4 Things You Should Know Before Buying a Condominium
4 Things You Should Know Before Buying a Condominium | Sayod | Are you thinking about buying a condominium? With prices of residential lots sky-high in many major business districts, owning a condominium unit offers a more practical way to take up residence in the city. While units are generally smaller than most standalone houses, condominiums provide less commute time to and from the office. In addition, they’re usually located in proximity to modern necessities such as banks, supermarkets, entertainment centers, and shops. Even better, condominiums usually come with an assortment of recreational facilties and amenities. This includes swimming pools, gyms, mini-parks, and event halls.
However, being a condo owner isn’t exactly the same as owning a house and lot. Prospective buyers keen on buying a condominium should note a few differences. This way, they’ll have a better understanding and appreciation of their hard-earned investment.
Specifically, below are four things you should know before buying a condominium.
1. Foreigners Can Also Own Condominium Units
Current laws on property ownership prohibit foreigners from owning land in the Philippines. However, they can make outright purchases of condominium units. The definition of foreign includes former Filipinos who renounced their citizenship in favor of their adopted country. This is according to Republic Act 4726, also known as the Condominium Act.
Note that there is a limit to the extent of foreign ownership in condos. The Condominium Act also specifies that total foreign ownership of any condominium project should not exceed 40%.
2. Condominium Ownership Is Limited to the Unit and Share of Common Areas
Condominiums are a great investment that maximizes the use of a parcel of land. Instead of the traditional ownership setup of one owner per property, condos fit hundreds or thousands of unit owners within the same space. Condominiums usually comprise several floors, so any number of residents can occupy the same land area at a given time.
Instead of getting to buy land, condominium unit owners get to own the unit itself. A purchase usually consists of a studio or one, two, or three-bedroom unit. By definition, ownership is limited to the four (or more) walls enclosing a unit. All other common areas of a condominium complex such as walkways, lobbies, and amenities are owned by the designated condominium homeowners association (HOA). The HOA is the legal organization tasked to manage the property and ensure its upkeep. More importantly, the HOA holds ownership of the condo’s land and its common areas.
3. Homeowner Association Dues Are Both Inevitable and Necessary
In order to preserve the beauty and function of the entire condominium complex, the HOA charges homeowners with a monthly fee called association dues. The money collected will bankroll the HOA’s adminstrative and maintenance operations. It covers the repair and maintenance budget for the entire complex. In addition, the association dues also cover the salaries and wages of condominium employees such as receptionists, security guards, maintenance workers, and administrative staff.
Dues are computed on a per square meter basis. This means that unit owner pay a fixed rate multiplied by the unit’s area in sq/m. It doesn’t matter if there are residents living in a unit. The HOA will collect association dues regardless of the unit’s state of occupancy.
4. Condominiums Can Operate for More Than 50 Years
A myth that can potentially turn off prospective buyers remains heavily in circulation today. It claims that condominiums in the Philippines can operate for up to 50 years only. After this period, any unit owner can petition the HOA to sell the property and divide the proceeds. This seemingly erroneous interpretation of the Condominium Act makes it seem that after reaching the age of 50 years, condominiums are no longer habitable.
In fact, section 8c of the Condominium Act specifies that a group of owners can request the partition of the property only when it fulfills three conditions. These are:
- The project is more than 50 years
- That it is obsolete and uneconomical
- Condominium owners holding more than 50% ownership oppose the further repair or rehabilitation of the project
An ownership group can only petition the HOA if the condominium meets all the above conditions. Only then can they ask the HOA to sell the property and divide the proceeds among the shareholders.
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Do you need help buying a condominium unit or selling/renting out your existing unit? Let Ohmyhome help you get the best deals available. Learn more on the finer points of investing in a condominium by visiting Ohmyhome Philippines. You can also subscribe to our Facebook, Instagram, or YouTube accounts to get the latest news and trends on the Philippine real estate scene. For even better convenience, download the Ohmyhome mobile app for iOS and Android.
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