Republic of the Philippines
House of Representatives
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 440 i

Introduced by Representative Giorgidi B. Aggabao

Explanatory Note

Foreign Direct Investment (FDI) has served as an important stimulus to the
Philippine economy , generating additional employment and economic activity amid
the relative scarcity of domestic capital resources. The Philippines has to do more,
however , in order to attract and capture more foreign investments, in terms of more
liberal incentives, efficient infrastructure system and more vibrant market.

This bill seeks to amend Republic Act No. 4726 otherwise known as the
“Condominium Law” by including 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 thereby giving
him a more stable asset base which he can then use for financial leveraging and related
purposes.

Short of a constitutional amendment that would achieve this objective, 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,

Approval of this bill is earnestly sought.

GIORGIDI B. AGGABAO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 4401

Introduced by Representative Giorgidi B. Aggabao

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 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 recognized by law, on property in the Civil Code 5 and
other pertinent laws.”

SEC. 2, Subsections (b) and (¢) of Section 3 cf 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 INDUSTRIAL ESTATES, 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 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 PRINIARILY FOR THE USE OF A COMMUNITY OF
INDUSTRIES WHICH MAY INCLUDE PROVISIONS FOR STAFF
HOUSING AND RECREATIONAL FACILITIES PROVIDED WITH
ROADS, WATER SUPPLY 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
ALLOCATIONS OF AREAS. INDUSTRIAL ESTATES MAY ALSO
INCLUDE SCIENCES AND TECHNOLOGY PARKS. ”


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 waits, floors, ceilings, windows and doors thereof. PROVIDED,
THAT IN THE 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
PERINIETER WALLS OR FENCES EXCEPT IN CONDOMINIUM
PROJECTS LOCATED INSIDE THE INDUSTRIAL ESTATE, the
following are not part of the unit hearing wails, columns, floors, roofs,
foundations and other common structural elements of the buildings;
lobbies, stairways, hallways, rand 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, wherever 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, citings, floors, windows and doors bounding hisown
unit. PROVIDED, HOWEVER, THAT IN THE CASE OF
ACONDOIVIINIUM 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 or THE SECURITIES AND
EXCHANGE COMMISSION (SEC) TO REGTSTER A CONDIMIUM
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 ofthe 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 shaii, 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 rhembers 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
NIANNER 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 the Act and snall read
as follows:

“SECTION 25. TI-IE BUILDING AND DESIGN STANDARDS FOR
CONDOMINIUM PROIECT 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 CONDOMINIUNI 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 AND
DVELOPMENT 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 Clause. - 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. Repeaiing Clause. - Alll 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,