The Condominium Act

RA 4726

Flow of the discussion

Condomin
ium Act

In Re: Art
12 sec 7 of
1987
Constituti
on

Landmark
Case

 A condominium is an interest in real

property consisting of 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.

What is a
condominuim?

Condominium Act

Section 5 of Condominium Act

Sec. 5. 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: Provided, however, That where the common areas in the
condominium project are owned by the owners of separate units as coowners thereof, no condominium unit therein shall be conveyed or
transferred to persons other than Filipino citizens, or corporations at least
sixty percent of the capital stock of which belong to Filipino citizens, except
in cases of hereditary succession. Where the common areas in a
condominium project are held by a corporation, no transfer or
conveyance of a unit shall be valid if the concomitant transfer of
the appurtenant membership or stockholding in the corporation
will cause the alien interest in such corporation to exceed the
limits imposed by existing laws

Owned by the owners of

separate units as co-owners

Condominium
Corporation

Who can own

condominium units?
Filipino Citizens
Corporation (60%
must be Filipinoowned)
Obtained by the
foreigner thru
Hereditary Succession
Foreigners

In Re: Art 12 sec of 1987 Constitution

General
Rule:

Exception:

Foreigners cannot
acquire ownership
over lands in the
Philippines.

Ownership thru
Succession
Ownership by
Corporation
Subject to Foreign
ownership must not
exceed 40%

Can foreigner own a Condo unit?

General Rule:
Foreigners
can own units.
Provided, It will
not exceed 40% of
the condominium
corporation.

Why were they allowed to own such kind of real property?

The constitution prohibits only the land

acquisition of Foreigners.
It does not prohibit the acquiring of space
or unit in a condominium corporation.
The ownership of the unit is legally
separated from the land.

In Jacobus Bernhard Hulst v. PR Builders, Inc.,

Petitioners contention:
It did not violate the Constitutional proscription against ownership of land by
aliens.
He argues that the contract to sell will not transfer to the buyer ownership of
the land on which the unit is situated;
thus, the buyer will not get a transfer certificate of title but merely a
Condominium Certificate of Title as evidence of ownership;
a perusal of the contract will show that what the buyer acquires is the seller's
title and rights to and interests in the unit and the common areas.

In Jacobus Bernhard Hulst v. PR Builders, Inc.,

the Supreme Court stated that foreign individuals are

allowed to purchase condominium units and shares in a

condominium corporation in the Philippines up to no more
than 40% of the condominium corporation. The Court
explained that under this setup, the ownership of the land
is legally separated from the unit itself. The land is owned
by a condominium corporation and the unit owner is
simply a member in this condominium corporation. As
long as 60% of the members of this condominium
corporation are Filipino, the remaining members can be
foreigners.

Question:
ARE YOU STILL IN FAVOR OF THE 60-40
RULE OF THE CONSTITUTION?