Philippine Condo Buying Experience: A Stress Free Guide (Part 2 Of 4)


Yesterday we tackled about lost deposits and OFW woes on condo buying. Let’s discuss more on the subject…

Condos don’t come with the parking slots. “Developers don’t provide units with their own parking slot. We have to buy a separate lot with a separate title just for parking.”

Parking slots are not bundled with the condo unit most of the time. It is an option for a client to buy or not. It has a separate title, thus, a separate acquisition cost. Many buyers would also opt not to have a parking slot. Designers therefore do not provide a one-to-one ratio for units and parking slots.

Most developers do provide parking slots, but yes you have to buy them separately. This gives the buyer a choice whether to get one or not. It is more practical than automatically offering the unit with parking (with the corresponding additional price, of course) and ‘forcing’ the clients to buy them even if they don’t have use for them, especially those who are just intending to lease out their units. But, as a piece of advice to condo buyers, it is really more practical to buy a parking slot. You may not have use for them but you can definitely easily lease them out.

Developers must balance parking provisions vis-à-vis various unit sizes, and usually priority slots are given to bigger sized units. The building code provides a certain ratio, sq m over parking, making a parking purchase not automatic and separate from the condo unit.

No price regulation of association dues.

It’s a balancing financial act played by the developer in the initial stage prior to the turnover. Then, another challenge will come from the facilities manager managing the condo using as baseline variables like security, staffing, cost of maintenance, brand value and competitiveness.

Rates for association dues really depend on several factors: a) who manages the condo (in-house or professional building managers?); b) number of units/residents (to share in the operating expenses); and, c) size of common areas, amenities to maintain and to secure. Thus, comparisons should be done apples to apples.

Varying rates would be due to project cost and package prices of condominiums differing greatly, depending on location, amenities, specifications and of course, target market. Such wildly varying dues happen especially if the condominium corporation is still controlled by the developer.

However, for condominium corporations already in the hands of the unit owners, all dues and assessment emanates from the boards after thorough discussion with the members. Besides, any excess becomes property of the corporation, which is owned by unit owners.

Multiple ownership leads to manipulation of condominium units.

Koreans, Chinese and Filipino politicians who own a number of units are renting out their units to ‘balikbayans’ for the duration of their vacation… Are they (unit owners) even paying income tax for renting out?

Since foreign nationals are not allowed by Philippine law to own land, but allowed to own condominium units, these enterprising foreigners opt to buy several units for their investments. The question remains, though, whether it will be easy for them to evade paying taxes as we now have stricter rules on taxation.

It is true that some units were sold to investors to be operated as condotels where the investors enjoy monthly returns through short- and long-term leasing of their units without personally managing it since it is being done by professional hotel operators, and there is absolutely nothing wrong with it.

>>  Go to part 1, 2, 3, 4 <<