Republic Act No. 4726, otherwise known as “The Condominium Act,” was enacted on June 18, 1966. This law defines what a condominium is, establishes requirements for its creation, and governs its incidents. It remains the primary legal framework for condominium ownership in the Philippines.
Key Provisions of RA 4726
1. Definition of Condominium
The Act covers all condominium projects as defined in RA 4726, including those that are now in existence, those under construction, or those that may be constructed. A condominium consists of individually owned units and common areas that are jointly owned by all unit owners.
2. Rights of Condominium Owners
Under Section 5 of the Condominium Act, a condominium owner has the exclusive right to mortgage, pledge, or encumber his condominium unit and to have the same appraised independently of the other condominiums. However, any obligation on the condominium unit does not affect the common areas. This means that a unit owner can use their unit as collateral without affecting the ownership rights of other unit owners.
3. Foreign Ownership of Condominiums
The Condominium Act allows foreigners to buy condominium units in the Philippines, subject to certain limitations. Section 5 of the Act provides that any transfer or conveyance of a condominium unit is subject to the constitutional limitation that foreigners cannot own land. However, they can own condominium units as long as the foreign ownership in the condominium project does not exceed 40% of the total units. This is a significant advantage for foreigners who wish to invest in Philippine real estate.
4. Declaration of Restrictions (Section 9)
Under Section 9 of RA 4726, a condominium owner shall register a declaration of restrictions, which shall be annotated to the certificate of title of the land included within the project. This declaration sets out the rules and restrictions governing the use of the common areas and the units themselves.
5. Lien for Association Dues (Section 20)
When a unit owner fails to pay the association dues, the condominium corporation can enforce a lien on the condominium unit by selling the unit in an extrajudicial foreclosure sale. This is a powerful remedy that protects the financial health of the condominium corporation.
Condominium Certificate of Title (CCT)
Unlike house and lot properties that use Transfer Certificates of Title (TCT), condominium units are registered under a Condominium Certificate of Title (CCT) . When buying a condo in Cebu, always request a Certified True Copy of the CCT from the Registry of Deeds to verify ownership and check for any annotations. The CCT will also show the proportion of ownership in the common areas.
Author
John Paul Ybañez Paquibot
Licensed Real Estate Broker | PRC No. 00014132 | DHSUD No. CVRFO-B-03/18-2672
Bachelors Realty and Brokerage, Inc. Cebu
G/F Cap Building, Brgy. Corner, Osmeña Blvd.
Arlington Pond St. Extension, Cebu City, 6000 Cebu
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