a) Concept of condominium

Condominium— 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.

(i) Condominium corporation

Condominium corporation— A corporation specially formed to hold title to the land and
common areas.

(ii) Interest in real property

Interest in property means a right, claim, title, or legal share in that property. In real estate, ownership
interest in a property refers to the rights that one or multiple owners hold on the investment. In the
case of multiple owners, the ownership interest is usually split based on the amount invested in the
property.

(iii) Concept of common areas, amendment

Common areas— Means the entire project excepting all units separately granted or held or reserved.

BEFORE AMENDMENT:
Section 16. 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 all the stockholders or members.

AFTER AMENDMENT:

Section 16. A condominium corporation shall not, during its existence, sell, exchange, lease or
otherwise dispose of the common areas owned or held by or in the condominium project unless
authorized by the affirmative vote of a simple majority of the registered owners: Provided, That prior
notifications to all registered owners are done: and Provided, further, That the condominium
corporation may expand or integrate the project with another upon the affirmative vote of a simple
majority of the registered owners, subject only to the final approval of the Housing and Land Use
Regulatory Board.

Summary of the amendment: A condominium corporation shall not sell, exchange, lease, or otherwise
dispose of the common areas of a condominium without:

1. The simple majority of the registered owners

 2. Prior notification to all registered owners
3. Approval of the Housing and Land Use Regulatory Board (HLURB)

(iv) Documents to consider (master deed, declaration of restrictions, articles and by-laws of the
condominium corporation or the association, where applicable)

Master deed— An enabling deed to be recorded in the Register of Deeds and annotated in the title of
the land, which shall contain:

[a] a description of the land;

[b] a description of the building
[c] a description of the common areas
[d] a statement of the interest acquired or to be acquired by the purchaser;
[e] a statement of the purposes for which the building and units are intended or restricted;
[f] consent of the registered owner; and
[g] any reasonable restriction on the right of the owner to alienate.

Declaration of restrictions— Restrictions on the use of the condominium which shall constitute a lien
on each unit in the project, to be enforced, by the owner or management body, description and
powers of the management body. Must be registered by the owner of the project in the Register of
Deeds prior to the conveyance of any condominium therein (Sec. 9).

The declaration of restrictions shall provide for the management of the project by:

1. a condominium corporation;
2. an association of the condominium owners;
3. a board of governors elected by condominium owners;
4. a management agent elected by the owners; or
5. by the board named in the declaration.

It shall also provide for voting majorities quorums, notices, meeting date, and other rules
governing such body or bodies.

The articles of incorporation or by-laws of the corporation— shall not contain any provision contrary
to or inconsistent with the provisions of this Act, the enabling or master deed, or the declaration of
restrictions of the project. (Sec. 10)

b) Rights and obligations of condominium owners

(i) Contributions/dues
These are monthly payments by unit owners and tenants for the maintenance of the condominium.

(ii) P.D. 957, The Subdivision and Condominium Buyers' Protective Decree and R.A. 6552, Realty
Installment Buyer Act

UNDER PD 957:

(Condominium project owner obli):

1. The owner shall submit his condominium plan to the NHA which shall act upon and approve the
same, upon a finding that the plan complies with the National Building Code. This will then be
submitted to the Register of Deeds of the province or city in which the property lies;

2. Shall pay registration fees;

3. Shall cause the publication of a notice of the filing of the registration statement at the expense
of the applicant-owner or dealer, in two newspapers general circulation, one published in
English and another in Filipino, once a week for two consecutive weeks;

4. Shall obtain a license to sell the project within two weeks from the registration of such project
prior to selling condominium unit;

5. Shall pay a performance bond to guarantee the construction and maintenance of the roads,
gutters, drainage, sewerage, water system, lighting systems, and full development of the
condominium project;

6. Shall pay real estate tax and assessment on a lot or unit shall without recourse to the buyer for
as long as the title has not passed to the buyer;

7. Must secure a right of way to a public road or street if without access to any existing public
road or street;

8. Shall initiate the organization of a homeowners association among the buyers and residents of
the projects.

(Buyer rights):

1. Right to be notified of a mortgage made on the condominium before the release of the loan
proceeds
 2. The rights of the buyer in the event of this failure to pay the installments due for reasons other
than the failure of the owner or developer to develop the project shall be governed by Republic
Act No. 6552.

NOTE: Where the transaction or contract was entered into prior to the effectivity of RA 6552 on
August 26, 1972, the defaulting buyer shall be entitled to the corresponding refund based on
the installments paid after the effectivity of the law in the absence of any provision in the
contract to the contrary.

UNDER RA 6552:

1. Where the buyer has paid at least two years of installment, he has the right to:

a. Pay without additional interest, the unpaid installments due within the total grace
period earned by him which is hereby fixed at the rate of 1 month grace period for every
1 year of installment payments made: Provided, That this right shall be exercised by the
buyer only once in every 5 years of the life of the contract and its extensions, if any.

b. Be refunded the cash surrender value of the payments on the property equivalent to
50% of the total payments made (if he paid at least 5 years installment: an additional
5% every year but not to exceed 90% of the total payments made)

2. Right to a grace period of not less than 60 days from the date the installment became due.

3. The right to sell his rights or assign the same to another person or to reinstate the contract by
updating the account during the grace period and before actual cancellation of the contract.

4. The right to pay in advance any installment or the full unpaid balance of the purchase price any
time without interest and to have such full payment of the purchase price annotated in the
certificate of title covering the property.

c) Grounds for partition of common areas, or dissolution of the condominium

PARTITION

General Rule: The common areas shall remain undivided, and there shall be no judicial partition thereof.

Exception: Except as provided in the Section 8 of the same Act.

A partition shall be made only upon a showing: (Sec. 8, RA 4726)

 (a) That 3 years after damage or destruction to the projects which render a material part thereof unfit
for its use prior thereto, the project has not been rebuilt or repaired substantially to its state prior to
its damage or destruction; or

(b) That damage or destruction to the project has rendered 1/2 or more of the units therein
untenantable and that condominium owners holding in aggregate more than 30% interest in the
common areas are opposed to repair or restoration of the projects; or

(c) That the project has been in existence in excess of 50 years, that it is obsolete and uneconomic,
and that condominium owners holding in aggregate more than 50% interest in the common areas are
opposed to repair or restoration or modeling or modernizing of the project; or

(d) That the project or a material part thereof has been condemned or expropriated and that the
project is no longer viable, or that the condominium owners holding in aggregate more than 70%
interest in the common areas are opposed to continuation of the condominium regime after
expropriation or condemnation of a material portion thereof; or

(e) That the conditions for such partition by sale set forth in the declaration of restrictions duly
registered in accordance with the terms of this Act, have been met.

DISSOLUTION

General Rule: Until the enabling or the master deed of the project in which the condominium corporation
owns or holds the common areas is revoked, the corporation shall not be voluntarily dissolved through an
action for dissolution under Rule 104 of the Rules of Court

Exception: Upon the showing of the following: (Sec. 13, RA 4726)

(a) That 3 years after damage or destruction to the project in which the corporation owns or holds the
common areas, which damage or destruction renders a material part thereof unfit for its use prior
thereto, the project has not been rebuilt or repaired substantially to its state prior to its damage or
destruction; or

(b) That damage or destruction to the project has rendered 1/2 or more of the units therein
untenantable and that more than 30% of the members of the corporation, if non-stock, or the share-
holders representing more than 30% of the capital stock entitled to vote, if a stock corporation, are
opposed to the repair or reconstruction of the project; or

(c) That the project has been in existence in excess of 50 years, that it is obsolete and uneconomical,
and that more than 50% of the members of the corporation, if non-stock, or the stockholders
representing more than 50% of the capital stock entitled to vote, if a stock corporation are opposed to
the repair or restoration or remodeling or modernizing of the project; or
(d) That the project or material part thereof has been condemned or expropriated and that the
project is no longer viable or that the members holding in aggregate more than 70% interest in the
corporation, if non-stock, or the stockholders representing more than 70% of the capital stock entitled
to vote, if a stock corporation, are opposed to the continuation of the condominium regime after
expropriation or condemnation of a material portion thereof; or

(e) That the conditions for such a dissolution set forth in the declaration of restrictions of the project
in which the corporation owns or holds the common areas, have been met.