(First of two parts)
Condominium units continue to sell like hotcakes.
In its report on the real estate industry, the Board of Investments foresaw at least a 3-percent yearly growth in the take-up of units, consistent with household formation in the country. Colliers International Philippines meanwhile noted that despite higher inflation and the Bangko Sentral ng Pilipinas’ increased benchmark yields, 54,000 condo units located in major business districts in Metro Manila were sold in 2018, surpassing the previous record of 53,000 units in 2017. The last year likewise saw a strong take-up of affordable to mid-income units, with prices ranging from P1.7 million to P5.9 million.
“Yields are more likely to remain attractive in major [central business districts (CBD)], unless an extraordinary event occurs,” Colliers was quoted in an Inquirer report. “We suggest that potential buyers seriously look at projects in primary CBDs and those in easily accessible surrounding fringe areas as they would offer the best returns for investment.”
Potential buyers should understand that investing in a condominium is more than just owning a unit. Under the Condominium Act, condominium refers to an interest in real property, consisting of a separate interest in said unit in a commercial, industrial, or residential building; and undivided interest in the land on which the building is located and in other common areas therein. In some cases, a condominium may likewise include a separate interest in other portions of such real property.
Title to the land, common areas, or the appurtenant interests in such areas may be held by a condominium corporation, in which the holders of separate interest shall automatically be members or shareholders thereof, to the exclusion of others. Their interest in the corporation shall be proportionate to the appurtenant interest of their respective units in the common areas.
Section 5 of the said Act states: “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 co-owners 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.”
It further noted that “…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.”
Unless otherwise expressly provided in the enabling or master deed or the declaration of restrictions, a unit owner is granted: the boundary of the unit, consisting of the interior surfaces of the perimeter walls, floors, ceilings, windows and doors thereof; an exclusive easement for the use of the air space encompassed by the boundaries of the unit as it exists at any particular time and as the unit may lawfully be altered or reconstructed from time to time; co-ownership of the common areas in equal shares, one for each unit, unless otherwise provided; and a non-exclusive easement for ingress, egress and support as appurtenant to each unit and the common areas.
A unit owner can also be granted 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; exclusive right to mortgage, pledge or encumber his condominium and to have the same appraised independently of the other condominiums, but any obligation incurred by such owner is personal to him; and absolute right to sell or dispose of his condominium, unless the master deed would require him to first offer the unit to the other condominium owners within a reasonable period of time before the same is offered to outside parties.
(To be continued)