Investments these days are in many different forms, mediums, and ways. It goes hand in hand with development and innovations, adapting to the current technologies such as investments in stocks, crypto currencies, NFT and such. But one of the most traditional yet still as efficient ways of investing is through real estate properties such as lands, apartments, and condominiums where condominiums are said to be one of the best choice if you are looking at something you can really use for business. But of course, before truly giving and entrusting your money out, one should always dig deep to see the pros and cons, and the risks of our choices.
It is undeniable that many buyers are sometimes being very sceptical in choosing whether to buy a condominium unit or to build a house and lot. Buying a condo unit is relatively cheaper and easier to attain than building your own space. But some thinks that condo unit are cheaper because of the myth that it is only good for 50 years and after that it will be demolished. Also, some are still wondering about how does ownership works in condominium units. But here are the facts that you should check about owning a condo unit.
There are two types of property ownership. One is the leasehold ownership while one is the perpetual ownership. In the leasehold type of ownership, you only own the right to manage a property every way you want but not the land it is built on. Most of the time, leasehold ownerships are limited only up to 50 years, and can be extended to 25 years or be given back to the owner/developer of the land. What one can gain from this ownership is the habitation and return of investment in cases that it will be used for business, but this property ownership cannot be given as inheritance since it is just like renting just for a very long period of time, and in advance.
Another type of ownership is the perpetual ownership where you have the right not just over the building of your property but also the land it is built on. For example is in condominium units where if you’ll own one under a perpetual ownership, you have a lifetime rights and privilege of your unit and all other common spaces and amenities of the building.
This is why, the myth of owning it for just 50 years are just mere fallacy and misinterpretation of the existing act about condominium property. In fact, the constitution here in the Philippines has a law that protects the interest of the unit owners in a condo project. The Republic Act 4726 or The Condominium Act of the Philippines which was mandated on June 18, 1966.
An excerpt of Section 8 is shown below to further discuss the myth regarding 50 years ownership.
SECTION 8. Where several persons own condominiums in a condominium project, an action may be brought by one or more such persons for partition thereof by sale of the entire project, as if the owners of all of the condominiums in such project were co-owners of the entire project in the same proportion as their interests in the common areas: Provided, however, that a partition shall be made only upon a showing:
- That three (3) years after damage or destruction to the project which renders material part thereof unit for its use prior thereto, the project has not been rebuilt or repaired substantially to its state prior to its damage or destruction, or
- That damage or destruction to the project has rendered one-half or more of the units therein untenantable and that condominium owners holding in aggregate more than thirty percent interest in the common areas are opposed to repair or restoration of the project; or
- That the project has been in existence in excess of fifty years, that it is obsolete and uneconomic, and that condominium owners holding in aggregate more than fifty percent interest in the common areas are opposed to repair or restoration or remodeling or modernizing of the project; or
- That the project or a material part thereof has been condemned or expropriated and that the project is no longer viable, or that the condominium owners holding in aggregate more than seventy percent interest in the common areas are opposed to continuation of the condominium regime after expropriation or condemnation of a material portion thereof; or
- That the conditions for such partition by sale set forth in the declaration of restrictions, duly registered in accordance with the terms of this Act, have been met.
Misconceptions and understanding may have arisen from not critically examining all the terms of this act. It is true that it says that there are limitation present in continuing the existence of the unit such as being “obsolete and uneconomic,” we may have not yet seen a lot of modern condominium repaired and developed through modern ways, engineering, and technologies to maintain its form and classic style and design while making it stay economical and habitable. Also, if you are going to read this carefully, “that condominium owners holding in aggregate more than fifty percent interest in the common areas are opposed to repair or restoration or remodeling or modernizing of the project”, it is clear that if more than 50% of the ownership approves to the remodelling and modernizing of the building, it will never cease to stand.
Most especially, in perpetual ownership, it means you own your unit and you have a right to common areas, has a co-ownership of the condominium land or lot area of the project for a lifetime. It cannot be possible that when you buy a condominium property, your investment will be gone after 50 years. Once a condominium unit is fully done and turned over, all owners of the unit became like owners of a corporation where they will be deciding in unison in whatever to do with their corporation (their condo building) when time of restorations are already needed.
So it will be upon all the owners to vote whether to remodel, sell, or demolish the property. When this happened, you will have a share of the proceeds of the sale.
That’s why it is very important to know all the terms and stipulations there is before buying your preferred unit. If you wish to have a perpetual ownership of your dream unit, there are many developers that are offering perpetual ownership these days. One of them is the Vista Residences who can offer you great deals in a very reasonable prices.
For more information on Vista Residences, email [email protected], follow @VistaResidencesOfficial on Facebook, Twitter, Instagram, and YouTube, or call the Marketing Office at 0999 886 4262 / 0917 582 5167.
