RA No. 4726 PD No.

957
AN ACT TO DEFINE CONDOMINIUM, ESTABLISH THE SUBDIVISION AND CONDOMINIUM PROTECTIVE
REQUIREMENTS FOR ITS CREATION AND GOVERN ITS BUYER’S DECREE
INCIDENTS
Purpose
Sec. 4 Provisions of this Act shall apply to property P.D. No. 957 was enacted to protect helpless
divided or to be divided into condominium only if a citizens who may fall prey to the manipulations and
Master Deed has been recorded in the Register of machinations of unscrupulous subdivision and
Deeds of the province or city in which the property condominium sellers. (Eugenio v. Drilon, 322 Phil. 112
lies, and duly annotated in the corresponding (1996)). It was issued in the wake of numerous reports
certificate of title of the land, if the latter had beenthat many real estate subdivision owners, developers,
patented or registered under either the Land operators and/or seller have reneged on their
Registration or Cadastral Acts representations and obligations to provide and
Evidence of ownership – In house and lot, evidenced maintain properly subdivision roads, drainage,
by original or transfer certificate of title while in sewerage, water systems, lighting systems, and other
condominium, ownership is evidenced by basic requirements for the health and safety of home
condominium certificate of title (ownership of a and lot buyers. (Casa Filipina Realty Corp. v. Office of
condominium unit issued by the Register of Deeds of the Pres., 311 Phil. 170 (1995).
the city or municipality where the condominium
project is located).
Capacity to buy – In house and lot, or lot only or
townhouse, alien acquisition is not allowed. In the
condominium concept, alien ownership not to exceed
40% interest in the project is legally allowed
Extent of ownership – the interest of the owner in
house and lot consists of absolute ownership of the
inner and outer structures of the building (the entire
building). In the condominium concept, the unit
owner is the absolute owner of the space within the
interior surface of his unit, but is only a co-owner of
the exterior or façade of the unit
Definition of Terms (Sec 3) Sec 2
Condominium project - shall mean the entire parcel of
Condominium – an interest in real property real property divided or to be divided primarily for
consisting of absolute ownership in a unit in a residential purposes into condominium units,
residential, industrial and commercial building and including all structures thereon.
common ownership in the land on which its located Condominium unit- shall mean a part of the
and in common areas of the condominium project. condominium project intended for any type of
Condominium Unit – the space bounded by the independent use or ownership, including one or more
interior surface of those intended for independent rooms or spaces located in one or more floors (or part
use or absolute ownership. of parts of floors) in a building or buildings and such
Common areas – the entire project, such as the land, accessories as may be appended thereto.
building structures, hallways, elevators, stairways, Owner- shall refer to the registered owner of the land
electrical, water and plumbing system, and all subject of a subdivision or a condominium project.
amenities in a condominium project, the exception is Developer- shall mean the person who develops or
the inside of the individual condominium unit. improves the subdivision
Condominium corporation – a non-stock and non- Buy and purchase- shall include any contract to buy,
profit corporation consisting of condominium unit purchase, or otherwise acquire for a valuable
owners which is the management body of the consideration a subdivision lot, including the building
condominium project and owner of its common and other improvements, if any, in a subdivision
areas. This is synonymous in function and nature to project or a condominium unit in a condominium
the homeowners association in subdivisions except project.
that it is taking the form of a corporation. Take note
therefore that it is the reason why a condominium Sec 4 Registration of Projects
unit can be personally owned by possession and title In case registered owner of land wishes to convert
by foreigners but only up to 40% of the total number such land to a condominium project, he/she must
of units of the whole condominium project. register project to the National Housing Authority now
Condominium project – the entire parcel of land HLRUB.
including all the structures thereon.
Master deed – the enabling act which creates the Authority to publish the notice of the filing of the
condominium and contains the description of the registration statement at the expense of the
land, building, common areas facilities use of the applicant-owner or dealer, in 2 newspapers of general
building, declaration of restrictions and plans of the circulation, one published in English and another in
 land and buildings and annotated on the certificate of Pilipino, once a week for two consecutive weeks.
title.
Declaration of restrictions – refers to the set of rules, The fact of such registration shall be evidenced by a
procedures, policies and limitations as to the registration certificate to be issued to the applicant-
management and usage of units and common areas owner or dealer.
in a condominium project which constitutes a lien
upon the project and each unit and building upon all Sec 5 After two weeks of obtaining a registration
unit owners, occupants, and others holding any right certificate, the applicant-owner dealer can now apply
or interest in the project, pursuant to the provisions for a license to sell the project, and after payment of
of the Condominium Act and other related laws. performance bond (Sec 6).

STEPS IN FORMING CONDOMINIUM Effect of absence of certificate of registration or

1. 1. Preparation of a Master Deed with Declaration of license to sell by the HLURB
Restrictions and registration with the Registry of In Sps. Co Chien v. Sta. Lucia Realty & Dev., Inc., et
Deeds for annotation in the title. al., G.R. No. 162090, January 31, 2007
2. 2. Organization of a condominium corporation with There was a sale of a realty but there was a
the project owners as incorporators. contention that the sale is void for lack of prior
3. 3. Causing issuance of individual tax declarations and certificate of registration and license to sell by the
condominium titles for the units and common areas HLURB. Is the contention correct? Why?
from the Assessor’s Office and the Registry of Deeds Held: No. P.D. 957 is a law that seeks to regulate the
respectively. sale of subdivision lots and condominiums in view of
4. 4. Execution of Deed of Conveyance on the land and the increasing number of incidents wherein “real
common areas in favor of the condominium estate subdivision owners, developers, operators,
corporation. and/or sellers have reneged on their representations
5. 5. Application for registrations with the Housing and and obligations to prove and maintain properly” the
Land Use Regulatory Board (HLURB). basic requirements and amenities, as well as “reports
6. of alarming magnitude… of swindling and fraudulent
CONTENTS OF A CONDOMINIUM MASTER DEED manipulations perpetrated by unscrupulous
1. 1. Description of the land including survey plan subdivision and condominium sellers and operators.”
2. 2. Description of the building/s, enclosing technical As such, P.D. 957 requires the registration not just of
and diagrammatic plans. the developers, seller, brokers and/or owners of the
3. 3. Description of the common areas and facilities project but also of the project itself. Upon the
4. 4. Deed of registration registration of the project, a license to sell must be
5. 5. Certification of the registered owner of the obtained prior to the sale of the subdivision lots or
property if it is other than the one executing the condominium units therein. The law also provides for
Master Deed, that he consents of the registration of the suspension and revocation of the registration and
the deed. license in certain instances, as well as the procedure
6. to be observed in the event thereof.
Note: The enabling or master deed may be amended
or revoked upon registration of an instrument Effect of failure develop subdivision within one year
executed by a simple majority of the registered from the issuance of license.
owners of the property. (RA 7899 Amending Secs 4 Under PD 957, the seller is obliged to develop the
and 16 of RA 4726) subdivision, otherwise, the buyer has the right to
suspend payment and the only requirement under the
law is to give due notice to the owner or developer of
Sec. 19. Where the enabling or master deed provides the buyer’s intention to suspend payment.
that the land included within a condominium project
are to be owned in common by the condominium Option to suspend payment or demand for
owners therein the Register of Deeds may at the reimbursement given to buyer
request of all the condominium owner and upon In case the developer of a subdivision or
surrender of all their condominium owner’s copies, condominium fails in its obligation under Section 20 of
cancel the certificate of title of the property and issue P.D. No, 957, Section 23 of the law gives the buyer the
a new one in the name of said condominium owners option to demand reimbursement of the total amount
as pro-indiviso co-owners thereof. paid, or to wait for further development of the
subdivision, and when the buyer opts for the latter
CONTENTS OF A DECLARATION OF RESTRICTION alternative, he may suspend payment of installments
1. 1. Formation of the condominium corporation, the until such time that the owner or developer had
project’s management body. fulfilled its obligation to him. (Tamayo v. Huang).
2. 2. Procedures and guidelines on maintenance of units
and common areas. It is thus clear that the law provides two remedies in
3. 3. Rules and restrictions on the occupancy and usage case of incomplete development of the subdivision
of units and common areas. project: (1) reimbursement of the total amount paid,
4. 4. Provision for insurance coverage. including amortization interest but excluding
5. 5. Realty taxes and assessments on units and delinquency interests, with interest thereon at the
common areas. legal rate; or (2) for the buyer to suspend amortization
6. 6. Right of assignees, mortgagees, tenants and payments until the completion of the project. These
occupants of the units. remedies are available to the prospective buyer to
7. 7. Provision for assessments and fees. give effect to the law’s intent to protect the buyers
8. 8. Penalty provisions. from abusive owners/developers of subdivisions. In
9. 9. Procedures in amending restrictions. cases of incomplete development, it is the developer
who is the one at fault, as it would then have violated
RIGHTS OF A CONDOMINIUM OWNER (Sec 6) its promise to the prospective buyers to provide the
1. 1. Absolute ownership of his unit. necessary facilities in the subdivision. The aggrieved
2. 2. Limited ownership of walls, ceilings and floor party, therefore, is the prospective buyer because of
3. 3. Co-ownership of the land and common areas in the non-fulfillment of the developer’s commitment.
proportion to the unit/s owned. As such, it is but logical that the option is given to the
4. 4. Exclusive easement of the air space within his unit. prospective buyer, not to the developer.
5. 5. Non-exclusive easement to common areas for
ingress and egress.
6. 6. Repair, decorate the inner surfaces of his unit as he
pleases.
7. 7. Sell, lease, mortgage his unit.
8. 8. Vote and be voted upon during meetings of the
condominium corporation.

CONVEYANCE (Sec 18)

Requisites:
1. A copy of the description of land
2. Brief description of condominium conveyed
3. Name and personal circumstances of the
condominium owner

Upon registration and payment of fees of an

instrument conveying a condominium, the Register of
Deeds shall enter and annotate the conveyance on
the certificate of title covering the land included
within the project. Transferee is then issued a
“condominium owners” copy of the pertinent portion
of such certificate of title.

In case of condominium project registered under the

provisions of the Spanish Mortgage Law or Act 3344
as amended, the registration of the deed of
conveyance of a condominium is sufficient if the
Register of Deed has the original or signed copy,
together with the certificate of the management
body of the project. A copy of said deed of
conveyance will be given to the condominium owner
duly acknowledged and stamped by the Register of
Deeds in the same manner as in the case of
registration of conveyance in accordance with the
provisions of the declaration of restrictions of such
project.

DISSOLUTION OF A CONDOMINIUM PROJECT

1. Term of corporation – the life of the condominium
corporation shall be co-terminus with the existence
of the condominium project and the registration and
regulation of the condominium corporation shall be
vested to the Housing and Land Use Regulatory Board
(Sec 11).

2. As per Building Code, a building has a life of 50 years

subject to an extension of another 25 years upon
issuance of the soundness of its structure.
 Note: 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 a simple majority of the
registered owners (RA 7899 Amending Secs 4 and 16
of RA 4726)

3. Effects of Voluntary Dissolution: (Sec 12)

a. The corporation shall be deemed to hold a power-
of-attorney from all unit owners/ members to sell
their separate interests in the project. (Sec 15)
b. Liquidation of the corporation shall be effected by
the sale of the entire project subject to the rights of
the corporation and individual creditors. (Sec 15)
c. The common areas held by the corporation shall be
transferred to the unit owners in the proportion to
their interests. (Sec 19)

EXCEPT as provided by Sec 13

3. Effects of Involuntary Dissolution:

The transfer shall be deemed full liquidation of the
interest of the members in the corporation.

SOME ADVANTAGES OF CONDOMINIUM

OWNERSHIP
1. - Enhances affordability
2. - Accessibility to the amenities of the metropolis.
3. - Better security
4. - Maximizes land efficiency
5. - Lesser cost of facilities, services and maintenance
6. - Privacy

References:
RA 4726
PD 957
RA 7899
Housing and land Use Regulatory Board- /hlrub.gov.ph/
Board of Investments- /boi.gov.ph/
Real Estate Brokers of the Philippines - /rebap.com.ph/
Chamber of Real Estate and Builders Assn. Inc – /creba.ph/