Philippine Senate Ratifies Bill Easing Redevelopment of Aging Condominiums
Key Takeaways
- •The Philippine Senate ratified a bicameral conference committee report reconciling Senate Bill No. 2420 and House Bill No. 2286, which seeks to encourage redevelopment of aging condominium projects.
- •Under the reconciled measure, redevelopment requires approval from two-thirds of unit owners for condominiums aged 30 to 50 years, while a simple majority suffices for projects older than 50 years.
- •Floor-area deviation rules were simplified from five brackets to three, with stricter limits ranging from 1% to 3% depending on unit size.
- •The final version provides two liquidation options: selling the entire condominium project or declaring liquidating dividends to shareholders.
- •With ratification complete, the bill will be transmitted to the President, whose approval or veto is the last step before the measure can take effect.
The Philippine Senate on Thursday ratified a measure seeking to protect condominium unit owners, occupants, and the public from the dangers posed by aging condominium buildings by providing incentives for their redevelopment.
The ratification followed a bicameral conference committee report — the stage of the legislative process in which negotiators from both chambers reconcile their differing versions — that reconciled Senate Bill No. 2420 and House Bill No. 2286, the versions separately passed by the Senate and the House of Representatives. Senator Francis G. Escudero, who sponsored the report, said the bill rationalizes the voting requirements that unit owners must meet to exercise their rights in the redevelopment of aging condominium projects.
Under the reconciled measure, approval by two-thirds of unit owners will be required for condominiums aged 30 to 50 years, while a simple majority vote will suffice for projects older than 50 years, according to Mr. Escudero. That age-based scale is where the bill's incentive for redevelopment takes shape: as a project grows older, the share of owner consent required to move a redevelopment forward shrinks.
The senator said the measure also reconciles differences between the two versions on adjusted floor area and liquidation options. Floor-area deviations, previously grouped into five brackets, were simplified to three, with stricter limits ranging from 1% to 3% depending on the size of the unit.
Mr. Escudero added that the final version provides two options for liquidation: selling the entire condominium project or declaring liquidating dividends to shareholders.
Condominium projects in the Philippines are currently governed primarily by the Condominium Act, or Republic Act No. 4726, a law enacted in 1966 that predates the aging projects the bill seeks to redevelop by decades. Under Philippine legislative procedure, a ratified bill is enrolled and transmitted to the President for approval into law or veto. With ratification complete, the President's decision is the remaining step before the measure can take effect.
The report was first published by BusinessWorld Online, with reporting by Francessca S. Abalos (original article).
