Demolition Cost Allocation for a Co-Owned House in the Philippines A comprehensive guide to the statutory rules, case law, and practical steps
1. Conceptual Framework
| Key term | Philippine legal basis | Core idea |
|---|---|---|
| Co-ownership | Civil Code arts. 484 – 501 | Two or more persons own undivided shares over the same property. |
| Necessary expenses | Art. 491 | Outlays indispensable for preservation or to prevent imminent damage. Recoverable pro-rata (or with reimbursement and 6% legal interest if advanced by one co-owner). |
| Acts of “alteration” | Art. 493 | Any material change beyond ordinary administration—including demolition—needs unanimous consent. |
| Building/Demolition permit | P.D. 1096 (National Building Code) & IRR | LGU issues the permit after clearance on safety, zoning, and environmental rules; the owner of record applies. |
| Dangerous building/demolition order | P.D. 1096, §215 & Local Government Code, §§447, 455, 475 | The City/Municipal Engineer may order demolition where structural integrity is compromised; compliance expenses pass to the owners. |
2. When Is Demolition a “Necessary” Expense?
State‐Ordered Demolition (Condemnation) Trigger: Notice from the Office of the Building Official (OBO) or a fire/earthquake renders the structure “dangerous.” Legal effect: Demolition is ipso facto a preservation measure for life and adjoining property. Expenses fall under Art. 491, hence shared in proportion to ownership stakes.
Voluntary Demolition to Rebuild or Develop Trigger: One or more co-owners want to raze the house to put up a new building. Legal effect: This is an act of alteration (Art. 493). Unanimous consent (100 % of ownership interest) is required. Cost rule:
- If all consent, costs are still charged pro-rata; salvage value of reusable materials likewise credited pro-rata.
- If some dissent, the project cannot legally proceed. A recalcitrant co-owner may instead file accion de partición to terminate the co-ownership and, after partition or judicial sale, build on his segregated share.
Demolition by a Single Co-Owner Without Authority Rule: The demolishing party becomes solely liable for all demolition costs and for damages under Arts. 19, 20, 21, and 22 (abuse of rights, quasi-delict) and must restore or indemnify the others (Art. 452 analogy). He may not demand reimbursement.
3. Allocation Mechanics
| Scenario | Permit fees | Professional fees (engineer, safety officer) | Demolition contractor & disposal | RPT, fire code fees, insurance | Salvage value (steel, lumber) |
|---|---|---|---|---|---|
| State-ordered (dangerous building) | Share pro-rata | Share pro-rata | Share pro-rata | Share pro-rata up to date of demolition | Credited back pro-rata |
| Voluntary w/ unanimous consent | Same as above | Same as above | Same as above | Same as above | Same as above |
| Unauthorized unilateral act | Actor pays 100 % | Actor pays 100 % | Actor pays 100 % | Actor pays; cannot charge co-owners | Goes to non-consenting co-owners as indemnity |
Tip: Put the sharing agreement in writing (e.g., a Memorandum of Cost-Sharing), attach the contractor’s quotation, and list how salvage proceeds will be applied.
4. Procedural Roadmap
Co-owner’s Resolution
Circulate written consent (or minutes) reflecting unanimous approval.
If unanimity is impossible, explore:
- Extra-judicial partition under Art. 496; or
- Judicial partition (Rule 69, Rules of Court).
Secure Demolition Permit
- Submit proof of ownership (TCT or Tax Declaration) and Special Power of Attorney if the applicant is not every co-owner.
- Post a Surety Bond (typically 30 % of demolition cost) as required by many LGUs.
Pre-demolition Conference
- Attend with the OBO, barangay officials, and immediate neighbours (to prevent nuisance claims).
- Present Methodology & Safety Plan signed by a licensed Civil Engineer.
Execution & Monitoring
- Maintain a logbook; OBO may conduct on-site inspections.
- Segregate debris; recyclable materials remain co-owned until proceeding disposition.
Post-Demolition Accounting
Prepare a Statement of Accounts showing:
- Gross cost
- Salvage proceeds
- Net cost and each co-owner’s share
If one advanced funds, settle within 15 days; legal interest (Art. 1169 in relation to Art. 2209) applies upon default.
5. Case-Law Highlights
| Case | G.R. No. | Doctrine relevant to demolition cost |
|---|---|---|
| Ramos v. Laguna | 173055, 26 Jan 2011 | Unilateral demolition of co-owned house without consent constitutes bad faith; owner liable for damages and cannot compel contribution. |
| Reyes v. CA | 9320, 13 Mar 1956 | Expenses to avert imminent danger are “necessary” under Art. 491; reimbursement demandable plus interest. |
| Spouses Abellera v. Spouses Diaz | 170526, 31 Jan 2006 | Acts of strict ownership (e.g., demolition/building) need unanimity; absent that, remedy is partition, not self-help. |
Note: Even older jurisprudence (e.g., Paras Commentaries, Jurado, Tolentino) consistently treats demolition for safety as preservation, triggering pro-rata sharing.
6. Interaction with Other Regimes
Conjugal / Absolute Community Property
- Husband and wife are deemed one legal personality; no co-ownership, so standard demolition decisions fall under Art. 96 FC (joint management) rather than Civil Code arts. 491-493.
Condominium Corporations
- Master Deed and By-Laws govern; demolition of a severely damaged common area triggers RA 4726, §6 (majority or more unit votes).
Ancestral Land Under IPRA
- Consent must include the Indigenous Peoples’ representative council; sharing of expenses often superseded by customary law.
7. Practical Tips & Best Practices
- Due Diligence – Have a structural engineer certify that demolition, not repair, is the least-cost safe option.
- Escrow Fund – Keep demolition funds and salvage proceeds in a joint bank account requiring joint signatures.
- Insurance Check – Fire-/earthquake-damage policies sometimes cover demolition/debris removal up to 10 % of face value; credit this first.
- Tax Compliance – Issue BIR-registered receipts for salvage sales; creditable withholding tax (1 %) applies on scrap bought by VAT taxpayers.
- ADR Clause – Insert a mediation clause in the cost-sharing agreement to pre-empt protracted litigation among co-owners.
8. Remedies for Non-Payment
- Extrajudicial Demand – Written demand triggers default; include computation and proof of advance.
- Action for Reimbursement – File before the appropriate Regional Trial Court (if amount > ₱2 million, else Metropolitan/Municipal Trial Court).
- Lien on Undivided Share – Under Art. 491, the paying co-owner may ask the court to create a lien over the delinquent co-owner’s undivided interest, enforceable by levy and sale.
9. Checklist (One-Page Summary)
- Unanimous consent obtained (unless state-ordered hazard).
- Written cost-sharing & salvage agreement signed.
- Demolition permit secured; bond posted.
- Licensed demolition contractor engaged.
- Insurance, tax, and safety compliance verified.
- Actual expenses logged and certified.
- Salvage proceeds credited proportionately.
- Settlement of shares within 15 days (interest thereafter).
- Legal remedies preserved for breach.
Conclusion
In Philippine law, who pays for demolition boils down to the character of the demolition (necessary vs. voluntary) and the consent regime under co-ownership rules. Necessary demolitions—usually those mandated by safety regulators—must be shared pro-rata, while voluntary projects require unanimity; lacking that, the remedy is partition, not unilateral wrecking. By observing the statutory guideposts of the Civil Code, the National Building Code, and relevant jurisprudence, co-owners can allocate costs fairly, preserve relationships, and avoid avoidable litigation.