Module 2

Special and Technical

Knowledge

Subdivision Development
Medium Cost & Open Market Housing
Economic & Socialized Housing
RA 7279 Urban Development and Housing Act
Condominiums
Other Real Estate Holdings
Legal Aspects of Sale, Mortgage and Lease
Documentation and Registration
6 SUBDIVISION DEVELOPMENT

RELEVANT TERMS

Subdivision
Division of a tract or parcel of land into two or more lots, site other divisions for the purpose, whether immediate
or future, of a sale or building development. It also includes re-subdivision.

Subdivision project
Shall mean a tract or a parcel of land registered under Act No. 496 which is partitioned primarily for residential
purpose into individual lots with or without improvements thereon, and offered to the public for sale, in cash or in
installment terms. It shall include all residential, commercial, industrial and recreational areas as well as open
spaces and other community and public areas in the project. (PD 95)

Subdivision lot
Any of the lots, wherever residential, commercial, industrial, or recreational, in a subdivision project

Subdivision Development
The conversion of unimproved raw land into a site that will be capable of supporting a desired activity and intended
usage, which may be for residential, commercial, or industrial purposes.

Open space
An area reserved exclusively for parks, playgrounds recreational uses, schools, roads, places of worship, hospitals,
Health center barangay centers and other similar facilities and amenities.

LAWS & ISSUANCES

PD 957 (Subdivision & Condominium Buyers Protective Decree)
Regulating the Sale of Subdivision Lots and Condominiums, Providing Penalties For Violations Thereof

PD 1216 (Amending PD 957)

Defining “Open Space” in Residential Subdivision and amending Se. 31 of PD 957Requiring Subdivision Owners to
Provide Roads, Alleys, Sidewalks and Reserve Open Space for Parks or Recreational Use

PD 1344
Empowering the NHA to Issue Writ of Execution in the Enforcement of its Decisions Under P.D. 957

BP 220
An Act Authorizing the Ministry of Human Settlements to Established and Promulgate Different Levels of Standards
and Technical Requirements for Economic and Socialized Housing Projects in Urban and Rural Areas from Those
Provided Under Presidential Decrees 957, 1216,1096 & 1185.

RA 7279 Urban Development and Housing Act

An Act to Provide For a Comprehensive and Continuing Urban Development and Housing Program, Established the
Mechanism for its Implementation, and for Other Purposes

RA 4726 The Condominium Act.

An Act to Define Condominium, Established Requirements for its Creation, and its Incidents

RA 7899 Amending Sections 4 and 6 of R.A 4726 (Condominium Act)

Defined requirements for amended/revocation of enabling or master deed of condominium and the disposal of
common areas owned or held by a condominium corporation
RA 6552 Realty Installment Buyer Protection Act
Maceda Law (please see Chapter_)

EO 71
Devolution of HLURB Function to Approved Subdivision Plan to LGUS

EO 184
Creating Socialized Housing One-Stop Processing Centers

CLASSIFICATION OF SUBDIVISIONS

AS TO COMPLEXITY

Simple
Development of a parcel of land into two (2) or more lots without need of a road and open space or playground

ACCORDING TO USE

Residential
Conversion of raw land into safe and serviceable areas for dwellings or permanent abodes with associated facilities

Commercial
-Development of strategically located property for office, retail, wholesale and financial activities and also for
general services and traveler’s needs. Its viability is dependent on the purchasing power of the supporting
population within the area and its accessibility.

Industrial
A tract of land partitioned into plots for sale or lease to establishments engaged primarily in industrial production
services

Institutional
Devoted to the use of organizations that are charitable, educational, religious, or the like in nature and character.

Resort or recreational
A planned community where a major part of activity is relaxation or recreation

Farm lot subdivision

A planned community intended primarily for intensive agricultural activities and secondarily, for housing

TYPES OF RESIDENTIAL SUBDIVISIONS

Single Family Development

Single dwelling unit on each lot with direct access to the street

Detached

Attached (e.g. duplex)

Multi-Family Development
More than one dwelling unit on each building (e.g. tenement housing multi-level housing)
DEVELOPMENT STANDARDS APPLIED- BP 220
Low-Cost Housing Packages

- Level 1-a (Socialized housing) – Price range : Php 400,000 and below (HUDDC MC 1, s, 2008)
- Economic Housing
● Level 1-B -above Php 400,000 to Php 500,000 (HUDDC MC 1,s, 2008 & HUDDC MC 5, s,2007)
● Level 2 –Price range; above Php 500,000 to Php 1,250,000 (HUDDC MC 5, s, 2007)
● Level 3 –Price range: above Php 1,250,000 to Php 3,000,000 (HUDDC MC 5, s.2007)

DEVELOPMENT STANDARDS APPLIED – PD957

● Medium cost –Price range: Above Php 3,000,000 (HUDDC MC 5, s.2005)
● Open market –Price range: Above Php 4,000,000 (HUDDC MC 5, s. 2007)

TYPES OF APPROVAL REQUIRED FOR DEVELOPMENT PROPOSAL

1. Location Clearance issued by the Housing and Land Use Regulatory Board for Projects of local, regional
and national significance.
2. Building Permit issued by the municipal or district engineer to proponents of construction projects who
have satisfactorily complied with the requirements as to build standards.
3. Environmental Compliance Certificate issued by the Environmental Management Bureau of the
Department of Environment and Natural Resources (DENR)

LOCATIONAL CLEARANCE PROCESS

Notice to Public of Proposal

As a prerequisite to locational clearance processing, a billboard must be setup on the project site to serve as a
notice to the public. Size of the billboard and duration of display are specified. Should there be objections from the
public, these are forwarded to the HLRP and EMB-DENR which may conduct field verification and inspection, the
results of which shall have a bearing on conducted and held to ascertain the validity and veracity of complaints.

Guidelines and Standards for Approval

Guidelines and standards are embodied in the rules and regulations governing the conduct of clearance and permit
issuances.

Decision by Authority
The decision on application is either approved, approved with conditions, or denied. In the case of denial, the
grounds or bases for denial are enunciated, thus, in some cases, some proponents are allowed to revise their plants
to comfort with regulations and public demand. In the case of conditional approval, a monitoring feedback system
ascertains are complied with within the specified.

Conditions Usually Attached to Locational Clearance

1. No major expansion, alteration and/or improvement shall be introduced thereto without prior clearance
from ”this” office.
2. No activity other than that applied for shall be conducted within the project site.
3. Provisions as to setbacks, yard requirements, bulk, easement and others shall strictly conform with those
of the National Building Code and/or the HLURB-approved zoning ordinance whichever is applicable.
4. A clearance from the EMB-DENR shall be secured prior to its actual operations Conditions attached to
Development Permit are varied but center mostly on compliance with revised or corrected site plan and
other corrected specifications clearly marked on the plans. EMB-DENR also prescribes conditions before
actual operation and a separate monitoring system checks compliance with the set conditions.

REVOCATION OR MODIFICATION OF APPROVAL

Any complaint against the location and/or pollution of the said project found valid after due hearing shall be
sufficient cause for revocation of the clearance. Furthermore, the clearance shall be considered automatically
revoked if not used within specified period from the issuance thereof.

Alteration of Plan

No owner or developer shall alter the roads, infrastructure and utilities and other forms of subdivision
developments without the permission of the HLRB and the written conformity or consent of the duly-organize
homeowners association or in the absence of the letter, by the majority of the lot buyers in the subdivision.

Administrative Review of Decision of Authorities

Any person aggrieved by the decision or action of the application for permit may appeal to the HLRB Board of
Commissioners. Further appeal can be made to the Office of the President.

The following are grounds for filling a motion for reconsideration:

● Fraud , accident, mistake or excusable negligence;
● Newly-discovered evidence which materially affects the decision rendered; and
● Errors of law or irregularities prejudicial to the substantial rights and interest of the party adversely
affected.

Judicial Review of Decision of Authority

● The findings of acts made therein must be respected, so long as they are supported by substantial
evidence, even if not overwhelming or preponderant. It is not for the reviewing court to weight the
conflicting evidence, determine the credibility of the witnesses, or otherwise substitute its judgment for
that of the administrative agency on the sufficiency of the evidence. The administrative decisions in
matters within the executive jurisdiction can only be set aside on proof of gross abuse of discretion, fraud,
or error of law. These principles negate the power of the reviewing court to re-examine the sufficiency
therein and do not authorized the court to receive additional evidences that may have not been submitted
to the administrative agency concerned.

OPEN SPACE REQUIREMENT

For subdivision project one (1) hectares or more, the owner or developer shall reserve thirty percent (30%) of the
gross for open space. Such open space shall have the following standards allocated exclusively for parks,
playgrounds and recreational use:

a. 9% of gross area for high density or social housing ( 66 to 100 family lot per gross hectares)
b. 7% of gross area for medium-density or economic housing (21 to 65 family lot per gross hectares).
c. 3.5% of gross area low-density or open market housing (20 family lots and below per gross hectares).

These areas reserved for parks, playgrounds and recreational use shall be non-alienable public lands, and
non-buildable. The plans of the subdivision project shall include tree planting on such parts of the subdivision.

7 MEDIUM COST AND OPEN MARKET HOUSING

IMPLENTING RULES & REGULATIONS OF PD 957, 1216, 1344 OTHER RELATED LAWS

Residential subdivision projects shall conform with the

1. Minimum design standards set by the IRR of PD 957
2. Applicable LGU zoning ordinances
3. Pertinent provisions of the National Building Code if project is with housing component

SITE CRITERIA
● Conformity with Zoning Ordinance/Comprehensive Land Use Plan
o Subdivision projects shall be located in residential zones or other areas appropriate for residential
uses.
● If there is no Zoning Ordinance or approved Comprehensive Land Use Plan, the dominant land use
principle and site suitability factors cited herein shall be used in determining suitability of a project.
● Subdivision projects supportive of other major urban activities (e.g. housing for industrial workers) may be
allowed in areas zoned for the said urban activities.

PHYSICAL SUITABILITY
● Subdivision project shall be located within suitable sites for housing and outside hazard prone areas and
protection areas as provided for by pertinent laws.
● The site shall be stable enough to accommodate foundation load without excessive earthmoving, grading
or cutting and filling.

Accessibility
● The site must be served by a road that is readily accessible to public transportation lines.
● Access road shall conform with the standards set in PD 957 IRR to accommodate expected demand cause
by the development of the area
● In no case shall a subdivision project be approved without the necessary access road/right-of-way.
● Access road right-of-way may be constructed either by the developer or the local government unit.

PLANNING CONSIDERATIONS

AREA PLANNING
● Planning and designing of subdivision projects shall take into account the following:
o Safety and general welfare of the future occupants
o Adequate, safe efficient and integrative road circulation system servicing every lot therein;
o Judicious allocation of land uses for diversity and amenity;
o Preservation of site;
o Proper siting or orientation of lots;
o Harmony with existing and proposed development in the vicinity;
o Application of workable design principles or parameters for a well planned and self- sustaining
● When a developer or planner submits a Planned Unit Development (PUD) type of Project, the layout shall
likewise conform to the standards for residential/condominium projects.

Open spaces
Open spaces shall conform with the provisions of P.D. 1216 and its implementing rules and shall include the
following:
● Streets – adequate and safe means of vehicular and pedestrian circulation and easements for utilities and
planting strips, shall be provide.
 ● Walks – paved walks shall be provided to the living units from streets, parking spaces and from living units
to play areas.
● Parks and playground – suitable recreational areas may be allocated within the subdivision.
o Where applicable, a hierarchy of such recreational areas may be provided for, such that, a
strategically located main park area is supplemented or completed by one or more smaller
pocket(s) or areas for recreational use.
o These areas must be accessible to living units and free from any form of hazard or risk.
o Said parks and playgrounds shall be cleared and free from any debris.
o Parks and playgrounds as much as possible shall be at street level.

Facilities and Amenities

Areas required for subdivision facilities and amenities shall be judiciously allocated in accordance with the
provision specified

Density
● Density of subdivision project shall conform with the residential densities set forth in the zoning ordinance
of the city/municipality where project is located.
● Where there is a mixture of housing types within the subdivision (such as single detached, row house,
etc.) density shall include the total number of

Streets
● Should conform to the contours of land as far as practicable.
● Proposed project adjoins a developed property – roads connected/integrated aligned with existing ones
● Proposed project adjoins undeveloped property – provision for future connection is mandatory.
● As far as practicable, streets shall be laid out at right angles to minimize critical intersections such as blind
corners, skew junction, etc.
● Roads shall conform to sound engineering practices.
● Comply with BP 344 (Accessibility Law)

INSTALLATION OF STREET NAMES/SIGNS

The developer shall bear the cost of installation of street names/signs coincident with the construction of streets

DESIGN PARAMETERS

LAND ALLOCATION
For open market and medium cost subdivision projects with an area of one (1) hectares or more, the percentage
(%) allocation of land shall be as follows:

● Saleable area – maximum of 70% of the gross area

● Non-saleable area – minimum of 30% of the gross area.

Parks and Playgrounds

● Non-building area
● Allocation mandatory for projects 1 hectares or more
● Should be strategically located
● Area allocated not less than 100 square meters

Community Facilities
● Mandatory provision of areas for community facilities for areas 1 ha. & above
● Dwelling units multi-storey structure plus the total number of lots intended for single and semi-detached
houses.
SITE PRESERVATION

Slope
● The finished grade shall have a desired slope to allow rain water to be channeled into street drains. Where
cut and fill is necessary an appropriate grade shall be attained to prevent any depression in the area.
● Grading and ditching shall be executed in a manner that will prevent erosion or flooding of adjoining
properties.

Preservation of Site Assets

● Suitable trees with a caliper diameter of 200 millimeters or more, shrubs and desirable groundcover per
DENR rules shall be preserved.
● Where a good quality top soil exists in the site it shall be banked and shall be preserved for finishing
grades of yards, playgrounds, parks and garden area.

Ground Cover
Grass, shrubs, plants and other landscaping materials used for ground cover shall be of a variety appropriate for its
intended use and location. They shall be planted so as to allow well-tended cover of the sea.

EASEMENTS
Subdivision projects all observe and conform to the provision on easements as may be required by:
● Water bodies-Chapter IV , section 51 of the Water Code;
● Transmission Lines- National Power Corporation (NPC)
● Identified fault traces- PHIVOLCS per Resolution No. 515, Series of 1992;
● Other public utility companies and other entities’ right-of-way.
● National/local government units – for projects abutting national roads (primary roads) where adequate
easement shall be provide for, including loading and unloading areas
● Other related laws

CIRCULATION

Road network
● Should result into a hierarchy of functions and should define and serve the subdivision as one integrated
unit.
● Roads & path walks aligned – to facilitate movement and to link the subdivision to the nearest major
transportation route and/or adjacent property
● Existing roads improved in accordance with the standards set in the IRR.

No. of saleable Neighborhood Convenience Elementary High School Tricycle

lots and/or multi-purpose stores & other School Terminals
dwelling center Commercial
Centers
10 & below
11-99
100-499 X
500-999 X
1000-1499 X
1500-1999 X X X X
2000-2499 X X X X X
2500 & over x x X x x
 ● Mandatory non-saleable
● Optional saleable but when provided in the plan, the same shall be annotated in the title

● Developer may provide additional areas for community facilities in excess of the mandatory
requirements-deemed saleable

Hierarchy of Roads
● In no case shall a major road be less than 10 meters when used as main access road and/or as future
connection
● Maintain uniform width of road ROW in major roads

Major Road – a street or a road that services as the main traffic artery within the leading to major roads.

Collector Road- a street or a road that services pedestrian/vehicular traffic from minor roads leading to
major roads.

Minor Road – a road which main function is to provide direct access to lots and other activity centers.

Motor Courts – shall have a right-of-way of not less than 6 meters in width with provision for sufficient
space for vehicular turn around in the form of a cul-de-sac, loop, branch or “T”, with a maximum length of
60 meters inclusive of terminal.

Service Roads – roads which provide for the distribution of traffic among individual lots and activity
centers.
 Alley – a 3-meter wide walkway which shall be used to break a block and to serve pedestrians and for
emergency purposes. It shall not be used as access to property.

Carriageway – the part of a road used by vehicular traffic

Right-of-way - Any strip or area of land, including surface and overhead or underground space, which is granted by
deed or easement for the construction and maintenance of specified linear elements such as power and telephone
lines; roadways; gas, oil, water, and other pipelines; sewers.

In no case shall a major road be less than 10 meters when used as main access road and/or as future connection.

Road Right-of-Way (ROW)

● Interior subdivision must ROW to nearest public road and ROW shall be designated as interconnecting
road with a minimum width of 10 meters; lot must be annotated on title lot.
● Road lot must be donated and deemed turned over to the LGU upon completion of the said
interconnecting road

LOT REQUIREMENTS
Lot Layout

● Preserve site assets

● Proper siting orientation of lots
● Blending with existing & proposed development in the vicinity
● Application of workable design principles/parameters for a well-planned environment

Minimum Lot Area

● Saleable lots designated as duplex/single attached and/or row house lots-provide with housing units
● Price of saleable lots intended for single-detached units – NMT 40% of the maximum selling price of house
& lot packages

TYPES OF HOUSING OPEN MARKET (SQM) MEDIUM COST (COST)

A. SINGLE Detached 120 100
B. Duplex/Single Attached 96 80
C. Row house 60 50

Lot Design
● Saleable lots designed such that they are not bisected by political boundaries
● Lots shall be planned with adequate width for side yards
● Lots shall be protected against risks
● Lots shall not be laid out if potential risks exist (e.g. erosion, sides, flooring, fault lines, etc.)

Lot Frontage
The number of row houses shall not exceed 20 units per block/cluster but in no case shall this be beyond 100
meters in length

Length of Block
● Maximum length 400 meters
● Blocks exceeding 250 meters-provide with alley approximately at mid-length
Shelter Component
● Minimum floor area
o Open Market Housing – 42sq.m.
o Medium Cost Housing -30sq.m.

● Minimum level completion –complete house for all types of dwelling units based on submitted
specifications
● Firewall provision –conform with Fire Code; Mandatory for duplex/single attached units and every unit for
row houses
● Yard/Setback
● Conform to National Building Code

Water Supply System

● Mandatory connection to appropriate public water system or community system
● Public water system or community system not available –centralized water system accepted
● Every dwelling unit shall be served by individual supply of water sufficient to meet the total hourly
domestic needs of every household for any 8 hour period

Water Requirements
● Average Daily Demand (ADD) -150 Liters per capital per day (LPCPD)
● Fire Protection Demand – comply with National Fire Protection Code
● Water Tack Capacity -20% ADD plus fire reserve
● Pipes –conform to standards of Metropolitan Waterworks & Sewerage System (MWSS) and/or Local Water
Utilities Administration (LWUA)

Electrical Power Supply System

● Mandatory individual HH connection to primary and/or alternative sources of power
● Installation practices, materials and fixtures used – in accordance with Philippine Electrical Code and/or
local utility company.
● Provision of street lighting per pole is mandatory at 50-meter distance and every other pole if distance is
less than 50 meters.
● Electrical bills for streetlights shall be proportionately shouldered by the users thereof prior to issuance of
Certificate of Completion (COC) and turn-over of open space to LGU.

Sewage Disposal System

● May either be: connection to community sewer system – per Sanitation Code of the Philippines and other
applicable rules and regulations, or
● Where community sewer system is not available, sewage shall disposed of and treated in individual septic
tanks.- conform with Sanitation Code (PD 856) and National Plumbing Code of The Philippines (RA 1378).

Drainage System
● Conform with the natural drainage pattern of the subdivision site, and shall drain into appropriate water
bodies or public drainage system.
● In no case shall drainage outfalls drain into a private lot.
● Its layout shall conform with sound engineering design/ principles certified by a duly licensed civil/sanitary
engineer.
● Drain lines shall be of durable materials and approved installation practices.
● Underground drainage system shall be properly engineered and environmentally sound and shall be
provide with adequate Reinforced Concrete Pipes (RCP), catch basins manholes, inlets and cross drain for
efficient maintenance.
● Minimum drainage pipes diameter shall be 30 centimeters.
Garbage Disposal System
The subdivision shall have a sanitary and efficient refuse collection and disposal system, whether independently or
in conjunction with the municipal/city garbage collection and disposal services.

8 ECONOMIC HOUSING AND SOCIALIZED HOUSING

RELEVANT LAWS & ISSUANCES
BP 220 (1982) – Authorizing HLURB to prepare IRR for Economic & Socialized Housing Projects
PD 957 (1976) – Subdivision & Condominium Buyers Protection Decree
PD 1096 (1977) – National Building Code of the Philippines
PD 1216 (1977) –Defining “Open Space” in Residential Subdivisions
PD 1185 (1977) –Fire Code of the Philippines

REVISED DEFINATION OF HOUSING LOAN PACKAGES

HUDCC Circular Letter dated March 31, 1996

Socialized housing refers to housing programs and projects covering houses and lots or home lots only undertaken
by the Government or the private sector to the underprivileged and homeless citizens which shall include sites and
services development, long-term financing, liberalized terms on interest payments, and such other benefits in
accordance with the provisions of R.A. No. 7279 (Urban Development and housing Act).

Economic and socialized housing refers to housing units which are within the affordability levels of the average and
low-income earners, which is thirty percent (30%) of the gross family income as determined by the National
Economic Development Authority from time to time. It also refers to the government-initiated sites and service
development and construction of economic and socialized housing projects in depressed areas.

DESIGN STANDARDS
Development of economic& socialized housing projects shall conform with the
● Minimum design standards set by the IRRs for BP220
● Applicable LGU zoning ordinances
● Pertinent provisions of the National Building Code if project is with housing component

PARAMETERS USED IN FORMULATING STANDARDS

1. Protection and safety of life, limb, property and general public welfare
2. Basic Needs of Human settlements (in descending order)

a. Water
b. Movement & circulation
c. Storm drainage
d. Solid & liquid waste disposal
e. Park/playground
f. Power

AFFORDABILITY LEVELS OF TARGET MARKETS

Affordability Cos –refers to the most reasonable price of land and shelter based on the needs and financial
capabilities of program Beneficiaries and Appropriate Financing Schemes (RA 7279)

LOCATION
Both economic and socialized housing projects shall be located within suitable site for housing and outside
potential hazard prone and protection area

TECHINICAL GUIDELINES AND STANDARDS

SITE CRITERIA

Availability of basic needs

The prioritized basic needs shall preferably be available with reasonable distance from the project site; if not,
developer shall provide

Conformity with Zoning Ordinance or Land Use Plan of the City/Municipality

● No CLUP or ZO –the predominant land use principle and site suitability factors cited shall be used to
determine site suitability
● If the project is undoubtedly supportive of other land uses and activities (e.g., housing for industrial
workers) said project shall be allowed

Physical Suitability
A potential site must have characteristics assuring healthful, safe and environmentally sound community life. It
shall be stable enough to accommodate foundation load without excessive site works. Critical areas (e.g., areas
subjected to flooring, landslides and stress) must be avoided.

Accessibility
The site be served by a road that is readily accessible to public transportation lines. Said access road shall conform
to the standards set by these Rules to accommodate expected demand caused by the development of the area. In
no case shall a subdivision project be approved without necessary access road/right-of-way constructed either by
the developer or the Local Government Unit

PLANNING CONSTRUCTIONS
1. Area Planning
● Project design should consider not only the reduction of cost of development to a minimum but
also the provision for possible future improvement or expansion, as in the prescription of lot
sizes, right-of-way of roads, open spaces, allocation of areas for common uses and facilities’
● Land allocation and alignment of the various utilities (roads, drainage, power and water) of
subdivision shall be integrated with those of existing networks as well as project outside the
boundaries of the project site, e.g. access road set forth herein and should follow the standard
specifications of the DPWH.

Site Preservation (same as for Open Market/Medium-Cost Housing)

Easements (same as for Open Market/Medium-Cost Housing)
Circulation (same as for Open Market/Medium-Cost Housing)

SIGN PARAMETERS

LAND ALLOCATION
SALEABLE AREAS

There shall be no fixed ratio between the saleable portion and non-saleable portion of a subdivision project.

Non-saleable Areas
Non-saleable areas shall conform with the minimum requirements for open space comprising those allotted for
circulation system, community facilities & parks/playgrounds
Parks and Playgrounds
● Allocation mandatory for projects 1 hectares or more
● Should be strategically located
● Non-alienable & non-buildable for community hall but buildable for basketball court
● Exclusive of areas allocated for community facilities
● Not less than 100 sq. m.; additional 1% for every increment of 10 above 225 housing units or fraction
thereof
● The site should not be subject to flooding situated in steep slopes;
● Sites potentially hazardous or dangerous the health and safety of users, esp. children, should be avoided
(along rivers, near dumping site, etc.)

Community Facilities
● Mandatory provision of areas for community facilities for areas 1 ha. & above
● Developer may provide of areas for community facilities in excess of the mandatory requirement-deemed
saleable
● Community facilities shall be strategically located and easily accessible where they can serve a maximum
number of population, preferably near or side of park/playground.
● The area allocated for community facilities shall vary with the density of the subdivision i.e., number of
lots and/or dwelling units whichever is applicable, as shown below.

No. of Saleable Neighborhood Convenience Elementary High School Tricycle

Lots and/or Multipurpose store & Other School Terminals
Dwelling Unit Center Commercial
Center
10 & below - - - - -
11-99 - - - - -
100-499 X - - - -
500-999 X - - - -
1000-1499 X - - - -
1500-1999 X X X - X
2000-2499 X X X X X
2500 & over x X x X x

● Mandatory non-saleable
● Optional saleable but when provided in the plan the same shall be annotated in the title

Circulation System
● The area allocated for circulation system shall not be fixed, as long as the prescribed dimension and
requirements for access (both for project site and dwelling units) as specified in these Rules are complied
with.
● Land circulation system shall comply with the pertinent requirements of BP 344 ( Accessibility Law)

Planning considerations to be observed for layout:

● Observance of the hierarchy of roads within the subdivision.
● Conformance to natural topography.
● Consideration for access and safety, e.g., adequate radius, minimum number of roads of intersections,
moderate slope/grade, adequate sight distance, no blind corners, etc.
● Optimization as to number of lots to lessen area for roads at the same time enhances community
interaction
Circulation
● Contiguous project or projects to be developed by phases –provide with interconnecting roads with a
minimum ROW of 10.0 meters. (Approved as per HLURB Resolution R-374 dated 03 March 1987)
● Pathwalk –width of 3.0 meters intended only to provide pedestrian access to property for socialized
housing projects; maximum length -60 meters.
● Major road to serve as inter connecting road -15-cm mix gravel (pit run) as base course on well-compacted
subgrade

Pavement
● Major, minor, motorcourt-asphalt
● Sidewalk, alley-macadam

LOT REQUIREMENT

Minimum Lot Area

Type of Housing Economic (sq.m.) Socialized (sq.m.)

Single detached 72 64
Duplex/Single-attached 54 48
Row house 36 32

● Saleable lots designated as duplex/single attached and/or rowhouse lots –provide with housing units
● Price f saleable lots & intended for single-detached units- NMT 40% of the maximum selling price of house
& lot package
● The number of rowhouses shall not exceed 20 units per block/cluster but in no cases shall this be beyond
100 meters in length

SHELTER COMPONENT

Minimum floor area for single-family dwelling

● Economic Housing-22 sq.m.
● Socialized Housing-18-sq.m.

Minimum level of completion

● Economic Housing- complete house for all types of dwelling units based on submitted specifications
● Socialized Housing-shell house with doors and windows to enclose the unit

Firewall provision
Conform to Fire Code; mandatory for duplexes/single attached units and every unit for rowhouses

Water Requirements
● Average Daily Demand (ADD) -15 liters per capital per day (LPCPD)
● Each subdivision must have at least an operational deepwell and pump sets with sufficient capacity to
provide ADD to all homeowners provided a spare pump and motor set is reserved
● Comply with LWUA standards
● Obtain required permits from the National Water Resources Board (NWRB)
● Multi-storey building –provide with water tank if the height of the building requires
● Subdivision may put up ground reservoir (allocated as community facilities) –buffer of 25 meters from
possible source of pollution
● If elevated reservoir/water tank -20% ADD plus fire reserve
● Alternative sources of water supply may be availed of such as collected rain water and other devices with
impounding capacity
 ● Fire Protection Demand-comply with National Fire Protection Code; if applicable, LGU to provide each
community w/fire hydrant & cistern which are operational at all times

Electrical Power Supply System

● Required when power is available
● Actual connection may depend on the minimum number of users as required by the powers supplier

Sewage Disposal System

● Either Communal or individual septic tank conforming to Sanitation Code
● Connection to Community Sewer System, whenever applicable, per Sanitation Code of the Philippines and
other applicable rules and regulations

Drainage System
● Consider existing development of adjacent areas relative to their impact /effect on the proposed drainage
system, if any
● Minimum drainage system-concrete lined canal with load bearing cover
● Non-existence of drainage system in locality-owner. developer provides provide catchment are for
drainage discharge in consultation with LGU or private entities concerned owner/developer makes it safe
maintains it

Garbage Disposal System

● Undertaken by LGU or in absence thereof, by individual lot owners homeowners association (HOA) with
proper observance of practices & methods

Firefighting
● HOA shall form fire brigade in collaboration with barangay fire brigade. Water for firefighting shall be part
of the water supply requirements and shall comply with the requirements of the local district unit of the
Philippine National Police.

9 RA 7279 URBAN DEVELOPMENT AND HOUSING ACT

(1992)
UBAN DEVELOPMENT AND HOUSING ACT (UDHA)
Provides for a comprehensive and continuing urban development and housing program and established the
mechanism for its implementation

Outlines a three point agenda:

● Fostering peoples participation in the urban development process,
● Empowerment of LGUs to address urban development issues particularly homeless, and
● Private sector participation in the national shelter program in exchange for incentives (i.e., UDHA requires
developers to set aside 20% of all proposed subdivision areas for socialized housing)

ECOLOGICAL BALANCE
● LGUs shall coordinate with the DENR in talking measure that plan and regulate urban activities for the
conservation and protection of vital, unique and sensitive ecosystems, scenic landscapes, cultural sites and
other similar resources areas.
● Active participation of the citizenry in environmental rehabilitation and in decision-making process shall
be promoted and encouraged.
 ● LGUs to recommend to the Environment and Management Bureau the immediate closure of factories,
mines and transport companies which are found to be causing massive pollution.

URBAN-RURAL INTERDEPENDENCE
To minimize rural to urban migration and pursue urban decentralization, the local government units shall
coordinate with the National Economic and Development Authority and other government agencies in the
formulation of national development programs that will stimulate economic growth and promote socioeconomic
development in the countryside.

URBAN RENEWAL AND RESETTLEMENT

● Include the rehabilitation and development of blighted and slum areas and the resettlement of program
beneficiaries in accordance with the provisions of this Act.
● On-side shall be implemented Whenever possible in order to ensure minimum movement of occupants of
blighted lands and slum areas
● The resettlement of the beneficiaries of the Program from existing places of occupancy shall be
undertaken only when on-site development is not feasible and after compliance with procedures laid
down Section 28 of this Act.

EXPPORIATION OF IDLE LAND

All idle lands in urban and urbanizable areas shall be expropriated and shall form part of the public domain.

These lands shall be disposed of or utilized by the Government for such purposes that conform with their use
plans.
Expropriation proceedings shall be instituted if, after lapse of one (1) year following receipt of notice of acquisition,
the owner fails to introduce improvements, except in the case of force majeure and other fortuitous events.

Exempted –ownership of which is subject of a pending litigation.

SOCIALIZED HOUSING
Refers to housing programs and projects covering houses and lots or home lots only undertaken by the
Government or the private sector for the underprivileged and homeless citizens which shall include sites and
services development, long-term financing, liberalized terms on interest payments, and such other benefits in
accordance with provisions of UDHA.

Primary strategy in providing shelter for the underprivileged and homeless

PRIORITIES IN THE ACQUISITION OF LAND FOR SOCIALIZED HOUSING

Lands for socialized housing shall be acquired in the following order:
1. Those owned by the Government or any of its subdivisions, instrumentalities or agencies, including
government-owned or controlled corporations and their subsidiaries;
2. Alienable lands of the public domain;
3. Unregistered or abandoned and idle lands;
4. Those within the declared Areas for Priority Development, Zonal Improvement Program sites, and Slum
Improvement and Resettlement Program sites which have not yet been acquired.
5. Bagong Lipunan Improvement of Sites and Service or BLISS which have not yet been acquired; and
6. Privately-owned lands.
Where on site development is found more practicable and advantageous to the beneficiaries, the priorities
mentioned in this section shall not apply. The local government units shall give budgetary priority to on-site
development of government lands.

MODES OF LAND ACQUISITION

The modes of acquiring lands shall include, among others, community mortgage, land swapping land assembly or
consolidation, land banking, donation to the Government, joint-venture agreement, negotiated purchase, and
expropriation: Provided, however,
● Expropriation shall be restored to only when other modes of acquisition have been exhausted
● Parcels of land owned by small property owners shall be exempted
● Abandoned property shall be reverted and escheated to the State in a proceeding analogous to the
procedure laid down in Rule 91 of the Rules of Court.

RIGHT OF FIRST REFUSAL

For the purpose of socialized housing, government-owned and foreclosed properties shall be acquired by the local
government units, or by the National Housing Authority primarily through negotiated purchase: Provided, that
qualified beneficiaries who area actual occupants of the land shall be given the right of first refusal.

Right of First Refusal – a contractual right granted by the owner of something, that gives the holder of the right an
option to enter a business transaction with the owner, according to specified terms, before the owner is entitled to
enter that transaction with a third party.

DISPOSITION OF LANDS FOR SOCIALIZED HOUSING

NHA, with respect to lands belonging to the National Government, and the LGUs with respect to other lands within
their respective localities, shall coordinate with each other to formulate and make available various alternative
schemes for the disposition of lands to the beneficiaries of the Program.

SCHEMES
● Transfer of ownership in fee simple
● Lease, with option to purchase,
● Usufruct or
● Such other variations as the LGU or the NHA may deem most expedient in carrying out the purposes of
this Act.

Consistent with this provision, a scheme for public rental housing may be adopted.

LIMITATIONS ON THE DISPOSITION OF LANDS FOR SOCIALIZED HOUSING

● No land for socialized housing, including improvements or rights thereon, shall be sold, alienated,
conveyed, encumbered or leased by any beneficiary of this Program except to qualified Program
beneficiaries as determined by the government agency concerned.
● Should the beneficiary unlawfully sell, transfer, or otherwise dispose of this lot or any right thereon, the
transaction shall be null and void.
● He shall also his right to the land, forfeit the total amortization paid thereon, and shall be barred from the
benefits under this Act for a period of ten (10) years from the date of violation.
● In the event the beneficiary dies before full ownership of the land is vested on him, transfer to his heirs
shall take place only upon their assumption of his outstanding obligations.
● In case of failure by the heirs to assume such obligations, the land shall revert to the Government for
disposition in accordance with this Act.

BALANCE HOUSING DEVELOPMENT

Developers of proposed subdivision projects shall be required to develop an area for socialized housing equivalent
to at least twenty percent (20%) of the total subdivision area or total subdivision project cost, at the option of the
developer, within the same city or municipality, whenever feasible, and in accordance with the standard set by the
HLURB and other existing laws.
The balance housing development acquired may also be complied with by the developers concerned in any of the
following manner:
● Development of new settlement;
 ● Slum upgrading or renewal of areas for priority development either through zonal improvement programs
or slum improvement and resettlement programs;
● Joint-venture projects with the local government units or any of the housing agencies; or
● Participation in the community mortgage program.

INCENTIVES PRIVATE SECTOR PARTICIPATING SOCIALIZED HOUSING

● Reduce and simplification and accreditation requirements for participation private developers;
● Creation of none-stop office in the different regions of the country for the processing, approval and
issuance of clearance, permits and licenses: Provided, That clearances, permits and licenses shall be issued
within ninety (90) days from date of submission, of all requirements by the participating private
developers;
● Simplification of financing procedure; and
● Exemption from payment of the following:
o Project-related income taxes;
o Capital gains tax on raw lands use for the project;
o Value-added tax for the project concerned
o Transfer tax for both raw and complete project; and
o Donor’s tax for both lands certified by the local government units to have been donated for
socialized housing purposes.

Upon application for exemption

● A lien on that title the land shall be annotated by the Registered of Deeds:
● Socialized housing development plan has already been approved by the appropriate government agencies
concerned:

All the saving acquired by virtue of this provision shall accrue in favor of the beneficiaries subject to the
implementing guidelines to be issued by the HUDCC.

INCENTIVES TO PROPERTY OWNERS

Property owners who voluntarily provide resettlement sites to illegal occupants of their lands shall be entitled to a
tax credit equivalent to the actual non-recoverable expenses incurred in the resettlement, subject to the
implementing guidelines jointly issued by the HUDCC and the Department of Finance.

SOCIALIZED HOUSING TAX

Consistent with the constitutional principle that the ownership and enjoyment of property bear a social function
and to raise funds from the Program, all local government units are hereby authorized to impose and additional
one-half percent (0.5%) tax on the assessed value of all lands in urban areas excess of fifty thousand pesos
(P50,000).

PROMOTION OF INDIGENOUS HOUSING MATERIALS AND TECHNOLOGIES

The local government units, in cooperation with the National Housing Authority, Technology and Livelihood
Resource Center, and other concerned agencies, shall promote the production and use of indigenous, alternative,
and low-cost construction materials and technologies for socialized housing.

BASIC SERVICES
Socialized housing or resettlement areas shall be provide by the LGU or the NHA in cooperation with the private
developer and concerned agencies with the following basic services and facilities:
● Potable water
● Power and electricity and an adequate power distribution system;
● Sewage facilities and efficient and adequate solid waste disposal system; and
● Access to primary roads and transportation facilities.
Provision of the Basic Service
Provision of other basic services and facilities such as health, education, communication, security, recreation, relief
and welfare shall be planned and shall be given priority for implantation by the local government unit concerned
agencies in cooperation with the private sector and the beneficiaries themselves.

ACTION AGAINST PROFESSIONAL SQUATTERS AND SQUATTING SYNDICATES

● The local government units, in cooperation with the Philippines National Police, the Presidential
Commission for the Urban Poor (PCUP), and the PCUP –accredited urban poor organization in the area,
shall adopt measures to identify and effectively curtain the nefarious and illegal activities of professional
squatters and squatting syndicates, as herein defined.
● Any person or group identified as such shall be summarily evicted and their dwellings or structures
demolished, and shall be disqualified to avail of the benefits of the Program.
● A public official who tolerates or abets the commission of the abovementioned acts shall be dealt with in
accordance with existing laws.

Penalties for Professional squatters

Professional squatters or members of squatting syndicates shall be imposed the penalty of six (6) years
imprisonment or a fine of not less than Sixty thousand pesos (P60,000) but not more than One hundred thousand
pesos (P100,000 ), or both, at the discretion of the court.

Eviction and Demolition

Eviction or demolition as a practice shall be discouraged. Eviction or demolition, however, may be allowed under
the following situations:
● When persons or entities occupy danger areas such as esteros, railroad tracks, garbage dumps, riverbanks
shorelines, waterways, and other public places such as sidewalks, roads, parks, and playgrounds.
● When government infrastructure projects with available funding are about to be implemented; or

Mandatory Requirements in the Execution of Eviction or Demolition

In the execution of eviction or demolition orders involving underprivileged and homeless citizens the following shall
be mandatory:
1. Notice upon the effected persons or entities at least thirty (30) days prior to the date of eviction or
demolition;
2. Adequate consultations on the matter of resettlement with the duly designated representatives of the
families to be resettled and the affected communities in the areas where they are to be recollected;
3. Presence of local government officials or their representatives during eviction or demolition;
4. Proper identification of all person taking part in the demolition;
5. Execution of eviction or demolition only during regular office hour from Mondays to Fridays and during
good weather, unless the affected families consent otherwise;
6. No use of heavy equipment for demolition except for structures that are permanent and of concrete
materials;
7. Proper uniforms for members of the Philippine National Police who shall occupy the first line of law
enforcement and observe proper disturbance control procedures; and
8. Adequate relocation, whether temporary or permanent; Provide, however, That in cases of eviction and
demolition pursuant to a court order involving underprivileged and homeless citizens, relocation shall be
undertaken by the local government unit concerned and the National Housing Authority with the
assistance of other government agencies within forty-five (45) days from service of notice of final
judgment by the court, after which period the said order shall be executed: Provided, further, That should
relocation not be possible within the said period, financial assistance in the amount equivalent to the
prevailing minimum daily wage multiplied by sixty (60) days extended to the affected families by the local
government unit concerned.

DILG and the HUDCC shall jointly promulgate the necessary rules and regulations to carry out the above provision.
Prohibition Against New Illegal Structures
It shall be unlawful for any person to construct any structure in danger areas such as esteros railroad tracks,
garbage dumps, riverbanks, shorelines, waterways, and in other public places such as sidewalks, roads parks and
playgrounds

The barangay, municipal or city government units shall prevent the construction of any kind or illegal dwelling units
or structures within their respective localities

The head of any local government unit concerned who allows, abets or otherwise tolerates the construction of any
structure in violation of this section shall be liable to administrative sanctions under existing laws and to penal
sanctions provided for in this Act.

COMMUNITY MORTGAGE PROGRAM

The Community Mortgage Program (CMP) is a mortgage financing program of the National Home mortgage
Finance Corporation which assists legally organized associations of underprivileged and homeless citizens to
purchase and develop a tract of land under the concept of community partnership.

The primary objective of the program is to assist residents of blighted or depressed areas to own the lots they
occupy, or where they choose to relocate to, and eventually improve their neighborhood and homes to the extent
of their affordability.

CENTIVES TO PARTICIPATION IN THE CMP PROGRAM

1. Government –owned or controlled corporations and local government units, may dispose of their idle lands
suitable for socialized housing under the CMP through negotiated salt at prices based on acquisition cost plus
financial carrying costs;
2. Properties sold under the CMP shall be exempted from the capital gains tax; and
3. Beneficiaries under the CMP shall not be evicted nor in payments of amortizations for three (3) months.

ORGANIZATION OF BENIFIARIES
Beneficiaries of the Program shall be responsible for their organization into association to manage their
subdivisions or places of residence, to secure housing loans under existing Community Mortgage Program and such
other projects beneficial to them.
Subject to such rules and regulations to be promulgated by the National Home Mortgage Finance Corporation,
Associations organized pursuant to this Act may collectively acquire and own lands covered by this Program.

Where the beneficiaries fail to form an association by and among themselves, the National Home Mortgage
Finance Corporation shall initiate the organization of the same in coordination with the Presidential Commission for
the Urban Poor and the local government units concerned .

No person who is not a bona fide resident of the area shall be a member or officer of such Association.

10 CONDOMINIUMS
LAWS AND ISSUANCES
RA 4726 (1966) “The Condominium Act”
Act To Define Condominium, Established Requirements For Its Creation, And Govern Its Incident
DD 957 (2001) “Subdivision and Condominium buyers Protective Decree”

DEFINATION OF CONDOMINIUM
A condominium is an interest in real property consisting of separate interest in a unit a residential, industrial or
commercial building and an undivided interest in common, directly or undirectly, in the land on which it is located
in other common, areas of the building. It may include, in additional, a separate interest in other portions of such
real property. Often called

VERTICAL SUBDIVISION.

RELEVANT TERMS

Unit
Means a part of the condominium project intended for any type of independent use or ownership, including one or
more rooms or spaces located in one or more floors (or part or parts of floors) in a building or buildings and such
accessories as may be appended thereon.

Common areas
Means the entire project excepting all units separately granted or held or reserved.

Appurtenance
An incidental right, privilege, etc., attached to something and passing with it, as by conveyance or sale

APPLICATION OF RA 4726
The provision s of this Act shall apply to property divided or to be divided into condominiums only if an
enabling or master deed recorded in the Register of Deeds of the province or city in which the property
lies, and duly annotated in the corresponding certificate of title of land, if the latter had been patented
or registered under either the Land Registration or Cadastral Acts.

CONVERSION OF EXISTING STRUCTURES TO CONDOMINIUM PROJECTS

Existing structures may be converted into condominium projects upon proper application therefor with the Board
and compliance with the requirements of condominium laws and these rules and standards.

TITLE AND OWNERSHIP

Title to the common area, may be held by a corporation specially formed for the purpose in which the holders of
separate interest shall automatically be members or shareholders, to the exclusion of other, in proportion to the
appurtenant interest of their respective units in the common areas. The interest in condominium may be
ownership or any other real interest in real property recognized by the law of property in the Civil Code and other
pertinent laws.

CONTENTS OF ENABLING OR MASTER DEED

1. Description of the land on which the building or buildings and improvements area to be located;
2. Description of the buildings stating the number of storeys and basements, the number of units and their
accessories, if any;
3. Description of the common areas and facilities;
4. A statement of the exact nature of the interest acquired or to be acquired by the purchaser in the separate
units and in the common areas of the condominium project. Where title to or the appurtenant interest in
the common areas in to be held by a condominium corporation, a statement to this effect shall be
included;
5. Statement of the purposes for which the building or buildings and each of the units are intended or
restricted as to use;
 6. A certificate of the registered owner of the property, if he is other than those executing the master deed,
as well as of all registered holders of any lien or encumbrance on the property, that they consent to the
registration of the deed;
7. The following plans shall be applied to the deed as integral parts thereof:
● A survey plan land included in the project, unless a survey plan of the same property had
previously been filed in said office;
● A diagrammatic floor plan of the building or buildings each unit, its relative location and
approximate dimensions;
8. Any reasonable restriction not contrary to law, morals or public policy regarding the right of any
condominium owner to alienate or dispose of his condominium.

AMENDENT OR REVOCATION OF MASTER DEED

RA 7899 amending Section 4, RA 4726

The enabling or master deed may be amended or revoked upon registration of an instrument executed by a simple
majority of the registration owners of the property:
● Condominium project exclusively for either residential or commercial use – simple majority shall be on a
per unit of ownership basis
● Mixed use –simple majority shall be on a floor area of ownership basis
● Prior notifications to all registered owners are done
● Any amendment or revocation already decided by a simple majority of all registered owners shall be
submitted to the HLURB and the city/municipal engineer for approval before it can be registered
● Until registration of a revocation, the provisions of this Act shall continue to apply to such property.

INCEDENTS OF A CONDOMINIUM GRANT

Unless otherwise expressly provide in the enabling or master deed or the declaration of restrictions, the incidents
of a condominium grant are as follows:
1. The boundary of the unit granted are the interior surfaces of the perimeter walls, floors, ceilings, windows
and doors thereof.
● Not part of the unit granted: bearing walls, columns, floors, foundations and other common
structural elements of the building; lobbies stairways, hallways, and other areas of common use,
elevator equipment and shafts, central heating, central refrigeration and central air conditioning
equipment, reservoirs, tanks, pumps and other central services and facilities, pipes, ducts, flues
chutes, conduits, wires and other utility installations, wherever located except the outlets thereof
when located within the unit.
2. There shall pass with the unit, as an appurtenance thereof, an exclusive easement for the use of the air
space encompassed by the boundaries of the unit as it exists at any particular time and as the unit may
lawfully be altered or reconstructed form time. Such easement shall be automatically terminated in any air
space upon destruction of the unit as to render it untenantable.
3. Unless otherwise provide, the common areas are held in common by the holders of units, in equal shares
one each unit.
4. A non-exclusive easement for egress and support through the common areas is appurtenant to each unit
and the common areas are subject to such easements.
5. Each condominium owner shall have exclusive right to repaint, tile, wax paper or otherwise refinish and
decorate the inner surfaces of the walls, ceilings, floors, windows and doors bounding his own unit.
6. Each condominium owner shall have the exclusive right to mortgage, pledge or encumber his
condominium and to have the same appraised independently of the other condominium, owner is
personal to him.
7. Each condominium owner has also the absolute right to sell or dispose of his condominium unless the
master deed contains a requirement that the property be first offered to the condominium owners within
a reasonable period of time before the same is offered to outside parties.`
DECLARATION OF RSETRICTIONS
● The owner of a Project shall, prior to the conveyance of any condominium therein, registered a
declaration of restriction relating to such project, and shall insure to and blind all condominium
owners in the projects.
● Such liens, unless otherwise provide, may be enforced by any condominium owners in the project
or by the management body of such project.
● The Register of Deeds shall enter and annotate the declaration of restrictions upon the certificate
of title covering the land include within the project, if the land is patented or registered under the
Land Registration or Cadastral Acts.

TYPE OF MANAGEMENT BODIES

The declaration of restriction shall provide for the management of the project anyone of the following
management bodies:
● Condominium corporation
● Association of the condominium owners
● Board of governors elected by condominium owners, or
● Management agent elected by the owners or by the board name in the declaration.

It shall also provide for voting majorities quorums, notices, meeting date, and other rules governing such body or
bodies.

OTHER PROVISION IN DECLARATION OF RESTRICTIONS

Such declaration of restrictions, among other things may also provide:
1. The manner and procedure for amending such restrictions: Provided, That the vote of not less than a
majority in interest of the owners is obtained.
2. For independent audit of the accounts of the management body;
3. For reasonable assessments to meet authorized expenditures, each condominium unit to be assessed
separately for its share of such expenses in proportion ( unless otherwise provided) to its owners
fractional interest in any common areas;
4. For the subordination of the liens securing such assessments to other liens either generally or specifically
described;
5. As to any management body;
a. For the power thereof, including power to enforce the provisions of the declarations of restriction;
b. For maintenance of insurance policies, insuring condominium owners against loss by fire, casualty,
liability, workmen’s compensation and other insurable risks and for bonding of the members of any
management body;
c. Provisions for maintenance, utility, gardening and other legal, accounting and other professional and
technical services;
d. For purchase of materials, supplies and the like needed by the common areas;
e. For payment of taxes and special assessments which would be a lien upon the entire project or
common areas, and for discharge of any lien or encumbrance levied against the entire project or the
common areas;
f. For reconstruction of any portion of any damage to or destruction of the project.
g. The manner for delegation of its power;
h. For entry by its officers agent into any unit when necessary in connection with the maintenance or
construction for which such body is responsible;
i. For power of attorney to the management body to sell the entire project for the benefits of all of the
owners thereof when partition of the project may be authorized under Section 8 of this Act, which
said power shall be binding upon all of the condominium owners regardless of whether they assume
the obligations of the restrictions or not;
 6. For condition under than those provided for in Section 8 and 13 of the condominium Act, upon which
partition of the project and dissolution of the condominium corporation may be made.
● Such right to partition or dissolution may be conditioned upon failure of the condominium
owners to rebuild within a certain period or upon specification percentage of damage to the
building, or upon a decision of an arbitrator, or upon any other reasonable condition

PARTITION
● The common areas shall remain undivided, and there shall be no judicial partition thereof.
● Where several persons own condominium 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 interest in the common areas.
1. That 3 years after damage or destruction to the project which rendered a material part thereof unfit for its
use prior to thereto, the project has not been rebuilt or repaired substantially to its state prior to its
damage or destruction, or
2. 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
3. That the project has been in existence in excess of 50 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
4. That the project or a material part thereof has been condemned or expropriated and uneconomic, 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.
5. 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.

TRANSFER OR CONVEYANCE

Transfer or conveyance of a unit or an apartment, office or store or other space therein shall include the
transfer or conveyance of the undivided interests in the common areas or, in a proper case the
membership or shareholding s in the condominium corporation:
● Common areas held by the owners of separate units as co-owners thereof-no condominium unit
therein shall be conveyed or transferred to person other than Filipino citizens or corporation at
least 60% percent of the capital stock of which belong to Filipino citizens, except in cases
hereditary succession.
● Common areas held by a corporation- no transfer or conveyance of a unit shall be valid if
transfer membership or stockholding will cause the alien interest to exceed the limits imposed
by existing laws. (40%)
CONDOMINIUM CORPORATION
● Whenever the common areas in a condominium project are held by a condominium corporation, such
corporation, shall constitute the management body of the project.
● Corporate purposes limited to the holding of the common areas; either in ownership or any other interest
in real property recognized by law, to the management of the project, and to such other purposes as may
be necessary, incidental or convenient to the accomplishment of said purposes.
 ● The articles of incorporation or by laws of the corporation shall not contain any provision contrary to or
inconsistent with the provisions of this Act, the enabling or master deed, or the declaration of restriction
of the project.
● Membership in a condominium corporation, regardless of whether it is a stock or non-stock corporation,
shall not be transferable separately from the condominium unit of which it is an appurtenance.
● When a member or stockholder ceases to own a unit in the project in which the cease to be a member or
stockholder of the condominium corporation.
● Term of corporation-co-terminus with the duration of the condominium project, the provisions of the
Corporation Law to the contrary notwithstanding.

INVOLUNTARY DISSOLUTION OF CONDOMINIUM CORPORATION

● In case of involuntary dissolution of a condominium corporation for any of the causes provided by law, the
common areas owned or held by the corporation shall, by way of liquidation, be transferred pro-indiviso
and in proportion to their interest in the corporation to the members or stockholders thereof, subject to
the superior rights of the corporation creditors .
● Such transfer or conveyance shall be deemed to be a full liquidation of the interest of such members or
stockholders in the corporation.
● After such or conveyance the provisions of this Act governing undivided co-ownership of, or undivided
interest in, the common areas in condominium projects shall fully apply.

VOLUNTARY DISSOLUTION OF CONDOMINIUM CORPORATION

Until the enabling or the master deed of the project in which the condominium corporation owns or holds the
common areas is revoked the corporation shall not be voluntarily dissolved through an action for dissolution under
Rules of Court except upon a showing:

1. That 3 years after damage or destruction to the project in which the corporation owns or holds the
common areas which damage or destruction renders a material part thereof unfit for its use prior thereof,
the project has not been rebuilt or repaired substantially to its state prior to its damage or destruction; or
2. That damage or destruction to the project has rendered one-half or more of the units therein
untenantable and that more than 30% percent of the members of the corporation, if non-stock, or the
shareholders representing more than 30% percent of the capital stock entitled to vote, if a stock
corporation, are opposed to the repair or reconstruction of the project, or
3. That the project has been in existence in excess of 50 years , that it is obsolete and uneconomical, and that
more than 50% percent of the members of the corporation, if non-stock, or the stockholders representing
more than 50 percent of the capital stock entitled to vote, if a stock corporation, are opposed to the repair
or restoration or remodeling or modernizing of the project; or
4. That the project or material part thereof has been condemned or expropriated and that the project is no
longer viable, or that the members holding in aggregate more than 70% interest in the corporation if
non-stockholders representing more than 70& percent of the capital stock entitled regime after
expropriation or condemnation of a material portion thereof; or
5. That the conditions for such a dissolution set forth in the declaration of restrictions of the project in which
the corporation owns or holds the common areas, have been met.

The condominium corporation may also be dissolved by the affirmative of all the stockholders or members thereof
at a general special meeting duly called for the purpose: Provided, That all the requirements of Section 62 of the
Corporation Law are complied with.
Unless otherwise provide for in the declaration of restrictions upon voluntary dissolution of a condominium
corporation in accordance with the provisions of sections 13 and 14 of this Act, the corporation shall be deemed to
hold a power of attorney from all the members or stockholders to sell and dispose of their separate interests in the
project and liquidation of the corporation shall be effected by sale of the entire project as if the corporation owned
the whole thereof, subjected to the rights of the corporate and of individual condominium creditors.

DISPOSITION OF COMMON AREAS

RA 7899 amending Section 16, RA 4726

A condominium corporation shall not, during its existence, sell, exchange, lease or otherwise dispose of the
common areas owned or held by it is in the condominium project unless authorized by the affirmative vote of a
simple majority of registered owners; Provided, that prior notification to all registered owners be done; Provided
Further, that the condominium corporation may expand or integrate the project with another upon the affirmative
vote of a simple majority of registered owners, subject only to the approval of the HLURB

LIQUIDITION OF MEMBER’S INTEREEST

● Any provision of the Corporation Law to the contrary notwithstanding, the by-the laws of a condominium
corporation shall provide that a stockholders or members shall be entitled to demand ;payment of this
shares or interest in those cases where such right is granted under the Corporation Law unless he consents
to sell his separate interest in the project to the corporation or to purchaser of the corporation’s choice
who also buy from the corporation the dissenting member or stockholder’s interest.
● In cases of disagreement as to price, the procedure set forth in the appropriate provision of the
Corporation Law for valuation of shares shall be followed.
● The corporation shall have 2 years within which to pay for the shares or furnish a purchaser of its choice
from the time of award.
● All expense incurred in the liquidation of the interest of the dissenting member or stockholders shall be
borne by him.

REGISTRATION OF CONVEYANCE

● Upon registration of an instrument conveying a condominium, the Registration of Deeds shall, upon
payment of the proper fees, enter and annotate the conveyance on the certificate of title covering the
land included within the project and the transferee shall be entitled to the issuance of a ‘condominium
owners copy of the pertinent portion of such certificate of title.
● Said ‘condominium owner’s’ copy need not reproduce the ownership status or other condominiums in the
project.
● A copy of the description of the, land a brief description of the condominium conveyed, name and
personal circumstances of the condominium owner would be sufficient for purposes of the ‘condominium
owner’s’ copy of the certificate of title.
● No conveyance of condominiums or part thereof, subsequent to the original conveyance thereof from the
owner of the project, shall be registered unless accompanied by a certificate of the management body of
the project that such conveyance is in accordance with the provisions of the declaration of restrictions of
such project.
● In cases of condominium projects registered under the provisions of the Spanish Mortgage Law or Act
3344, as amended, the registration of the deed of conveyance of a condominium shall be sufficient if the
Register of Deeds shall keep the original or signed return a copy of the deed of conveyance to the
condominium owner fully acknowledged and stamped by the Registered of Deeds in the same manner as
in the case of registration of conveyances of real property under said laws.
● Where the enabling or master deed provides that the land included within a condominium project are to
be owned in common by the condominium owners therein, the Register of Deeds may, at the request of
all the condominium owner therein, the Register of Deed may, at the request of all the condominium
owners and upon surrender of all their condominium owner’s copies cancel the certificates of title of the
property and issue a new one in the name of said condominium owners as pro-indiviso co-owners thereof.
ASSESSMENTS
● An assessment upon any condominium made in accordance with a duly registered declaration of
restrictions shall be an obligation of the owner thereof at the time the assessment is made.
● The amount of any such assessment plus any other charges thereon, such as interest, costs (including
attorney’s fees) and penalties, as such may be provided for in the declaration of restrictions, shall be and
become a lien upon cause a notice of assessment to be Register of Deeds of the city or province where
such condominium project is located.
● The notice state the amount of such assessment and such other charges thereon as may be authorized by
the declaration of restrictions, a description of the condominium unit against which same has been
assessed, and the name of the registered owner thereof.
● Such notice shall be signed by an authorized representative of the management body or as otherwise in
the declaration of restriction.
● Upon payment of said assessment and charges or other satisfaction thereof, the management body shall
cause to be registered a release of the lien
● Such lien shall be superior to all other liens registered subsequent to the registration of said notice of
assessment except real property tax liens and except that the declaration of restrictions may provide for
the subordination thereof to any other liens and encumbrances

FORECLOSURE
● Assessments may be enforced in the same manner provide for by law for the judicial or extra-judicial
foreclosure of mortgages of real property.
● Unless otherwise provide for in the declaration of restrictions, the management body shall have power to
bid at foreclosure sale.
● The condominium owner shall have the same right of redemption as in cases of judicial or extra-judicial
foreclosure of mortgages.

LIEN BASED ON LABOR/SERVICES/MATERIALS

● No labor performed or services or materials furnished without the consent of at the request of a
condominium owner or his agent or his contractor or subcontractor shall be the basis of a lien against the
condominium of any other condominium owner, unless such other owner have expressly consented to or
requested the performance of such labor or furnishing of such materials or services.
● Such express consent shall be deemed to have given by the owner of any condominium in the case of
emergency repairs of his condominium unit.
● Labor performed or services or materials furnished for the common areas, if duly authorized by the
management body provided for in a declaration of restrictions governing the property, shall be deemed to
be performed or furnished with the express consent of each condominium owner.
● The owner of any condominium may remove his condominium from a lien against two of the lien of the
fraction of the total sum secured lien which is attributable to his condominium unit.

ACQUISITION OF PERSONAL PROPERTY

● Unless otherwise provide for by the declaration of restrictions, the management body, provide for herein,
may acquire and hold, for the benefit of the condominium owners, tangible personal property and may
dispose of the same by sale or otherwise;
● The beneficial interest in such personal property be owned by the condominium owners in the same
proportion as their respective interests in the common areas.
● A transfer of a condominium shall transfer to the transferee ownership of the transferor’s beneficial
interest in such personal property.

RECOGNIZATION OF THE PROJECT

Where, in an action for partition of a condominium corporation on the ground that the project or a material part
thereof has been condemned or expropriated, the court finds that the conditions provided in this Act or in the
declaration have not been met, the Court may decree a reorganization of the project declaring.
● Which portions of the project shall continue as a condominium project,
● The owners thereof, and
● The respective rights of said remaining owners and
● The just compensation, if any, that a condominium owner may be entitled to due to deprivation of his
property.

Upon receipt of a copy of the decree, the Register of Deeds shall enter and annotate the same on the pertinent
certificate of title.

Any deed, declaration or plan for a condominium project shall be liberally construed to facilitate the operation of
the project, and its provisions shall be presumed to be independent and severable.

Whenever real property has been divided into condominiums, each condominium separately owned shall be
separately assessed, for purposes of real property taxation and other tax purposes, to the owners thereof and the
tax on each such condominium shall constitute a lien solely thereon.

DESIGNATION STANDARDS AND GUIDELINES FOR RESIDENTIAL CONDOMINIUM PROJECTS

Presidential Decree No. 957 Subdivision and Condominium Buyers Protective Decree

SITE CRITERIAL
Conformity to Comprehensive Land Use/Zoning Ordinance/National Building Code
● Residential condominium projects shall preferably be located in areas zoned as or appropriate for
residential uses.
● Condominium projects shall likewise conform with the minimum building requirements., lot occupancy,
open spaces, parking and other requirements of the National Building Code of the Philippines and its
Implementing Rules and Regulations.

PLANNING CONSIDERATION
1. Area Planning
● Supplementary and supportive activities to residential use shall be allowed provided that the
privacy, order health and safety of the residents are not jeopardized nor threatened and that the
land use plan and/or zoning ordinance of the locality can accommodate such mixture of land
uses.
● Open spaces shall be provided within the project site pursuant to the National Building Code of
the Philippines and its Implementing Rules and Regulations. These shall include courts, yards
setbacks, light wells, uncovered driveways, access roads, parking spaces, buffer strips, parks and
playgrounds. These spaces shall be open from the ground to the sky. The open spaces shall be
allocated for basic utilities and community facilities or common areas.
● Easements for utilities, such as drainage system, water supply, power lines and communication
lines, shall be integrated with land circulation system.
● Building orientation on lot shall take into account proper ventilation, sunlight and land
characteristics.
● No Development shall be allowed within the 5-meter mandatory easement on both sides of the
Marikina Valley Trace and such other fault traces as may be identified by PHIVOLCS. (Approved
per HYDCC Board Res. No 515, Series of 1992)

2. Site Preservation/Alteration
● Slope –The finished grade shall have a desire slope to allow rainwater to be channeled into street
drains. Where cut and fill is necessary an appropriate grade shall be attained to prevent any
 depression in the areas. Grading and ditching shall be executed in a manner that will prevent
erosion of flooding of adjoining properties.
● Preservation of Site Assets-Suitable trees with caliper diameter of 200 millimeters or more, as
well as shrubs and desirable ground cover shall be preserved in accordance with the
implementing rules and regulations of DENR. Where good quality top soil exists in the site it
shall be banked and shall be preserved for finishing grades of yards, playgrounds, parks and
garden area.
● Ground Cover – Grass, shrubs, plants and other landscaping material for ground cover shall be
variety appropriate for its intended use and location. They shall be so planted as to allow
complete and permanent cover of the area.

C.DESIGN PARAMETERS

1. Space Allocation
Space allocations shall areas for living, dining, kitchen, sleeping, toilet and bath, laundry/drying area and
storage, the minimum size shall be in accordance with the requirements of the National Building Code of the
Philippines and its implementing rules and regulations/referral codes.
1.1 parks/Playground and/or Other Recreational Areas
a. Parks/Playground (exclusive of easements, access roads, driveways, parking space) shall be required
for:
● Projects with gross saleable area of 1,000 square meters; or
● Projects with ten (10) or more condominium units.
Except when the condominium is part of a subdivision project or a park/playground not more
than or 800 meters away exists, and in reaching it the pedestrian will not be unduly exposed to
hazard.
b. Minimum area for a single park/playground -50 sq. m. Increments of 3.00 sq. m. for every additional
family dwelling type in excess of 10 units shall be added.
c. Properly landscaped to accommodate both active and passive activities.
d. Parks/Playground may be accommodated in the yard/s provide such yards are adequate and usable as
park.
e. Other facilities (optional) as tennis courts, swimming pool, etc. may be integrated with the
park/playground.
1.2 Parking space Requirement
a. For Residential Condominium Units
● The minimum parking slot requirement shall be in accordance with the provisions of the
National Building Code of the Philippines.
● Off-site parking may be allowed in addition to the on-site parking provided that designated
parking area is part of the project and provided further that the required distance conforms
to National Building Code of the Philippines – NMT 200 meters away from condominium
project
● Compliance with additional parking spaces as required by local ordinances shall be
mandatory.
b. For Commercial Condominium Units
● The minimum parking slot requirements shall be in accordance with the provisions of the
National Building Code of the Philippines.
● Off-site parking may be allowed in addition to the on-site parking provided that designated
parking area is part of the project or the project is within the commercial subdivision plan
and provided further that parking area is part of the approved subdivision plan and provided
further that parking arrangements are explicitly indicated in the contract of sale of property
to be developed-NMT 200 meters away from condominium project
1.3 Access Roads
a. Roads shall serve every building, parking space, park/playground and service points (e.g. garbage
collection points).
 b. Minimum roads -8m ROW, 6m carriageway, 2m Sidewalk/planting strip
c. Path walks shall be provided for pedestrian circulation with minimum width of 1.2 meters.
d. Construction of roads sidewalk and pathwalk shall be in accordance with the standards of a residential
subdivision.
e. Space for turn around at dead end shall be provided.
f. Direct vehicular access to the property shall be provided by public street or alley.
g. An independent means of access shall be provided to each dwelling or group of dwellings in a single
plot, without trespassing adjoining properties.
h. Utilities and service facilities must be independent for each dwelling unit.
i. An independent means of access to each living unit shall be provided without passing through any
yard of living unit or any other yard.
j. Hierarchy of Roads- for horizontal condominium projects, the hierarchy of roads shall be the same as
the minimum design standard requirements for subdivision projects.
k. Pavement – all roads (major, minor, motorcourt) for both residential and commercial condominium
projects shall be paved concrete/asphalt.
1.4 Basic Facilities and Services
1. Service Area (Laundry/Drying Area)
● Adequate laundry and drying areas shall be provided.
● Where such areas are held in common, they shall have suitable outdoor locations, fenced or
screened and kept away from living rooms, entrance or front yards.
2. Utilities
● Water supply, power, sewerage and drainage utilities shall conform with the requirements of
subdivision.
● For multi-storey buildings
● If the height of the building requires water pressure in excess of that in the main water line, a
water tank shall be provided.
● Tank shall also be required if the peak drawn should reduce the pressure on the highest
usable floor to less than 0.06 Mpa- the minimum pressure required for satisfactory operation
of fixtures, particularly those with flush valves.
● Water tank capacity-20% Average Daily Demand plus fire reserve
3. Mechanical Equipment and Service Areas
● Provision of elevators shall conform with the plans and specifications of the duly licensed
architect/engineer who shall determine the requirement for elevator including the number
of cars, capacity, safety features and standards, elevator type, speed and location in relation
to the over-all design and use of the building.
● The design architect/engineer shall certify under oath that all the components thereof are in
accordance with the National Building Code of the Philippines, the accessibility law and
national industry standards and other pertinent laws.
● Compliance to the provisions of the Fire Code of the Philippines, shall be mandatory.
4. Refuse Collection/Disposal
● Centralized garbage depository area and efficient refuse collection and disposal services shall
be provided whether independently or in conjunction with the city or municipality garbage
collection and disposal services.
● It shall conform to the provisions of the sanitation code of the Philippines and its
implementing rules and regulations/pertinent referral codes.

2. Floor Area Requirements

2.1 Single-Occupancy Unit
1. Single occupancy units shall have a minimum floor area of 18 square meters, however, a net floor area
of 12 square meters may be allowed provided that these are intended for students/ employees/
workers and provide further that the condominium project to which these will be integrated is within
highly urbanized areas.
 2. Provided with common basic facilities such as laundry/drying area and support amenities such as
visitor’s lounge and dining area.
3. Said facilities/support amenities including all other measure that will ensure compliance with the
intended use of the unit shall be explicitly indicated in the master deed/contract to sell.
2.2 Family Dwelling Unit

The minimum floor area of family condominium units shall be 36 square meters and 22 square meters for open
market and medium cost condominium project respectively.

VARIANCES
These design standards and requirements may be modified or varied by the Board in case of
1. Large scale government and private residential subdivision or condominium projects,
2. Housing in areas for priority development or urban land reform zones,
3. Resettlement or social housing projects oriented towards low income groups, or
4. Housing projects financed by any government financing institution, or
5. In cases where strict observance hereof will cause extreme hardship to the subdivision or condominium
owner/developer:
● The location is unique and different from the adjacent locality, and because of its uniqueness, the
owners cannot obtain a reasonable return on the residential subdivision/condominium projects;
● Hardship is not self-created;
● The proposed variance is due to existing permanent structures (concrete/steel) and are necessary
to permit a reasonable use of the residential sub division/condominium;
● The variance will not alter the essential character of the location where the residential
subdivision for which the variance is sought, is located, and will not substantially or permanently
or permanently conflict the use of the other residential kilometer radius thereof;
● The variance will not give rise to unauthorized reclassification of the approved residential
subdivision/condominium plan (i.e. whether partial or full alteration of the plan), and will not
adversely affect the public health, safety or general welfare, and is in keeping with the general
welfare of the community. (Per Commission Proper Resolution No. R-53, S. 1982)

SALIENT POINTERS ON RULES AND REGULATIONS OF THE HOUSING AND LAND

USE REGULATORY BOARD

AS LECTURE BY:

LENA S. VERGARA
Department Group Head, Technical Service Section,
Expanded National Capita Regional Field Office, HLURB
A. Laws
1. Executive Order No. 6-18 ( 1981 )
The HLURB was reorganized and revitalized and was vested with quasi-judicial powers to make it a
more effective regulatory agency. By virtue of said order, it assumed the functions of the National
Housing Authority on real estate management and was mandated to enforce P.D 957, PD 1216 and PD
1517 among others.
2. Executive Order No. 90 (1986)
The HLURB was designated as the sole regulatory body for housing and land development. It was
mandate to encourage greater private sector partition in low cost housing through liberalization of
development standards, simplification of regulations and decentralization of permits and licenses. Iot
was identified together with National Housing Authority (NHA), National Home Mortgage and Finance
Corporation (NHMFC) and Home Guaranty Corporation (HGC), as a key shelter agency under the
housing activities of the government to ensure the accomplishment of National Shelter housing
activities of the government to ensure the accomplishment of National Shelter Program.

3. Presidential Decree 957 (PD 957,1976)

Otherwise known as the Subdivision and Condominium Buyers Protective Decree. Its features are
-regulates sale of subdivision lots and condominium units to buyers
-defines sale to be covered by registration
-defines duties and responsibilities of owner/developer (o/d) of condominium and subdivision
projects
-defines rights of condominium/subdivision unit/lot buyers

4. Batas Pambansa 220 (BP 220, 1982)

Authorizes HLURB to promulgate different levels of standards and technical requirements for
economic and socialized housing projects from those provide under PD 957, PD 1216, PD 1096 and
PD 1185

5. Republic Act 7279 (1992)

Provides for Balanced Socialized Housing Program through provision of low cost housing program
(SHP) intended benefits the underprivileged and homeless and to be sold at the lowest interest rate.
Requires developers of residential subdivision projects to allocate 20% of the project area cost into
socialized housing.

6. Presidential Decree No 1216 (1977)

Define open spaces in residential subdivision and amended Sect. 31 of PD 957. Requires subdivision
owners to provide adequate roads. Alleys, sidewalks and reserved open spaces for parks or
recreational use equivalent tom 30% of the total area of the subdivision project; and are non-saleable
non alienable public lands.

7. Republic Act 6652’ The Maceda Law’(1972

Provides protection to buyers of residential units on installments against serupulous sellers contracts
(including residential condominium apartments, but excluding industrial lots. Commercial buildings
and sales tenants)
8. Presidential Decree No. 1517 (1978)
Provides for protection of legitimate tenants and requires clearance for development proposals and
land transactions in proclaimed Areas for Priority Development (APDs) and Urban Land Reform Zone
(ULRZS). Its important feature under Section 6. Defines legitimate tenants as follows (a) Ten years
residency or more the ones who built their homes (c) Legally occupied the lands by virtue of
contract with landowners continuously for ten years, d) used the lands for residential purpose only.

9. Republic Act 7160 of the Local Government Code of 1991

-Issuance of approval of subdivision plans to local government units subject to national laws and
standards,
-Devolves to the Sangguniang Panlalawigan subject to national guidelines and standards the approval
of comprehensive land use plans of municipalities.

10. Executive Order No. 71(1993)

 Provides for implementing guidelines and role of HLURB in the devolution of approval of subdivision
plans to the LGU,s
11. Executive Order No. 71 (1993)
a) Provides that HLURB shall review and approved land use plans of provinces, highly urbanized
cities, and all of the independent component cities/municipalities within Metro Manila., b)
Devolves the issuance of locational clearance to LGU,s.

12. Republic Act 7899 (1995)

Amends Sections 4 and 16 of RA 4726 OF THE Condominium Act, Where HLURB is Given the following
authorities; a) approval of any amendment to or revocation of the enabling or master deed of
condominium project subject to consent by a simple majority of all registered owners, and where
prior notification to all registered owners is done. B) Approval of the expansion of a condominium
corporation or integration of a condominium project with another project upon the affirmative vote
of a simple majority of registered owners.

13. Republic Act 6657 or the Comprehensive Agrarian Reform Law (June 15, 1988)
Implements a comprehensive agrarian reform with the intention that any conversion of a private
agricultural land to non-agricultural uses should first be cleared before hand by the Department of
Agrarian Reform (Please see attached notes on this on RA 6657 OR CARP).

14. Presidential Decree No. 1586 (1978)

Requires all person, partnership, or corporation to secure an Environmental Compliance Certificate
prior to undertaking any activity.

15. Proclamation No. 2146 (1981)

Proclaimed certain areas and types of projects as environmentally critical and within the scope of the
requirements of PD 1586.

B. DEFINATION OF TERMS
1. SALE: as defined under Section 1(b) of PD 957:

Sale or sell. “Sale” shall include every disposition or attempt to dispose for a valuable consideration
of a subdivision lot including the building and other improvements thereon, if any, in a condominium
project, “Sale’ or “Sale” shall also include a contract to sell a contract of purchase and sale, an
exchange, an attempt to sell an option of sale or purchase, a solicitation of a sale, letter,
advertisement or otherwise.

A privilege given to a member of a cooperative, corporation, partnership, or any association and/ or

the issuance of certificate or receipt evidencing or giving the right of participation in, or right to any
land in consideration of payment of membership fee or dues shall be deemed a sale.

2. SOCIALIZED HOUSING PROJECT: As defined pursuant to Section 18 of RA 7179:

Refers to housing programs and project covering houses and lot or homelots only undertaken by the
Government or the private sector for the underprivileged and homeless citizens which shall include
sites and services development long term financing, liberalized terms on interest payments, and such
other benefits in accordance with the provisions of RA 7279.
In addition to the definition in RA 7279, its shall to projects intended for the underprivileged and
homeless wherein the housing package selling price is within the lowest interest rate under the
Unified Home Lending Program or any equivalent housing program of the government, the private
sector or non-government organizations.
3. BULK BUYING Refers to the purchase of by a person, natural or judicial of more than one saleable unit
or within an HLURB approved subdivision for the purpose of re-selling the same with or without
introducing alteration in the approved plan (please refer to notes on exempt transactions)

4. CERTIFICATE OF REGISTRATION (CR): An issuance by HLURB that is proper only upon compliance with
Section 4 of PD 957 and other similar provisions of various rules. It vests legal status on the project
such that its name may change only upon proper application and publication among other
requirements.

5. LICENSE TO SELL (LS): A document granting authority to any registered owner developer to sell lots or
units within an approved subdivision or condominium project and providing for the duties and
responsibilities of said owner/developer.

6. TOWN PLAN: A) It is an official document adopted by a local government unit as a guide to decision
regarding the physical and socio-economic development to their community. B) It provides for the
directions on how the local leaders and their population would want their community to develop
within a given framework of time C) It sets the goals, objectives and policy guidelines of the local
government unit after defining the strengths and weaknesses. Identifying its opportunities and
threats in relation to its environs. In the Philippines, a town plan is synonymous to comprehensive
development plan, city plan, physical framework plan, comprehensive land use plan or municipal
development plan.

7. LAND USE PALN: It is the rational and deliberate allocation of land resources to different uses on the
comprehensive and integrated plan for the area. It translates the socio-economic, the infra-structure
and environmental plan into land allocations.

8. ZONING: It is the division of the community into functional zones based on the present and potential
uses of properties for the purpose of regulating the use and growth of properties in accordance with
the comprehensive development plan of the city.

9. ZONING ORDINANCE: A locally enacted legislation which embodies among other a) regulations
affecting uses allowed or not in each zone or district: b) conditions for allowing them c) procedure for
processing a request for a clearance and d) penalties for violating of its provisions.

10. LOCATIONAL CLEARANCE: It is a written authorization or permit to develop or use or construct in

certain areas or any parcel of land based on an approved land use plan or zoning ordinance; in the
absence the grant of permit shall be based on HLURB planning standards and quidelines.

11. ECOLOGY: A branch of science concerned with the interrelationships of organisms and their
environment.

12. ENVIRONMENT: Includes the physical factors of the total surroundings of human being including the
land, water, atmosphere, change, sound odor, tastes the biological factors of animals and plants and
the social factors of aesthetics. In a broad sense, it shall include the total environment of man, such as
economics social, political and historic factors.

13. CONVERSION: The act of authorization the change of the current use of a piece of agricultural land
into non-agricultural use. Such perm it is proper only upon issuance of a clearance from the
department of Agrarian Reform
 14. AGRICULTURAL LAND. Refers to land devoted to or suitable to agriculture as define in RA 6657 and
owned by natural or juridical persons. Or by the government in its proprietary capacity;

15. PRIVATE AGRICULTURAL LAND: Lands devoted to or suitable to agriculture as defined in RA 6657 and
owned by natural juridical persons or by the government its proprietary capacity, (For Nos. 13,14 &
please refer to attached notes on RA 6657 or CARP).

16. DEALER; Shall mean any person directly engaged as principal in the business of selling: or exchanging
real estate whether on full-time or part-time basis (Sect. 2(k). PD 957. A bulk buyer, which is for
purposes of this guidelines, is covered in the definition of a dealer, shall mean any person who
acquires a lot or a portion of the subdivision and who. With or without re-subdividing or introducing
housing or other facilities, seller the same. Under its previous license to sell or in license to sell or in
his name to the public.

17. SUBDIVISION PROJECT. As defined Sect 2 (d) of PD 957 a tract or a parcel of land registered under Act
No. 496 which is partitioned primarily for residential purposes into individual lots with or without
improvements thereon and offered to the public for sale in cash or installment terms. It shall include
all residential commercial industrial and recreational areas as well as open spaces and other
community and public areas in the project.

18. “HABITUALLY ENGAGED IN REAL ESTATE BUSINESS “IN ACCORDANCE WITH REVENUE REGULATIONS
NO. 2-98
A person or entity habitually engaged in real estate business is one who as owner or developer
undertakes development and construction of subdivision/housing for sale to the general public as
his/its regular source of income and has submitted and updated hits /its reportorial requirements to
HLURB in accordance with the government standards rules regulation.

C. ENVIRONMENTALLY CRITICAL AREAS (ECA): Refers to areas that are ecologically, socially, or geologically
sensitive as declared by law such as:
1. Areas declared by law as national parks, watershed reserves, wildlife preserves and sanctuaries;
2. Areas identified as potential tourist spots;
3. Areas that are habitats of endangered or threatened species of indigenous Philippine plants and
animals;
4. Areas of unique historic, archeological or scientific interest
5. Areas traditionally occupied by indigenous people or cultural communities;
6. Areas frequently hit by natural calamities (geologic hazards, floods, typhoons and
7. Activities)
8. Areas with critical slopes of 18% and above
9. Areas classified as prime agricultural lands.
10. Recharged areas of aquifer
11. Water bodies used for domestic supply or to support fisheries and wildlife;
12. Mangrove areas with critical ecological functions or on which people depend for livelihood: or
13. Coral reefs.

D. ENVIRONMENTALLY CRITICAL PROJECTS (ECP) Refers to a:

1. Heavy industry involving ferrous metal, iron or steel mills: petroleum or petro-chemical, oil gas, or
smelling plants:
2. Resource extractive project such as major mining and quarrying project, forestry logging project,
major wood processing, introduction of fauna of exotic animals in public or private forests, forest
occupancy extraction of mangrove products, grazing, fishery dikes, or fishpond development;
3. Major infrastructure project such as dam power plant (utilizing fossils-fuel, hydroelectric geothermal,
nuclear power) reclamation, bridge or a major road, bridge or a major road or
4. Golf course project.
E. DIFFERENT TYPES OF PROJECT REQUIRING CERTIFICATE OF REREGITRATION & LICENSE TO SELL FROM THE
HLURB
1. Condominiums
1.1 Residential
1.2 Commercial
1.3 Mixed Residential-Commercial
2. Residential
Categories:
PD 957 BP 220
Open market only Economic Socialized
No price ceiling Sells @ P/500,000.00 P/150,000 or
House & lot 180,000
30% open space is mandatory per PD 1216 Open space requirements is computed based on
the density of the project and not covered by
30% open space requirement
1. Follows the National Building Code (NBC) Relax the provision of NBC and FC but design
and the Fire Code(FC) and ; should conform with the minimum design
2. Follows the minimum design standards standards by HLURB in pursuance to the
setforth by HLURB adoption of BP 220; this serve as an incentive to
developers to engage in housing for the middle
income group and the low income group

3. Farm lots Subdivision 4. Commercial Subdivision 4. Industrial Subdivision

5.. Industrial Estate 6. Memorial Parks and Cemeteries’

F. BASIC REQUIREMENTS IN PROCESSING REQUEST FOR CERTIFICATE OF REGISTRATION AND LICENSE TO SELL

1. For residential projects

1.1 clearance from DAR, if applicable conformity with the Zoning the area
1.2 development plan approved by the local Government Unit
1.3 Environmental Compliance Certificate
1.4 Verified Survey returns from the LMS-DENR
1.5 Right over land, free from liens and encumbrances
1.6 Program of development
1.7 Organizational and financial capability to complete the project
1.8 Copy of contract to sell and ads materials to be used in the sale
1.9 Compliance to Sec 18 of RA 7279 or the Socialized Housing Project

2. For commercial, farm lots memorial parks and industrial estates

Numbers 1.1 to 1.8 above
3. Condominium projects
3.1 Plans to be approved by HLURB
3.2 Master Deed with Declaration of Restrictions
3.3 Building Permit
3.4 Numbers 1.1 up to 1.8 above

In cases where the project is not yet started or fully develop. The remaining development shall be
covered by a performance bond. All of these projects can only be registered after the required
publications and upon findings that the sale will not be fraudulent the owner developer is not ill
refute and that they are organizationally and financially capable to complete the project.

G. TRANSACTIONS EXEMPTED FROM SECURING CR/LS

 1. Sec 7, PD 957
(a) Sale of a subdivision lot resulting from partition of land among co-owners and heirs
(b) Sale or transfer of subdivision lot by the original purchaser thereof and any subsequent sale of the
same lot;
(c) Sale of subdivision lot or a condominium unit for the account of a mortgage in the ordinary course of
business when necessary to liquidate a bonafide debt

2. Per Resolution No. R- 546 s. 1994. Rules on Bulk Buying as an Exempt Transaction
(a) Bulk Buying as an exempt transaction:

Bulk buying of lots and subsequent introduction of housing unit without altering the original plan
(b) Bulk buying as an Exempted from securing CR/LS:
Bulk buying with construction of housing units resulting in increased density from the original plan;
bulk buying resulting in the re-subdivision of lots issuance of new TGTs
3. On site Community Mortgage Projects
4. NHA controlled projects

H. MODE OF COMPLIANCE WITH SECTION 18 OF RA 7279

The developer may choose any of the following as compliance:

1. Development of a New Settlement
2. Slum Upgrading. To be certified by the National Housing Authority or the Local Government Unit
Concerned.
3. Participation in the Community Mortgage Program either as a financier or a developer
4. Joint Venture Project with the Local Government Unit concerned consisting of

Participation equivalent to 20% of the project area or 20% of the local development cost of the main
project. It may consist in or include the purchase of socialized housing bonds by the owner-developer.

5. Purchase of socialize housing bonds from PAG-IBIG.

I. DUTIES AND RESPONSIBILTIES OF OWNERS/DEVELOPERS OF SUBDIVISION AND CONDOMINIUM PROJECTS

UNDER PD 957
(Please refer to the particular section of PD 957 as follows

1. Mortgage: Section 18
2. Advertisements: Section 19
3. Time of Completion: Section 20
4. Alteration of Plan Section 22
5. Non-Forfeiture of PAYMENTS: Section 23
6. Issuance of Title Section 25
7. Donation of Open Spaces: Section 31 as amended by PD 1216
8. Organization of Homeowners Association: Section 30
9. Reality Taxes Payment: Section 26
10. Other Charges: Section 27

J. Rules and Regulations on the Conversion of Agricultural Lands to Non-Agricultural Uses (DAR
Administrative Order 01, Series of 2002)

Legal Bases
1. RA 6657: Comprehensive Agrarian Reform Law of 1987
2. RA 8435: The Agricultural and Modern Fisheries Modernization
Governing Policies
1. Preservation of agricultural lands to ensure foods security.
2. Provide all economic sectors and all regions optimum opportunity maximize agricultural productivity.
3. Conversion shall strictly regulated and allowed only according to RA 6657 AND RA 8435.

Coverage: Agricultural lands to be converted to

1. Agricultural lands to be converted to non-agricultural uses.
2. Agricultural lands to be converted to another type of agricultural activities such as livestock, poultry and
fishpond, the effected of which is to exempt the land from Comprehensive Agrarian Reform Program
(CARP)
3. Agricultural lands to be converted to non-agricultural use other than previously authorized.
4. Agricultural lands reclassified to non-agricultural uses by the LGU after5 June 15, 1988.

Who May Apply

1. Owners of private agricultural lands or other persons duly authorized by landowners.
2. Beneficiaries of the agrarian reform program after the lapse of 5 years from award reckoned from date of
issuance of the C.L.O.A. (Certificate of Land Ownership Award) with fully paid obligation and qualified to
apply.
3. Government agencies, including government owned or controlled corporations, LGUs owners of
agricultural lands as patrimonial property.

Priority Development Areas for Conversion

1. In accordance with RA 7916, EO-124 of 1993 and EO 258 of 200;

1.1 specific areas in Regional-Agri -Industrial Centers/Regional Industrial Centers
(RAIC/RIC) Identified by the Dept. of Trade and Industry and Dept. of Agriculture
Pursuant to EO 124 OF 1993
1.2 Tourism Development areas identified by the Dept. of Tourism pursuant to EO 124 OF 1993.
1.3 Agricultural areas intended for Eco Zone Projects endorsed by Philippine Economic Zone Authority
(Pursuant to RA 7916.
1.4 Agricultural land, owned by the government, to be converted for projects of national interest, as
certified by proper government agency.
1.5 Agricultural land proposed to be developed as sites for processing plants of agricultural products, as
certified by the Dept. of Agriculture.
1.6 Sites intended for telecommunication facilities endorsed by the National Telecommunications
Commission.

2. Housing projects. In case of mixed use of housing projects and non-housing projects, the application shall.
Not enjoy then privileges of housing projects unless at least 80% of the land applied for conversion shall
be used directly and exclusively for housing.

Lands within SAFZ: or areas identified for production agro-processing and marketing activities to help develop and
modernized, with support of the government, the agriculture and fisheries sectors in an environmentally and
socio-culturally sound manner.

1. All irrigated lands, irrigable lands already covered by irrigation projects with firm funding commitments,
and lands with existing or having the potential for growing high-value crops included within the SAFDZ
shall be subject to a conversion moratorium for a period of five (5) years from 10 February 1998 to 9
February 2003.
2. During the effectivity of the moratorium conversion may be allowed with respect to only five percent (5%)
of said lands within SAFDZ upon compliance with existing laws, rules and regulations.
 3. The maximum of five percent (5%) of lands eligible for conversion to non-agricultural use from the total
SAFDZ area shall be jointly determined by the DA and the DAR, upon the recommendation of the Regional
and National SAFDZ Committees pursuant to Rule 9.5.2 of DA-AO-6-1998, or implementing rules and
regulations of RA 8435.
4. After the expiration of the conversion moratorium, conversion may be allowed on case to case basis,
subject to existing laws, rules and regulations on land use conversion.

Areas Non-Negotiable for Conversion

1. Lands within protected areas designated under the NIPAS (National Integrated Protection System),
Including mossy and virgin forest, riverbanks, swamp forest or marshlands.
2. All irrigated lands as delineated by DA and/or NIA , where water is available to support rice and corn
production(Dept. of Agriculture /National Irrigation Authority).
All irrigated land where water is not available for rice and corn production but are within areas
programmed for irrigation facility by DA and /or NIA.
3. All irrigable lands already covered by irrigation projects with firm finding commitment as delineated by DA
and/or NIA.
4. All agricultural lands with irrigation facilities.

All applications for conversion involving areas non-negotiable for conversion shall not be given due course, even
when portions thereof are eligible for conversion.

Areas Highly Restricted for Conversion

1. Irrigable lands not covered by irrigation projects with firm funding commitment.
2. Agro-industrial croplands or lands presently planted to industrial crops that support the economic viability
of existing agricultural infrastructure and agro-based enterprises.
3. Highlands or areas located in elevations of 500 meters or above and have the potentials for growing
semi-temperate and usually high value crops.
4. Land issued with notice of land valuation and the beneficiaries under the voluntary land transfer/direct
payment scheme under the CARP.
5. Environmentally critical areas as determined by the DENR in accordance with law.

Conversion to Home lot

Conversion to a home lot is allowable when the applicant owns the lot that he proposes to convert, he
intends to establish a dwelling place for himself on said lot; the lot has an area not exceeding 500 square
meters and the conversion shall be from agricultural to purely residential use.

Procedure s

Conversion may be allowed:

1. If the land subject of conversion is not those considered non-negotiable for conversion
2. When the land cease to be economically feasible and sound for agricultural purposes OR. The locality has
become urbanized and the land will have greater value for residential, commercial, industrial and other
non-agricultural purposed.
3. For lands within SAFDZs (Strategic Agricultural and Fishes and Development Zones)
3.1 Conversion is consistent with the natural expansion of the locality, as contained in the approved LUP.
3.2 The area is not the only remaining food production area of the community.
3.3 Conversion shall not hamper the availability for irrigation to nearby farmlands.
3.4 Land is law productivity area
3.5 Sufficient disturbance compensation to affected farmers.
3.6 Shall not adversely air and water quality and the ecological stability of the area as determined by the
EIA(Environmental Impact Assessment)
Posting of Cash Bond performance Bond
a. To guarantee that there will be no premature conversion while application is under process and ensure
faithful compliance with conditions of the conversion order (per Section 35, Chapter IV of the
Administrative Code of 1987).
b. Cash bond equivalent to 2.5% for the total zonal value of the land;
● Refundable upon issuance of conversion order or convertible to into performance bond at
applicant’s option.
● Shall be forfeited in favor of the government in event of actual conversion by applicant prior to
approval of application
● Forfeiture shall be without prejudice to the filing of criminal charges against those responsible for
premature conversion

Performance bond shall be posted within five 5 days from issuance of the conversion of the conversion or order in
any of the following form

1. Cash manager’s check, irrevocable letter or credit bank draft equivalent to 2.5% of the total zonal value of
the lands.
2. Bank guarantee equivalent to 15% percent of the total zonal value of the land.

(shall be posted in favor of DAR to guarantee the payment of amount of security as penalty in the event of
applicant’s default to comply with conversion order:)
(Shall be co-terminus with the final completion of the project and will be forfeited in favor of the government
in case of violence).

Disturbance Compensation
1. Cash in kind shall be paid by landowner or developer to ensure farm workers, or bona fide occupants to be
affected by the conversion.
2. Mutually agrees upon between land owners or the developer
3. Not less 5 times the average of the gross harvest on their land landholdings for the past 5 proceeding
calendar years.
4. Fee housing, homes lots, employment and other benefits
5. Must be approved be DAR
6. In case of disagreement on the amount of, may be brought to the DAR Adjudication Board for resolution.

Effects of Conversion Approval

1. Shall be limited to the specific use of the land authorized in the conversion.
2. Subjected to the schedule indicated in the plan, but in no caseb shall exceed beyond five years from
issuance of conversion order, excepts as allowed.
3. Condition shall be binding upon successor-in-interest of the property
4. DAR representative shall henceforth allowed entry to monitor compliance with conversion order
5. Use authorized in the conversion order shall be annotated at the back of
6. Shall be without prejudice to ancestral domain claims of indigenous peoples, if any subjected to
Indigenous People Rights Act.

Approving Authorized: Official Authorized to Approved/Dis approve Conversion Requests

1. Five (5) lectures: Regional Director
2. Above 5 hectares involving several parcel that total areas exceed 5 hectares:
● Located within the same or adjacent barangays
● Adjacent to an area previously granted conversion order
● Single project, with different owners, within same or two or more barangays.

Grounds for revocation of Conversion Order

1. Lack of jurisdiction by approving authority.
 2. Misrepresentation of facts
3. Non-compliance with the conditions of conversion order
4. Non-compliance with the agreement on disturbance compensation payment
5. Conversion to other use other than authorized
6. Any other serious violation of agrarian laws.

Penalties and Sanctions

1. Administrative:
-cancellation of approval
-blacklisting
-automatic disapproval of subsequent application
-CDO, in case of premature conversion
-Forfeiture of cash bond or performance bond

2. Criminal
-imprisonment: 2 to 6 years
-fine or
-both

Exemption: DAR AO# 6 of 1994 9guidelines for the Issuance of Exemption Clearance bases of Sec. 3 © of R.A. 6657
and DOJ Option No. 44 Series of 1990).

● Section 3 © of R.A 6657 to agricultural lands devoted to agricultural activity and not classified as mineral,
forest, residential, commercial or industrial land.
● DOJ Option:
Ruled that the authority classified as commercial, industrial, residential before June 15, 1998 no longer
need conversion clearance.

October 23, 2002

NOTES ON BATAS PAMBANSA BLG. 220

Approved March 25, 1982

An act authorizing the ministry of Human Settlements to established and promulgate different levels of standards
and technical requirements for economic and socialized housing projects in urban and rural areas from those
provided under:

PD 957- Subdivision and Condominium Buyers Protective Decree:

PD 1216-Define Open Space in Residential Subdivision;
PD 1098-National Building Code and
PD 1185-Fire Code of the Philippines

Economic and Socialized Housing –refers to housing units which are the affordability level of the average and
low-income earners which is 30% of the gross family income as determine by National Economic and Development
Authority and also those initiated government sites and services development and construction of economic and
socialized housing in depressed areas.

72SQ.METERS-minimum lots size if the project does not include housing component and its cost shall be 40% of the
total selling allowed.

BP 344-Accessibility Law

TABLE 1
Required area for community facilities according to density (socialized and economic)
DENSITY AREAS FOR COMMUNITY FACILITIES
No. of lots or living units per hectares % of area of subdivision
150 and below 1%
151 to 225 1.5%
Above 225 2.0%

TABLE 11
Required area for parks and playground according to density (socialized and economic)
DENSITY AREAS FOR PARKS AND PLAYGROUND
150 and below 3.5% of gross area of subdivision
151-160 4.0%
161-175 5%
176-200 6%
201-225 7%
Above 225 9%

Note: Minimum size for pocket park is 100 sq. meters

Application for socialized and economics housing

10 METERS-minimum right of way for major road
6 METERS-minimum carriage way for major road
3 METERS-minimum right of way for minor road
5 METERS- minimum carriage way for minor road
6 METERS-minimum right of way for major court
3 METERS-minimum right of way for alley, foorpath, pathwalk, access to interior lot

BP 220 (Page 2)

60 METERS – maximum length of alleys and pathwalks

50 METERS- maximum distance of street lights
Maximum Lot Areas
-single detached -72 sqm, for economics 72 sqm for socialized
-single attached/duplex -54 sqm 54 sqm
-rowhouse -35 sqm 32 sqm

Price Ratio to be maintained

-lot should be 40% of selling price
-house should be 60% of selling price

Maximum Lot Frontages (economic and socialized)

-single detached (10m. for corner lot, 8m for regular lot 4m for irregular lot
-single attached/duplex (6meters)
-rowhouse (3.5 meters)

Minimum Setback Requirements (economics and socialized)

-single detached (front-1.5m, sides-2.00; 2.00m-rear)
-single attached or duplex or semi-attached (front-1.5m; side and one rear-2m

400 METERS- maximum block length. Block length exceeding 250 meters shall be provided by an alley

2STOREY- maximum number of storey

Minimum Floor Area Requirement
-single family dwelling -22sqm.
-economic -20sqm.
-socialized -18 sqm.

Minimum Ceiling Height

-2 meters headroom clearance
-1.8 meters for mezzanine (mezzanine shall not cover 50% of the floor area below it)

Administrative sanctions and penalties-for non-development

Homeowners Association- shall be registered with HLURB
Donation of roads and open spaces- to the local government
Parks and playground- maybe donated with the Homeowners Association
Water supply system- maybe donated also to the Homeowners Association

Ground for revocation of registration certification and license to sell:

-the owner or dealer is insolvent:
-has violated any provisions of the law;
-has been engaged in fraudulent transactions.

Ground for suspension license to sell/cease and desist order:

-upon verified compliant filed by the buyer;
-misleading information in the registration
When the developer/dealer is engaged in any act or practice which constitute violation

REPUBLIC ACT NO. 6552 (MACEDA LAW)

An act To Provide Protection To Buyer Of Real Estate On Installment Payments

SECTION 1: This act shall be known as the “Realty Installment Buyer Protection Act.

SECTION 2: It is hereby declared a public policy to protect buyers of real estate on installment payments against
onerous and oppressive conditions.

SECTION 3: In all transactions or contracts involving the sale or financing of real estate on installment payments,
including residential condominium apartments but excluding industrial lots commercial buildings and sale tenants
under RA No. 3844 as amended by RA No. 6389, where the buyer has paid at least two years of installments,
succeeding installments.

(a) To pay, without additional interest, the unpaid installments due within the total grace period earned by
him, which is hereby fixed at the rate of one month grace period for every one years of installments
 payments. Provide , that this right shall be exercised by the only once in every five years of life of the
contract and its extensions, is any.
(b) If the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the payments
on the property equivalent to 50% of the total payments made and after five years of installments, an
additional 5% every year but not to exceed 90% of the total payments made: Provide that the actual
cancellation of the contract shall take place after 30 days from receipt by the buyer of the notice of an
cancellation or the demand for the recission of the contract by a notarial act upon full payment of the cash
surrender value to the buyer.
(c) Down payment, deposit or options on the contract shall be included in the computation of the number
installments made.

SECTION 4: In case where less than two years of installment were paid, the seller shell give the buyer a grace period
of not less than sixty days from the date the installment became due. If the buyer fails to pay the installments due
at the expiration of the grace period, the seller may cancel the contract after thirty days from receipt by the buyer
of the notice of cancellation of the demand for recission of the contract by a notarial act.

SECTION 5: UNDER Section 3 and 4, the buyer shall have the right to sell his rights or assigns-the same to another
person or to reinstate the contract by updating the account during the grace period and before the actual
cancellation of the contract. The deed of sale or assignment shall be done by notarial act.

SECTION 6: The buyer shall have the right to pay in advance any installment or the full unpaid balance of the
purchase price anytime without interest and to have such full payment of the purchase price annotated in the
certificate of title covering the property.

SECTION 7: any stipulation in any contract hereafter entered into contrary to the provisions of section 3,4,5 and 6
shall be rull and void.

SECTION 8: If any provisions of this Act are held invalid or unconstitutional, no other provisions shall be affected
there by.

SECTION 9: This shall take upon its approval.

APPROVED, SEPTEMEBER 14, 1972.

VALUATION APPROCHES AND TECHNIQUES

LAND BUILDING RESIDUAL TECHNIQUE.

The residual method requires the appraiser to have the following information:
● Reliable estimate of market value or actual market value sale of a property (preferred).
● Good description of the building (construction type, size, condition, area, etc
● Reliable building costs and depreciation rates allows the value of building of that particular age style and
condition.

Hypothetical Development- The hypothetical process allows the value of the land and buildings to be determined
in cases where there may be no sales.

Example:
 1. Know value of the raw land, determine the value of developed lots

Assumptions:

60 lots to be developed and sold

Purchase of large parcel P 12,000,000.00
Add: Survey cost permits & const. cost 16,000,000.00
Loan interests, advertising, etc. 2,500,000,00

Total investment P 30,500,000.00

Market-up of 25% of the investment P 7,625,000.00

Total Cost including. Mark-up P 38,125,000.00

Selling Price each lot:

P 38,125,000/60 P 635,500.00/lot
vvvvvvvvv

2. Know value of developed lots, determine the value of the raw land

Assumptions/Given:

Lot value of developed area=P 635,500

Find the estimated value of the raw land

Solution:

Total projected Gross Income: 60@ P635,500.00= P38,000.130,00

Mark-up is 25%, so the calculation is:
P38,130,000/125%X25% P 7,626,000.00

Thus, balance available for dev’t., etc is P30,504,000.00

Less:
Est. cost for const. cost, survey, etc P 16,000,000
Loan interest, advertising, etc 2,500,000

Balance Available for land purchase P 12,004,000.00

vvvvvvvvv

3. Know rental rates per sq.m., determine the value of commercial lot.
Find the value of the vacant land in a commercial area

Given:
a.) Size 20m 25m = 500sq.m.
b.) Supports 4 individual ground level retail shops each 5x20 with an area for unloading/casual storage.
c.) Building unit const cost P 5,000/SQ.M.
 d.) Pavement= P 100 sq.m. @ P 450/sq.m.
e.) Fencing and gate P 40,000.00

Assumptions:

Ground level retail shops (if constructed)

=4XP100XP1,100 sq.m. = P440,000.00
Ground rent for the offices (2nd level)
=4XP100XP675 sq.m. =P270,000.00
Total P710,000.00

Capitalization rate 9%

To find market value of the entire property = Total rent/cap rate

= P710,000,9%
Market Value of the land =P7,888,888 say
=P7,900,000
vvvvvvvvv

To find the Market Value of the Land:

Market Value =P7,900,000.00
Less:
Value of main building X2
New Bldg (no dept.) 400 sq.m,Mx2@ P5,000 = 4,000.000.00
Pavement (P100sq.m.@ P450/sq.m.) 45,000.00
Fence and gate = P 40,000.00

P4,085,000.00

Thus Value attributable to land =P3,815,000.00

Unit Value (P3,815,000/500) =P7,630/sq.m.

Example 4. Known Value of the whole property with depreciation, determine the value of the land.

Given:
House and lots sold property for P1,120,000
Land area =240 sq.m.
Floor area =112 sq.m. Type III (Fiar quality)
RCN =P8,000sq.m.
Building age =10 years
Dep allowance =42.5%
Impt. Concrete pavement and fence=P85,000

Solution:
Sale price = P1,120,000
Less Dep value of the house
RCN=112 sq.m,. X P8,000 =P896,000
Depn=896,000X42.5% =P380,000

Dep value of the house =P516,000

Add: Impts = 85,000
 P601,000

Residual Value of the Land =P 519,000

Unit Value (P519,000/240sq.m.) =P2,162/sq.m.
Say 2,200/sq.m.

Two Main Capitalization Techniques

1. Direct Capitalization Technique-is the techniques used to convert an estimate of single years income into
an indication of value by either
a.) Dividing the estimated income by an appropriate capitalization rate. The appropriate capitalization or
income multiplier rate is based on the analysis of comparable properties considering similar attributes
(physical, location, financial, etc.) and selecting an appropriate rate.
b.) Multiplying the income estimate by an appropriate income multiplier. The income multiplier rate is
derived by dividing comparable selling prices by the income of comparable properties
2. Yield Capitalization Technique or Discounted Cash Flow

Conceptually, the property capitalization rate is the sum of two rates, the rate of return ON the investment
property (interest rate) and the rate of return OF the investment/property called the (recapture).

Example

A property sells for P1M and property generates an annual net income of P100T for the first year of ownership.
The income multiplier said to be 10 times (P1M/P100T) and the capitalization rate is 10% (P100T/P1M).

Techniques in determining Capitalization Rate

1. Comparative method – the appraiser ascertains selling prices and corresponding income of several
comparable properties and determines the appropriate capitalization rate by getting the ratio income to
sale prices.
Example:

a. Property A – selling price is P2M and its annual net income is P120,000.

The rate of return is 6% (P120,000/P2M).

b. Property B – selling price is P1M and its annual net income is P60T. The rate of return is also 6%
(P60,000/P1M).
c. Property C – selling price is P1.5M and its annual net income is P100T. The rate of return is 6.67%
(P100,000/P1.5M).

From these rates of return the appraiser will select the area of return that is in his judgment is the most
applicable and appropriate to the subject property under appraisal.

2. Component Rate Method – the rate of return of the subject property will not depend on the income and
selling prices of comparative properties but also on the quality of the investment/property.

Example:

Fist establish a base rate or safe rate (which is usually the rate of return of an Investment having the
greatest liquidity and safety such as the rate of
Government securities like the government T-bills say 4%

Add :
Risk rate (allowance for the ability of the property
 To general current income, say 2.5%
Penalty for non-liquidity and relative salability,
Rentability collateral value of the property, say 2.0%
Burden of managing the property 1.25%

Total capitalization rate 9.75%

Note: The over all capitalization rate decreases as the quality of the subject
Income property increases and vice versa.

APPLICATION OF CAPITALIZATION TECHNIQUES

3 basis techniques of Direct Capitalization Method

1. Building Residual Technique

2. Land residual technique
3. Property residual technique

BUILDING RESIDUAL TECHNIQUE

This technique is used when the value of the land is known (by market approach) and the value building is not.

Example

Data:
a. Value of the land P1.5M
b. Annual net income P150T
c. Capitalization rate 7%
Interest rate 4%
Recapture rate 3%
Estimate Property Value using Building Residual Technique

Solution:

Income attribute to the property (land and building) P150,000

Less: Income attribute to land (P1.5M X .04) P 60,000
Residual income attributable to building P 90,000
Estimate Value of the building:
Building cap rate – 7% therefore P90T/.07 P1,285,714
Add: Value of the land P1.5M
Total Property Value P2,785.714
vvvvvvvvv

LAND RESIDUAL TECHNIQUE

This technique is used when the value of the building is known (by copst approach) and the value of the land is not.

Example:

Data Given:
Value of the building is P1.5M
Annual net income P150T
Over-all cap rate is 7%
 Interest rate is 4%

Compute the property value using the Land Residual Technique

Income attribute to land and building P150,000

Less: Income attribute to building (P1.5M x .07) P105,000
Residual income attribute to land P 45,000
Est: land value (P45,000/.04) P1,125,000
Add; Value of the building P1,500,000

Total Property Value P2,625,000

vvvvvvvvv

PROPERTY RESIDUAL TECHNIQUE

This technique assume that the value of the property cannot be segregated between land and building
and is capitalized at its over all capitalization rate. The value of either one of the property components not be
reasonably estimated.

This technique is used when the building is relatively old and very difficult to estimate its reproduction or
replacement cost-new and there is no recent sale of comparable land property in the market.

Example:

The annual net income of the property is P200T and the over all cap rate is 7%

The total property value can be estimated by dividing the income (P200T) by the cap rate (7%)
P200T/.07=P2,857,142