Condominium Act Of The Philippines
Republic Act no. 4726 otherwise known as the Condominium Act of the Philippines is the governing law on condominiums. The Condominium Act, as amended, lays down the requirements for the creation of condominiums and provides for the incidents that operate within such an arrangement. Under the law, a condominium is defined as an interest in real property consisting of a separate interest in a unit in 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.
In cases where co-owners of separate units hold interest on the land over which the condominium building stands, the prohibitions and limitations encountered regarding foreign ownership of real property within the country may find proper application. The Condominium Act itself provides for a provision dealing with any transfer of interest which may eventually lead to a violation of such rules. The Condominium Act provides that in case the common areas are held by the owners of separate units as co-owners, no condominium unit therein shall be conveyed or transferred to persons other than Filipino citizens or corporations at least sixty percent (60%) of the capital stock of which belong to Filipino citizens except in the case of hereditary succession. In cases where the common areas in a condominium unit are owned by a corporation, any transfer of interest that would increase alien interest thereby exceeding the limits set by law is prohibited.
Although foreigners may indeed own condominium units, as long as not more than 40% of the units in a project are acquired by foreigners. This same rule applies to corporations holding title to condominium units. It is required that 60% of the capital stock of these corporations must be owned by Filipino citizens. Any attempt to circumvent such prohibition may put the provisions of the Anti-Dummy Act into effect. The only exceptions to the prohibition against foreign ownership of land in the Philippines are those who would inherit land through the operation of intestate succession and former natural born Filipino citizens subject to the limitations provided for by law.