CONDOMINIUM FINAL EXAM

Read each question carefully.

Use WORD, Font: Arial, Size: 12
Type your name in block letters on the upper left side ( LAST NAME, FIRST
NAME) with your SECTION NAME below it.
Each student must 

EMAIL the answers (in WORD or PDf) ON or BEFORE 8:00 pm to

[email protected] with the subject: CONDOMINIUM FINAL EXAM.

PACASUM, PRINCE MUADDIB MIKUNUG

SECTION B

Based on your own understanding and everything that you have learned, answer the
following questions:
1. What are the salient points of PD 957?
= “WHEREAS, this state of affairs has rendered it imperative that the real estate
subdivision and condominium businesses be closely supervised and regulated,
and that penalties be imposed on fraudulent practices and manipulations
committed in connection therewith.”
Buying a real property can be a rewarding experience especially if it is
done with due diligence and care. To avoid having sleepless nights and spare
the headache caused by an erroneous transaction one must know his rights.
Below are the salient features of PD 957 otherwise known as the Subdivision and
Condominium Buyers Protective Decree which will help us understand the things
required of the developer before purchase of a property.
1. Registration and License to Sell- Developers are required to secure
development permit, registration certificate, and license to sell from the Housing
and Land Use Regulatory Board (HLURB). Selling a subdivision or condominium
project is defined to include offering to sell, advertising to sell and receiving
reservation deposits.
2. Non Forfeiture of Payments – No installment of the buyer may be
forfeited by the developer when the buyer who is not delinquent, and after due
notice, desist from further payment due to failure of the developer to complete
the development within the required period. The buyer may, at his option, be
reimbursed with the total amount paid including amortization interest, with
interest thereon at the legal rate.
 3. Mortgage of Project – No mortgage of any lot by the project
owner/developer without permit to mortgage from HLURB. In case a mortgage
was executed by the developer pursuant to an HLURB permit, the buyer may opt
to pay his installment directly to the mortgage.
4. Representation in Ads – Representations by the developer on
development facilities and infrastructures appearing in advertisements,
brochures, leaflets and other announcements are deemed part of the main
contract and enforceable against the developer.
5. Alteration of Plans – Any alteration in the approved plan relating to
roads, open spaces, facilities and other forms of development require prior
approval of HLURB (now LGU) and written consent of Homeowners Association.
6. Realty Tax – The realty tax on the lot shall be paid by the developer
without recourse to the buyer for as long as title has not yet passed to the buyer.
However, if the buyer has taken possession of the lot although title has not yet
been transferred, the realty tax shall be for the account of the buyer effective the
year following said taking of possession.
7. Right of Way – When the project is without access to any existing
public road, the developer must secure a right of way which must be developed
and maintained according to the requirement of the government authorities
concerned.

What are the salient points of Condominium Act

= REPUBLIC ACT NO. 4726, AN ACT TO DEFINE CONDOMINIUM,
ESTABLISH REQUIREMENTS FOR ITS CREATION, AND GOVERN ITS
INCIDENTS.

The 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 Deeds of the
province or city in which 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 Land Registration or Cadastral Acts, an enabling or
master deed which shall contain, among others, the following:

(a) Description of the land on which the building or buildings and improvements
are or are to be located;

(b) Description of the building or buildings, stating the number of stories and
basements, the number of units and their accessories, if any;

(c) Description of the common areas and facilities;

(d) A statement of the exact nature of the interest acquired or to be acquired by
the purchaser in the separate units and in the common areas of the condominium
project. 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;

(e) Statement of the purposes for which the building or buildings and each of the
units are intended or restricted as to use;

(f) A certificate of the registered owner of the property, if he is other than those
executing the master deed, as well as of all registered holders of any lien or
encumbrance on the property, that they consent to the registration of the deed;

(g) The following plans shall be appended to the deed as integral parts thereof:

(1) A survey plan of the land included in the project, unless a survey plan of the
same property had previously bee filed in said office;

(2) A diagrammatic floor plan of the building or buildings in the project, in

sufficient detail to identify each unit, its relative location and approximate
dimensions;

(h) 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.

The enabling or master deed may be amended or revoked upon

registration of an instrument executed 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. The term “registered owner” shall
include the registered owners of condominiums in the project. Until registration of
a revocation, the provisions of this Act shall continue to apply to such property.

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 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. Title to the
common areas, including the land, or the appurtenant interests in such areas,
may be held by a corporation specially formed for the purpose (hereinafter known
as the “condominium corporation”) in which the holders of separate interest shall
automatically be members or shareholders, to the exclusion of others, in
proportion to the appurtenant interest of their respective units in the common
areas.

The real right in condominium may be ownership or any other interest in

real property recognized by law, on property in the Civil Code and other pertinent
laws.

“Unit” means a part of the condominium project intended for any type of
independent use or ownership, including one or more rooms or spaces located in
one or more floors (or part or parts of floors) in a building or buildings and such
accessories as may be appended thereto.

Upon registration of an instrument conveying a condominium, the Register

of Deeds shall, upon payment of the proper fees, enter and annotate the
conveyance on the certificate of title covering the land included within the project
and the transferee shall be entitled to the issuance of a “condominium owner’s”
copy of the pertinent portion of such certificate of title. Said “condominium
owner’s” copy need not reproduce the ownership status or series of transactions
in force or annotated with respect to other condominiums in the project. A copy of
the 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 “condominium owner’s” copy of the certificate of title. No
conveyance of condominiums or part thereof, subsequent to the original
conveyance thereof from the owner of the project, shall be registered unless
accompanied by a certificate of the management body of the project that such
conveyance is in accordance with the provisions of the declaration of restrictions
of such project.

In cases of condominium projects registered under the provisions of the

Spanish Mortgage Law or Act 3344, as amended, the registration of the deed of
conveyance of a condominium shall be sufficient if the Register of Deeds shall
keep the original or signed copy thereof, together with the certificate of the
management body of the project, and return a copy of the deed of conveyance to
the condominium owner duly acknowledge and stamped by the Register of
Deeds in the same manner as in the case of registration of conveyances of real
property under said laws.

Unless otherwise expressly provided in the enabling or master deed or the

declaration of restrictions, the incidents of a condominium grant are as follows:
 (a) The boundary of the unit granted are the interior surfaces of the
perimeter walls, floors, ceilings, windows and doors thereof. The following are not
part of the unit bearing walls, columns, floors, roofs, foundations and other
common structural elements of the building; lobbies, stairways, hallways, and
other areas of common use, elevator equipment and shafts, central heating,
central refrigeration and central air-conditioning equipment, reservoirs, tanks,
pumps and other central services and facilities, pipes, ducts, flues, chutes,
conduits, wires and other utility installations, wherever located, except the outlets
thereof when located within the unit.

(b) There shall pass with the unit, as an appurtenance 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. Such easement shall be automatically
terminated in any air space upon destruction of the unit as to render it
untenantable.

(c) Unless otherwise, provided, the common areas are held in common by
the holders of units, in equal shares, one for each unit.

(d) A non-exclusive easement for ingress, egress and support through the
common areas is appurtenant to each unit and the common areas are subject to
such easements.

(e) Each condominium owner shall have the 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.

(f) Each condominium owner shall have the 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
condominium owner is personal to him.

(g) 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 the condominium owners within a reasonable period of
time before the same is offered to outside parties;

An assessment upon any condominium made in accordance with a duly

registered declaration of restrictions shall be an obligation of the owner thereof at
the time the assessment is made. The amount of any such assessment plus any
other charges thereon, such as interest, costs (including attorney’s fees) 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 management body
causes a notice of assessment to be registered with the Register of Deeds of the
city or province where such condominium project is located. The notice shall
state the amount of such assessment and such other charges thereon a may be
authorized 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 authorized representative of the
management body or as otherwise provided in the declaration of restrictions.
Upon payment of 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 said notice of assessment except real property tax liens and
except 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 judicial or extra-judicial foreclosure of mortgages of real property. Unless
otherwise provided for in the declaration of restrictions, the management body
shall have power to bid at foreclosure sale. The condominium owner shall have
the same right of redemption as in cases of judicial or extra-judicial foreclosure of
mortgages.

2. Do you think there is really a need for these laws? Why? Why not? Explain your
answers (25pts)
= Yes. The Importance of Presidential Decree 957 aims to control and
prevent “reneged on representations and obligations,” “swindling and fraudulent
manipulations,” and “failure to deliver.”

It consists of rules and regulations on buying and selling a house or

condominium, from the point of sale to turnover of unit to property title of
ownership. It also states the other laws governing the after-sale rights of buyers
and developer’s obligations.
It specifies details pertaining to policies in dealing with real estate
practitioners such as developer, dealer, broker, and salesman or agent.
It empowers the National Housing Authority (NHA) to have “exclusive
jurisdiction to regulate real estate trade and business.” At present, Housing and
Land Use Regulatory Board (HLURB) is now the key government agency to
implement this law.
It enumerates the process and procedures of registration, as well as the
sanctions and penalties for any unauthorized transactions made by real estate
practitioners.
 3. Are there other aspects that you think needs to be discussed or expounded in
PD957? How about in the Condominium Act? Briefly explain your answers.
(25pts)
= I believe that penalties provided should further be discussed or be given a
heavier weight for a more effective deterrence of transgressors and more
protection from manipulators in the real estate industry.
4. Explain the Maceda Law and Its relevance to the Condominium Act. (25pts)
= Ernesto Maceda, a former senator, is acknowledged as the primary author of
Republic Act No. 6552, also known as the Realty Installment Buyer Protection Act.
Property owners are protected from unjust terms that can result from sales funded by
installment agreements by the Maceda Law jurisprudence. It emphasizes a buyer's
rights if they fall behind on payments for such items. Grace periods and refunds are
available to qualified buyers of real estate.

The protection of real estate buyers making installment payments against

onerous and oppressive circumstances is expressly stated in Section 2 of the Philippine
Maceda Law as being a public policy. Should an offense be committed by the developer
or seller, the law is on the side of the homebuyers.

Only real estate transactions or contracts involving installment payments, such

as those with residential condominium apartments, are covered by the Maceda Law.
Moreover, this does not apply to industrial lots, commercial buildings, or sales to tenants
under R.A. No. 3844, as modified.
The Maceda Law seeks to safeguard buyers against deceptive payment terms
and conditions. Low-income and middle-class buyers who want to own a piece of
property are able to apply according to the Maceda Law.
In every transaction or agreement involving the sale or financing of real estate on
installment payments, there are essentially two categories of qualified buyers:

Those who have paid less than two years of installments (under Section 4); and
those who have paid at least two years' worth of installments (Section 3) — residential
condominiums, apartments, houses, townhomes, and lots are among the types of
property that are included; however, industrial lands, enterprises, and leases to current
tenants are not.

Section 5 states that under Sections 3 and 4, the buyer has the option to sell or
transfer his rights as well as to reinstate the contract by updating the account during the
grace period and prior to the contract's actual cancellation. The sale or assignment
deed must be executed by a notarial act.
 Furthermore, Section 6 indicated that any installment or the remaining balance of
the purchase price may be paid in full at any time without interest by the buyer, and this
full payment of the purchase price may be noted in the certificate of title covering the
property.
Certain scenarios involved that the Maceda Law would help you would be the
odds of a default on a loan, meaning you did not meet the obligations while applying for
a loan in an installment plan offered to you. Another case is real estate sellers or
developers who do not cooperate with buyers in terms of getting their refund after
canceling due to a health crisis. The Maceda Law would determine the necessary
measures given in these situations.