lawfully be altered or reconstructed from time to
time. Such easement shall be automatically terminated in any air space upon destruction of the unit as to render it untenantable.
(3) Unless otherwise, provided, the common areas are held in common by the holders of units, in equal shares, one for each unit.
(4) A non-exclusive easement for ingress, egress and support through the common areas is appurtenant to each unit and the common
areas are subject to such easements.
(5) Each condominium owner shall have the exclusive right to paint, repaint, tile, wax, paper or otherwise refinish and decorate the
inner surfaces of the walls, ceilings, floors, windows and doors bounding his own unit.
(6) 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 condominiums but any obligation incurred by such condominium owner is personal to him.
(7) Each condominium owner has also the absolute right to sell or dispose of his condominium unless the master deed contains a
requirement that the property be first offered to the condominium owners within a reasonable period of time before the same is
offered to outside parties (R.A. No. 4726, Sec. 6).
COMMON AREAS
Is the entire project excepting all units separately granted or held or reserved (R.A. No. 4726, Sec. 3).

General Rule: common areas shall remain undivided, and there shall be no judicial partition thereof (R.A. No. 4726, Sec. 7).

Exceptions/ Grounds for Partition

Where several persons own condominiums in a condominium project, an action may be brought by one or more such persons for
partition thereof by sale of the entire project, as if the owners of all of the condominiums in such project were co-owners of the entire
project in the same proportion as their interests in the common areas (R.A. No. 4726, Sec. 8) in the following cases: (UU-OC-R)
(1) That three years after damage or destruction to the project which renders material part thereof unfit for its use prior
thereto, the project has not been rebuilt or repaired substantially to its state prior to its damage or destruction, or
(2) That damage or destruction to the project has rendered one-half or more of the units therein untenantable and that
condominium owners holding in aggregate more than thirty percent (30%) interest in the common areas are opposed to
repair or restoration of the project; or
(3) That the project has been in existence in excess of fifty (50) years, that it is obsolete and uneconomic, and that
condominium owners holding in aggregate more than fifty percent (50%) interest in the common areas are opposed to
repair or restoration or remodeling or modernizing of the project; or
(4) That the project or a material part thereof has been condemned or expropriated and that the project is no longer viable,
or that the condominium owners holding in aggregate more than seventy percent (70%) interest in the common areas are
opposed to continuation of the condominium regime after expropriation or condemnation of a material portion thereof; or

Note: Where, in an action for partition of a condominium project or for the dissolution of condominium corporation on the
ground that the project or a material part thereof has been condemned or expropriated, the Court finds that the conditions
provided for in this Act or in the declaration of restrictions have not been met, the Court may decree a reorganization of the
project, declaring which portion or portions of the project shall continue as a condominium project, the owners thereof, and
the respective rights of said remaining owners and the just compensation, if any, that a condominium owner may be entitled
to due to deprivation of his property. Upon receipt of a copy of the decree, the Register of Deeds shall enter and annotate
the same on the pertinent certificate of title. (R.A. No. 4726, Sec. 23(e)).

(5) That the conditions for such partition by sale set forth in the declaration of restrictions, duly registered in accordance with
the terms of this Act, have been met.

The owner of a project shall, prior to the conveyance of any condominium therein, register a declaration of restrictions
relating to such project, which restrictions shall constitute a lien upon each condominium in the project, and shall insure to
and bind all condominium owners in the project. Such liens, unless otherwise provided, may be enforced by any condominium
owner in the project or by the management body of such project. (R.A. No. 4726, Sec. 9).

Condominium Corporation
Whenever the common areas in a condominium project are held by a condominium corporation, such corporation shall constitute the
management body of the project.

The corporate purposes of such a corporation shall be limited to the holding of the common areas, either in ownership or any other
interest in real property recognized by law, to the management of the project, and to such other purposes as may be necessary,
incidental or convenient to the accomplishment of said purposes.

Membership in a condominium corporation, regardless of whether it is a stock or non-stock corporation, shall not be transferable
separately from the condominium unit of which it is an appurtenance. When a member or stockholder ceases to own a unit in the
project in which the condominium corporation owns or holds the common areas, he shall automatically cease to be a member or
stockholder of the condominium corporation (R.A. No. 4726, Sec. 10).

The term of a condominium corporation shall be co-terminus with the duration of the condominium project, the provisions of the
Corporation Law to the contrary notwithstanding (R.A. No. 4726, Sec. 11).

In case of involuntary dissolution of a condominium corporation for any of the causes provided by law, the common areas owned or
held by the corporation shall, by way of liquidation, be transferred pro-indiviso and in proportion to their interest in the corporation
to the members or stockholders thereof, subject to the superior rights of the corporation creditors.

Such transfer or conveyance shall be deemed to be a full liquidation of the interest of such members or stockholders in the corporation.
After such transfer or conveyance, the provisions of this Act governing undivided co-ownership of, or undivided interest in, the
common areas in condominium projects shall fully apply (R.A. No. 4726, Sec. 12).

Until the enabling or the master deed of the project in which the condominium corporation owns or holds the common area is revoked,
the corporation shall not be voluntarily dissolved through an action for dissolution under Rule 104 of the Rules of Court except upon
a showing of UU-OC (see conditions in Section 8 above). (R.A. No. 4726, Sec. 13).
.
The condominium corporation may also be dissolved by the affirmative vote of all the stockholders or members thereof at a general
or special meeting duly called for the purpose: Provided, that all the requirements of Section sixty-two of the Corporation Law are
complied with (R.A. No. 4726, Sec. 14).
.
The corporation shall be deemed to hold a power of attorney from all the members or stockholders to sell and dispose of their separate
interests in the project and liquidation of the corporation shall be effected by a sale of the entire project as if the corporation owned
the whole thereof, subject to the rights of the corporate and of individual condominium creditors, unless otherwise provided for in
the declaration of restrictions upon voluntary dissolution of a condominium corporation in accordance with the provisions of Sections
thirteen and fourteen of this Act (R.A. No. 4726, Sec. 15).

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 all the stockholders or members (R.A. No. 4726,
Sec. 16).

The management body, unless otherwise provided for by the declaration of restrictions, the management body, provided for herein,
may acquire and hold, for the benefit of the condominium owners, tangible and intangible personal property and may dispose of the
same by sale or otherwise; and the beneficial interest in such personal property shall be owned by the condominium owners in the
same proportion as their respective interests in the common areas. A transfer of a condominium shall transfer to the transferee
ownership of the transferor's beneficial interest in such personal property (R.A. No. 4726, Sec. 22).