The proposed Condominium Redevelopment Act would change how the Philippines manages its aging condominium buildings, protects the property rights of unit owners, and uses scarce urban land. Senate Bill No. 2420 amends Republic Act No. 4726, the Condominium Act of 1966, with new rules on governance, maintenance, dissolution, and redevelopment. The Senate approved it on third reading in September 2026, and in October ratified the bicameral conference committee report reconciling it with House Bill No. 2286. The measure now awaits the President’s action.
The problem it addresses is familiar. How can a condominium be redeveloped when its structure has deteriorated, its economic usefulness has declined, or its owners cannot agree on what to do? Under the present law, dissolving a condominium corporation for redevelopment generally requires the consent of all its members, so a single owner can block a project.
The issue reaches beyond developers and unit owners, however. Condominium redevelopment is also a housing policy question. The test is not whether redevelopment produces taller buildings, more units, or higher property values, but whether it improves the availability, affordability, accessibility, and security of housing. This article examines the measure against three tests: economic efficiency, protection of property rights, and housing welfare.
Condominiums and the Philippine housing problem
Vertical development has reshaped Philippine cities. By placing many dwellings on a small parcel, it offers an alternative to the continuous horizontal spread of subdivisions. This matters most in Metro Manila, Metro Cebu, and other urban centers, where developable land is limited and residential, commercial, industrial, and infrastructure uses compete for it. A hectare that might hold a few dozen detached houses can, subject to zoning, building regulations, infrastructure capacity, and feasibility, hold several hundred condominium units, spreading the cost of land across far more dwellings.
Density does not, however, produce affordability by itself. High-rise construction carries heavy costs for structural systems, elevators, fire protection, mechanical equipment, common facilities, and continuing maintenance. The resulting units may remain beyond the reach of the households in greatest need. This is why unmet housing need in the Philippines can coexist with large unsold condominium inventories in some market segments. The contradiction is not evidence of too little or too much construction across the whole market. It reflects a mismatch between what is built, where it is built, the prices at which it is offered, and what households can finance.
The figures bear this out. The 2020 census counted 169,327 occupied housing units in condominiums or condotels, only 0.7 percent of the national total. In Metro Manila, middle-income inventory stood at 80,300 unsold units across 578 actively selling buildings at the end of November 2025. The Makati central business district, where redevelopment interest is concentrated, accounts for less than two percent of Metro Manila’s unsold ready-for-occupancy units. Redevelopment in prime districts will add premium supply; it will not by itself reach the households in need.
Housing need is not the same as effective demand, and neither is the same as demand for homeownership. A household may need adequate accommodation without the means to buy a condominium. The contribution of condominium development to housing welfare should therefore be measured not only by units built but by the number of households that can afford to occupy and keep them.
The emerging problem of aging buildings
The country has accumulated a large condominium stock over six decades. As buildings age, their owners and corporations face rising obligations for structural maintenance, repairs, replacement of building systems, financial reserves, and compliance with current safety standards. Some buildings will remain useful for decades with proper care; others will need major rehabilitation or replacement.
The aging problem is also concentrated. Leechiu Property Consultants estimates that about 97 percent of the condominium buildings it tracks nationwide are under 30 years old, while buildings 30 years or older make up about 26.2 percent of its tracked buildings in Makati. In the near term, the bill’s lower thresholds will therefore apply mainly to well-located older buildings in established districts such as Legaspi and Salcedo Villages, where redevelopment interest is driven largely by land value and recent increases in permitted floor area.
Three conditions should be kept apart. Physical deterioration is the loss of utility from wear, damage, and age. Functional obsolescence arises when a building’s design or facilities no longer meet current requirements. External or economic obsolescence results from conditions outside the property, such as changes in land use, market demand, infrastructure, or the surrounding area. A building may be old without being obsolete, and a newer building may already suffer from functional defects or poor maintenance. The age of a building should not, by itself, decide whether demolition and redevelopment are justified.
What the bill changes
The Senate text, prepared by the Committees on Urban Planning, Housing and Resettlement and on Ways and Means in substitution of Senate Bill Nos. 235, 922, and 1442 and taking House Bill No. 2286 into account, amends thirteen sections of the Condominium Act and adds one. Its changes fall into four groups.
- Dissolution and sale. Section 14 of the Act would still require the vote of all members in good standing to dissolve a condominium corporation, but a project in existence for at least thirty and not more than fifty years could be dissolved by two-thirds, and a project in existence for at least fifty years by a majority. Where the project or a material part has been condemned or expropriated, the threshold in Section 13 falls from more than seventy percent to a majority. On dissolution, the corporation is deemed to hold a power of attorney from all members to sell the entire project, and each member may receive an advance on his or her pro rata share “based on the agreed valuation and terms of payment between the condominium corporation and the buyer.”
- Taxes. Transfers of the common areas, including real rights over the land, to the corporation or co-owners, and to the buyer of the project or of all its units in a sale preceding redevelopment, are exempt from all national and local taxes, including income tax, capital gains tax, value-added tax, and local transfer tax.
- Governance and management. The master deed may be amended by a simple majority, counted per unit or by floor area as the deed provides, with DHSUD approval. Unless the by-laws provide otherwise, a quorum is a majority of units held by members in good standing. Dues may be assessed on the actual use of common areas. The management body and the developer gain a right of entry into units in emergencies and, with notice, for maintenance and repair. The corporation may lease portions of the common areas, with net rental income accruing to the members.
- Developer obligations. Allowable deviations between as-built and approved floor areas are fixed, from six percent for units up to 60 square meters to two percent above 500 square meters. Developers must apply to DHSUD for a Certificate of Completion, after which the corporation must accept the common areas, and disputes go to the Human Settlements Adjudication Commission.
The repealing clause deems the provisions of existing master deeds amended. The new thresholds would therefore apply to buildings whose owners bought under the unanimity rule, and the older the building, the smaller the share of owners whose consent is needed.
The aim is to overcome the difficulty of securing agreement among many owners, where disagreement can delay or block redevelopment even when the property has substantial potential. Lower thresholds make collective decisions easier. They also raise questions about the rights of minority owners and the distribution of the economic gains. The law should not merely make redevelopment easier. It should make redevelopment economically justified, legally fair, and socially responsible.
First test: is redevelopment economically efficient?
The economic case should begin with the principle of substitution. An informed owner or investor compares the benefits and costs of the available alternatives: continued operation, major rehabilitation, or demolition and redevelopment. Continued operation may require rising maintenance spending but keeps existing occupancy. Rehabilitation may extend the building’s remaining useful life without full replacement. Redevelopment may add floor area and raise values, but it carries the costs of demolition, construction, financing, transactions, and displacement.
The question is therefore whether redevelopment yields a greater net benefit than the best feasible alternative, after all relevant costs and risks. Neither the age of the building nor the projected selling prices of new units can answer it. A proper feasibility study should weigh the remaining economic life of the existing improvements, rehabilitation and redevelopment costs, market demand, allowable development intensity, land value, financing conditions, and the costs borne by existing owners and occupants. A higher gross development value does not establish that redevelopment is superior, and a rise in land value is not a rise in housing welfare. Where a decision would end or substantially alter existing property interests, it should rest on an independent economic and financial assessment.
Second test: are property rights protected?
A condominium owner holds a defined interest in a unit together with rights and obligations in the common areas and, depending on the legal structure, an interest in the land through the condominium corporation. Redevelopment can alter all of these. Lower voting thresholds address the problem of a minority blocking a beneficial project, but they also allow a majority to approve a transaction that dissenting owners consider undercompensated.
This is where valuation matters. An owner’s interest should not be measured solely by the depreciated construction cost of the unit. Depending on the property rights, the governing documents, and market evidence, its value may reflect location, the underlying land interest, common facilities, marketability, and redevelopment potential. In many locations land values have risen even as buildings have depreciated, so a redevelopment proposal may create a large surplus. The central question is how that surplus is shared among existing owners, developers, and other participants.
Here the text has a gap. Once a corporation is dissolved, the project is sold as a whole, and members’ shares are advanced on “the agreed valuation and terms of payment between the condominium corporation and the buyer.” The bill requires no independent appraisal, no disclosure of the buyer’s redevelopment assumptions, and no procedure by which a dissenting owner can contest the price. Because the corporation acts under a deemed power of attorney from all members, owners who voted against dissolution are bound by a valuation negotiated by the majority. And because existing master deeds are deemed amended, the change reaches owners who bought on the understanding that unanimity was required.
Comparison with two Asian cities that faced the same problem is instructive. Both lowered consent thresholds for older buildings, but both kept them higher and placed an independent body between the majority and the minority.
| Jurisdiction | Consent required, by building age | Who resolves disputes over value | How the property is sold |
|---|---|---|---|
| Philippines (SB 2420) | All members below 30 years; two-thirds at 30 to 50 years; a majority at 50 years or more | No body specified; valuation agreed between the corporation and the buyer | By the corporation under a deemed power of attorney from all members |
| Hong Kong (Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545) | 90% below 50 years; 70–80% at 50 to 59; 65–70% at 60 to 69; 65% at 70 or more | Lands Tribunal hears disputed valuations and may adjust them | Public auction by tribunal-appointed trustees, unless all parties agree otherwise |
| Singapore (Land Titles (Strata) Act; 2026 amendment bill) | 90% below 10 years; 80% at 10 to 39; proposed 70% at 40 to 59 and 65% at 60 or more | Strata Titles Board hears objections, with appeal to the courts | Collective sale under a Board order |
At comparable ages the Philippine thresholds are the lowest of the three, and only the Philippine bill provides no independent body to hear disputes over value. Hong Kong’s choice of 50 years also has a technical basis: it is the assumed design working life of ordinary buildings there. The Philippine bill begins lowering consent at 30.
The implementing rules, or a later amendment, should therefore require an independent valuation by a licensed appraiser, disclosure of the assumptions behind the redevelopment proposal, and a transparent method for fixing each owner’s share, with an effective remedy for dissenting owners who dispute the result. Protecting property rights is not an obstacle to redevelopment; it is a condition of legitimate redevelopment.
Third test: does redevelopment improve housing welfare?
This may be the most important test, and the bill’s operative provisions do not address it, although its declaration of policy commits the State to communities that are “equitable” and “inclusive.” A project can add units without improving affordability for the households who lived there. Suppose a building of 100 units is replaced by one of 300. Physical supply has risen by 200 units. But if the original units were rented at modest rates and the new units are sold at much higher prices, the former tenants may be unable to return, and some owner-occupants may be unable to afford a replacement unit or its dues. Supply has increased while access for the original residents has fallen.
Housing welfare comprises adequacy, affordability, accessibility, security of tenure, and the ability to remain in occupancy. A project may do well on one and badly on another. The task is to identify these effects, weigh reasonable alternatives, and provide safeguards in proportion to their significance.
The forgotten stakeholders: tenants
The bill is concerned chiefly with unit owners, condominium corporations, and developers. Its declaration of policy names occupants among those the State must protect from unsafe structures, but no operative provision deals with them. Yet the owner of a unit is often not its occupant. Many units are leased. In Metro Manila 32.6 percent of households rented their dwellings in 2020, and condominium tenants have no vote in the corporation even though demolition or reconstruction may force them to move, bear new costs, and lose access to work, schools, transport, and services.
A redevelopment law should distinguish the protection of ownership from the protection of legitimate occupancy. Tenants need not have voting rights or a power to stop a project. The law should, however, require reasonable notice, respect for existing leases, disclosure of expected displacement, and relocation or transition measures where circumstances warrant. This matters all the more if condominiums are to support a national housing strategy that treats rental housing as a tenure in its own right, not only as a stage on the way to ownership.
Redevelopment and the economics of urban land
Redevelopment also raises the question of the highest and best use of urban land. In business districts and fast-growing areas, land values rise with infrastructure, employment, transport access, and changes in permitted density. An aging condominium on such land may have redevelopment potential far exceeding the value of its existing improvements.
The most profitable proposal is not necessarily the most beneficial use of the property. Private financial feasibility and economic efficiency are related but distinct. A project may be attractive because of its sales revenue while imposing costs on others through infrastructure demand, congestion, environmental effects, displacement, and reduced access to housing. Local governments and planning authorities therefore have a central role. Redevelopment should conform to comprehensive land use plans, zoning ordinances, and environmental and building regulations. Where it raises density, authorities should examine whether roads and transit, water supply, drainage, wastewater treatment, and emergency services can carry the added population. Redevelopment should not simply maximize floor area without regard to the capacity of its surroundings.
A condominium redevelopment impact assessment
One practical improvement to the measure, whether in the implementing rules that DHSUD and the Human Settlements Adjudication Commission must issue within sixty days of effectivity or in a later amendment, would be a redevelopment impact assessment for projects above set thresholds of scale. It would combine three professional evaluations:
- An economic and financial feasibility assessment comparing continued operation, rehabilitation, and redevelopment.
- An independent valuation assessment identifying the property interests affected, the evidence for compensation, and the proposed sharing of redevelopment gains.
- A housing and planning impact assessment evaluating changes in residential supply, affordability, occupancy, displacement, and infrastructure needs.
The assessment should not become an administrative obstacle. Its scope should be proportionate to the size of the project and the rights affected. Minor repairs and alterations would need little; projects involving demolition, dissolution of the corporation, compulsory disposition of interests, or substantial displacement would justify a full assessment. The result would be an objective basis for collective decisions that also protects legitimate property and housing interests.
Beyond construction: the life-cycle economics of housing
Housing policy tends to concentrate on producing and financing new units. Yet a building’s usefulness extends far beyond its construction and sale. Maintenance, repair, replacement of major systems, reserve funding, and estate management decide whether a condominium stays safe and habitable. Neglected maintenance hastens deterioration and raises the eventual cost of rehabilitation, so that buildings become prematurely obsolete and require redevelopment that good asset management might have avoided.
Several provisions of the bill bear on this: dues may be assessed on the actual use of common areas, the management body gains a right of entry for maintenance and repair, and net income from leasing common areas accrues to the owners. The bill does not, however, require maintenance planning or capital reserves. It could be strengthened by requiring long-term maintenance plans, periodic building condition assessments, and transparent capital reserve policies. A redevelopment law should not only provide for replacing buildings after they fail; it should encourage their preservation throughout their useful economic lives.
A broader housing policy perspective
Philippine housing policy has always used more than one tenure. Commonwealth-era intervention combined rental tenements, homesite acquisition, land development, and ownership-oriented schemes; later decades built up housing finance and property acquisition. The Condominium Act of 1966 gave legal form to ownership within multi-unit buildings. The Condominium Redevelopment Act addresses a later stage: the governance, preservation, and transformation of an existing stock.
This reflects a maturing urban property market. The housing problem is no longer only how new dwellings are built, but how existing ones are maintained, occupied, rehabilitated, redeveloped, and passed between generations. Housing policy must therefore cover the whole life cycle of residential property, and it must recognize that a condominium can house different tenures: owner-occupation, private renting, and other arrangements the law permits. The physical form of a building should not dictate a single tenure.
Conclusion: redevelopment for whom?
The Condominium Redevelopment Act is an opportunity to modernize a law nearly sixty years old. It may ease redevelopment, improve governance, and help resolve the problems of aging buildings. It should not be judged only by whether it makes redevelopment faster or more profitable. Three questions should guide its implementation: Is redevelopment economically justified? Are legitimate property rights protected? Does redevelopment preserve or improve housing welfare?
The questions are linked. Efficiency without protection of property rights produces inequitable outcomes. Protection of property rights without workable collective decisions can prevent necessary rehabilitation or redevelopment. Redevelopment that raises property values without regard to affordability and displacement may strengthen the property market without improving housing for the people who live there. The law, and the rules that will implement it, should allow urban land to be used productively while requiring that redevelopment decisions rest on sound economic analysis, reliable valuation, effective governance, and reasonable protection of affected households.
In the end, the success of condominium redevelopment should not be measured by the number of buildings demolished, towers built, or values realized. It should be measured by whether our cities become more livable, our housing stock more durable, property rights more secure, and adequate and affordable homes more accessible to Filipinos. Redevelopment should serve cities and the people who live in them, not merely the appreciation of real estate assets.
This article is based on the text of Senate Bill No. 2420 (Twentieth Congress, Second Regular Session) as submitted by the Senate committees. The measure ratified by the Senate in October 2026 reconciles that text with House Bill No. 2286 and may differ in detail. At the time of writing it had not been signed into law; the enrolled text and the implementing rules should be checked before reliance.
References
- Republic Act No. 4726, The Condominium Act (1966), as amended by Republic Act No. 7899 (1995).
- Senate Bill No. 2420, Twentieth Congress, Second Regular Session, An Act Providing for the Redevelopment of Condominiums, Amending for the Purpose Republic Act No. 4726, as Amended (in substitution of Senate Bill Nos. 235, 922, and 1442, taking into consideration House Bill No. 2286).
- House Bill No. 2286, Twentieth Congress, Condominium Redevelopment Act.
- Presidential Decree No. 957, The Subdivision and Condominium Buyers’ Protective Decree (1976).
- Republic Act No. 7279, Urban Development and Housing Act of 1992.
- Republic Act No. 11201, Department of Human Settlements and Urban Development Act (2019).
- Republic Act No. 11232, Revised Corporation Code of the Philippines (2019).
- Hong Kong. Land (Compulsory Sale for Redevelopment) Ordinance (Cap. 545) and Specification of Lower Percentage Notice (Cap. 545A).
- Singapore. Land Titles (Strata) Act 1967, Part 6A; Land Titles (Strata) (Amendment) Bill 2026.
- Philippine Statistics Authority. (2023). Housing characteristics in the Philippines (2020 Census of Population and Housing).
- International Valuation Standards Council. International Valuation Standards.
- National Economic and Development Authority. Philippine Development Plan 2023–2028.
- BusinessWorld. (2025, December 12). Metro Manila condo inventory may take up to three years to clear — LPC.
- Context.ph. (2026, October 6). Condo redevelopment bill to unlock urban renewal, revive Makati market — LPC.
- The Manila Times. (2026, September 2). Senate OKs proposed condo law.
- BusinessWorld. (2026, October 8). Senate ratifies bill easing redevelopment of aging condominiums.
- Legislative Council of Hong Kong. (2009). Panel on Development paper on the Land (Compulsory Sale for Redevelopment) Ordinance.
