|
REPUBLIC ACT NO.
4726 June 18, 1966
AN ACT TO DEFINE
CONDOMINIUM, ESTABLISH REQUIREMENTS FOR ITS CREATION, AND GOVERN ITS INCIDENTS.
Sec. 1. The short
title of this Act shall be "The Condominium Act".
Sec. 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.
Sec. 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.
Sec. 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 bee 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.
Sec. 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.
Sec. 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;
Sec. 7. Except as
provided in the following section, the common areas shall remain undivided, and
there shall be no judicial partition thereof.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 27. This Act
shall take effect upon its approval.
Approved: June 18, 1966
|