UTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
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Introduced bv Senator Ralph G. Recto 
Explanatory Note 
Industrial estates have become the centers of economic growth in the country today but time 
and again, business entities are faced with the dilemma of expanbg in terms of physical space while 
keeping costs of expansion to a minimum. The inherent risks of not owning the land on which 
theit factories and offices are situated could easily tip the scale against an investor's business plans. 
Land is indispensable to man as development is to a nation. For centuries, wars have been 
fought, lives forsaken, dignity wagered because man cannot part with the land he and his forbears 
were born to and have lived on. In the same v+, foreign investors would be wary of parting with 
their money without the security of land tenure. 
While investment of over 40% foreign capital necessary for later expansion of an industrial 
plant is allowed for companies with foreign capital under 40% at the time of establishment, part- 
transfer of ownership to local companies becomes necessary. Since 100% land ownership is not 
recogmzed even when establishing an industrial base, there is the risk faced by investors of longer 
periods and higher interest rates for loans. 
This bill seeks to amend Republic Act No. 4726, otherwise known as the Condominium Act 
as amended by R.A. 7899, to include the industrial estates in the definition of the condominium, It 
essentially expands the definition of a condominium to include multiple units in a horizontal 
building such as pre-built standard factory buildings and community facilities within the industrial 
estates and economic zones, and consequently allows foreign investors to hold condominium 
certificates of title in their name. 
Under R.A. 4726 as amended, ownership over the common areas of a condominium project, 
including the land where the condominium building is constructed may be vested in a corporation 
which shall be called the condominium corporation. As such, a buyer of a unit in the condominium 
project automatically becomes a member or shareholder of the condominium corporation. With 
this provision of the Condominium Act, a non-Filipino, who is generally prohibited from owning 
real estate/properties in the Philippines unless by hereditq succession, may purchase and own a 
condominium provided the total shareholdings of non-Filipinos in the condominium corporation 
does not exceed forty percent (400/0). Foreigners can own these condominims in theit own names 
through a Condominium Certificate of Title (CCT). But they are legally prohibited from directly 
owning any form of land property with an Original Certificate of Title (OCT) and/or Transfer 
Certificate of Title VCl). 
If the current law is expanded to include industrial estates and economic zones, investors 
will have more flexibility especially in planning in order for them to maximize the use of space 
according to the needs of their operations. Likewise, the buildings and other structures within the 
industrial estate can be considered as collateral for loans and thereby improve the cash-flow position 
of said fzms. 
In view of the foregoing, the 
f this bill is earnestly sought. 
MRC/SB 1324 condadoc 


UTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
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Introduced by Senator Ralph G. Recto 
AN ACT 
MODIFYING THE DEFINITION OF A CONDOMINIUM UNIT, AMENDING FOR 
THE PURPOSE REPUBLIC ACT NUMBERED FOUR THOUSAND SEVEN 
HUNDRED TWENTY-SIX, AS AMENDED, OTHERWISE KNOWN AS THE 
CONDOMINIUM ACT, TO APPLY TO INDUSTRIAL ESTATES AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and the Home ofRepresentatiues ofthe Phih$pines in Congress assembled: 
SECTION 1. Section 2 of Republic Act No. 4726, as amended, 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 un&vided interest in 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 
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 the separate 
interests shall automatically be embers or shareholders, to the exclusion of others, in 
proportion to the appurtenant interest of theit respective units in the cotnmon 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.” 
SEC. 2. Subsections (b) and (c) of Section 3 of the Act are also amended to read as follows: 
“@) ‘Unit’ means a part of the condominium project intended for any type of 
independent use of ownership, includmg one or more room 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: PROWDED, THAT IN THE CASE OF INDUSTRIAL ESTATES, 


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THE BUILDINGS, PLANTS, HOUSES, RECREATIONAL FACILITIES 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 into condominium 
UNITS, including all stmctwes thereon: PROVTDED, 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 
INFRASTMCTURE . 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 of the Act 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 INCLUDE 
PROVISIONS FOR STAFF HOUSING AND RECREATIONAL FACILITIES 
PROVIDED WITH ROADS, WATER SUPPLY FACILITIES, 
ELECTRICAL 
FACILITIES, COMMUNICATION FACILITIES, 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 ALLOCATION OF AREAS. 
INDUSTRIAL 
ESTATES MAY ALSO INCLUDE SCIENCE AND TECHNOLOGY PARIC%” 
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 a d  doors thereof: PROWDED, THAT IN THE CASE OF AN 
INDUSTRIAL ESTATE, THE WHOLE BUILDINGS, PLANTS OR FACTORIES IN A 


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CONDOMINIUM PROJECT MAY BE CONSIDERED AS SEPARATE UNITS 
DEFINED UNDER SECTION 3 HEREOF. 
“(b) THE BOUNDARY OF A UNIT SHALL INCLUDE THE OUTER 
SURFACES OF THE PERIMETER WALLS 
OR 
FENCES, 
EXCEPT IN 
CONDOMINIUM PROJECTS LOCATED INSIDE THE INDUSTRIAL ESTATES. 
The following are not part of the unit: bearing walls, columns, floors, roof, foundations and 
other common structural elements of the buildings; lobbies, stairways, hallways and other 
areas of common use, elevator equipment and shafts, central heating, central refrigeration 
and central air conditioning equipment, reservoir, tanks, pumps and other central services 
and facilities, pipes, ducts, flues, chutes, conduits, wires and other utility installations, 
whefever 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 hls own unit: PROVIDED, 
HOWEVER, THAT IN THE 
CASE OF A CONDOMINIUM UNIT IN AN INDUSTW 
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 THE PROJECTS 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 CORPORATION IN ACCORDANCE WITH THE PROVISIONS 
OF THE CORPORATION CODE. The term of the said corporation shall be coterminous 
with the duration of the condominium projects, the provisions of the Corporation Law to 
the contrary notwithstanding.” 
SEC. 6. Section 12 of the Act is herby amended to read as follows: 


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“Sec 12. [In case of involuntary dissolution of a condominium corporation for any 
of the causes by the law, the common areas owned or held by the corporation shall, by way 
of liquidation, be transferredpro-indiviro and in proportion to their interest in 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 liquidauon 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 the condominium projects shall fully apply.] THE DISSOLUTION OF 
THE CONDOMINIUM CORPORATION IN ANY MANNER AND FOR ANY OF 
THE 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 THE 
CONDOMINIUM PROJECTS 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. THE EXISTING LAWS ON BALANCED HOUSING 
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. Separabikg Chm. - If any provision of this Act is held unconstitutional or invalid, 
all other provisions not affected thereby ‘shall remain valid. 


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SEC. 10. Repealing Ciame. - 
All laws, acts, presidential decrees, executive orders, 
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proclamation and/or adrmnistrative regulations that are inconsistent with the provisions of this Act, 
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are hereby amended, modified, superseded or repealed.accordingly. 
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SEC. 11. Efi&i&. - This Act shall take effect fifteen (15) days following its publication in 
the Official Gazette or h at least two (2) newspapers of general drculation, whichever comes hrst. 
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Approved,