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THIRTEENTH CONGRESS OF THE REPUBLIC 
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OF THE PHILIPPINES 
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First Regular Session 
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S E N A T E  
s. No. 
introduced by Senator S. R. OsmeAa Ill 
EXPLANATORY NOTE 
With the leaps and bounds in transportation and communication technologies, 
the world has been reduced to a global village where capital has become as footloose 
as labor in seeking economic opportunities. 
Foreign Direct Investment (FDI) have served as an important external stimulus to 
the Philippine economy, generating additional employment and economic activity amid 
the relative scarcity of domestic capital resources. In trying to capture foreign 
investments, the Philippines has to compete with other countries in Asia and Eastern 
Europe who offer more liberal incentives, more efficient infrastructure systems, and 
more vibrant markets. 
One of the disadvantages that hinder the Philippines’ drive to attract foreign 
investments is the prohibition against the ownership by foreign nationals of fixed assets 
and real property including lands and buildings. 
This bill proposes an amendment to R.A. 4726, otherwise known as the 
“Condominium Law” to include industrial estates within the definition of a condominium. 
When a foreign investor invests in the stocks of a condominium corporation, he acquires 
ownership rights over the condominium system, which gives him a more stable asset 
base which can be used for financial leveraging and other purposes. 
Recent irreversible global developments have changed the international 
economic backdrop amid which Filipino businesses have to operate. A paradigm shift is 
in order for the Philippine economy to cope with the rest of the world, discarding the 
parochial and autarkic values in favor of more open outlook that will allow our 
businessmen to take advantage of the emerging opportunities in the global economy. 
Short of a Constitutional amendment that would achieve this effect, this bill addresses 
the need to realign our policies in order to be at par with other countries vying to offer 
investment venues to the world’s capital resources. 
In view of the foregoing, early passage of this bill is earnestly requested 
S E ~ G I O  
OSMENA 111 
Senator 


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THIRTEENTH CONGRESS OF THE REPUBLIC 
First Regular Session 
) 
OF THE PHILIPPINES 
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‘,li 
S E N A T E  
S. No. 
Introduced by Senator S. W. BsmeAa 111 
AN ACT 
MODIFYING THE DEFINITION OF A CONDOMINIUM UNIT, AMENDING FOR THE 
PURPOSE REPUBLIC ACT NO. 4726, OTHERWISE KNOWN AS THE 
CONDOMINIUM LAW, TO APPLY TO INDUSTRIAL ESTATES AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress Assembled: 
SECTION 1. Section 2 of Republic Act No. 4726, entitled “An Act to 
Define Condominium, Establish Requirements for its Creation and Govern its 
Incidents,” hereinafter referred to as the Act, is hereby amended to read as 
follows: 
“Section 2. A condominium is an interest in real property consisting 
of a separate interest in a unit in a residential, industrial or commercial 
building OR INDUSTRIAL ESTATE and an undivided interest in common, 
directly and indirectly, in ‘the land on which it is located’and in otfier‘ 
common areas of the building OR INDUSTRIAL ESTATE. 
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 interest 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 the separate interest shall 
automatically be members or shareholders, to the exclusion of others, in 
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proportion to the appurtenant interest of their respective units in the 
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common areas.” 
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and other pertinent laws. 
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to read as follows: 
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The real right in condominium may be ownership or any other 
interest in real property recognized by law, on property in the Civil Code 
SEC. 2. Subsections (b) and (c) of Section 3 of the Act are also amended 
”(b) ’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 and such accessories as may be appended thereto. PROVIDED, 
THAT, IN THE CASE OF INDUSTRIAL ESTATES, THE BUILDINGS, 
PLANTS, HOUSES, RECREATIONAL FACILITIES AND FACTORIES IN 
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A 
CONDOMINIUM 
PROJECT 
SHALL 
BE 
CONSIDERED 
AS 
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SEPARATE UNITS AS HEREIN DEFINED.” 
“(C) ‘Project’ means the entire parcel of real property divided or to 
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be divided into condominium UNITS, including all structures thereon. 
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PROVIDED, THAT, IN THE CASE OF AN INDUSTRIAL ESTATE, 
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PROJECT REFERS TO A TRACT OF LAND SUBDIVIDED AND 
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DEVELOPED ACCORDING TO A COMPREHENSIVE PLAN UNDER A 
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UNIFIED CONTINUOUS MANAGEMENT AND WITH PROVISIONS FOR 
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BASIC INFRASTRUCTURE AND UTILITIES, WITH OR WITHOUT PRE- 
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BUILT 
STANDARD 
FACTORY 
BUILDING 
AND 
COMMUNITY 
a
.
 
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FACILITIES FOR THE USE OF THE COMMUNITY OF INDUSTRIES.” 
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SEC. 3. A new subsection, subsection (0, 
is hereby inserted after Section 
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3(e) of the Acts and shall read as follows: 
“(f) ‘INDUSTRIAL ESTATE’ MEANS A LARGE AND SUITABLE 
TRACT OF LAND WHICH HAS BEEN SUBDIVIDED AND DEVELOPED 
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PRIMARILY FOR THE USE OF A COMMUNITY OF INDUSTRIES 
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WHICH MAY BE INCLUDE PROVISIONS FOR STAFF HOUSING AND 
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RECREATIONAL FACILITIES PROVIDED WITH ROADS, WATER 
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SUPPLY FACILITIES, SEWERAGE AND DRAINAGE SYSTEMS, AND 
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OTHER INFRASTRUCTURES. THE ESTATE SHALL BE SO PLANNED 
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BASED ON SOUND PLANNING PRINCIPLES AS TO PROVIDE GOOD 
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LAYOUT AND JUDICIOUS ALLOCATIONS OF AREAS. INDUSTRIAL 
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ESTATES MAY ALSO INCLUDE SCIENCES AND TECHNOLOGY 
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PARKS. ” 
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“(a) The boundary of the unit granted are the interior surfaces of the 
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perimeter walls, floors, ceilings, windows and doors thereof. PROVIDED, 
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THAT, IIN THE CASE OF AN INDUSTRIAL ESTATE WHEREIN WHOLE 
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BUILDING, PLANTS OR FACTORIES IN A CONDOMINIUM PROJECT 
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MAY BE CONSIDERED AS SEPARATE UNITS DEFINED UNDER 
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SECTION 3(b) HEREOF, THE BOUNDARY OF A UNIT SHALL 
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INCLUDE THE OUTER SURFACES OF THE PERIMETER WALLS OR 
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FENCES EXCEPT IN CONDOMINIUM PROJECTS LOCATED INSIDE 
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THE INDUSTRIAL ESTATE, the following are not part of the unit hearing 
SEC. 4. Subsections (a) and (e) of Section 6 of the Act are hereby 
amended to read as follows: 
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walls, columns, floors, roofs, foundations and other common structural 
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elements of the buildings; lobbies, stairways, hallways, and other areas of 
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common use, elevator equipments and shafts, central heating, central 
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refrigeration and central air conditioning equipment, reservoirs, tanks, 
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pumps and other central services and facilities, pipes, ducts, flues, chutes, 
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conduits, wires and other utility installations, wherever located, except the 
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outlets thereof when located within the unit. 
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“(e) Each condominium owner shall have the exclusive right to 
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paint, repaint, tile, wax, paper or otherwise refinish and decorate the inner 
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surfaces of the walls, ceilings, floors, windows and doors bounding his 
own unit. 
PROVIDED, HOW€V€R, THAT IN THE CASE OF A 
CONDOMINIUM UNIT IN AN INDUSTRIAL ESTATE, SUCH RIGHT MAY 
BE EXERCISED OVER THE EXTERNAL SURFACES OF THE SAID 
UNIT. ” 
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SEC. 5. Section 11 of the Act is hereby amended to read as follows: 
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“Sec. 11. THE DESIGN STANDARDS OF A CONDOMINIUM 
PROJECT SHALL BE REGULATED BY THE HOUSING AND LAND 
.
.
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USE REGULATORY BOARD (HLURB), PROVIDED THAT PROJECT 
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LOCATED IN AN ECOZONE SHALL BE REGULATED BY THE 
PHILIPPINE ECONOMIC ZONE AUTHORITY 
(PEZA), WITHOUT 
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PREJUDICE TO THE AUTHORITY OF THE SECURITIES AND 
EXCHANGE 
COMMISSION 
TO 
REGISTER 
A 
CONDOMINIUM 
CORPORATION IN ACCORDANCE WITH THE PROVISIONS OF THE 
CORPORATION CODE. The term of a condominium corporation shall be 
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co-terminous with the duration of the condominium project, the provisions 
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of the Corporation Law to the contrary notwithstanding.” 
SEC. 6. Section 12 of the Act is hereby amended to read as follows: 
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“Sec. 12, [In case of involuntary dissolution of a condominium 
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corporation for any of the causes provided by the law, the common areas 
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owned or held by the corporation shall, by way of liquidation, be 
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transferred pro-indiviso and in proportion to their interest in the corporation 
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to the members or stockholders thereof, subject to the superior rights of 
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the corporation creditors. Such transfer or conveyance shall be deemed 
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to be a full liquidation of the interest of such members or stockholders in 
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the corporation. After such transfer or conveyance, the provisions of this 
. .  . 
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Act governing undivided co-ownership of, or undivided interest in, the 
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common areas in condominium projects shall fully apply.] 
THE 
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DISSOLUTION OF THE CONDOMINIUM CORPORATION IN ANY 
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MANNER AND FOR ANY OTHER CAUSES PROVIDED BY LAW 
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SHALL BE GOVERNED BY THE PROVlSlOMS OF THE TITLE XIV OF 
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THE CORPORATION CODE.” 
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SEC. 7. A new section, Section 25, is hereby inserted after Section 24 of 
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“SECTION 25. THE BUiLDlNG AND DESIGN STANDARDS FOR 
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CONDOMINIUM PROJECT SHALL BE BASED ON SOUND PLANNING 
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PRINCIPLES AS TO PROVIDE GOOD LAYOUT AND JUDICIOUS 
the Act and shall read as follows: 
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ALLOCATION 
OF 
AREAS 
AMONG 
OTHERS, 
ACCESSIBILITY 
FEATURES FOR DISABLED PERSONS PURSUANT TO BATAS 
PAMBANSA BILANG 344 OF 1984.’’ 
“THE DESIGN STANDARDS FOR CONDOMINIUM PROJECTS 
SHALL INCLUDE A SYSTEM OF LAND UTILIZATION SPECIFIED IN 
THE FRAMEWORK PLAN SET BY THE HOUSING AND LAND USE 
REGULATORY BOARD (HLURB) AND OTHER EXISTING LAWS.” 
“THE EXISTING LAWS ON BALANCED I-lOUSlNG 
AND 
DEVELOPMENT 
AND 
OPEN 
SPACES 
SHALL 
APPLY 
ON 
EC 020 N E S 
. ” 
SEC. 
8. Sections of the Act subsequent to the new Section 25 are 
hereby renumbered accordingly. 
SEC. 
9. 
Repealing Clause - All laws, acts, presidential decrees, 
executive orders, proclamations and/or administrative regulations which are 
inconsistent with the provisions of this Act, are hereby amended, modified, 
superseded or repealed accordingly. 
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SEC. IO. This Act shall take effect fifteen (15) days after its complete 
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publication in at least two (2) national newspapers of general circulation. 
Approved, 
.. . 
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