What happens to a condo after 50 years?
It’s not surprising to hear people say that investing in or buying a condominium is part of their goals. After all, as an investment in the Philippines, a condo in the city offers a lifestyle centered on comfort and convenience.
But is a condo worth it for the long haul? Whether you’re a go-getter chasing after that check and climbing up the ladder, an adult starting or growing a family, or a senior leader in the community wanting to put your money into real estate, it is important to know what becomes of your condo after 50 years.
Republic Act No. 4726 aka “The Condominium Act”
To protect consumers, Section 8C of The Condominium Act states three elements that would categorically define a condo building or structure as unfit for tenants. For an entire condo building or project to be up for selling, it must be:
- Over 50 years in existence
- Obsolete and uneconomic, which means it is of no value
- The majority of unit owners reject the idea of repairing the building.
But it doesn’t necessarily mean that if a condo reaches 50 years and upwards, it is considered obsolete and uneconomic by default. If the building is 50 years old and is still habitable, then things remain at status quo.
However, if at 50 years, a condo project fails the necessary building inspections and safety certifications, and the other elements as stated in The Condominium Act are satisfied, selling it becomes a viable option.
Given the vast options of Manila condos for sale, due diligence is warranted before signing any contracts and pushing forth with such an investment.
Modern condo building construction and development
With the rise of green building projects, a shift towards sustainability, and long-term benefits, most condominium buildings are more than likely to survive past 50 years. Especially when a complex is well maintained and a majority share of homeowners believe that their building is safe and secure, the need for demolition is deemed unwarranted.
If a 50-year-old condo is nearly dilapidated and it requires monthly maintenance fees to cover repairs, alongside the need to pay real property tax assessed at a cost higher than the average monthly rental value of a similar unit in another property, it might be wise for the homeowners to seek legal advice and consider selling.
So, what happens if a condominium building is deemed untenantable?
In the event that a condominium is declared obsolete, uneconomic, and uninhabitable, the unit owners have to convene, evaluate their options moving forward, and cast a vote. The collective can either sell the property and divide the profits of their shares accordingly or engage with the original developer and erect a new condo building on their land.
The unit owners of a condominium form a corporation—a legal entity that serves to represent the interests of the collective. Any action relevant to everyone’s well-being in the condominium requires a majority vote to push through. Your voting power is equivalent to the size and value of your property, so the more units you own, the larger is your stake in the corporation.
As a condo unit owner, you are a member of this corporation by default, which includes the actual structure, the land where the property is standing on, and all other interests like common areas and amenities.
As a guiding principle, securing a real estate loan to turn your investment into reality is advisable when one already has their life savings in the bag. This enables you, as a condo unit owner, to exercise more options and enjoy financial freedom after your investment turns 50 years old. So, if you’re ready to invest in homeownership, feel free to send us a message to find out more about Metrobank’s home loan.
Is a condo considered a lost investment in the Philippines after 50 years?
Depending on how you perceive a loss, a condo unit can become a great investment even after 50 years especially if you consider its benefits.
For example, choosing to invest in a condo in one of Metro Manila’s central business districts allows you to save up on gas or commuting fare if your workplace is within walking distance from your property. You can calculate the amount of money you saved from walking in the amount of years living in that condo versus living elsewhere and allocating gas and travel expenses. What you might fail to quantify, however, is the value of convenience and the amount of time you saved living near your workplace.
A condo is often a more cost-effective option than a house since it is more affordable, allowing you to finish paying for it faster, so you can enjoy its benefits right away.
Whether you intend to use a condo unit for yourself, resell it later, or put it up for rent, you are assured that after 50 years, your shares in the property are not lost in the air. Condominiums have the potential to keep growing in value. Like any investment, it is up to you to make the right move towards generating higher ROI.
Ready to buy a condo unit? Apply for a Metrobank Home Loan today and start making meaningful memories in your new home.
