|Home » Articles » Real Estate|
Top 6 Things to Consider Before Buying a Condominium
In the Philippines, a condominium building is any vertical development, ranging from, say, 5 to 50-stories tall comprising of, say, a hundred to 500 individually-owned units per building wherein the units share walls.
In the United States, condominiums also usually share walls, although, that is not always the case. There, many condominiums resemble what may appear to us here in the Philippines like townhouses, row houses or apartment complexes that may be only 1 to 2 stories tall. The similarity is in the extent of ownership. Here are the top six (6) things to consider before buying a condominium.
1.) Extent of ownership in a condominium project
What makes a condominium project unique is not the number of stories they have or whether the units share walls or not. What makes it unique is that each home buyer owns his unit space but shares ownership and use of the common areas and there is no individual ownership of a plot of land. The entire land on which the condominium project stands is owned in common by all the homeowners.
2.) Condominiums are set up like a corporation
Though, it’s not required by law for a condominium project to be set up as a corporation, the fact that all local condominium developers also target foreign buyers makes this necessary. Foreigners cannot own or co-own land in the Philippines; they can only buy into a corporation that owns land.
This, to me, is the most important thing to consider when buying a condominium unit. As a unit owner, you become a shareholder of the condominium corporation. One unit is equal to one share (that is proportionate to the size and price of your unit) in the corporation which is then equal to a proportionate vote.
If there are 500 individually-owned units in the condominium you are buying into, it means there are 499 other incorporators, with varying motivations and idiosyncrasies, who have more or less the same stake and voting power as you do. Everyone, through the condominium corporation, owns all the common areas in the condominium and the land on which the building stands.
Like in any corporation, certain issues and problems will arise that can only be decided through votes by the shareholders or unit owners. As such, some unit owners will lose and some will win. Later, I shall discuss the most important issue that condominium owners will inevitably decide on.
3.) Condominium unit owners can only obtain a CCT and not a TCT
Ownership of a condominium unit is evidenced by a CCT or Condominium Certificate of Title. Unlike a TCT or Transfer Certificate of Title which is evidence of ownership of a traditional house and gives the homeowner absolute ownership of the "inside” and "outside” of his house up to the boundaries of his lot, a CCT only endows the condo buyer ownership of the "inside” of his unit. By the way, a townhouse owner is also issued a TCT that entitles him ownership of his unit and the land on which his unit stands.
4.) Condominiums have a life span of 50 years
Although, the law does not explicitly say that condominiums have a life span of 50 years, it definitely implies so. Section 8c of The Condominium Act says:
That project has been in existence in excess of 50 years; that it is obsolete and uneconomical, and that condominium owners holding in aggregate more than 50 percent interest in the common areas are opposed to repair or restoration or remodeling or modernizing of the project…
In such case, the owners can vote to have the building demolished which presents them two options:
Sell the land and the scrap from the demolished building, deduct the cost of demolition and divide the net proceeds among the owners, or
Strike a deal with the original developer or another developer to build a new condominium on their land. But until such time that the new project is completed, the owners will have to live in a temporary home which may take 2 to 4 years.
You might be laughing at this point telling yourself: "I’ll be dead by the time my condo reaches 50 years old.”
This leads us to another point:
5.) A condominium is not an ideal inheritance for your children or grandchildren
By the time you pass on your condo to your heir, it may no longer be ideal for dwelling. If you ask me, 50 years is too long given the propensity of many developers to build very tall condominiums. The taller a building is, the more prone it is to the ravages of time and harsh environmental conditions, ergo, the shorter its life span. They are also the most technologically-dependent type of housing.
Short of 10 years, 40 years from now, will future buildings be using the same electrical, water or cooling systems that buildings are employing today? Will replacing these systems, even just their cables, pipes and conduits (which are mostly embedded in the walls) in a, say, 30-story condominium, be feasible? How will you replace a totally broken down elevator in such a building? Will the elevators that we have now still be the same mode for transporting residents up and down a building?
At the very least, modern condominiums today will become eyesores 50 years from now; they will be drowned out by future architectural designs.
6.) Association dues is not the only expense that you will have to pay
Payment of association dues is not unique to condominiums since owners of single-detached houses in subdivisions and owners of townhouses also pay association dues for the maintenance of common areas, solid waste management, security and more. But association dues in condominiums are highest per square meter.
The following are the other expenses that you shall pay when living in a condominium:
Given these 6 things to consider before buying a condominium unit, does it mean you shouldn’t buy a condo?
No, it does not; it depends on the lifestyle problems you want solved.
Author: Cecilio A. Sanchez, Jr. (Licensed Real Estate Broker)
"Top 6 Things to Consider Before Buying a Condominium" was written by admin under the Real Estate category. It has been read times and generated 0 comments. The article was created on .
|Total comments: 0|