RA No. 4726
957
AN ACT TO DEFINE CONDOMINIUM, ESTABLISH
REQUIREMENTS FOR ITS CREATION AND GOVERN ITS
INCIDENTS
Sec. 4 Provisions of this Act shall apply to property
divided or to be divided into condominium only if a
Master Deed has been 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 beenthat many real estate subdivision owners, developers,
patented or registered under either the Land
Registration or Cadastral Acts
Evidence of ownership – In house and lot, evidenced
by original or transfer certificate of title while in
condominium, ownership is evidenced by
condominium certificate of title (ownership of a
condominium unit issued by the Register of Deeds of
the city or municipality where the condominium
project is located).
Capacity to buy – In house and lot, or lot only or
townhouse, alien acquisition is not allowed. In the
condominium concept, alien ownership not to exceed
40% interest in the project is legally allowed
Extent of ownership – the interest of the owner in
house and lot consists of absolute ownership of the
inner and outer structures of the building (the entire
building). In the condominium concept, the unit
owner is the absolute owner of the space within the
interior surface of his unit, but is only a co-owner of
the exterior or façade of the unit
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, accessories as may be appended thereto.
building structures, hallways, elevators, stairways,
electrical, water and plumbing system, and all
amenities in a condominium project, the exception is Developer- shall mean the person who develops or
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 In case registered owner of land wishes to convert
by foreigners but only up to 40% of the total number such land to a condominium project, he/she must
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
PD No.
THE SUBDIVISION AND CONDOMINIUM PROTECTIVE
BUYER’S DECREE
Purpose
P.D. No. 957 was enacted to protect helpless
citizens who may fall prey to the manipulations and
machinations of unscrupulous subdivision and
condominium sellers. (Eugenio v. Drilon, 322 Phil. 112
(1996)). It was issued in the wake of numerous reports
operators and/or seller have reneged on their
representations and obligations to provide and
maintain properly subdivision roads, drainage,
sewerage, water systems, lighting systems, and other
basic requirements for the health and safety of home
and lot buyers. (Casa Filipina Realty Corp. v. Office of
the Pres., 311 Phil. 170 (1995).
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
Owner- shall refer to the registered owner of the land
subject of a subdivision or a condominium project.
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
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
 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.
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).

STEPS IN FORMING CONDOMINIUM Effect of absence of certificate of registration or

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 Assessor’s 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 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 owner’s 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
project’s management body.
2. 2. Procedures and guidelines on maintenance of units
and common areas.
3. 3. Rules and restrictions on the occupancy and usage case of incomplete development of the subdivision
of units and common areas.
4. 4. Provision for insurance coverage.
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.
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 buyer’s 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
project: (1) reimbursement of the total amount paid,
including amortization interest but excluding
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.
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 law’s 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 developer’s 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/