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6.1 Condominium Concept

A condominium is a project with multiple owners who each have a separate interest in their individual unit and an undivided interest in common areas like land. Key elements of a condominium include a master deed that establishes the condo regime, a declaration of restrictions that defines management and rules, and condominium certificates of title held by each unit owner. Unit owners have rights to their interior spaces and obligations to pay assessments for common areas. The management body oversees common areas and can dissolve the condo under certain conditions like damage or obsolescence.

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269 views3 pages

6.1 Condominium Concept

A condominium is a project with multiple owners who each have a separate interest in their individual unit and an undivided interest in common areas like land. Key elements of a condominium include a master deed that establishes the condo regime, a declaration of restrictions that defines management and rules, and condominium certificates of title held by each unit owner. Unit owners have rights to their interior spaces and obligations to pay assessments for common areas. The management body oversees common areas and can dissolve the condo under certain conditions like damage or obsolescence.

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Shangrila Homes Tarlac
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We take content rights seriously. If you suspect this is your content, claim it here.
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MBR Real Estate Manual 2013

6.1 CONDOMINIUM CONCEPT


Highlights of RA 4726, “The Condominium Act” – June 18, 1966
by Engr. Wilfredo L. Segovia
___________________________________________________________________________________

IMPORTANT DEFINITIONS:
1) “Condominium” - a project (residential, industrial or commercial) with multiple owners with a
separate interest in a unit and undivided interest in the common areas. Title to the common areas (land,
etc..) may be held by a condo corporation where unit owners shall automatically be members or
shareholders in proportion to the fractional interest.
2) "Unit" – the part of the project for independent use or ownership, and appended accessories.
3)"Project" - the entire property to be divided in condominiums, including all structures thereon.
4) "Common areas" - means the property held in common, excepting all units separately granted.

The Master Deed


The condominium regime is effected by the Master Deed and Declaration of Restrictions,
annotated in the property’s title. Under the R.A. 7899 amendment, the Master Deed may be
amended or revoked by a simple majority of the condo owners. In residential or commercial
condos, simple majority shall be on a per unit of ownership. In a mixed use, simple majority
shall be on a floor area of ownership basis.

Contents of Master Deed -- description of the land, building, common areas, nature of interest
acquired by buyers and the condo corporation, uses and restrictions, consent of property owner and lien
holders. Attachments – lot survey, floor plans.

Declaration of Restrictions
Defines the management body -- either a condominium corporation, an association of the
condominium owners, a board of governors. It also defines the authority of such body and prescribes
the voting majorities, quorums, notices, amendments, meeting date, manner of general and special
assessments, liens to secure such assessments, and other rules.
Authority may include – (1) To enforce the restrictions; (2) Secure insurance policies; (3) Provide for
maintenance, utilities and other technical and professional services; (4) Purchase materials, supplies for
common areas; (5) Pay taxes for common areas; (6) Rebuild damaged portions; (7) Delegate its
powers; (8) Enter and inspect units; (9) Power of attorney to sell when dissolution is authorized.
The Condominium Certificate of Title (CCT)
Each unit owner holds title in the form of the condominium certificate of title (CCT) which contains:
the description of the land, description of the condominium unit, name and personal circumstances of
the condominium owner. CCTs are registered with the RD and can be conveyed just like any title -- by
Deed of Absolute Sale, Deed of Donation, Deed of Conveyance, etc.. or similar instruments.
The management body shall certify that conveyance is in accord with the master deed and declaration
of restrictions. All unit owners automatically own a proportionate fractional interest in the management
body. Therefore, if the latter holds title to the land, being part of the common areas, only 40% of the
units may be sold to foreigners.

1
MBR Real Estate Manual 2013. (6.1) Condominium Concept.
Prepared by SG Academy for MBR. Rights reserved.
MBR Real Estate Manual 2013

Boundaries of a Condominium Unit


Boundary of a unit : Interior surfaces of perimeter walls, floors, ceilings, windows and doors thereof.
Not part of the unit: structural elements of the building; common areas; 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, except the outlets thereof located within the unit.
Rights of Condominium Unit Owners
1) Paint, repaint, tile, wax, paper, refinish and decorate the inner surfaces of the unit.
2) Mortgage, pledge or encumber the condo and to have the same appraised independently.
3) Sell or dispose, subject to the master deed (pre-emptive rights may exist);

The Management Body


1) Corporate purposes limited to - holding and managing the common areas. Membership in a
condominium corporation, shall not be transferable separately from the unit. Unit owners who sell their
units automatically cease to be members.
2) Corporate term - co-terminus with the duration of the condominium project;
3) In case of dissolution, the common areas liquidated and proportionately distributed to unit owners.
4) The condominium corporation shall not sell, exchange, lease or dispose of the common areas unless
authorized by the affirmative vote of all stockholders or members;
5) The condominium corporation’s by-laws shall provide that a unit owner can not expect payment of
his unit’s interest (where such right is granted under the Corporation Law) unless he consents to sell his
unit to the corporation or any purchaser of the corporation's choice. As to price, the provision of the
Corporation Law for valuation shall be followed. The corporation shall have 2 years to pay for the
shares or furnish a purchaser of its choice.. All expenses incurred in the liquidation of the interest of the
dissenting member or stockholder shall be borne by him.

Assessments and Dues


1. Assessments of the condominium corporation are valid obligations of all unit owners;
2. Unpaid assessments can become liens if registered with the Register of Deeds.
3. Such lien are superior to future liens, except real property tax, and those excepted in the declaration
of restrictions.
4. Liens are like mortgages; management body may bid at foreclosure sale; unit owners can redeem.
5. Unit owners can not charge others for materials, labor, etc. unless with consent, except in
emergency.
6. Materials, labor, services for common areas shall be deemed as having the express consent of all.
7. The owner of any unit may remove his unit from a lien by payment his fractional share.
Taxation: Each condominium unit separately assessed for property and other taxes.
Conditions for Dissolution
The condo corporation can be dissolved by simple majority vote for any of the following reasons
1) Project is not restored 3 years after serious damage or destruction; 2) 50% or more of units are un-
tenantable; and more than 30% of members are opposed to reconstruction; or 3) Project is more than 50
years old, obsolete, un-economical, and more than 50% of members are opposed; 4) Project has been
condemned or expropriated; or that 70% of the members are opposed; 5) Dissolution conditions in the
declaration of restrictions have been met.
2
MBR Real Estate Manual 2013. (6.1) Condominium Concept.
Prepared by SG Academy for MBR. Rights reserved.
MBR Real Estate Manual 2013
Upon dissolution, the corporation has the power to sell and dispose all units and common areas. [ ]
___________________________________________________________________________________

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MBR Real Estate Manual 2013. (6.1) Condominium Concept.
Prepared by SG Academy for MBR. Rights reserved.

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