Published 10 January 2020, The Daily Tribune

Condominium living is increasingly being preferred by city dwellers for the convenience, accessibility, and security it affords. Whether you already own a condominium unit or are still deciding to buy, it pays to know more about the laws governing condominium ownership and the legal safeguards in place to protect your property rights.

Republic Act No. 4726, otherwise known as The Condominium Act, governs the ownership, rights, and obligations of condominium owners.  The law defines a condominium as an interest in real property consisting of separate interest in a unit in a building (whether residential, industrial or commercial). The interest also includes an undivided common interest in the land where the building is built and the common areas of the building.

The condominium corporation, its function, and composition

A condominium corporation is the body formed to manage the common areas and assets of the condominium. RA 4726 provides that title to the common areas, including the land, or the appurtenant interests in such areas of a condominium may be held by a condominium corporation specially formed for the purpose. Holders of separate interest, or unit owners, shall automatically be members or shareholders, to the exclusion of others. Such ownership is in proportion to the appurtenant interest of their respective units in the common areas (Section 2).

When a member or stockholder ceases to own a unit in the project in which the condominium corporation owns or holds the common areas, he shall automatically cease to be a member or stockholder of the condominium corporation.

In the case of Mary E. Lim vs. Moldex Land, Inc. (G.R. No. 206038, January 25, 2017),  petitioner questioned the acts of the condominium corporation which had as its members certain representatives of the developer, respondent Moldex. The latter became a member of the condominium corporation on the basis of its ownership of unsold units in the project.

The Supreme Court ruled that although the RA 4726 provides for the minimum requirement for membership in a condominium corporation, a corporation’s articles of incorporation or by-laws may provide for other terms of membership, so long as they are not inconsistent with the provisions of the law, the enabling or master deed, or the declaration of restrictions of the condominium project.

Being governed by special law, a condominium corporation is different from a homeowners’ association. A condominium corporation, unlike a homeowners association under Presidential Decree No. 957, known as The Subdivision and Condominium Buyers’ Protective Decree (P.D. No. 957),  is not just a management body of the condominium project. A condominium corporation also holds title to the common areas, including the land, or the appurtenant interests in such areas. Hence, it is especially governed by RA 4726 and not PD 957.

Since RA 4726 does not provide a specific mode of acquiring ownership, whether one becomes an owner of a condominium unit by virtue of sale or donation is of no moment. The Supreme Court further ruled that since a corporation can act only through natural persons duly authorized for the purpose or by a specific act of its board of directors, the same may act through duly appointed representatives to the condominium corporation.

Term of existence, basis for dissolution

The term of a condominium corporation is co-terminus with the duration of the condominium project (Section 11, RA 4726) Being a special creature of the law, a condominium corporation is generally immune from voluntary dissolution by its members, except upon a showing:

  • of damage or destruction to the project in which the corporation owns or holds the common areas which renders the same unfit for its prior use, or the project has not been rebuilt to its prior state;
  • of damage or destruction to the project that has rendered 50% or more of the units untenantable, and more than 30% of the members are opposed to the repair or reconstruction of the project;
  • that the project has been in existence for more than 50 years, is obsolete and uneconomical, and more than 50% of the members or shareholders are opposed to the repair or restoration;
  • that the project or a material part thereof has been condemned, expropriated, and is no longer viable, or that more than 70% of the members and shareholders are opposed to the continuation of the condominium regime after expropriation or condemnation of a material portion thereof; or
  • 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 (Section 13, RA 4726)

Indeed, condominium living presents the advantage of staying at the most central locations in the city while enjoying top-notch amenities and tight security. But as with any investment, the decision to purchase a condominium unit is a major decision that must be made with full knowledge of its pros and cons, starting with the foregoing provisions of law governing condominium ownership.

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