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Lecture 1: Condominium Concepts February 13, 2020

This document provides an overview of key concepts related to condominium ownership and development in the Philippines. It discusses the enabling law for condominiums, the dual nature of condo ownership involving both individual unit ownership and common area ownership. It also outlines the master deed that establishes a condo project, how to purchase a condo unit, recurring ownership costs, transferring ownership, and managing a condo corporation after project completion.

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82 views4 pages

Lecture 1: Condominium Concepts February 13, 2020

This document provides an overview of key concepts related to condominium ownership and development in the Philippines. It discusses the enabling law for condominiums, the dual nature of condo ownership involving both individual unit ownership and common area ownership. It also outlines the master deed that establishes a condo project, how to purchase a condo unit, recurring ownership costs, transferring ownership, and managing a condo corporation after project completion.

Uploaded by

AAPHBRS
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Lecture 1: Condominium Concepts

February 13, 2020



Enabling law: R.A. 4726, June 18, 1966

Dual Nature of Condo Ownership
1. Unit ownership –Certificate Condominium Certificate of Title (CCT)
2. Common ownership – Shares in a Condo Corporation

A condominium project is set up by annotating a “Master Deed and Declaration of Restrictions
(MDDR) on the land title

What can be found on the MDDR:
Descriptions – land, building, common areas and facilities; interest acquired by buyers title
holder
Purpose - uses and restrictions
Consents - lot owner, holders of liens.
Attachments - lot plan; building floor plans.
Restrictions - on the right to dispose.

HOW TO BUY A CONDO
1. Define your need – Location, size. Budget, other concerns.
2. Exercise due deligence -reputable developer, License to Sell, Read the “fine print” of the
contract, Delivery date, Amenities, Start of association dues

TERMS OF PAYMENT – Reservation, Down payment, Installments. Baloon payment or bank ,
financing (eligible?), Can you afford the amortization payments?

OTHER TRANSACTION CHARGES
a. Transfer tax
a. Not to exceed 50% of 1% (Province) or 75% of 1% MMCM
b. Title registration fees.
c. Electric meter deposit.
d. Misc. fees are illegal

RECURRING COSTS OF A CONDO
1. Real property tax: AV x 1% (Province) or 2% MMCM
2. Special education fund 1% AV
3. Unit insurance
4. Association dues - Usually per sq. meter

TRANSFERRING OWNERSHIP OF YOUR CONDO
1. CCTs conveyed by: Deed of Absolute Sale, Deed of Donation, Deed of Conveyance,
2. The management body shall certify..
3. Transfers include conveyance of the undivided interests (condo corp shares)
4. Transfers shall not reduce ownership to less than 60% Filipino..

BOUNDERIES OF YOUR CONDO
Part of the unit: Interior areas bounded by inside face perimeter walls, floors, ceilings, windows
and doors thereof.
Not part of the unit : The structure, common areas, common utilities

WHAT ARE YOUR RIGHTS AS A CONDO OWNER
1. To paint, repaint, tile, wax, paper or otherwise refinish and decorate
2. To mortgage, pledge or encumber
3. Absolute right to sell or dispose, subject to the Master Deed
4. Use of unrestricted common areas.
5. Elect the directors of the Board.

WHAT ARE YOUR DUTIES AS A CONDO OWNER
1) To respect your co-owners;
2) To observe the restrictions;
3) To pay your dues;
4) To pay your share of taxes, insurance, and other assessment.
5) To perform your duty as a shareholder of the condo corp.

WHO MANAGES THE CONDO PROJECT AFTER TURNOVER
The Condo Authority – can either be a homeowners association or a condominium corporation.
Condo Corporation is a more common form.

ROLE AND RESPONSIBILITIES OF THE CONDO AUTHORITY
Enforce the restrictions. Secure insurance. Maintenance. Procure materials and supplies. Pay
taxes. Rebuild damaged portions.
Power of attorney in case of dissolution.

HOW IS THE CONDO CORP ORGANIZED
1. Developer first establishes it with SEC.
2. All unit owners automatically shareholders.
a. 1 share per unit if residential.
b. Proportionate to area if mixed use.
3. Unit owners elect the Board annually.
4. Board elects the officers annually.
5. Unit owners are assessed for dues and special expenses.

THE NATURE OF ASSESSMENT OF THE MANAGEMENT BODY
1. Valid obligations. Unpaid assessments are liens. Can be registered with RD. Superior to
other liens, except taxes.
2. Management body can bid at foreclosure sale; condo owners have the right of
redemption..
3. Unit owner can not bill another without consent unless in emergency
4. Materials, labor, services furnished for the common deemed with consent..
5. Condo owner can free unit lien by paying his fractional share.


CONDITIONS WHERE A CONDO PROJECT CAN BE DISSOLVED
1. Not repaired or rebuilt 3 years after serious damage
2. More than ½ is un-tenantable; more than 30% are opposed to its continuation..
3. Over 50 years, obsolete, uneconomical, and more than 50% are opposed to its
continuation.
4. The project is condemned or expropriated; or that more than 70% are opposed to
continuation
5. Conditions about dissolution in the declaration of restrictions have been met.

TYPES OF CONDO PROJECT
The “Mixed-Use” Condo is the ideal “LIVE, WORK and PLAY” project.
1. Basic mixed-use model, Podium: Commercial and Recreational,
2. Binondo model - Podium: Warehouse for goods, Upper Podium: Offices. Towers: Residential
3. School model. - Podium: 24-hour food, service shops, Upper Podium: Recreational areas, gym,
Towers: Dormitories for students
4. Call center model. Podium: 24-hour food, service shops. Upper Podium: Call center offices
Towers: Dormitories
6. Health center model. Podium: Health food stores, drugstores, diagnostics services. Upper
Podium: Medical clinics Towers: Home for seniors.

BASIC STEPS IN BUILDING A CONDO PROJECT
Step 1 - Find a suitable lot
o Near mass transit, mall or neighborhood retail
o Zoning allows your proposed use
o Physically acceptable

Step 2 - Acquire the property
o Outright purchase
o Joint venture
o Long-term lease

Step 3 - Plan the Project
o Master plan
o Architectural design
o Marketing strategy
o Financing strategy

Step 4 – Build and Sell the Project
o Hire a Project Manager or Consultant
o Engage the contractor/s
o Set up the marketing program

Step 5 – Deliver the Project
o Fulfill all commitments
o Establish the condo
o Management body
o Turnover
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