The Philippine Condominium Act (Republic Act 4726), enacted in 1966 and amended over the decades, is the foundational legal framework governing condominium ownership in the Philippines. For investors — particularly foreigners — purchasing condominium units in Boracay, understanding this law is not optional. It defines your rights, your obligations, and the governance structure of the development you are buying into.
The Foreign Ownership Cap Explained
The most critical provision for foreign investors is the 40% foreign ownership limit. Under the Condominium Act, no more than 40% of the total floor area of a condominium project may be owned by non-Filipino citizens or non-Filipino corporations. The remaining 60% must be owned by Filipino citizens or corporations that are at least 60% Filipino-owned.
In practice, this means that the first 40% of a building's units sold to foreign buyers fills the foreign allocation, and any subsequent foreign buyer must wait for a unit in the foreign allocation to become available on the resale market. In popular Boracay developments, the foreign allocation can fill quickly during the pre-selling phase.
Always confirm how much of the foreign allocation remains available in any target development before assuming you can proceed with a purchase.
The Condominium Corporation
Every legally constituted condominium development in the Philippines has a condominium corporation — an SEC-registered entity formed by the unit owners collectively. The condominium corporation owns and manages the common areas (lobby, corridors, pool, gym, parking, etc.) and collects monthly maintenance dues from unit owners to fund these operations.
Each unit owner is automatically a member of the condominium corporation and has voting rights proportional to their unit's interest in the corporation. The board of directors, elected by unit owners, makes decisions on maintenance, assessments, and management contracts.
Understanding the condominium corporation's financial health — its reserve funds, pending special assessments, and management efficiency — is a critical part of due diligence.
The Master Deed and Declaration of Restrictions
The Master Deed is the foundational document of every condominium development. It defines the boundaries of individual units, the common areas, and the percentage interest of each unit in the common areas. The Declaration of Restrictions sets out the rules and limitations governing unit use, which may include restrictions on subletting, short-term rental, pets, and renovations.
For Boracay investors planning to rent their units, the Declaration of Restrictions must be carefully reviewed. Some developments restrict independent short-term subletting in favor of the developer's rental pool program.
Violating Declaration of Restrictions can result in fines, loss of rental participation rights, or other penalties from the condominium corporation.
Title: CCT vs. TCT
Condominium units in the Philippines are evidenced by a Condominium Certificate of Title (CCT), not a TCT (Transfer Certificate of Title). The CCT is issued by the Registry of Deeds in the province where the condominium is located (for Boracay, this is Kalibo, Aklan). The CCT confirms ownership of the individual unit and the proportionate interest in the common areas.
For foreign buyers, the CCT is the ultimate proof of ownership and should be physically held by the owner or their designated safe custody arrangement.