CONDOMINIUM CONCEPTS

Notes # 2:

General steps in condomizing

 Preparation of building plans

 Execution and registration of master deed
 Organization of a non-stock, non-profit condominium corporation
 Execution of a deed of conveyance transferring land title to
condominium corporation.
 Submission of building plans to assessor’s office to obtain individual
tax declarations for the condominium units and common areas.
 Application for registration and license to sell with the HLURB

Amendment of revocation of master deed

 The master deed may be amended or revoked upon registration with

the register of deeds of an instrument executed by a simple majority
of the registered owners
 For condominium projects exclusively for either residential or
commercial use, simple majority shall be based on a per unit of
ownership.
 In case of mixed use condominium projects, simple majority shall be
on the floor area of ownership basis
 Any amendment or revocation already decided by a majority shall be
on a floor area of ownership basis

Disposition of common areas

 The condominium corporation shall not, during its existence, sell,

exchange, lesse 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.
 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.

Rights of unit owner:

 Absolute ownership of his unit

 Co-ownership of land and common areas
 Exclusive easement of the space of his unit
  Non-exclusive easement to common areas for ingress or egress
 Right to sell, lease, or mortgage his unit
 Right to repair, paint, decorate the interior surface of his unit
 Right to participate and vote in condominium corporation meetings

Obligations of condominium unit owner

 Pay the realty tax on his unit.

 Share the realty tax on the land and common areas.
 Pay the insurance on his unit.
 Share the insurance on the common areas.
 Comply with use restrictions.
 Pay dues and assessments.
 Give other unit owners the priority right to buy his unit (right of first
refusal). If so required by the master deed.

Dues and Assessments

The Deed of Restriction usually provides for two kinds of assessments:

 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 realty tax and insurance on the common areas.
 Special assessment – this is imposed as the need arises, such as the
need for replacement of the generator.

  Consequences of non-payment of assessment

 The management body may constitute a lien on the delinquent

condominium unit by registering with the Register of Deeds a notice of
assessment and delinquency.
 Such lien may be enforced in the same manner provided by law for the
judicial or extra-judicial foreclosure of mortgage.
 Unless otherwise provided in the declaration of restrictions, the
condominium corporation may bid at the foreclosure sale.
 The unit owner affected shall have the same right of redemption as in
cases of judicial or extra-judicial foreclosure of mortgage.

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 unit
owners’ interest on the common areas, such fact must be expressly provided
in the master deed. The interest based on floor area of ownership is arrived
at by dividing the unit area by the total floor area of all condominium units.  

Condominium Corporation

Optional and Mandatory Requirement. The condominium corporation is

optional if no unit will be sold in 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 corporations may acquire real estate provided
that at least sixty percent of its capital or membership is Filipino

Principal Purposes: a) To hold title to the land and b) To set as the

management body of the condominium project.
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:

 It is the matter deed which gives birth in the condominium project.

The project cannot exist without a master deed, but it can exist
without a condominium corporation.
 The condominium law specifically provides that the articles of
incorporation and by-laws of the condominium corporation shall not
conflict with the master deed.

  Effects of Voluntary Dissolution

Unless otherwise provided in the Deed of Restriction, the corporation shall
be deemed to hold a power of attorney from all the members to sell their
separate interest in the project. Liquidation of the corporation shall be
effected by the sale of the entire project, subject to the rights of individual
creditors
 
Effects of involuntary Dissolution 
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.
The transfer shall be deemed full liquidation of the interest of the members
in the corporation.