“The space, though limited at times, gives hope and the expectation of a good life.”

 

In the last 30 years, the number of Filipinos residing in condominiums has grown in leaps and bounds. Condominiums in 1980s Philippines were then for the urbane, independent, and those who wanted to avoid the clutter of a regular house and lot. The sale of these condominium units was not as commercialized as it was today.

In the 90s, acquisitions of condominium units, subdivisions lots and golf/sports club memberships were considered as investments. The smallest (studio) units then were at least thirty square meters and the minimum downpayment was no less than 20 percent of the purchase price.

However, buying condominium units became easier in the mid-2000s when developers made down payments more flexible (payable in three to five years) and the size of the studio unit was further reduced to at least 24 square meters, making it more affordable. It was around this time when those living in apartments considered buying their condominium instead of renting them.

Under Republic Act No. 4726 otherwise known as “The Condominium Act,” a condominium is defined as an interest in real property consisting of separate interests in a unit inside a residential, industrial or commercial building and an undivided interest in common in the land on which it is located (erected) and in other common areas of the building. It may also include a separate interest in other portions of such real property (Section 2, The Condominium Act).

The title to the common areas, including the land, or the interests in such areas, may be held by a corporation formed especially for that purpose (Section 2, The Condominium Act). When the common areas in a condominium project are held by a condominium corporation, such a corporation shall constitute the management body of the project (Section 10, The Condominium Act).

The corporate purposes of the condominium corporation shall be limited to the holding of the common areas, ownership or any interest in real property, to the management of the project, and other purposes as may be necessary or incidental to the accomplishment of the purposes (Section 10, The Condominium Act). In simpler words, the condominium corporation will only exist for the interest of the condominium and its unit owners.

The condominium unit owner has the absolute right to sell or dispose of his unit unless the master deed contains a requirement that the property be first offered to the other condominium owners before the same is offered to outside parties (Section 6 (g), The Condominium Act). The unit owner shall have the exclusive right to mortgage, pledge or encumber his condominium (Section 6 (f), The Condominium Act).

Any transfer or conveyance of a unit in the condominium shall include the transfer or conveyance of the undivided interests in the common areas or shareholdings in the condominium corporation (Section 5, The Condominium Act). The membership in a condominium corporation shall not be transferable separately from the condominium unit. Hence, when a member or stockholder ceases to own a unit he shall automatically cease to be a member or stockholder. (Section 10, The Condominium Act).

The boundary of the condominium unit are the interior surfaces of the perimeter walls, floors, ceilings, windows and doors (Section 6 (a), The Condominium Act). The unit owner shall have the exclusive right to paint, repaint, tile, wax, paper or otherwise refinish and decorate the inner surfaces of the walls, ceilings, floors, windows and doors bounding his own unit (Section 6 (e), The Condominium Act).

Considered as not part of the unit are: bearing walls, columns, floors, roofs, foundations and other common structural elements of the building. Also excluded are the lobbies, stairways, hallways, and other areas of common use; such as elevator equipment and shafts, central heating, central refrigeration and central air-conditioning equipment (Section 6(a), The Condominium Act).

Unlike ownership of lands in the Philippines which is restricted to Filipino citizens, a foreigner can own a condominium unit. A foreigner can own a unit as long as at least sixty percent of the capital stock of the condominium corporation belongs to Filipino citizens (Section 5, The Condominium Act).

Each condominium separately owned shall be separately assessed for purposes of real property taxation and other tax purposes; and the tax on each such condominium shall constitute a lien solely on his unit (Section 20, The Condominium Act). The unit owner shall be assessed with condominium dues based on the size of his unit.

The assessment, which may include condominium dues made in accordance with a declaration of restrictions, shall be an obligation of the owner of the unit. The amount of the assessment plus interest, costs (including attorney’s fees) and penalties, may be provided in the declaration of restrictions (Section 20, The Condominium Act). The unpaid assessment shall become a lien upon the condominium unit.

To create a lien on the unit, the management body must give notice to the Register of Deeds of the city or province where the condominium project is located. The notice shall state the amount of the assessment and other charges, a description of the condominium, the unit against which the same has been assessed, and the name of the unit registered owner (Section 20, The Condominium Act).

Such lien shall be superior to all other liens registered subsequent to the registration of the said notice of assessment, except to real property tax liens. These unpaid assessment liens may be enforced by the management body in the same manner as judicial or extra-judicial foreclosure of mortgages of real property (Section 20, The Condominium Act).

Some unit owners who have been unable to pay their assessments because of being temporarily outside of or not residing in the Philippines, or who simply cannot pay have been surprised by the foreclosure sale of their condominium units. It is worse when the management body is in cahoots with enterprising local government officials or the Register of Deeds of the locality.

While the condominium owner shall have the same right of redemption as in judicial or extra-judicial foreclosure of mortgages it may be too late if the unit owner’s period to redeem had lapsed. The unit owner would not have been prejudiced if he knew his rights and was timely notified of the foreclosure sale.

A common problem of a condominium unit buyer involves claims for refund or cases involving the specific performance of statutory obligations against the project owner, developer, dealer, broker or salesman (Section 2 (b) and (c), Rule 1, Rules of Procedure of the HLURB). Cases of this nature shall be filed only with the Housing Land Use and Regulatory Board (HLURB).

However, controversies arising out of intra-corporate relations between and among stockholders or members in condominium corporations, like in any other corporation, shall be instituted in the Regional Trial Court (RTC) that has jurisdiction over the principal office of the corporation. Hence, disputes in the condominium regarding the validity of the assessment of association dues, characterization of a delinquent member, decisions to bar a member from exercising his rights to vote and be voted (Medical Plaza Makati v. Cullen, G.R. No. 181416, November 11, 2013), are within the jurisdiction of the RTC and not the HLURB.

The Magna Carta for Homeowners or Homeowners’ Association cannot apply in a controversy between a condominium unit owner and the condominium corporation. While the term “association,” as defined in the law covers homeowners’ associations and is broad enough to cover a condominium corporation, it does not seem to be the legislative intent (Medical Plaza Makati v. Cullen, G.R. No. 181416, November 11, 2013).

The condominium unit may not be as spacious as a house but it is a home. The occupant is that which makes it a home. The space, though limited at times, gives hope and the expectation of a good life. It is not the size of the house that makes it a home, but the love and affection that springs from and breathes life to it. 

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