The Condominium Act

RA 4726
 In Re: Art
12 sec 7 of
Condomin Landmark
1987
ium Act Case
Constituti
on
 Condominium Act

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
What is a the land on which it is located and in
condominuim? other common areas of the building.
 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 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.
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 Condominium
separate units as co-owners Corporation

Who can own Who can own

condominiums? condominium units?

Filipino Citizens
Corporation (60%
must be Filipino- Filipino Citizens
owned) Corporation (60%
Obtained by the must be Filipino-
foreigner thru owned)
Hereditary Succession Foreigners
In Re: Art 12 sec of 1987 Constitution

Foreigners cannot
General acquire ownership
Rule: over lands in the
Philippines.

Ownership thru
Succession
Ownership by
Exception: 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?