Republic Act 4726

The Condominium Act

Effective upon its approval on June 18, 1966.
An act to define condominium, establish requirements for its creation, and govern its incidents.
DEFINITION – Section 2 of RA 4726
Condominium
– is 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.
- may include, in addition, a separate interest in other portions of such real property. Title to the common
areas, including the land, or the appurtenant interests in such areas, may be held by a corporation
specially formed for the purpose in which the holders of separate interest shall automatically be members
or shareholders, to the exclusion of others, in proportion to the appurtenant interest of their respective
units in the common areas.
DEFINITION OF TERMS – Section 3 of RA 4726
Unit
– a part of the condominium project intended for any type of independent use or ownership including one
or more rooms or spaces located in one or more floors in a building or buildings and such accessories as
may be appended thereto.
Project
– the entire parcel of real property divided or to be divided in condominiums, including all structures
thereon.
Common areas
– the entire project excepting all units separately granted or held or reserved.
“To divide” real property
– means to divide the ownership thereof or other interest therein by conveying one or more
condominiums therein but less than the whole thereof.
Section 4 OF RA 4726
The provisions of this Act shall apply to property divided or to be divided into condominiums only if
there shall be recorded in the Register of Deeds of the province or city in which the property lies and duly
annotated in the corresponding certificate of title of the land, if the latter had been patented or registered
under either the Land Registration or Cadastral Acts.
Contents of Condominium Master Deed:
1) Description of the land including survey plan;
2) Description of the building or buildings, enclosing technical and diagrammatic plans;
 3) Description of the common areas and facilities;
4) A deed of registration; and
5) A certificate of the registered owner of the property, if he is other than those executing the master
deed, that he consents to the registration of the deed.
WHO CAN OWN A CONDOMINIUM?
1) Filipino citizens and corporations
2) Foreigners, but restricted to owning no more than 40 percent of the total and outstanding capital
stock of a corporation, which must be Filipino-owned and controlled.
Note: Foreigners and foreign corporation are, by law, prohibited to own land.
WHO CAN OWN A CONDOMINIUM UNIT?
1) Filipino citizens and corporations
2) Foreigners, by virtue of the condominium act
Note: as a unit owner, you are essentially a co-owner of a condominium, entitled to such
privileges and limited by such restrictions that may follow the title.
INCIDENTS OF A CONDOMINIUM GRANT – Section 6 of RA 4726
According to Section 6a, the boundary of the unit granted are the interior surfaces of the perimeter walls,
floors, ceilings, windows and doors thereof. That is, of course, unless the master deed or declaration of
prescriptions by the condominium corporation or administration stipulate otherwise.
RIGHTS OF A CONDOMINIUM OWNER:
1) Absolute ownership of his unit;
2) Limited ownership of walls, ceilings, and floors;
3) Co-ownership of the land and common areas in proportion to the units owned;
4) Exclusive easement of the airspace within his unit;
5) Non-exclusive easement to common areas for ingress and egress;
6) To repair and decorate the inner surfaces of his unit as he pleases;
7) To sell, lease, and mortgage his unit; and
8) To vote and be voted upon during meetings of the condominium corporation.

TRANSFER OF UNIT – Section 5 of RA 4726

Any transfer or conveyance of a unit or an apartment, office or store or other space therein, shall include
the transfer or conveyance of the undivided interests in the common areas or, in a proper case, the
membership or shareholdings in the condominium corporation
SALE OF A UNIT

 When a person sells a unit, he is also selling his interest in the common areas, as well as his
membership and shareholdings in the condominium corporation.
 Selling a condominium unit is restricted by certain rules under the Condominium Act, one of
which is the ownership requirement.
OWNERSHIP REQUIREMENT
For condominiums where the common areas are co-owned by the owner of the units, the purchaser must
be either a Filipino citizen or corporation – a corporation that is at least 60 percent owned and controlled
by Filipinos.
For condominiums owned by corporations, the sale will be deemed invalid if such a sale would result in
the foreign interest in the corporation exceeding the limits prescribed by law, which in this case, is 40
percent.
In other words, in both cases, the foreign ownership in the purchasing corporation cannot exceed 40
percent, otherwise, the sale would be invalid.
DECLARATION OF RESTRICTIONS – Section 9 of RA 4726
The owner of a project shall, prior to the conveyance of any condominium therein, register a declaration
of restrictions relating to such project, which restrictions shall constitute a lien upon each condominium in
the project, and shall insure to and bind all condominium owners in the project.
CONDOMINIUM CORPORATION – Section 10 of RA 4726
Whenever the common areas in a condominium project are held by a condominium corporation, such
corporation shall constitute the management body of the project. 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. Membership in a
condominium corporation, regardless of whether it is a stock or non-stock corporation, shall not be
transferable separately from the condominium unit of which it is an appurtenance. 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.
Term of a Condominium Corporation = Duration of the Condominium Project
INVOLUNTARY DISSOLUTION OF THE CORPORATION – Section 12 of RA 4726
In case of involuntary dissolution of a condominium corporation for any of the causes provided by law,
the common areas owned or held by the corporation shall, by way of liquidation, be transferred pro-
indiviso and in proportion to their interest in the corporation to the members or stockholders thereof,
subject to the superior rights of the corporation creditors.
Effects:
Such transfer or conveyance shall be deemed to be a full liquidation of the interest of such members or
stockholders in the corporation.

VOLUNTARY DISSOLUTION OF THE CORPORATION – Section 13 of RA 4726

It must be proven:
1) That the project has not been rebuilt or repaired substantially three years after damage and
destruction to the project in which the corporation owns or holds the common areas, which makes
the damaged part unfit for use; or
 2) That damage or destruction to the project has rendered one-half or more of the units therein
untenantable and that more than thirty percent of the members of the corporation, if non-stock, or
the shareholders representing more than thirty percent of the capital stock entitled to vote, if a
stock corporation, are opposed to the repair or reconstruction of the project; or
3) That the project has been in existence in excess of fifty years, that it is obsolete and
uneconomical, and that more than fifty percent of the members of the corporation, if non-stock,
or the stockholders representing more than fifty percent 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
4) ) That the project or a 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 seventy percent
interest in the corporation, if non-stock, or the stockholders representing more than seventy
percent 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
5) That the conditions for such a dissolution set forth in the declaration of restrictions of the project
in which the corporation owns of holds the common areas, have been met.

Section 14 of RA 4726
Alternatively, this section provides that the condominium corporation may also be dissolved by the
affirmative vote of all the stockholders or members thereof at a general or special meeting duly called for
the purpose.

EFFECTS OF VOLUNTARY DISSOLUTION:

1) The corporation shall be deemed to hold a power of attorney from all the members or
stockholders to sell and dispose of their separate interests in the project. (Section 15 of RA 4726)
2) Liquidation of the corporation shall be effected by a sale of the entire project as if the corporation
owned the whole thereof, subject to the rights of the corporate and of individual condominium
creditors. (Section 15 of RA 4726)
3) The common areas held by the corporation shall be transferred to the unit owners in the
proportion to their interests. (Section 19 of RA 4726)

SALE, EXCHANGE, LEASE, OR DISPOSAL OF COMMON AREAS – Section 16 of RA 4726

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.

REGISTRATION OF AN INSTRUMENT CONVEYING A CONDOMINIUM - Section 18 of RA

4726
Requisites:
 1) A copy of the description of the land;
2) Brief description of condominium conveyed; and
3) Name and personal circumstances of the condominium owner.
Upon registration of an instrument conveying a condominium, the Register of Deeds shall, upon payment
of the proper fees, enter and annotate the conveyance on the certificate of title covering the land included
within the project and the transferee shall be entitled to the issuance of a "condominium owner's" copy of
the pertinent portion of such certificate of title. 
In cases of condominium projects registered under the provisions of the Spanish Mortgage Law or Act
3344, as amended, the registration of the deed of conveyance of a condominium shall be sufficient if the
Register of Deeds shall keep the original or signed copy thereof, together with the certificate of the
management body of the project.
A copy of the deed of conveyance to the condominium owner duly acknowledge and stamped by the
Register of Deeds in the same manner as in the case of registration of conveyances of real property under
said laws.

COMMON OWNERSHIP OF LAND – Section 19 of RA 4726

Where the enabling or master deed provides that the land included within a condominium project are to
be owned in common by the condominium owners therein, the Register of Deeds may, at the request of
all the condominium owners and upon surrender of all their "condominium owner's" copies, cancel the
certificates of title of the property and issue a new one in the name of said condominium owners as pro-
indiviso co-owners thereof.