6 CONDOMINIUM CONCEPT

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DEFINITIONS:
• Condominium Project is the totality of the site (land), condominium units, and common
areas.
• Condominium Unit is a space encompassed by the interior surface of the floor, ceiling,
walls, and exterior doors and windows that is susceptible of independent use and
ownership.
• Common Areas refer to the weight-bearing structures (foundation, columns, beams),
service areas (lobby, corridors, stairways, elevators, etc.), utilities and facilities (electric,
water, plumbing and sewerage systems), and amenities (clubhouse, swimming pool, gym,
etc.).
• Condominium refers to an interest in a condominium project consist of absolute
ownership of a condominium unit and co-ownership of the land and common areas of the
project.
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CONDOMINIUM vs. TRADITIONAL CONCEPT OF OWNERSHIP
1. Evidence of Ownership – ownership in the traditional concept is evidenced by an
original or transfer certificate of title, while condominium ownership is evidenced by
condominium certificate title.
2. Capacity to Buy – in the traditional concept of ownership, alien acquisition is not allowed
except in cases of hereditary succession or transfer in favour of former natural-born
Filipino citizens. In the condominium concept, alien ownership not to exceed forty
percent interest in the project is legally allowed.
3. Extent of Ownership – The interest of an owner in the traditional concept consists of
absolute ownership of the inner and other structures of the building (the entire building).
In the condominium concept, the unit owner is the absolute owner of the space within the
interior surface of his unit, but is only a co-owner of the exterior or façade of the unit.
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ADVANTAGES OF CONDOMINIUM CONCEPT:
1. Enhances affordability by fractionalizing cost of land and building.
2. Facilities, utilities, amenities and services will cost less to build and maintain.
3. Economy in land space. Families holding title contiguous lands of say 40 or 50 square
meters may obtain adequate housing by consolidating their lots and constructing a
condominium project.
4. Enhances marketability because foreigners can buy.
5. Multiplies saleable or rentable floor areas by as many storey’s put up.
6. Eliminate the routinely chores of daily maintenance, security, and garbage collection
associated with single-detached dwellings.
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OPERATIVE ACT FOR A CONDOMINIUM PROJECT

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 An owner or developer may convert a property into a condominium project by executing
a legal document called Master of Deed and registering the same with the Register of Deeds.
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DOCUMENTS IN CONDOMINIUM DEVELOPMENT AND MARKETING
1. Master Deed with Deed of Restrictions
2. Articles of Incorporation and by-laws of condominium corporation
3. Deed of assignment of land in favour of condominium corporation
4. Reservation Agreement, Contract to Sell, Deed of Absolute Sale, Buyer’s Acceptance of
Unit.
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CONTENTS OF MASTER DEED
1. Technical description of the land
2. Description of the building (number of storey’s) and condominium units.
3. Description of the common areas and facilities
4. Interests acquired by unit buyers
5. Purposes for which the building and units are to be used.
6. Certification by the landowner, if he is other than the party executing the master deed,
that he is agreeable to the registration of the master deed on his title.
7. Annexes: land survey plan and building diagrammatic floor plan
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CONTENTS OF DEED RESTRICTIONS
1. Management body
2. Provisions for insurance coverage
3. Maintenance of the common areas
4. Realty tax on the common areas
5. Use of restriction
6. Manner of amending
7. Independent audit
8. Dues and assessments
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GENERAL STEPS IN CONDOMINIUM DEVELOPMENT
1. Preparation of building plans
2. Execution and registration of master deed.
3. Organization of a non-stock, non-profit condominium corporation
4. Execution of a deed of conveyance transferring land title to condominium corporation
5. Submission of building plans to assessor’s office to obtain individual tax declarations for
the condominium units and common areas.
6. Application for registration and license to sell with the HLURB
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AMENDMENT OF REVOCATION OF MASTER DEED
1. The master deed may be amended or revoked upon registration with the Register of
Deeds with an instrument executed by a simple majority of the registered owners.
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 For condominium projects exclusively for either residential or commercial use, simple
majority shall be on a per-unit of ownership.
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In case of mixed-used condominium project, simple majority shall be on a floor area of
ownership basis.
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2. Any amendment or revocation already decided by a majority of all registered owners
shall be submitted to the HLURB and the city/municipal engineer for approval before it
can be registered.
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DISPOSITION OF COMMON AREAS
1. The 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.
Prior notification to all registered owners is required.
2. The condominium corporation may expand or integrate the project with another upon the
affirmative vote of a simple majority of the registered owners, subject only to final
approval of the HLURB.
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RIGHTS OF UNIT OWNER
1. Absolute ownership of his unit.
2. Co-ownership of land and common areas.
3. Exclusive easement of the space of his unit.
4. Non-exclusive easement to common areas for ingress or egress.
5. Right to sell, lease, or mortgage his unit.
6. Right to repair, paint, decorate the interior surface of his unit.
7. Right to participate and vote in condominium corporation meetings.
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OBLIGATIONS OF CONDOMINIUM UNIT OWNER
1. Pay the realty tax on his unit
2. Share the real tax on the land and common areas
3. Pay the insurance on his unit
4. Share the insurance on the common areas
5. Comply with use restrictions
6. Pay dues and assessments
7. Give other unit owners the priority right to buy his unit (right of first refusal), if so
required by the master deed.
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DUTIES AND ASSESSMENTS
1. The Deed of Restriction usually provides for two kinds of assessments:
a) Regular Assessment – a monthly obligation to fund ordinary project expenses, such as
security, garbage collection, repair and maintenance of the common areas, electricity
and water bills on the common areas and real tax and insurance in the common areas.
b) Special Assessment – This is imposed as the need arises, such as the need to replace
the generator.
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2. Consequences for non-payment of assessment:
a) The management body may constitute a lien on the delinquent condominium unit by
registering with Register of Deeds a notice of assessment and delinquency.
b) Such lien may be enforced in the same manner provided by law for the judicial or
extra-judicial foreclosure of mortgage.
c) Unless otherwise provided in the declaration of restrictions, the condominium
corporation may bid at the foreclosure sale.
d) The unit owner affected shall have the same right of redemption as in cases of judicial
or extra-judicial foreclosure of mortgage.
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EXTENT OF INTEREST IN COMMON AREAS
In the absence of any provision in the master deed, all unit owners shall have equal
share in the common areas. If the intent is to pro-rate the owner’s interest on the common
areas, such fact must be expressly provided in the master deed. The interest based on the
floor area of all condominium units.
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PARTITION BY SALE OF ENTIRE PROJECT
One or more unit owners may bring an action for partition by sale of the entire project
based on the following grounds:
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1. Three years after damage or destruction to the project which render a material part
thereof unfit for use, the project has not been rebuilt or repaired substantially to its state
prior to damage destruction; or
2. Damage or destruction to the project has rendered one-half or more of the units
untenantable and unit owners holding more than 30% interest in the common areas are
opposed to repair or restoration of the project; or
3. The project has been in existence, obsolete and uneconomical, and that unit owners
holding more than 50% interest in the common areas are opposed to repair, restoration, or
remodelling of the project; or
4. The project or a material part thereof has been condemned or expropriated and the project
is no longer viable, or unit owners holding more than 70% interest on the common areas
are opposed to the continuation of the condominium regime after the expropriation or
condemnation of a material portion thereof.
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CONDOMINIUM CORPORATION
1. Option and Mandatory Requirement. The condominium corporation is optional if no
units will be sold to foreigners. However, the corporation is mandatory if some units, not
exceeding forty percent interest in the project will be sold to foreigners, in which case title
to the land will be transferred in the name of the condominium corporation and thus
comply with the constitutional mandate that corporation may acquire real estate provided
that at least sixty percent of its capital or membership is Filipino.
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2. Principal Purposes: a) To hold title to the land and to act as the management body of the
condominium project.
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 3. Conflict with Master Deed. In case of conflict between the articles of incorporation of the
condominium corporation and the master deed of the condominium project, the latter
should always prevail because:
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a) It is the master deed that gives birth to the condominium project. The project cannot
exist without a condominium corporation.
b) The condominium law specifically provides that the articles of incorporation and by-
laws of the condominium corporation shall not conflict with the master deed.
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4. Term of Corporation: the life of the condominium corporation shall be coterminous with
the life of the condominium project unless the corporation is earlier dissolved.
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5. Effects of Voluntary Dissolution. Unless otherwise provided in the deed of restriction:
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a) The corporation shall be deemed to hold a power of attorney from all the members to
sell their separate interest in the project.
b) Liquidation of the corporation shall be effected by the sale of the entire project, subject
to the rights of individual creditors.
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6. Effects of Involuntary Dissolution:
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a) The common areas held by the corporation shall be transferred to the members of the
corporation pro-indiviso and in proportion to their respective interest.
b) The transfer shall be deemed full liquidation of the interest of the members in the
corporation.
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