REPUBLIC ACT No. 4726
AN ACT TO DEFINE CONDOMINIUM, ESTABLISH REQUIREMENTS
FOR ITS CREATION, AND GOVERN ITS INCIDENTS
Section 1
The short title of this Act shall be "The Condominium Act"
Section 2
A condominium is 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. Title
to the common areas, including the land, or the appurtenant interests in such
areas, may be held by a corporation specially formed for the purpose
(hereinafter known as the "condominium corporation") 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.
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.
Section 3
As used in this Act, unless the context otherwise requires:
(a) Condominium means a
condominium as defined in the next preceding section.
(b) Unit means 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.
(c) Project means the entire
parcel of real property divided or to be divided in condominiums, including all
structures thereon,
(d) Common areas means the entire
project excepting all units separately granted or held or reserved.
(e) To divide real
property means to divide the ownership thereof or other interest therein by
conveying one or more condominiums therein but less than the whole thereof.
Section 4
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, an
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 be 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.
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.
Section 5
Any transfer or conveyance of a unit or an apartment, office or store
or other space therein, shall include the transfer or conveyance of the
undivided interests in the common areas or, in a proper case, the membership or
shareholdings in the condominium corporation: Provided, however, That where the
common areas in the condominium project are owned by the owners of separate
units as co-owners thereof, no condominium unit therein shall be conveyed or
transferred to persons other than Filipino citizens, or corporations at least
sixty percent of the capital stock of which belong to Filipino citizens, except
in cases of hereditary succession. Where the common areas in a condominium
project are held by a corporation, no transfer or conveyance of a unit shall be
valid if the concomitant transfer of the appurtenant membership or stockholding
in the corporation will cause the alien interest in such corporation to exceed
the limits imposed by existing laws.
Section 6
Unless otherwise expressly provided in the enabling or master deed or
the declaration of restrictions, the incidents of a condominium grant are as
follows:
(a) 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.
(b) 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.
(c) Unless otherwise, provided, the common areas are
held in common by the holders of units, in equal shares, one for each unit.
(d) 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.
(e) 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.
(f) 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.
(g) 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;
Section 7
Except as provided in the following section, the common areas shall
remain undivided, and there shall be no judicial partition thereof.
Section 8
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: Provided, however, That a partition shall be
made only upon a showing:
(a) That three years after damage or destruction to the
project which renders material part thereof unit for its use prior thereto, the
project has not been rebuilt or repaired substantially to its state prior to
its damage or destruction, or
(b) 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 interest in
the common areas are opposed to repair or restoration of the project; or
(c) That the project has been in existence in excess of
fifty years, that it is obsolete and uneconomic, and that condominium owners
holding in aggregate more than fifty percent interest in the common areas are
opposed to repair or restoration or remodeling or modernizing of the project;
or
(d) 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 interest in
the common areas are opposed to continuation of the condominium regime after
expropriation or condemnation of a material portion thereof; or
(e) 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.
Section 9
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. The
Register of Deeds shall enter and annotate the declaration of restrictions upon
the certificate of title covering the land included within the project, if the
land is patented or registered under the Land Registration or Cadastral Acts.
The declaration of restrictions shall provide for the management of 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 a management agent elected by the owners or
by the board named in the declaration. It shall also provide for voting
majorities quorums, notices, meeting date, and other rules governing such body
or bodies.
Such declaration of restrictions, among other things, may also provide:
(a) As to any such management body;
(1) For the powers thereof, including power to enforce
the provisions of the declarations of restrictions;
(2) For maintenance of insurance policies, insuring
condominium owners against loss by fire, casualty, liability, workmen's
compensation and other insurable risks, and for bonding of the members of any
management body;
(3) Provisions for maintenance, utility, gardening and
other services benefiting the common areas, for the employment of personnel
necessary for the operation of the building, and legal, accounting and other
professional and technical services;
(4) For purchase of materials, supplies and the like
needed by the common areas;
(5) For payment of taxes and special assessments which
would be a lien upon the entire project or common areas, and for discharge of
any lien or encumbrance levied against the entire project or the common areas;
(6) For reconstruction of any portion or portions of any
damage to or destruction of the project;
(7) The manner for delegation of its powers;
(8) For entry by its officers and agents into any unit
when necessary in connection with the maintenance or construction for which
such body is responsible;
(9) For a power of attorney to the management body to
sell the entire project for the benefit of all of the owners thereof when
partition of the project may be authorized under Section 8 of this Act, which
said power shall be binding upon all of the condominium owners regardless of
whether they assume the obligations of the restrictions or not.
(b) The manner and procedure for amending such
restrictions: Provided, That the vote of not less than a majority in interest
of the owners is obtained.
(c) For independent audit of the accounts of the
management body;
(d) For reasonable assessments to meet authorized
expenditures, each condominium unit to be assessed separately for its share of
such expenses in proportion (unless otherwise provided) to its owners
fractional interest in any common areas;
(e) For the subordination of the liens securing such
assessments to other liens either generally or specifically described;
(f) For conditions, other than those provided for in
Sections eight and thirteen of this Act, upon which partition of the project
and dissolution of the condominium corporation may be made. Such right to
partition or dissolution may be conditioned upon failure of the condominium
owners to rebuild within a certain period or upon specified inadequacy of
insurance proceeds, or upon specified percentage of damage to the building, or
upon a decision of an arbitrator, or upon any other reasonable condition.
Section 10
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. The articles of incorporation or by-laws of
the corporation shall not contain any provision contrary to or inconsistent
with the provisions of this Act, the enabling or master deed, or the
declaration of restrictions of the project. 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.
Section 11
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.
Section 12
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.
Section 13
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:
(a) That three years after damage or destruction to the
project in which the corporation owns or holds the common areas, which damage
or destruction renders a 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
(b) That damage or destruction to the project has
rendered one-half or more of the units therein untenantable and that more than
thirty percent of the members of the corporation, if non-stock, or the
shareholders representing more than thirty percent of the capital stock entitled
to vote, if a stock corporation, are opposed to the repair or reconstruction of
the project, or
(c) That the project has been in existence in excess of
fifty years, that it is obsolete and uneconomical, and that more than fifty
percent of the members of the corporation, if non-stock, or the stockholders
representing more than fifty percent of the capital stock entitled to vote, if
a stock corporation, are opposed to the repair or restoration or remodeling or
modernizing of the project; or
(d) That the project or a material part thereof has been
condemned or expropriated and that the project is no longer viable, or that the
members holding in aggregate more than seventy percent interest in the
corporation, if non-stock, or the stockholders representing more than seventy
percent of the capital stock entitled to vote, if a stock corporation, are
opposed to the continuation of the condominium regime after expropriation or
condemnation of a material portion thereof; or
(e) That the conditions for such a dissolution set forth
in the declaration of restrictions of the project in which the corporation owns
of holds the common areas, have been met.
Section 14
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.
Section 15
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, 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.
Section 16
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.
Section 17
Any provision of the Corporation Law to the contrary notwithstanding,
the by-laws of a condominium corporation shall provide that a stockholder or
member shall not be entitled to demand payment of his shares or interest in
those cases where such right is granted under the Corporation Law unless he
consents to sell his separate interest in the project to the corporation or to
any purchaser of the corporation's choice who shall also buy from the
corporation the dissenting member or stockholder's interest. In case of
disagreement as to price, the procedure set forth in the appropriate provision
of the Corporation Law for valuation of shares shall be followed. The
corporation shall have two years within which to pay for the shares or furnish
a purchaser of its choice from the time of award. All expenses incurred in the
liquidation of the interest of the dissenting member or stockholder shall be
borne by him.
Section 18
Upon registration of an instrument conveying a condominium, the
Register of Deeds shall, upon payment of the proper fees, enter and annotate
the conveyance on the certificate of title covering the land included within
the project and the transferee shall be entitled to the issuance of a
"condominium owner's" copy of the pertinent portion of such
certificate of title. Said "condominium owner's" copy need not
reproduce the ownership status or series of transactions in force or annotated
with respect to other condominiums in the project. A copy of the description of
the land, a brief description of the condominium conveyed, name and personal
circumstances of the condominium owner would be sufficient for purposes of the
"condominium owner's" copy of the certificate of title. No conveyance
of condominiums or part thereof, subsequent to the original conveyance thereof
from the owner of the project, shall be registered unless accompanied by a
certificate of the management body of the project that such conveyance is in
accordance with the provisions of the declaration of restrictions of such project.
In cases of condominium projects registered under the provisions of the
Spanish Mortgage Law or Act 3344, as amended, the registration of the deed of
conveyance of a condominium shall be sufficient if the Register of Deeds shall
keep the original or signed copy thereof, together with the certificate of the
management body of the project, and return a copy of the deed of conveyance to
the condominium owner duly acknowledge and stamped by the Register of Deeds in
the same manner as in the case of registration of conveyances of real property
under said laws.
Section 19
Where the enabling or master deed provides that the land included
within a condominium project are to be owned in common by the condominium
owners therein, the Register of Deeds may, at the request of all the
condominium owners and upon surrender of all their "condominium
owner's" copies, cancel the certificates of title of the property and
issue a new one in the name of said condominium owners as pro-indiviso
co-owners thereof.
Section 20
An assessment upon any condominium made in accordance with a duly
registered declaration of restrictions shall be an obligation of the owner
thereof at the time the assessment is made. The amount of any such assessment
plus any other charges thereon, such as interest, costs (including attorney's
fees) and penalties, as such may be provided for in the declaration of
restrictions, shall be and become a lien upon the condominium assessed when the
management body causes a notice of assessment to be registered with the
Register of Deeds of the city or province where such condominium project is
located. The notice shall state the amount of such assessment and such other
charges thereon a may be authorized by the declaration of restrictions, a
description of the condominium, unit against which same has been assessed, and
the name of the registered owner thereof. Such notice shall be signed by an
authorized representative of the management body or as otherwise provided in
the declaration of restrictions. Upon payment of said assessment and charges or
other satisfaction thereof, the management body shall cause to be registered a
release of the lien.
Such lien shall be superior to all other liens registered subsequent to
the registration of said notice of assessment except real property tax liens
and except that the declaration of restrictions may provide for the
subordination thereof to any other liens and encumbrances.
Such liens may be enforced in the same manner provided for by law for
the judicial or extra-judicial foreclosure of mortgages of real property.
Unless otherwise provided for in the declaration of restrictions, the
management body shall have power to bid at foreclosure sale. The condominium
owner shall have the same right of redemption as in cases of judicial or
extra-judicial foreclosure of mortgages.
Section 21
No labor performed or services or materials furnished with the consent
of or at the request of a condominium owner or his agent or his contractor or
subcontractor, shall be the basis of a lien against the condominium of any
other condominium owner, unless such other owners have expressly consented to
or requested the performance of such labor or furnishing of such materials or
services. Such express consent shall be deemed to have been given by the owner
of any condominium in the case of emergency repairs of his condominium unit.
Labor performed or services or materials furnished for the common areas, if
duly authorized by the management body provided for in a declaration of
restrictions governing the property, shall be deemed to be performed or
furnished with the express consent of each condominium owner. The owner of any
condominium may remove his condominium from a lien against two or more
condominiums or any part thereof by payment to the holder of the lien of the
fraction of the total sum secured by such lien which is attributable to his
condominium unit.
Section 22
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.
Section 23
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.
Section 24
Any deed, declaration or plan for a condominium project shall be
liberally construed to facilitate the operation of the project, and its
provisions shall be presumed to be independent and severable.
Section 25
Whenever real property has been divided into condominiums, each
condominium separately owned shall be separately assessed, for purposes of real
property taxation and other tax purposes to the owners thereof and the tax on
each such condominium shall constitute a lien solely thereon.
Section 26
All Acts or parts of Acts in conflict or inconsistent with this Act are
hereby amended insofar as condominium and its incidents are concerned.
Section 27
This Act shall take effect upon its approval.
Approved:
June 18, 1966
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