RA No. 4726 PD No.
957
Definition of Terms (Sec 3)
Condominium an interest in real property consisting of
absolute ownership in a unit in a residential, industrial and
commercial building and common ownership in the land on
which its located and in common areas of the condominium
project.
Condominium Unit the space bounded by the interior
surface of those intended for independent use or absolute
ownership.
Common areas the entire project, such as the land,
building structures, hallways, elevators, stairways, electrical,
water and plumbing system, and all amenities in a
condominium project, the exception is the inside of the
individual condominium unit.
Condominium corporation a non-stock and non-profit
corporation consisting of condominium unit owners which is
the management body of the condominium project and
owner of its common areas. This is synonymous in function
and nature to the homeowners association in subdivisions
except that it is taking the form of a corporation. Take note
therefore that it is the reason why a condominium unit can
be personally owned by possession and title by foreigners
but only up to 40% of the total number of units of the whole
condominium project.
Condominium project the entire parcel of land including
all the structures thereon.
Master deed the enabling act which creates the
condominium and contains the description of the land,
building, common areas facilities use of the building,
declaration of restrictions and plans of the land and
buildings and annotated on the certificate of title.
Declaration of restrictions refers to the set of rules,
procedures, policies and limitations as to the management
and usage of units and common areas in a condominium
project which constitutes a lien upon the project and each
unit and building upon all unit owners, occupants, and
others holding any right or interest in the project, pursuant to
the provisions of the Condominium Act and other related
laws.
STEPS IN FORMING CONDOMINIUM
1. 1. Preparation of a Master Deed with Declaration of
Restrictions and registration with the Registry of Deeds for
annotation in the title.
2. 2. Organization of a condominium corporation with the
project owners as incorporators.
3. 3. Causing issuance of individual tax declarations and
condominium titles for the units and common areas from the
Assessors Office and the Registry of Deeds respectively.
4. 4. Execution of Deed of Conveyance on the land and
common areas in favor of the condominium corporation.
5. 5. Application for registrations with the Housing and Land
Use Regulatory Board (HLURB).
6.
CONTENTS OF A CONDOMINIUM MASTER DEED
1. 1. Description of the land including survey plan
2. 2. Description of the building/s, enclosing technical and
diagrammatic plans.
3. 3. Description of the common areas and facilities
4. 4. Deed of registration
5. 5. Certification of the registered owner of the property if it is
other than the one executing the Master Deed, that he
consents of the registration of the deed.
6.
Note: The enabling or master deed may be amended or
Sec 2
Condominium project - shall mean the entire parcel of real
property divided or to be divided primarily for residential
purposes into condominium units, including all structures
thereon.
Condominium unit- shall mean 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 of parts of floors) in a building
or buildings and such accessories as may be appended
thereto.
Owner- shall refer to the registered owner of the land
subject of a subdivision or a condominium project.
Developer- shall mean the person who develops or
improves the subdivision
Buy and purchase- shall include any contract to buy,
purchase, or otherwise acquire for a valuable consideration
a subdivision lot, including the building and other
improvements, if any, in a subdivision project or a
condominium unit in a condominium project.
Sec 4 Registration of Projects
In case registered owner of land wishes to convert such land
to a condominium project, he/she must register project to the
National Housing Authority now HLRUB.
Authority to publish the notice of the filing of the registration
statement at the expense of the applicant-owner or dealer, in
2 newspapers of general circulation, one published in
English and another in Pilipino, once a week for two
consecutive weeks.
The fact of such registration shall be evidenced by a
registration certificate to be issued to the applicant-owner or
dealer.
Sec 5 After two weeks of obtaining a registration certificate,
the applicant-owner dealer can now apply for a license to
sell the project, and after payment of performance bond (Sec
6).
Effect of absence of certificate of registration or license
to sell by the HLURB
In Sps. Co Chien v. Sta. Lucia Realty & Dev., Inc., et
al., G.R. No. 162090, January 31, 2007
There was a sale of a realty but there was a contention that
the sale is void for lack of prior certificate of registration and
license to sell by the HLURB. Is the contention correct?
Why?
Held: No. P.D. 957 is a law that seeks to regulate the sale
of subdivision lots and condominiums in view of the
increasing number of incidents wherein real estate
subdivision owners, developers, operators, and/or sellers
have reneged on their representations and obligations to
prove and maintain properly the basic requirements and
amenities, as well as reports of alarming magnitude of
swindling and fraudulent manipulations perpetrated by
unscrupulous subdivision and condominium sellers and
operators. As such, P.D. 957 requires the registration not
just of the developers, seller, brokers and/or owners of the
project but also of the project itself. Upon the registration of
the project, a license to sell must be obtained prior to the
sale of the subdivision lots or condominium units therein.
The law also provides for the suspension and revocation of
the registration and license in certain instances, as well as
the procedure to be observed in the event thereof.
 revoked upon registration of an instrument executed by a
simple majority of the registered owners of the property. (RA
7899 Amending Secs 4 and 16 of RA 4726)
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 owner and upon surrender of all their
condominium owners copies, cancel the certificate of title of
the property and issue a new one in the name of said
condominium owners as pro-indiviso co-owners thereof.
CONTENTS OF A DECLARATION OF RESTRICTION
1. 1. Formation of the condominium corporation, the projects
management body.
2. 2. Procedures and guidelines on maintenance of units and
common areas.
3. 3. Rules and restrictions on the occupancy and usage of
units and common areas.
4. 4. Provision for insurance coverage.
5. 5. Realty taxes and assessments on units and common
areas.
6. 6. Right of assignees, mortgagees, tenants and occupants
of the units.
7. 7. Provision for assessments and fees.
8. 8. Penalty provisions.
9. 9. Procedures in amending restrictions.
RIGHTS OF A CONDOMINIUM OWNER (Sec 6)
1. 1. Absolute ownership of his unit.
2. 2. Limited ownership of walls, ceilings and floor
3. 3. Co-ownership of the land and common areas in
proportion to the unit/s owned.
4. 4. Exclusive easement of the air space within his unit.
5. 5. Non-exclusive easement to common areas for ingress
and egress.
6. 6. Repair, decorate the inner surfaces of his unit as he
pleases.
7. 7. Sell, lease, mortgage his unit.
8. 8. Vote and be voted upon during meetings of the
condominium corporation.
Effect of failure develop subdivision within one year
from the issuance of license.
Under PD 957, the seller is obliged to develop the
subdivision, otherwise, the buyer has the right to suspend
payment and the only requirement under the law is to give
due notice to the owner or developer of the buyers intention
to suspend payment.
Option to suspend payment or demand for
reimbursement given to buyer
In case the developer of a subdivision or condominium fails
in its obligation under Section 20 of P.D. No, 957, Section 23
of the law gives the buyer the option to demand
reimbursement of the total amount paid, or to wait for further
development of the subdivision, and when the buyer opts for
the latter alternative, he may suspend payment of
installments until such time that the owner or developer had
fulfilled its obligation to him. (Tamayo v. Huang).
It is thus clear that the law provides two remedies in case of
incomplete development of the subdivision project: (1)
reimbursement of the total amount paid, including
amortization interest but excluding delinquency interests,
with interest thereon at the legal rate; or (2) for the buyer to
suspend amortization payments until the completion of the
project. These remedies are available to the prospective
buyer to give effect to the laws intent to protect the buyers
from abusive owners/developers of subdivisions. In cases of
incomplete development, it is the developer who is the one
at fault, as it would then have violated its promise to the
prospective buyers to provide the necessary facilities in the
subdivision. The aggrieved party, therefore, is the
prospective buyer because of the non-fulfillment of the
developers commitment. As such, it is but logical that the
option is given to the prospective buyer, not to the
developer.

CONVEYANCE (Sec 18)

Requisites:
1. A copy of the description of land
2. Brief description of condominium conveyed
3. Name and personal circumstances of the condominium
owner

Upon registration and payment of fees of an instrument

conveying a condominium, the Register of Deeds shall enter
and annotate the conveyance on the certificate of title
covering the land included within the project. Transferee is
then issued a condominium owners copy of the pertinent
portion of such certificate of title.

In case of condominium project registered under the

provisions of the Spanish Mortgage Law or Act 3344 as
amended, the registration of the deed of conveyance of a
condominium is sufficient if the Register of Deed has the
original or signed copy, together with the certificate of the
management body of the project. A copy of said deed of
conveyance will be given to the condominium owner duly
acknowledged and stamped by the Register of Deeds in the
same manner as in the case of registration of conveyance in
 accordance with the provisions of the declaration of
restrictions of such project.

DISSOLUTION OF A CONDOMINIUM PROJECT

1. Term of corporation the life of the condominium
corporation shall be co-terminus with the existence of the
condominium project and the registration and regulation of
the condominium corporation shall be vested to the Housing
and Land Use Regulatory Board (Sec 11).

2. As per Building Code, a building has a life of 50 years

subject to an extension of another 25 years upon issuance
of the soundness of its structure.

Note: 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 a simple
majority of the
registered owners (RA 7899 Amending Secs 4 and 16 of RA
4726)

3. Effects of Voluntary Dissolution: (Sec 12)

a. The corporation shall be deemed to hold a power-of-
attorney from all unit owners/ members to sell their separate
interests in the project. (Sec 15)
b. Liquidation of the corporation shall be effected by the sale
of the entire project subject to the rights of the corporation
and individual creditors. (Sec 15)
c. The common areas held by the corporation shall be
transferred to the unit owners in the proportion to their
interests. (Sec 19)

EXCEPT as provided by Sec 13

3. Effects of Involuntary Dissolution:

The transfer shall be deemed full liquidation of the interest of
the members in the corporation.

SOME ADVANTAGES OF CONDOMINIUM OWNERSHIP

1. - Enhances affordability
2. - Accessibility to the amenities of the metropolis.
3. - Better security
4. - Maximizes land efficiency
5. - Lesser cost of facilities, services and maintenance
6. - Privacy

References:
RA 4726
PD 957
RA 7899
Housing and land Use Regulatory Board- /hlrub.gov.ph/
Board of Investments- /boi.gov.ph/
Real Estate Brokers of the Philippines - /rebap.com.ph/
Chamber of Real Estate and Builders Assn. Inc /creba.ph/