What You Need to Know about the Condominium Act

The Philippine real estate industry has been continuously growing over the recent years. Unsurprisingly, more and more people are investing in the property market, and the easiest way to enter it is by purchasing a condominium unit. Whether the purchase is for personal use or for investment, it might be time to brush up on your knowledge of the Condominium Act to better understand your rights and responsibilities as a condo unit owner.

Republic Act No 4726 or “The Condominium Act” is an act to define condominium, establish requirements for its creation, and govern its incidents. 


What is a condominium?

As defined in the Condominium Act, a condominium is “an interest in real property consisting of a separate interest in a unit in a residential, industrial or commercial building and an undivided interest in common, directly or indirectly, in the land on which it is located and in other common areas of the building. A condominium may include, in addition, a separate interest in other portions of such real property.”

Title to the common areas, including the land, or the appurtenant interests in such areas, may be held by a corporation specially formed for the purpose in which the holders of separate interest shall automatically be members or shareholders, to the exclusion of others, in proportion to the appurtenant interest of their respective units in the common areas.



What is a condominium unit?

unit means 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 or parts of floors) in a building or buildings and such accessories as may be appended thereto.

Who can own condominiums?

Filipino citizens and corporations can own condominiums. However, foreigners are restricted to owning no more than 40% of the total and outstanding capital stock of a corporation. At least 60% should be Filipino-owned and controlled. In addition to that restriction, foreigners and foreign corporations are, by law, prohibited to own land.

Who can own condominium units?

Filipino citizens and corporations can own condominium units. Likewise, foreigners are allowed to purchase and acquire condominium units.

What forms part of a condominium unit?

The boundary of the unit granted are the interior surfaces of the perimeter walls, floors, ceilings, windows and doors thereof, unless the master deed or the declaration of restrictions prescribed by the condominium corporation or the administration stipulate otherwise.

What do not form part of the condominium unit?

Areas that are not found inside the unit are excluded from the unit. According to the Condominium Act, “bearing walls, columns, floors, roofs, foundations, and other common structural elements (e.g., lobbies, stairways, hallways, and other 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, flutes, chutes, conduits, wires, and other utility installations, wherever located.” An exception to the list are those outlets that are located within the unit.

Who owns the common areas in a condominium?

Common areas, which comprise of the entire project except all units separately granted or held or reserved.  Generally, titles to the common areas are held by a corporation formed for the purpose. However, RA  4726 also states that the common areas are held in common by the holders of units, in equal share for each unit.

What is my stake in a condominium?

As a unit owner, you are essentially a co-owner of the condominium, entitled to such privileges and limited by such restrictions that may follow the title.

Can I mortgage my unit for a loan?

Yes. The condominium act states that “each condominium owner shall have the exclusive right to mortgage, pledge, or encumber his condominium and to have the same appraised independently of the other condominium owner is personal to him.”

Can I sell my condominium unit?

Yes. When you sell your unit, however, you are not just selling the unit itself, you are also selling your interest in the common areas as well as your membership and shareholdings in the condominium corporation.

Can the condominium corporation sell the condominium without my consent?

Generally, yes. However, if the master deed contains a requirement that the property should first be offered to the other condominium owners within a reasonable time before offering it to third parties, then it may not.

Another restriction is one that has been amended to the Corporation Code by Republic Act No. 7899, which states that, as an owner, you shall not sell, exchange, lease, or otherwise dispose of the common areas of a condominium without the approval of the simple majority of the registered owners, subject as well, to the approval of the Housing and Land Use Regulatory Board (HLURB).

What will happen to a condominium investment after 50 years?

When a condominium project is fully turned over to the unit owners, it becomes just like a corporation, and you become one of the owners of that corporation. This means that as a condominium unit owner, you will have a “say” in the decision making as to what to do with the whole building. If it has been decided that the property is going to be sold, you will get your appropriate share of the proceeds of the sale.


What are my rights as a condominium unit owner?

  • Absolute ownership of your unit
  • Co-ownership of land and common areas
  • Exclusive easement of the space of your unit
  • Non-exclusive easement to common areas for ingress or egress
  • Right to sell, lease, or mortgage your unit
  • Right to repair, paint, decorate the interior surface of your unit
  • Right to participate and vote in condominium corporation meetings

What are my obligations as a condominium unit owner?

  • Pay the realty tax on your condominium unit.
  • Share the realty tax on the land and common areas.
  • Pay the insurance on your unit.
  • Share the insurance on the common areas.
  • Comply with use restrictions.
  • Pay dues and assessments.
  • Give other unit owners the priority right to buy your unit (right of first refusal) if so required by the master deed.

    (c) Filipinohomes.com

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