FACTS:

The Contract to Sell between the petitioner and respondent involved a condominium unit and did not violate the Constitutional proscription against ownership of land by aliens. The contract only transferred the seller's title and rights to and interests in the unit and the common areas, and did not transfer ownership of the land. The Contract to Sell provided that upon full payment by the buyer, the seller would deliver the Deed of Absolute Sale conveying its rights, interests, and title to the unit and the corresponding Condominium Certificate of Title in the seller's name. The Contract also stated that all title, rights, and interest conveyed would be subject to the provisions of the Condominium Act and other regulations. Under the Condominium Act, foreign nationals can own Philippine real estate through the purchase of condominium units or townhouses. Section 5 of the Condominium Act allows foreigners to acquire condominium units and shares in condominium corporations up to not more than 40% of the total and outstanding capital stock of a Filipino-owned or controlled corporation. The ownership of the land in a condominium setup is legally separated from the unit itself, with the land owned by a Condominium Corporation. As long as 60% of the members of the Condominium Corporation are Filipino, the remaining members can be foreigners. The Court held that there was no circumvention of the constitutional prohibition on aliens owning real property in the present case. Hence, the Court granted the petitioner's motion for partial reconsideration and modified the decision by deleting the order for the petitioner to return the amount in excess of the proceeds of the auction sale.

ISSUES:

1. Whether or not the Contract to Sell between petitioner and respondent violates the Constitutional proscription against ownership of land by aliens.

2. Whether or not the ownership of the land is legally separated from the unit itself under the Condominium Act.

RULING:

1. The Contract to Sell between petitioner and respondent does not violate the Constitutional proscription against ownership of land by aliens because it does not transfer ownership of the land on which the unit is situated to the buyer. The buyer only acquires the seller's title and rights to and interests in the unit and the common areas.

2. Under the Condominium Act, the ownership of the land is legally separated from the unit itself. The land is owned by the Condominium Corporation, and the unit owner is a member of the Condominium Corporation. As long as 60% of the members of the Condominium Corporation are Filipino, the remaining members can be foreigners.

PRINCIPLES:

• The Condominium Act allows foreigners to acquire condominium units and shares in condominium corporations up to not more than 40% of the total and outstanding capital stock of a Filipino-owned or controlled corporation. This legal separation of ownership of land and unit allows foreigners to own Philippine real estate through the purchase of condominium units or townhouses constituted under the Condominium principle with Condominium Certificates of Title.