Purchasing a condominium is one of the wise investments that a person may consider, but there are still some lingering questions on the value of condo units after 50 years. Things can get unpredictable when it comes to purchasing a property. A place that is considered to be a real estate hotspot at present may be of no value in the coming years. This is why some people who want to invest their money in a condominium are a little bit hesitant because of the risks involved.
Truth be told, structures and buildings are not damage-proof. Once they are exposed to harsh elements such as heavy rains and strong winds, they will become more prone to damage. When it comes to determining the value of a condominium, the location is an important factor to consider. Even locations deemed as the central business district is not immune to urban decay. If the location shows some inevitable signs of aging, there can be a time when the building you are residing will be demolished and this is a harsh reality every condo owner needs to face and this is where most of potential buyers’ concerns are coming from. Your mind might be clouded with doubts and fears due to preconceived notions about buying a condo unit, but before you get completely discouraged, here are some answers to common questions about owning a condo unit.
Are there limitations on the ownership in a condo project?
Unlike landed properties, homeowners have limited entitlement when it comes to a condominium project. Homeowners only possess the specific dwellings, and the land where the building stands is not part of the homeowner’s entitlement. In addition, they do not hold exclusive ownership to the common areas of a condominium. Condominium corporation is composed of shareholders, who happen to be the individual unit owners. The equation for condominium corporation is that one unit is equal to one share.
Is there a law that tackles condominium corporation?
The Republic Act No. 4726 or the Condominium Act is a law that provides details of the condominium ownership. Although the Act does not necessarily talk about foreign buyers, it can serve as a buying guide for foreigners who want to buy into a corporation. Since foreigners are prohibited to own land in the Philippines, their only option is a condo project. However, foreign ownership must not exceed 40 percent.
Does the decision of shareholders need to be in unison?
Since a condominium corporation is profit-oriented, issues within a condominium must be decided through the shareholders’ votes. Whether issues are as mundane as having the common areas repainted, the shareholders have to decide in unison.
Does a condominium building have a lifespan?
The law does not specifically indicate that a condo building becomes obsolete after 50 years. However, Section 8c implies: “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”
It is up to the shareholders to decide if the building will be demolished. There are two options that shareholders to the condominium corporation can consider: 1. Sell the land; 2. Make a deal with the original developer.
While buying a condominium is not discouraged, a buyer must keep in mind that ownership of a condominium is limited compared to a landed property. The decision to buy a condominium will depend on the buyer’s preferences and the benefits they can obtain from a condominium such as convenience.
