Opinion No. 05-17 RE : Voting requirement in Condominium Corporation

.,. ) 0' I ... Republic of the Philippines SECURITIES AND EXCHANGE COMMISSION SEC Building, EDSA, Greenhills Mandaluyong City Metro Manila Philippines 5 December 2005 SEC Opinion No. 05-17 Voting Requirement in Condominium Corporation MS. AMELIA GINA I. CARAGA Y Property Manager Pioneer Highlands South Condo. Corp. Pioneer corner Madison Streets, Mandaluyong City Madam: This refers to your letter dated ] 2 July 2005 requesting opinion on the queries posed therein: 1. Whether the Master Deed of Pioneer I-lighlands Condominium Corporation (Pioneer) may be amended or revoked upon registration of an instrument by a simple majority of the registered owners of the property based on floor area of ownership. 2. Whether the simple majority based on floor area of ownership is also applicable in computing for the equivalent number of votes unit owners are entitled to when they participate in election process or any decision requiring their participation. Relative to your first query, Section] of Republic Act No. 78991 categorically provides and we quote: "Section L IAn Act amending Section Four and Section Sixteen of Republic Act NumoelTed Four Thousand Seven Hundred Twenty-Six, Otherwise known <IS "lhe Condominium Act".

..- ' . " ~l • o The enabling or master deed may be amended ~r revoked IIPOIl registration of an instrument execllted by a simple majority of the registered owners of the property: Provided, That in a condominium project eXclusir1ely for either resident or commercial use, simple majority shall be on a per unit of ownership basis and that in the case of mixed llse, simple majority s1lall be on a floor area of ownership basis." Considering that Pioneer is a mixed-use condominium, amendment or revocation of the enabling or master deed requires registTation of an instrument executed by a simple majority based on floor area of ownership. Anent the second query, Article 1, Section 7 of the amended by-laws of Pioneer and Part 1, Section 14(d) last paragraph of the Amended Master Deed with Declaration of Restrictions provide and we quote respectively: "Section 7. Voting Proxy -l\le11lbers s1lall be entitled to one vote, and they may vote either ill person or by proxy, which shall be in writing and filed with the Secretary of the association b~fore the scheduled meeting." (Underscoring Ollrs) "Section 14. THE CONDOMINIUM CORPOI~A TlON/S: xxx Each llnit owner shall have one vote in the Condominillm Corporation/so However, in cases where Republic Act No. 4726, as amended, requires the vote of owners owning a speCific percentage interest in the common areas as a condition precedent for the approval of certain corporate acts, then tlle interest of the owner shall be determined on the basis of the forlllula used to determine its pro-rata share in the expenses for general cOl11mon/areasIInder Section 13. For pW110sesof this Section, Unit owners are defined as those who have paid for their IInits and who are not delinquent in the paYIIlCllt of allY assessment levied lipan them at the time of the transfer of the IInit. The mm11ler and procedure for voting shall be governed by the By-laws of the Condominium C01poration." (Underscoring Ours) TIle aforequoted provisions of the amended by-laws and the amended Master Deed of j"ioneer entitle every unit owner to one (1) vote irrespective of floor area of ownership in the election process or any decision requiring their participation except in cases where the RA. 47262, as amended, provides otherwise. 2 Section 10 of Republic Act No. 4726, otherwise known as An Act to Define Condominium, U Establishing Requirements for its Creation, and Govern its incident.

( ,<$ - •. Finally, it is to be sh'essed that, in the amendment of Articles of the Incorporation of Pioneer, the Corporation Code requires the concurrent votes of at least a majority of the board of directors and by two-thirds (2/3) of the members or unit owners.3 In case of amendm~nt of the By-laws, the approval of the majority of the board and majority of the unit owners or members4 is required under the Code. Very h'uly yours, w<--- VERNETTE G. UMALI-PACO General Counsel ':' .. ,3 S~ction l6. Amendment of Articles of Incorporation. - Unless otherwise prescribed by this Code or by special law, and for legitimate purposes, any pro~ision or matter stated in the articles of incorporation may be amended by a majority vote of the hoard of directors or trustees and the vote or written assent of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock, x x x or the vote or .written assent of two-thirds (2/3) of the memhers if it be a non-stock corporation. . 4 Section 48. Amendment to by-laws - The board of di.'ectors or trustees, hy a majority vote thereof, and the owners of at least a majority of the outstanding capital stock, or at least a majority of the members of a non- . stock corporation, at a regular or special meeting duly called for the purpose, may amend or repeal any by- laws or adopt new by-laws. x x x