special laws in civil law

8/12/2019 Special Laws in Civil Law

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PRESIDENTIAL DECREE No. 957 July 12, 1976

REGULATING THE SALE OF SUBDIISION LOTS AND CONDO!INIU!S,

PROIDING PENALTIES FOR IOLATIONS THEREOF

WHEREAS, it is the policy of the State to afford its inhabitants the requirements of decenthuman settlement and to provide them with ample opportunities for improving their quality of

life;

WHEREAS, numerous reports reveal that many real estate subdivision owners, developers,

operators, andor sellers have reneged on their representations and obligations to provide andmaintain properly subdivision roads, drainage, sewerage, water systems, lighting systems, and

other similar basic requirements, thus endangering the health and safety of home and lot buyers;

WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent

manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators,

such as failure to deliver titles to the buyers or titles free from liens and encumbrances, and topay real estate ta!es, and fraudulent sales of the same subdivision lots to different innocent

purchasers for value;

WHEREAS, these acts not only undermine the land and housing program of the government but

also defeat the ob"ectives of the #ew Society, particularly the promotion of peace and order and

the enhancement of the economic, social and moral condition of the $ilipino people;

WHEREAS, this state of affairs has rendered it imperative that the real estate subdivision andcondominium businesses be closely supervised and regulated, and that penalties be imposed on

fraudulent practices and manipulations committed in connection therewith%

#&W, 'HERE$&RE, (, $ER)(#A#) E% *AR+&S, resident of the hilippines, by virtue of

the powers vested in me by the +onstitution, do hereby decree and order-

T"#l$ I

TITLE AND DEFINITIONS

S$%#"o& 1.Title.'his )ecree shall be .nown as 'HE S/0)(1(S( A#) +)&*(#(/*

0/2ERS3 R&'E+'(1E )E+REE%

S$%#"o& 2.Definition of Terms When used in this Decree,the following terms shall, unless the

conte!t otherwise indicates, have the following respective meanings-

4a5 erson% 6erson7 shall mean a natural or a "uridical person% A "uridical person refers

to a business firm whether a corporation, partnership, cooperative or associations or a

single proprietorship%

4b5 Sale or sell% 6Sale7 or 6sell7 shall include every disposition, or attempt to dispose, for

a valuable consideration, of a subdivision lot, including the building and other


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improvements thereof, if any, in a subdivision pro"ect or a condominium unit in a

condominium pro"ect% 6Sale7 and 6sell7 shall also include a contract to sell, a contract of

purchase and sale, an e!change, an attempt to sell, an option of sale or purchase, asolicitation of a sale, or an offer to sell, directly or by an agent, or by a circular, letter,

advertisement or otherwise%

A privilege given to a member of a cooperative, corporation, partnership, or any

association andor the issuance of a certificate or receipt evidencing or giving the right ofparticipation in, or right to, any land in consideration of payment of the membership fee

or dues, shall be deemed a sale within the meaning of this definition%

4c5 0uy and purchase% 'he 6buy7 and 6purchase7 shall include any contract to buy,purchase, or otherwise acquire for a valuable consideration a subdivision lot, including

the building and other improvements, if any, in a subdivision pro"ect or a condominium

unit in a condominium pro"ect%

4d5 Subdivision pro"ect% 6Subdivision pro"ect7 shall mean a tract or a parcel of landregistered under Act #o% 89: which is partitioned primarily for residential purposes into

individual lots with or without improvements thereon, and offered to the public for sale,

in cash or in installment terms% (t shall include all residential, commercial, industrial and

recreational areas as well as open spaces and other community and public areas in thepro"ect%

4e5 Subdivision lot% 6Subdivision lot7 shall mean any of the lots, whether residential,

commercial, industrial, or recreational, in a subdivision pro"ect%

4f5 +omple! subdivision plan% 6+omple! subdivision plan7 shall mean a subdivision plan

of a registered land wherein a street, passageway or open space is delineated on the plan%

4g5 +ondominium pro"ect% 6+ondominium pro"ect7 shall mean the entire parcel of real

property divided or to be divided primarily for residential purposes into condominium

units, including all structures thereon%

4h5 +ondominium unit% 6+ondominium unit7 shall mean a part of the condominium

pro"ect intended for any type of independent use or ownership, including one or more

rooms or spaces located in one or more floors 4or part of parts of floors5 in a building or

buildings and such accessories as may be appended thereto%

4i5 &wner% 6&wner7 shall refer to the registered owner of the land sub"ect of a subdivisionor a condominium pro"ect%

4"5 )eveloper% 6)eveloper7 shall mean the person who develops or improves the

subdivision pro"ect or condominium pro"ect for and in behalf of the owner thereof%

4.5 )ealer% 6)ealer7 shall mean any person directly engaged as principal in the businessof buying, selling or e!changing real estate whether on a fulltime or parttime basis%


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4l5 0ro.er% 60ro.er7 shall mean any person who, for commission or other compensation,

underta.es to sell or negotiate the sale of a real estate belonging to another%

4m5 Salesman% 6Salesman7 shall refer to the person regularly employed by a bro.er toperform, for and in his behalf, any or all functions of a real estate bro.er%

4n5 Authority% 6Authority7 shall mean the #ational Housing Authority%

T"#l$ II

REGISTRATION AND LICENSE TO SELL

S$%#"o& '.National Housing Authority The National Housing Authority shall have exclusivejurisdiction to regulate the real estate trade and business in accordance with the rovisions of

this Decree.

S$%#"o& (.!egistration of "rojects The registered owner of a arcel of land who wishes to

convert the same into a subdivision roject shall submit his subdivision lan to the Authoritywhich shall act uon and arove the same, uon a finding that the lan comlies with the

#ubdivision #tandards$ and !egulations enforceable at the time the lan is submitted.'he same

procedure shall be followed in the case of a plan for a condominium pro"ect e!cept that, inaddition, said Authority shall act upon and approve the plan with respect to the building or

buildings included in the condominium pro"ect in accordance with the #ational 0uilding +ode

4R%A% #o% :


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4d5 'he general character of the business actually transacted or to be transacted by the

owner; and

4e5 A statement of the capitaliBation of the owner, including the authoriBed andoutstanding amounts of its capital stoc. and the proportion thereof which is paidup%

'he following documents shall be attached to the registration statement-

4a5 A copy of the subdivision plan or condominium plan as approved in accordance with

the first and second paragraphs of this section%

4b5 A copy of any circular, prospectus, brochure, advertisement, letter, or communicationto be used for the public offering of the subdivision lots or condominium units;

4c5 (n case of a business firm, a balance sheet showing the amount and general character

of its assets and liabilities and a copy of its articles of incorporation or articles of

partnership or association, as the case may be, with all the amendments thereof ande!isting bylaws or instruments corresponding thereto%

4d5 A title to the property which is free from all liens and encumbrances- rovided,

however, that in case any subdivision lot or condominium unit is mortgaged, it is

sufficient if the instrument of mortgage contains a stipulation that the mortgagee shallrelease the mortgage on any subdivision lot or condominium unit as soon as the full

purchase price for the same is paid by the buyer%

'he person filing the registration statement shall pay the registration fees prescribed therefor by

the Authority%

'hereupon, the Authority shall immediately cause to be published a notice of the filing of the

registration statement at the e!pense of the applicantowner or dealer, in two newspapers general

circulation, one published in English and another in ilipino, once a wee. for two consecutive

wee.s, reciting that a registration statement for the sale of subdivision lots or condominium unitshas been filed in the #ational Housing Authority; that the aforesaid registration statement, as

well as the papers attached thereto, are open to inspection during business hours by interested

parties, under such regulations as the Authority may impose; and that copies thereof shall befurnished to any party upon payment of the proper fees%

'he subdivision pro"ect of the condominium pro"ect shall be deemed registered upon completion

of the above publication requirement% 'he fact of such registration shall be evidenced by aregistration certificate to be issued to the applicantowner or dealer%

S$%#"o& 5.%icense to sell.Such owner or dealer to whom has been issued a registration

certificate shall not, however, be authoriBed to sell any subdivision lot or condominium unit in

the registered pro"ect unless he shall have first obtained a license to sell the pro"ect within two

wee.s from the registration of such pro"ect%


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'he Authority, upon proper application therefor, shall issue to such owner or dealer of a

registered pro"ect a license to sell the pro"ect if, after an e!amination of the registration statement

filed by said owner or dealer and all the pertinent documents attached thereto, he is convincedthat the owner or dealer is of good repute, that his business is financially stable, and that the

proposed sale of the subdivision lots or condominium units to the public would not be fraudulent%

S$%#"o& 6."erformance &ond.#o license to sell subdivision lots or condominium units shall be

issued by the Authority under Section < of this )ecree unless the owner or dealer shall have filedan adequate performance bond approved by said Authority to guarantee the construction and

maintenance of the roads, gutters, drainage, sewerage, water system, lighting systems, and full

development of the subdivision pro"ect or the condominium pro"ect and the compliance by theowner or dealer with the applicable laws and rules and regulations%

'he performance bond shall be e!ecuted in favor of the Republic of the hilippines and shall

authoriBe the Authority to use the proceeds thereof for the purposes of its underta.ing in case of

forfeiture as provided in this )ecree%

S$%#"o& 7.'xemt transactions.A license to sell and performance bond shall not be required in

any of the following transactions-

4a5 Sale of a subdivision lot resulting from the partition of land among coowners and co

heirs%

4b5 Sale or transfer of a subdivision lot by the original purchaser thereof and anysubsequent sale of the same lot%

4c5 Sale of a subdivision lot or a condominium unit by or for the account of a mortgagee

in the ordinary course of business when necessary to liquidate a bona fide debt%

S$%#"o& ).#usension of license to sell./pon verified complaint by a buyer of a subdivision lotor a condominium unit in any interested party, the Authority may, in its discretion, immediately

suspend the owner3s or dealer3s license to sell pending investigation and hearing of the case as

provided in Section =C hereof%

'he Authority may motu proprio suspend the license to sell if, in its opinion, any information inthe registration statement filed by the owner or dealer is or has become misleading, incorrect,

inadequate or incomplete or the sale or offering for a sale of the subdivision or condominium

pro"ect may wor. or tend to wor. a fraud upon prospective buyers%

'he suspension order may be lifted if, after notice and hearing, the Authority is convinced thatthe registration statement is accurate or that any deficiency therein has been corrected or

supplemented or that the sale to the public of the subdivision or condominium pro"ect will

neither be fraudulent not result in fraud% (t shall also be lifted upon dismissal of the complaint forlac. of legal basis%


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/ntil the final entry of an order of suspension, the suspension of the right to sell the pro"ect,

though binding upon all persons notified thereof, shall be deemed confidential unless it shall

appear that the order of suspension has in the meantime been violated%

S$%#"o& 9.!evocation of registration certificate and license to sell.'he Authority may, motu

proprio or upon verified complaint filed by a buyer of a subdivision lot or condominium unit,revo.e the registration of any subdivision pro"ect or condominium pro"ect and the license to sell

any subdivision lot or condominium unit in said pro"ect by issuing an order to this effect, withhis findings in respect thereto, if upon e!amination into the affairs of the owner or dealer during

a hearing as provided for in Section =8 hereof, if shall appear there is satisfactory evidence that

the said owner or dealer-

4a5 (s insolvent; or

4b5 has violated any of the provisions of this )ecree or any applicable rule or regulation

of the Authority, or any underta.ing of hisits performance bond; or

4c5 Has been or is engaged or is about to engage in fraudulent transactions; or

4d5 Has made any misrepresentation in any prospectus, brochure, circular or otherliterature about the subdivision pro"ect or condominium pro"ect that has been distributed

to prospective buyers; or

4e5 (s of bad business repute; or

4f5 )oes not conduct his business in accordance with law or sound business principles%

Where the owner or dealer is a partnership or corporation or an unincorporated association, itshall be sufficient cause for cancellation of its registration certificate and its license to sell, if any

member of such partnership or any officer or director of such corporation or association has been

guilty of any act or omission which would be cause for refusing or revo.ing the registration of an

individual dealer, bro.er or salesman as provided in Section == hereof%

S$%#"o& 1*.!egisters of subdivision lots and condominium units.A record of subdivision lots

and condominium units shall be .ept in the Authority wherein shall be entered all orders of the

Authority affecting the condition or status thereof% 'he registers of subdivision lots and

condominium units shall be open to public inspection sub"ect to such reasonable rules as theAuthority may prescribe%

T"#l$ III

DEALERS, BRO+ERS AND SALES!EN

S$%#"o& 11.!egistration of dealers, bro(ers and salesmen.#o real estate dealer, bro.er orsalesman shall engage in the business of selling subdivision lots or condominium units unless he

has registered himself with the Authority in accordance with the provisions of this section%


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(f the Authority shall find that the applicant is of good repute and has complied with the

applicable rules of the Authority, including the payment of the prescribed fee, he shall register

such applicant as a dealer, bro.er or salesman upon filing a bond, or other security in lieuthereof, in such sum as may be fi!ed by the Authority conditioned upon his faithful compliance

with the provisions of this )ecree- rovided, that the registration of a salesman shall cease upon

the termination of his employment with a dealer or bro.er%

Every registration under this section shall e!pire on the thirtyfirst day of )ecember of each year%Renewal of registration for the succeeding year shall be granted upon written application therefor

made not less than thirty nor more than si!ty days before the first day of the ensuing year and

upon payment of the prescribed fee, without the necessity of filing further statements orinformation, unless specifically required by the Authority% All applications filed beyond said

period shall be treated as original applications%

'he names and addresses of all persons registered as dealers, bro.ers, or salesmen shall be

recorded in a Register of 0ro.ers, )ealers and Salesmen .ept in the Authority which shall be

open to public inspection%

S$%#"o& 12.!evocation of registration as dealers, bro(ers or salesmen.Registration under the

preceding section may be refused or any registration granted thereunder, revo.ed by the

Authority if, after reasonable notice and hearing, it shall determine that such applicant orregistrant-

=% Has violated any provision of this )ecree or any rule or regulation made hereunder; or

% Has made a material false statement in his application for registration; or

C% Has been guilty of a fraudulent act in connection with any sale of a subdivision lot orcondominium unit; or

8% Has demonstrated his unworthiness to transact the business of dealer, bro.er, or

salesman, as the case may be%

(n case of charges against a salesman, notice thereof shall also be given the bro.er or dealer

employing such salesman%

ending hearing of the case, the Authority shall have the power to order the suspension of thedealer3s, bro.er3s, of salesman3s registration; provided, that such order shall state the cause for

the suspension%

'he suspension or revocation of the registration of a dealer or bro.er shall carry with it all thesuspension or revocation of the registrations of all his salesmen%

T"#l$ I

PROCEDURE FOR REOCATION OF REGISTRATION CERTIFICATE


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S$%#"o& 1'.Hearing.(n the hearing for determining the e!istence of any ground or grounds for

the suspension andor revocation of registration certificate and license to sell as provided in

Section D and 9 hereof, the following shall be complied with-

4a5 #otice% #o such hearing shall proceed unless the respondent is furnished with a copy

of the complaint against him or is notified in writing of the purpose of such hearing%

4b5 1enue% 'he hearing may be held before the officer or officers designated by the

Authority on the date and place specified in the notice%

4c5 #ature of proceeding% 'he proceedings shall be nonlitigious and summary in naturewithout regard to legal technicalities obtaining in courts of law% 'he Rules of court shall

not apply in said hearing e!cept by analogy or in a suppletory character and whenever

practicable and convenient%

4d5 ower incidental to the hearing% $or the purpose of the hearing or other proceeding

under this )ecree, the officer or officers designated to hear the complaint shall have thepower to administer oaths, subpoena witnesses, conduct ocular inspections, ta.e

depositions, and require the production of any boo., paper, correspondence,memorandum, or other record which are deemed relevant or material to the inquiry%

S$%#"o& 1(.)ontemt.

4a5 )irect contempt% 'he officer or officers designated by the Authority to hear the

complaint may summarily ad"udge in direct contempt any person guilty of misbehavior inthe presence of or so near the said hearing officials as to obstruct or interrupt the

proceedings before the same or of refusal to be sworn or to answer as a witness or to

subscribe an affidavit or deposition when lawfully required to do so% 'he person foundguilty of direct contempt under this section shall be punished by a fine not e!ceeding$ifty 4


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S$%#"o& 16.)ease and Desist *rder.Whenever it shall appear to the Authority that any person is

engaged or about to engage in any act or practice which constitutes or will constitute a violation

of the provisions of this )ecree, or of any rule or regulation thereunder, it may, upon due noticeand hearing as provided in Section =C hereof, issue a cease and desist order to en"oin such act or

practices%

S$%#"o& 17.!egistration% All contracts to sell, deeds of sale and other similar instruments relative

to the sale or conveyance of the subdivision lots and condominium units, whether or not thepurchase price is paid in full, shall be registered by the seller in the &ffice of the Register of

)eeds of the province or city where the property is situated%

Whenever a subdivision plan duly approved in accordance with Section 8 hereof, together withthe corresponding owner3s duplicate certificate of title, is presented to the Register of )eeds for

registration, the Register of )eeds shall register the same in accordance with the provisions of

the >and Registration Act, as amended- rovided, however, that it there is a street, passageway

or required open space delineated on a comple! subdivision plan hereafter approved and as

defined in this )ecree, the Register of )eeds shall annotate on the new certificate of titlecovering the street, passageway or open space, a memorandum to the effect that e!cept by way

of donation in favor of a city or municipality, no portion of any street, passageway, or open spaceso delineated on the plan shall be closed or otherwise disposed of by the registered owner

without the requisite approval as provided under Section of this )ecree%

S$%#"o& 1).+ortgages.#o mortgage on any unit or lot shall be made by the owner or developer

without prior written approval of the Authority% Such approval shall not be granted unless it isshown that the proceeds of the mortgage loan shall be used for the development of the

condominium or subdivision pro"ect and effective measures have been provided to ensure such

utiliBation% 'he loan value of each lot or unit covered by the mortgage shall be determined and

the buyer thereof, if any, shall be notified before the release of the loan% 'he buyer may, at hisoption, pay his installment for the lot or unit directly to the mortgagee who shall apply the

payments to the corresponding mortgage indebtedness secured by the particular lot or unit beingpaid for, with a view to enabling said buyer to obtain title over the lot or unit promptly after full

payment thereto;

S$%#"o& 19.Advertisements.Advertisements that may be made by the owner or developer

through newspaper, radio, television, leaflets, circulars or any other form about the subdivisionor the condominium or its operations or activities must reflect the real facts and must be

presented in such manner that will not tend to mislead or deceive the public%

'he owner or developer shall answerable and liable for the facilities, improvements,

infrastructures or other forms of development represented or promised in brochures,advertisements and other sales propaganda disseminated by the owner or developer or his agents

and the same shall form part of the sales warranties enforceable against said owner or developer,

"ointly and severally% $ailure to comply with these warranties shall also be punishable inaccordance with the penalties provided for in this )ecree%


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S$%#"o& 2*.Time of )omletion.Every owner or developer shall construct and provide the

facilities, improvements, infrastructures and other forms of development, including water supply

and lighting facilities, which are offered and indicated in the approved subdivision orcondominium plans, brochures, prospectus, printed matters, letters or in any form of

advertisement, within one year from the date of the issuance of the license for the subdivision or

condominium pro"ect or such other period of time as may be fi!ed by the Authority%

S$%#"o& 21.#ales "rior to Decree.(n cases of subdivision lots or condominium units sold ordisposed of prior to the effectivity of this )ecree, it shall be incumbent upon the owner or

developer of the subdivision or condominium pro"ect to complete compliance with his or its

obligations as provided in the preceding section within two years from the date of this )ecreeunless otherwise e!tended by the Authority or unless an adequate performance bond is filed in

accordance with Section : hereof%

$ailure of the owner or developer to comply with the obligations under this and the preceding

provisions shall constitute a violation punishable under Sections CD and C9 of this )ecree%

S$%#"o& 22.Alteration of "lans.#o owner or developer shall change or alter the roads, open

spaces, infrastructures, facilities for public use andor other form of subdivision development as

contained in the approved subdivision plan andor represented in its advertisements, without the

permission of the Authority and the written conformity or consent of the duly organiBedhomeowners association, or in the absence of the latter, by the ma"ority of the lot buyers in the

subdivision%

S$%#"o& 2'.Non-orfeiture of "ayments.#o installment payment made by a buyer in asubdivision or condominium pro"ect for the lot or unit he contracted to buy shall be forfeited in

favor of the owner or developer when the buyer, after due notice to the owner or developer,

desists from further payment due to the failure of the owner or developer to develop thesubdivision or condominium pro"ect according to the approved plans and within the time limitfor complying with the same% Such buyer may, at his option, be reimbursed the total amount paid

including amortiBation interests but e!cluding delinquency interests, with interest thereon at the

legal rate%

S$%#"o& 2(.-ailure to ay installments.'he rights of the buyer in the event of this failure to paythe installments due for reasons other than the failure of the owner or developer to develop the

pro"ect shall be governed by Republic Act #o% :


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the buyer, the owner or developer shall redeem the mortgage or the corresponding portion

thereof within si! months from such issuance in order that the title over any fully paid lot or unit

may be secured and delivered to the buyer in accordance herewith%

S$%#"o& 26.!ealty Tax.Real estate ta! and assessment on a lot or unit shall de paid by the owner

or developer without recourse to the buyer for as long as the title has not passed the buyer;rovided, however, that if the buyer has actually ta.en possession of and occupied the lot or unit,

he shall be liable to the owner or developer for such ta! and assessment effective the yearfollowing such ta.ing of possession and occupancy%

S$%#"o& 27.*ther )harges.#o owner or developer shall levy upon any lot or buyer a fee for an

alleged community benefit% $ees to finance services for common comfort, security and sanitationmay be collected only by a properly organiBed homeowners association and only with the

consent of a ma"ority of the lot or unit buyers actually residing in the subdivision or

condominium pro"ect%

S$%#"o& 2).Access to "ublic *ffices in the #ubdivisions.#o owner or developer shall deny anyperson free access to any government office or public establishment located within the

subdivision or which may be reached only by passing through the subdivision%

S$%#"o& 29.!ight of Way to "ublic !oad.'he owner or developer of a subdivision without

access to any e!isting public road or street must secure a right of way to a public road or streetand such right of way must be developed and maintained according to the requirement of the

government and authorities concerned%

S$%#"o& '*.*rgani/ation of Homeowners Association.'he owner or developer of a subdivision

pro"ect or condominium pro"ect shall initiate the organiBation of a homeowners association

among the buyers and residents of the pro"ects for the purpose of promoting and protecting theirmutual interest and assist in their community development%

S$%#"o& '1.Donations of roads and oen saces to local government.'he registered owner or

developer of the subdivision or condominium pro"ect, upon completion of the development ofsaid pro"ect may, at his option, convey by way of donation the roads and open spaces found

within the pro"ect to the city or municipality wherein the pro"ect is located% /pon acceptance of

the donation by the city or municipality concerned, no portion of the area donated shall thereafterbe converted to any other purpose or purposes unless after hearing, the proposed conversion is

approved by the Authority%

S$%#"o& '2."hases of #ubdivision.$or purposes of complying with the provisions of this )ecree,the owner or developer may divide the development and sale of the subdivision into phases, eachphase to cover not less than ten hectares% 'he requirement imposed by this )ecree on the

subdivision as a whole shall be deemed imposed on each phase%

S$%#"o& ''.Nullity of waivers.Any condition, stipulation, or provision in contract of sale

whereby any person waives compliance with any provision of this )ecree or of any rule orregulation issued thereunder shall be void%


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S$%#"o& '(.0isitorial owers.'his Authority, through its duly authoriBed representative may, at

any time, ma.e an e!amination into the business affairs, administration, and condition of any

person, corporation, partnership, cooperative, or association engaged in the business of sellingsubdivision lots and condominium units% $or this purpose, the official authoriBed so to do shall

have the authority to e!amine under oath the directors, officers, stoc.holders or members of any

corporation, partnership, association, cooperative or other persons associated or connected withthe business and to issue subpoena or subpoena duces tecum in relation to any investigation that

may arise therefrom%

'he Authority may also authoriBe the rovincial, +ity or *unicipal Engineer, as the case may

be, to conduct an ocular inspection of the pro"ect to determine whether the development of saidpro"ect conforms to the standards and specifications prescribed by the government%

'he boo.s, papers, letters, and other documents belonging to the person or entities herein

mentioned shall be open to inspection by the Authority or its duly authoriBed representative%

S$%#"o& '5.Ta(eover Develoment.'he Authority, may ta.e over or cause the development andcompletion of the subdivision or condominium pro"ect at the e!penses of the owner or developer,

"ointly and severally, in cases where the owner or developer has refused or failed to develop or

complete the development of the pro"ect as provided for in this )ecree%

'he Authority may, after such ta.eover, demand, collect and receive from the buyers theinstallment payments due on the lots, which shall be utiliBed for the development of the

subdivision%

S$%#"o& '6.!ules and !egulations.'he Authority shall issue the necessary standards, rules and

regulations for the effective implementation of the provisions of this )ecree% Such standards,

rules and regulations shall ta.e effect immediately after their publication three times a wee. fortwo consecutive wee.s in any newspaper of general circulation%

S$%#"o& '7.Deuti/ation of law enforcement agencies.'he Authority may deputiBe the

hilippine +onstabulary or any law enforcement agency in the e!ecution of its final orders,rulings or decisions%

S$%#"o& ').Administrative -ines.'he Authority may prescribe and impose fines not e!ceeding

ten thousand pesos for violations of the provisions of this )ecree or of any rule or regulation

thereunder% $ines shall be payable to the Authority and enforceable through writs of e!ecution inaccordance with the provisions of the Rules of +ourt%

S$%#"o& '9."enalties.Any person who shall violate any of the provisions of this )ecree andor

any rule or regulation that may be issued pursuant to this )ecree shall, upon conviction, be

punished by a fine of not more than twenty thousand 4?,???%??5 pesos andor imprisonment ofnot more than ten years- rovided, 'hat in the case of corporations, partnership, cooperatives, or

associations, the resident, *anager or Administrator or the person who has charge of the

administration of the business shall be criminally responsible for any violation of this )ecreeandor the rules and regulations promulgated pursuant thereto%


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S$%#"o& (*.%iability of controlling ersons.Every person who directly or indirectly controls any

person liable under any provision of this )ecree or of any rule or regulation issued thereunder

shall be liable "ointly and severally with and to the same e!tent as such controlled person unlessthe controlling person acted in good faith and did not directly or indirectly induce the act or acts

constituting the violation or cause of action%

S$%#"o& (1.*ther remedies.'he rights and remedies provided in this )ecree shall be in addition

to any and all other rights and remedies that may be available under e!isting laws%

S$%#"o& (2.!eealing clause.All laws, e!ecutive orders, rules and regulations or part thereof

inconsistent with the provisions of this )ecree are hereby repealed or modified accordingly%

S$%#"o& ('.'ffectivity.'his )ecree shall ta.e effect upon its approval%

)one in the +ity of *anila, this =th day of uly, in the year of &ur >ord, nineteen hundred and

seventysi!%

RE/0>(+ A+' #&% 8@: /#E =D, =9::

A# A+' '&DEFINE CONDO!INIU!, ESTABLISH REUIRE!ENTS FOR ITS

CREATION, AND GOERN ITS INCIDENTS.

Sec% =% 'he short title of this Act shall be 6'he +ondominium Act7%

Sec% % 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 orindirectly, in the land on which it is located and in other common areas of the building% A

condominium may include, in addition, a separate interest in other portions of such real property%

'itle to the common areas, including the land, or the appurtenant interests in such areas, may beheld by a corporation specially formed for the purpose 4hereinafter .nown as the 6condominium

corporation75 in which the holders of separate interest shall automatically be members or

shareholders, to the e!clusion of others, in proportion to the appurtenant interest of their

respective units in the common areas%

'he real right in condominium may be ownership or any other interest in real property

recogniBed by law, on property in the +ivil +ode and other pertinent laws%

Sec% C% As used in this Act, unless the conte!t otherwise requires-

4a5 6+ondominium7 means a condominium as defined in the ne!t preceding section%

4b5 6/nit7 means a part of the condominium pro"ect intended for any type of independent use orownership, including one or more rooms or spaces located in one or more floors 4or part or parts

of floors5 in a building or buildings and such accessories as may be appended thereto%


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4c5 6ro"ect7 means the entire parcel of real property divided or to be divided in condominiums,

including all structures thereon,

4d5 6+ommon areas7 means the entire pro"ect e!cepting all units separately granted or held orreserved%

4e5 6'o divide7 real property means to divide the ownership thereof or other interest therein by

conveying one or more condominiums therein but less than the whole thereof%

Sec% 8% 'he provisions of this Act shall apply to property divided or to be divided into

condominiums only if there shall be recorded in the Register of )eeds of the province or city inwhich the property lies and duly annotated in the corresponding certificate of title of the land, if

the latter had been patented or registered under either the >and Registration or +adastral Acts, an

enabling or master deed which shall contain, among others, the following-

4a5 )escription of the land on which the building or buildings and improvements are or are to be

located;

4b5 )escription of the building or buildings, stating the number of stories and basements, the

number of units and their accessories, if any;

4c5 )escription of the common areas and facilities;

4d5 A statement of the e!act nature of the interest acquired or to be acquired by the purchaser inthe separate units and in the common areas of the condominium pro"ect% Where title to or the

appurtenant interests in the common areas is or is to be held by a condominium corporation, a

statement to this effect shall be included;

4e5 Statement of the purposes for which the building or buildings and each of the units are

intended or restricted as to use;

4f5 A certificate of the registered owner of the property, if he is other than those e!ecuting the

master deed, as well as of all registered holders of any lien or encumbrance on the property, thatthey consent to the registration of the deed;

4g5 'he following plans shall be appended to the deed as integral parts thereof-

4=5 A survey plan of the land included in the pro"ect, unless a survey plan of the same property

had previously bee filed in said office;

45 A diagrammatic floor plan of the building or buildings in the pro"ect, in sufficient detail toidentify each unit, its relative location and appro!imate dimensions;

4h5 Any reasonable restriction not contrary to law, morals or public policy regarding the right of

any condominium owner to alienate or dispose of his condominium%


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'he enabling or master deed may be amended or revo.ed upon registration of an instrument

e!ecuted by the registered owner or owners of the property and consented to by all registered

holders of any lien or encumbrance on the land or building or portion thereof% 'he term6registered owner7 shall include the registered owners of condominiums in the pro"ect% /ntil

registration of a revocation, the provisions of this Act shall continue to apply to such property%

Sec%


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4f5 Each condominium owner shall have the e!clusive 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 condominium owner is personal to him%

4g5 Each condominium owner has also the absolute right to sell or dispose of his condominium

unless the master deed contains a requirement that the property be first offered to thecondominium owners within a reasonable period of time before the same is offered to outside

parties;

Sec% @% E!cept as provided in the following section, the common areas shall remain undivided,

and there shall be no "udicial partition thereof%

Sec% D% Where several persons own condominiums in a condominium pro"ect, an action may be

brought by one or more such persons for partition thereof by sale of the entire pro"ect, as if theowners of all of the condominiums in such pro"ect were coowners of the entire pro"ect in the

same proportion as their interests in the common areas-"rovided, however, 'hat a partition shall

be made only upon a showing-

4a5 'hat three years after damage or destruction to the pro"ect which renders material part thereofunit for its use prior thereto, the pro"ect has not been rebuilt or repaired substantially to its state

prior to its damage or destruction, or

4b5 'hat damage or destruction to the pro"ect has rendered onehalf or more of the units therein

untenantable and that condominium owners holding in aggregate more than thirty percentinterest in the common areas are opposed to repair or restoration of the pro"ect; or

4c5 'hat the pro"ect has been in e!istence in e!cess of fifty years, that it is obsolete and

uneconomic, and that condominium owners holding in aggregate more than fifty percent interestin the common areas are opposed to repair or restoration or remodeling or moderniBing of thepro"ect; or

4d5 'hat the pro"ect or a material part thereof has been condemned or e!propriated and that the

pro"ect is no longer viable, or that the condominium owners holding in aggregate more thanseventy percent interest in the common areas are opposed to continuation of the condominium

regime after e!propriation or condemnation of a material portion thereof; or

4e5 'hat the conditions for such partition by sale set forth in the declaration of restrictions, duly

registered in accordance with the terms of this Act, have been met%

Sec% 9% 'he owner of a pro"ect shall, prior to the conveyance of any condominium therein,register a declaration of restrictions relating to such pro"ect, which restrictions shall constitute a

lien upon each condominium in the pro"ect, and shall insure to and bind all condominium owners

in the pro"ect% Such liens, unless otherwise provided, may be enforced by any condominiumowner in the pro"ect or by the management body of such pro"ect% 'he Register of )eeds shall

enter and annotate the declaration of restrictions upon the certificate of title covering the land


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included within the pro"ect, if the land is patented or registered under the >and Registration or

+adastral Acts%

'he declaration of restrictions shall provide for the management of the pro"ect by anyone of thefollowing management bodies- a condominium corporation, an association of the condominium

owners, a board of governors elected by condominium owners, or a management agent electedby the owners or by the board named in the declaration% (t shall also provide for voting ma"orities

quorums, notices, meeting date, and other rules governing such body or bodies%

Such declaration of restrictions, among other things, may also provide-

4a5 As to any such management body;

4=5 $or the powers thereof, including power to enforce the provisions of the declarations of

restrictions;

45 $or maintenance of insurance policies, insuring condominium owners against loss by fire,casualty, liability, wor.men3s compensation and other insurable ris.s, and for bonding of the

members of any management body;

4C5 rovisions for maintenance, utility, gardening and other services benefiting the common

areas, for the employment of personnel necessary for the operation of the building, and legal,accounting and other professional and technical services;

485 $or purchase of materials, supplies and the li.e needed by the common areas;

4


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4d5 $or reasonable assessments to meet authoriBed e!penditures, each condominium unit to be

assessed separately for its share of such e!penses in proportion 4unless otherwise provided5 to its

owners fractional interest in any common areas;

4e5 $or the subordination of the liens securing such assessments to other liens either generally or

specifically described;

4f5 $or conditions, other than those provided for in Sections eight and thirteen of this Act, upon

which partition of the pro"ect and dissolution of the condominium corporation may be made%Such right to partition or dissolution may be conditioned upon failure of the condominium

owners to rebuild within a certain period or upon specified inadequacy of insurance proceeds, or

upon specified percentage of damage to the building, or upon a decision of an arbitrator, or uponany other reasonable condition%

Sec% =?% Whenever the common areas in a condominium pro"ect are held by a condominium

corporation, such corporation shall constitute the management body of the pro"ect% 'he corporate

purposes of such a corporation shall be limited to the holding of the common areas, either inownership or any other interest in real property recogniBed by law, to the management of the

pro"ect, and to such other purposes as may be necessary, incidental or convenient to the

accomplishment of said purposes% 'he articles of incorporation or bylaws of the corporation

shall not contain any provision contrary to or inconsistent with the provisions of this Act, theenabling or master deed, or the declaration of restrictions of the pro"ect% *embership in a

condominium corporation, regardless of whether it is a stoc. or nonstoc. corporation, shall not

be transferable separately from the condominium unit of which it is an appurtenance% When amember or stoc.holder ceases to own a unit in the pro"ect in which the condominium corporation

owns or holds the common areas, he shall automatically cease to be a member or stoc.holder of

the condominium corporation%

Sec% ==% 'he term of a condominium corporation shall be coterminus with the duration of thecondominium pro"ect, the provisions of the +orporation >aw to the contrary notwithstanding%

Sec% =% (n case of involuntary dissolution of a condominium corporation for any of the causes

provided by law, the common areas owned or held by the corporation shall, by way of

liquidation, be transferred proindiviso and in proportion to their interest in the corporation to themembers or stoc.holders thereof, sub"ect to the superior rights of the corporation creditors% Such

transfer or conveyance shall be deemed to be a full liquidation of the interest of such members or

stoc.holders in the corporation% After such transfer or conveyance, the provisions of this Actgoverning undivided coownership of, or undivided interest in, the common areas in

condominium pro"ects shall fully apply%

Sec% =C% /ntil the enabling or the master deed of the pro"ect in which the condominium

corporation owns or holds the common area is revo.ed, the corporation shall not be voluntarilydissolved through an action for dissolution under Rule =?8 of the Rules of +ourt e!cept upon a

showing-


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4a5 'hat three years after damage or destruction to the pro"ect in which the corporation owns or

holds the common areas, which damage or destruction renders a material part thereof unfit for its

use prior thereto, the pro"ect has not been rebuilt or repaired substantially to its state prior to itsdamage or destruction; or

4b5 'hat damage or destruction to the pro"ect has rendered onehalf or more of the units thereinuntenantable and that more than thirty percent of the members of the corporation, if nonstoc., or

the shareholders representing more than thirty percent of the capital stoc. entitled to vote, if astoc. corporation, are opposed to the repair or reconstruction of the pro"ect, or

4c5 'hat the pro"ect has been in e!istence in e!cess of fifty years, that it is obsolete and

uneconomical, and that more than fifty percent of the members of the corporation, if nonstoc.,or the stoc.holders representing more than fifty percent of the capital stoc. entitled to vote, if a

stoc. corporation, are opposed to the repair or restoration or remodeling or moderniBing of the

pro"ect; or

4d5 'hat the pro"ect or a material part thereof has been condemned or e!propriated and that thepro"ect is no longer viable, or that the members holding in aggregate more than seventy percent

interest in the corporation, if nonstoc., or the stoc.holders representing more than seventy

percent of the capital stoc. entitled to vote, if a stoc. corporation, are opposed to the

continuation of the condominium regime after e!propriation or condemnation of a materialportion thereof; or

4e5 'hat the conditions for such a dissolution set forth in the declaration of restrictions of the

pro"ect in which the corporation owns of holds the common areas, have been met%

Sec% =8% 'he condominium corporation may also be dissolved by the affirmative vote of all the

stoc.holders or members thereof at a general or special meeting duly called for the purpose-"rovided, 'hat all the requirements of Section si!tytwo of the +orporation >aw are complied

with%

Sec% =aw to the contrary notwithstanding, the bylaws of a

condominium corporation shall provide that a stoc.holder or member shall not be entitled todemand payment of his shares or interest in those cases where such right is granted under the


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+orporation >aw unless he consents to sell his separate interest in the pro"ect to the corporation

or to any purchaser of the corporation3s choice who shall also buy from the corporation the

dissenting member or stoc.holder3s interest% (n case of disagreement as to price, the procedureset forth in the appropriate provision of the +orporation >aw for valuation of shares shall be

followed% 'he corporation shall have two years within which to pay for the shares or furnish a

purchaser of its choice from the time of award% All e!penses incurred in the liquidation of theinterest of the dissenting member or stoc.holder shall be borne by him%

Sec% =D% /pon registration of an instrument conveying a condominium, the Register of )eeds

shall, upon payment of the proper fees, enter and annotate the conveyance on the certificate of

title covering the land included within the pro"ect and the transferee shall be entitled to theissuance of a 6condominium owner3s7 copy of the pertinent portion of such certificate of title%

Said 6condominium owner3s7 copy need not reproduce the ownership status or series of

transactions in force or annotated with respect to other condominiums in the pro"ect% A copy ofthe description of the land, a brief description of the condominium conveyed, name and personal

circumstances of the condominium owner would be sufficient for purposes of the 6condominium

owner3s7 copy of the certificate of title% #o conveyance of condominiums or part thereof,subsequent to the original conveyance thereof from the owner of the pro"ect, shall be registered

unless accompanied by a certificate of the management body of the pro"ect that such conveyance

is in accordance with the provisions of the declaration of restrictions of such pro"ect%

(n cases of condominium pro"ects registered under the provisions of the Spanish *ortgage >awor Act CC88, as amended, the registration of the deed of conveyance of a condominium shall be

sufficient if the Register of )eeds shall .eep the original or signed copy thereof, together with

the certificate of the management body of the pro"ect, and return a copy of the deed of

conveyance to the condominium owner duly ac.nowledge and stamped by the Register of )eedsin the same manner as in the case of registration of conveyances of real property under said laws%

Sec% =9% Where the enabling or master deed provides that the land included within a

condominium pro"ect are to be owned in common by the condominium owners therein, theRegister of )eeds may, at the request of all the condominium owners and upon surrender of all

their 6condominium owner3s7 copies, cancel the certificates of title of the property and issue a

new one in the name of said condominium owners as proindiviso coowners thereof%

Sec% ?% An assessment upon any condominium made in accordance with a duly registereddeclaration of restrictions shall be an obligation of the owner thereof at the time the assessment is

made% 'he amount of any such assessment plus any other charges thereon, such as interest, costs

4including attorney3s fees5 and penalties, as such may be provided for in the declaration of

restrictions, shall be and become a lien upon the condominium assessed when the managementbody causes a notice of assessment to be registered with the Register of )eeds of the city or

province where such condominium pro"ect is located% 'he notice shall state the amount of such

assessment and such other charges thereon a may be authoriBed by the declaration of restrictions,a description of the condominium, unit against which same has been assessed, and the name of

the registered owner thereof% Such notice shall be signed by an authoriBed representative of the

management body or as otherwise provided in the declaration of restrictions% /pon payment of


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said assessment and charges or other satisfaction thereof, the management body shall cause to be

registered a release of the lien%

Such lien shall be superior to all other liens registered subsequent to the registration of saidnotice of assessment e!cept real property ta! liens and e!cept that the declaration of restrictions

may provide for the subordination thereof to any other liens and encumbrances%

Such liens may be enforced in the same manner provided for by law for the "udicial or e!tra

"udicial foreclosure of mortgages of real property% /nless otherwise provided for in thedeclaration of restrictions, the management body shall have power to bid at foreclosure sale% 'he

condominium owner shall have the same right of redemption as in cases of "udicial or e!tra

"udicial foreclosure of mortgages%

Sec% =% #o labor performed or services or materials furnished with the consent of or at therequest of a condominium owner or his agent or his contractor or subcontractor, shall be the

basis of a lien against the condominium of any other condominium owner, unless such other

owners have e!pressly consented to or requested the performance of such labor or furnishing ofsuch materials or services% Such e!press consent shall be deemed to have been given by the

owner of any condominium in the case of emergency repairs of his condominium unit% >abor

performed or services or materials furnished for the common areas, if duly authoriBed by the

management body provided for in a declaration of restrictions governing the property, shall bedeemed to be performed or furnished with the e!press consent of each condominium owner% 'he

owner of any condominium may remove his condominium from a lien against two or more

condominiums or any part thereof by payment to the holder of the lien of the fraction of the totalsum secured by such lien which is attributable to his condominium unit%

Sec% % /nless otherwise provided for by the declaration of restrictions, the management body,

provided for herein, may acquire and hold, for the benefit of the condominium owners, tangibleand intangible personal property and may dispose of the same by sale or otherwise; and thebeneficial interest in such personal property shall be owned by the condominium owners in the

same proportion as their respective interests in the common areas% A transfer of a condominium

shall transfer to the transferee ownership of the transferor3s beneficial interest in such personalproperty%

Sec% C% Where, in an action for partition of a condominium pro"ect or for the dissolution of

condominium corporation on the ground that the pro"ect or a material part thereof has been

condemned or e!propriated, the +ourt finds that the conditions provided for in this Act or in thedeclaration of restrictions have not been met, the +ourt may decree a reorganiBation of the

pro"ect, declaring which portion or portions of the pro"ect shall continue as a condominium

pro"ect, the owners thereof, and the respective rights of said remaining owners and the "ustcompensation, if any, that a condominium owner may be entitled to due to deprivation of his

property% /pon receipt of a copy of the decree, the Register of )eeds shall enter and annotate the

same on the pertinent certificate of title%


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Sec% 8% Any deed, declaration or plan for a condominium pro"ect shall be liberally construed to

facilitate the operation of the pro"ect, and its provisions shall be presumed to be independent and

severable%

Sec%

special laws in civil law

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