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FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
) 
) 
) 
OFFlw tl 
. i, 
,,' f\;'Y 
First Regular Session 
SENATE 
1025 
~.No. __ _ 
1 0 ,JUt -8 :'!: I't 
Introduced by Senator Manuel "Lito" M. Lapid 
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 RA 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, 
. 
at: ) 
. 
MAN~ITO" M. LAPID 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 1025 
) 
) 
) 
Introduced by Senator Manuel "Lito" M. Lapid 
, ANACT 
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 
other 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 
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 recog~ized by law, on property in the Civil Code 5 
and other pertinent laws," 
1 


SEC. 2. 
Subsections (b) and (c) of Section 3 of the Act are hereby amended 
to read as follows: 
"(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 I~DUSTRIAL ESTATES, THE BUILDINGS, 
PLANTS, HOUSES, RECREATIONAL FACILlJIES AND FACTORIES IN 
A 
CONDOMINIUM 
PROJECT 
SHALL 
BE 
CONSIDERED 
AS 
SEPARATE UNITS AS HEREIN DEFINED." 
"(C) 
'Project' means the entire parcel of real property divided or 
to be divided into condominium UNITS, including all structures thereon, 
PROVIDED, THAT IN THE, CASE OF AN INDUSTRIAL ESTATE, 
PROJECT REFERS TO A TRACT OF LAND SUBDIVIDED AND 
DEVELOPED ACCORDING TO A COMPREHENSIVE PLAN UNDER A 
UNIFIED CONTINUOUS MANAGEMENT AND WITH PROVISIONS FOR 
BASIC INFRASTRUCTURE AND UTILITIES, WITH OR WITHOUT PRE-
BUILT 
STANDARD 
FACTORY 
BUILDING 
AND 
COMMUNITY 
. 
FACILITIES FOR THE USE OF THE COMMUNITY OF INDUSTRIES." 
SEC. 3. 
A new subsection, subsection (f), is hereby inserted after Section 
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 PRIMARILY FOR THE USE OF A COMMUNITY OF 
INDUSTRIES WHICH MAY ,BE INCLUDE PROVISIONS FOR STAFF 
HOUSING AND 
RECREATIONAL 
FACILITIES PROVIDED WITH 
ROADS, WATER SUPPLY ~ACILITIES, SEWERAGE AND DRAINAGE 
SYSTEMS, AND OTHER INFRASTRUCTURES. THE ESTATE SHALL 
BE SO PLANNED BASED ON SOUND PLANNING PRINCIPLES AS TO 
PROVIDE GOOD LAYOUT. AND JUDICIOUS ALLOCATIONS OF 
AREAS. INDUSTRIAL ESTATES MAY ALSO INCLUDE SCIENCES 
AND TECHNOLOGY PARKS. " 
2 


SEC. 4. 
Subsections (a) and (e) of Section 6 of the Act are hereby amended 
to read as follows: 
"(a) 
The boundary of the unit granted are the interior surfaces of 
the perimeter walls, floors, ceilings, windows and doors thereof. 
PROVIDED, THAT IN 
TH~ CASE OF AN INDUSTRIAL ESTATE 
WHEREIN WHOLE BUILDING, PLANTS OR FACTORIES IN A 
CONDOMINIUM PROJECT MAY BE CONSIDERED AS SEPARATE 
UNITS DEFINED UNDER SECTION 3(b) HEREOF, THE BOUNDARY 
OF A UNIT SHALL INCLUDE THE OUTER SURFACES OF THE 
PERIMETER WALLS OR FENCES EXCEPT IN CONDOMINIUM 
PROJECTS LOCATED INSIDE THE INDUSTRIAL ESTATE, the 
following are not part of the' unit hearing walls, columns, floors, roofs, 
foundations and other common structural elements of the buildings; 
'. 
lobbies, stairways, hallways,' and other areas of common use, elevator 
equipments 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, when;wer located, except the outlets thereof when 
located within the unit. 
"(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. PROVIDED, HOWEVER, 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. " 
SEC. 5. 
Section 11 of the Act is hereby amended to read as follows: 
"Sec. 11. THE DESIGN STANDARDS OF A CONDOMINIUM 
PROJECT SHALL BE REGULATED BY THE HOUSING AND LAND 
USE REGULATORY BOARD (HLURB), PROVIDED THAT PROJECT 
LOCATED IN AN ECOZONE SHALL BE REGULATED BY THE 
PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA), WITHOUT 
PREJUDICE TO THE AUTHORITY OF THE SECURITIES AND 
EXCHANGE COMMISSION (SEC) TO REGISTER A CONDOMINIUM 
3 


CORPORATION IN ACCORDANCE WITH THE PROVISIONS OF THE 
CORPORATION CODE. The'term of a condominium corporation shall be 
co-terminous with the duration of the condominium project, the provisions 
of the Corporation Law to the contrary notwithstanding." 
SEC. 6. 
Section 12 of the Act is hereby amended to read as follows: 
"Sec. 12, [In case of involuntary dissolution of a condominium 
corporation for any of the causes provided by the law, the common areas 
owned or held by the corporation shall, by way of liquidation, be 
transferred pro-indiviso and in proportion to their interest in the corporation 
to the members or stockholders thereof, subject 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 stockholders in the 
corporation. After such transfer or conveyance, the provisions of this Act 
governing undivided co-ownership of, or undivided interest in, the common 
areas in condominium projects shall fully apply.) THE DISSOLUTION OF 
, 
THE CONDOMINIUM CORPORATION IN ANY MANNER AND FOR ANY 
OTHER CAUSES PROVIDED BY LAW SHALL BE GOVERNED BY THE 
PROVISIONS OF THE TITLE XIV OF THE CORPORATION CODE." 
SEC. 7. 
A new section, Section 25, is hereby inserted after Section 24 of 
the Act and shall read as follows: 
"SECTION 25. 
THE BUILDING AND DESIGN STANDARDS 
FOR CONDOMINIUM PROJECT SHAll BE BASED ON SOUND 
PLANNING PRINCIPLES AS TO PROVIDE GOOD LAYOUT AND 
JUDICIOUS 
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." 
4 


"THE EXISTING LAWS 
ON 
BALANCED HOUSING AND 
DEVELOPMENT 
AND 
OPEN 
SPACES 
SHALL 
APPLY 
ON 
ECOZONES." 
SEC. 8. 
Sections of the Act subsequent to the new Section 25 are hereby 
renumbered accordingly. 
SEC. 9. 
Separability C/~use. - If, for any reason, any provision of this Act 
is declared unconstitutional or invalid, other parts or provisions hereof which are not 
affected thereby shall continue to be·. in full force and effect. 
SEC. 10. 
Repealing Clause. - All laws, decrees, executive orders, rules and 
regulations, issuances or parts thereof inconsistent with the provisions of this Act are 
hereby repealed or modified accordingly. 
SEC. 11. 
Effectivity Clause. - This Act shall take effect fifteen (15) days 
following its publication in at least two (2) national newspapers of general circulation. 
Approved, 
5