Under the Condominium Act (RA 4726), a condominium is an interest in real property consisting of a separate ownership of a unit plus an undivided interest in common in the land and other common areas. The master deed (Master Deed with Declaration of Restrictions) is the founding document that establishes the condominium project, describing the land, the building(s), the units, the common areas, and the rules or restrictions governing the project; it is registered with the Registry of Deeds and annotated on the title. The common areas are typically owned or held for the benefit of the unit owners through a condominium corporation, in which each unit owner is automatically a member (or shareholder) in proportion to their unit. The corporation manages the common areas, enforces the restrictions, and collects association dues. Notably, foreigners may own condominium units, provided foreign ownership in the project does not exceed the allowed percentage (foreign ownership of the condominium corporation must not exceed 40%).
Buying a condo is not like buying a house and lot. You own your unit, but you also share the common areas through a condominium corporation. Two documents define it all: the master deed and the corporation's rules.
What a Condominium Is
Under the Condominium Act (RA 4726), a condominium is an interest in real property consisting of:
- Separate ownership of a unit (your specific space); plus
- An undivided interest in common in the land and the other common areas (lobbies, hallways, amenities).
The Master Deed
The Master Deed with Declaration of Restrictions is the founding document of the condominium project. It:
- Describes the land, building(s), and units;
- Defines the common areas and each unit's share in them;
- Sets the restrictions and rules governing the project; and
- Is registered with the Registry of Deeds and annotated on the title.
It is essentially the constitution of the condominium.
The Condominium Corporation
The common areas are typically owned or held for the unit owners through a condominium corporation. Each unit owner is automatically a member (or shareholder), in proportion to their unit. The corporation:
- Manages and maintains the common areas;
- Enforces the master deed's restrictions; and
- Collects association dues to fund operations.
Association Dues Are Enforceable
Unit owners must pay association dues for the upkeep of common areas. Unpaid dues can become an enforceable lien on the unit and are a common source of disputes — so buyers should check the dues and the association's health.
Foreigners and Condominium Units
A distinctive feature: while foreigners generally cannot own land, they may own condominium units — provided foreign ownership in the condominium corporation does not exceed 40%. This is why condos are a common route for foreign buyers, subject to that cap.
Practical Takeaways
- A condo means owning your unit plus an undivided share of the common areas;
- The master deed is the founding document (units, common areas, restrictions), and the condominium corporation manages the common areas and collects dues;
- Foreigners may own units as long as foreign ownership in the project's corporation stays within 40%.
Frequently Asked Questions
What do you actually own when you buy a condo? Separate ownership of your unit plus an undivided interest in common in the land and the common areas, under the Condominium Act (RA 4726).
What is a master deed? The Master Deed with Declaration of Restrictions is the founding document of a condominium project. It describes the land, building, units, and common areas, sets the restrictions, and is registered with the Registry of Deeds.
What does the condominium corporation do? It owns or holds the common areas for the unit owners, manages and maintains them, enforces the master deed's restrictions, and collects association dues. Each unit owner is automatically a member in proportion to their unit.
Can a foreigner own a condominium unit? Yes. While foreigners generally cannot own land, they may own condominium units, provided foreign ownership in the condominium corporation does not exceed 40%.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
If you have questions about your rights or options under Philippine law, our firm is available to assist. You may reach us via Viber or WhatsApp, call us at 0995 433 5550, or send an email to vivasnobles@gmail.com. We look forward to hearing from you.