THE CONDOMINIUM ACT

Case Overview and Summary

Summary of Republic Act No. 4726 (The Condominium Act)

Definition of Condominium (Sec. 2)
- A condominium is an interest in real property consisting of:
• Separate interest in a unit in a residential, industrial or commercial building
• Undivided interest in common areas, land, and other portions of the property
• Title to common areas may be held by a condominium corporation

Key Terms (Sec. 3)
• Unit: Part intended for independent use or ownership, including rooms, spaces, accessories (Sec. 3b)
• Project: The entire parcel divided or to be divided into condominiums (Sec. 3c)
• Common areas: The entire project excluding units (Sec. 3d)

Requirements for Condominium Creation (Sec. 4)
• Record an enabling or master deed containing:
• Description of land, building(s), units, common areas (Sec. 4a-c)
• Statement of interest acquired by purchaser in units and common areas (Sec. 4d)
• Intended use restrictions for building(s) and units (Sec. 4e)
• Consent of owner and lienholders (Sec. 4f)
• Survey and floor plans (Sec. 4g)
• Restrictions on alienation of condominiums (Sec. 4h)

Transfer of Condominiums (Sec. 5)
• Includes transfer of undivided common area interest or corporation membership/shares
• Alien ownership restrictions for common areas owned by co-owners or corporation

Incidents of Condominium Grant (Sec. 6)
• Unit boundaries are interior surfaces of walls, floors, ceilings, windows, doors (Sec. 6a)
• Exclusive easement for air space within unit boundaries (Sec. 6b)
• Common areas held in equal shares by unit owners, unless otherwise provided (Sec. 6c)
• Non-exclusive easement for ingress, egress, support through common areas (Sec. 6d)
• Exclusive right to decorate interior unit surfaces (Sec. 6e)
• Exclusive right to mortgage, pledge or encumber unit (Sec. 6f)
• Absolute right to sell unit, unless master deed requires offer to other owners first (Sec. 6g)

Undivided Common Areas and Judicial Partition (Sec. 7-8)
• Common areas remain undivided, no judicial partition allowed (Sec. 7)
• Partition by sale allowed under certain conditions: (Sec. 8)
• 3+ years after damage without substantial repair (Sec. 8a)
• Damage rendering 50%+ units untenantable, 30%+ owners opposed to repair (Sec. 8b)
• Project over 50 years old, obsolete, 50%+ owners opposed to repair/remodeling (Sec. 8c)
• Condemnation/expropriation, project no longer viable, 70%+ owners opposed to continuation (Sec. 8d)
• Conditions in declaration of restrictions met (Sec. 8e)

Declaration of Restrictions (Sec. 9)
• Must be registered prior to conveyance of any condominium
• Constitutes a lien on each condominium
• Provides for management by corporation, association, board or agent
• May include provisions for:
• Powers of management body (Sec. 9a)
• Insurance, bonding, services, supplies, taxes, reconstruction (Sec. 9a1-6)
• Delegation of powers, entry into units (Sec. 9a7-8)
• Power to sell entire project if partition allowed (Sec. 9a9)
• Amendment procedures requiring majority vote (Sec. 9b)
• Independent audit (Sec. 9c)
• Assessments proportional to ownership interest (Sec. 9d)
• Subordination of assessment liens (Sec. 9e)
• Conditions for partition or dissolution (Sec. 9f)

Condominium Corporation (Sec. 10-17)
• Constitutes the management body if common areas held by corporation (Sec. 10)
• Limited purposes: holding common areas, management, related purposes (Sec. 10)
• Membership tied to unit ownership, not separately transferable (Sec. 10)
• Term co-terminus with project duration (Sec. 11)
• Involuntary dissolution transfers common areas pro-indiviso to members (Sec. 12)
• Voluntary dissolution requirements (Sec. 13):
• 3+ years after damage without repair (Sec. 13a)
• Damage rendering 50%+ units untenantable, 30%+ members/shareholders opposed to repair (Sec. 13b)
• Project over 50 years, obsolete, 50%+ members/shareholders opposed to repair/remodeling (Sec. 13c)
• Condemnation/expropriation, project no longer viable, 70%+ members/shareholders opposed to continuation (Sec. 13d)
• Conditions in declaration of restrictions met (Sec. 13e)
• Voluntary dissolution by all members/shareholders (Sec. 14)
• Power to sell entire project upon dissolution unless restricted (Sec. 15)
• Prohibited from selling common areas without all members/shareholders approval (Sec. 16)
• Dissenting member/shareholder rights and valuation process (Sec. 17)

Registration and Conveyance (Sec. 18-19)
• Register of Deeds to annotate conveyances on title, issue condominium owner's copy (Sec. 18)
• Conveyance requires certificate from management body (Sec. 18)
• Option to cancel titles and issue new one for co-ownership of land (Sec. 19)

Assessment Liens (Sec. 20)
• Assessments per declaration are obligations of owner at time of assessment
• Unpaid assessments become liens upon registration of notice with Register of Deeds
• Lien superior to subsequent liens except taxes and permitted subordinations
• Lien enforceable by foreclosure, owner has redemption rights

Contractor's Liens (Sec. 21)
• Work/materials by request of owner only liens that owner's unit
• Emergency repairs deemed consented by owner
• Common area work by management body deemed consented by all owners
• Partial lien removal by paying fractional amount

Personal Property (Sec. 22)
• Management body may acquire/dispose personal property for owners' benefit
• Beneficial interest proportional to common area interests
• Transfers with conveyance of condominium

Reorganization by Court (Sec. 23)
• Court may reorganize project if partition/dissolution conditions not met
• Determine remaining condominium portions and owners
• Determine compensation for deprived owners

Liberal Construction (Sec. 24)
• Deeds, declarations, plans to be construed to facilitate project operation
• Provisions presumed independent and severable

Taxation (Sec. 25)
• Each separately owned condominium separately assessed for taxes
• Tax constitutes lien solely on that condominium

Applicability (Sec. 26-27)
• Amends conflicting laws regarding condominiums
• Effective upon approval on June 18, 1966