I. The Core Question

Can a local government unit (LGU)—city, municipality, or province—collect building permit fees if there is no local ordinance prescribing or authorizing those fees?

The legally careful answer is:

As a general rule, an LGU cannot impose and collect “local fees and charges” without an ordinance enacted by the sanggunian (local legislative council), because the power to impose fees is legislative in character.
However, some building-related fees may be collectible even without a local ordinance when the amount and authority come directly from national law or valid national regulations (e.g., the National Building Code framework), and the LGU is acting more as an implementing arm than as a policy-maker.
In practice, the decisive issue is often what kind of fee is being collected: (a) a locally-created local revenue measure vs (b) a nationally-authorized regulatory fee with a fixed schedule.

This article explains the legal structure and the practical consequences.

II. Legal Foundations: Where the Power Comes From

A. Constitutional and statutory setting

LGUs enjoy local autonomy, but they are still creatures of law: they possess only powers:

expressly granted,
necessarily implied, or
essential to their declared objectives.

Revenue collection is especially sensitive because it affects property rights and due process.

B. Two separate powers often confused

Police power (regulatory) – authority to regulate for public safety and welfare (e.g., ensuring buildings comply with structural, fire, sanitation, zoning, and occupancy standards).
Taxing / revenue power (fiscal) – authority to raise revenues (taxes, fees, charges).

Building permits primarily arise from police power (regulation), but the money collected can still be treated as a fee/charge that generally requires a legislative basis.

III. The Building Permit Regime in the Philippines

A. The National Building Code structure

The “National Building Code” system (commonly associated with PD 1096 and its implementing rules) sets a national framework for:

when permits are required,
who issues them (the Office of the Building Official),
plan review and inspections,
issuance of certificates (e.g., occupancy),
and the concept of fees for processing and enforcement.

In most cities/municipalities, the Building Official is part of the local structure, but the permitting function is exercised within a nationally-defined regulatory system.

B. Types of building-related fees commonly collected

Depending on the LGU’s setup, applicants may be charged for:

building permit application/processing,
electrical/mechanical/plumbing permits,
excavation, fencing, signage (sometimes),
certificate of occupancy,
ancillary clearances (often through other local offices),
surcharges/penalties for late renewals or violations.

The legal treatment can differ depending on whether the fee is for the core building permit under the national code framework or an extra local charge attached by the LGU.

IV. Fees vs Taxes: Why the Distinction Matters

Courts generally distinguish:

A. Regulatory fees (police power fees)

A regulatory fee is valid when:

it is imposed primarily to defray the cost of regulation (processing, inspections, enforcement),
it is reasonable and not oppressive,
it is connected to a legitimate regulatory purpose.

Regulatory fees are still not “free-floating.” They must have legal authority—either:

directly from national law/regulations, or
from a local ordinance when the LGU itself is setting or creating the charge.

B. Taxes (revenue-raising)

A tax is imposed primarily to raise revenues. If a “fee” is excessive, unrelated to regulatory cost, or structured like a general revenue measure, it risks being treated as a tax, which is more strictly constrained and typically requires an ordinance and compliance with Local Government Code rules.

V. The General Rule: Local Fees and Charges Require an Ordinance

Under the Local Government Code (LGC) framework, the sanggunian is the body empowered to:

enact ordinances,
approve revenue measures,
and authorize the imposition of fees and charges.

That matters because:

The executive branch (mayor, treasurer, building official as an office under the LGU) generally implements; it does not create revenue measures.
If the fee exists because the LGU decided to impose it or decided its amount, that is a legislative policy decision, normally needing an ordinance.

Practical legal consequence: If an LGU is collecting a building-related fee that exists only because of a local policy decision (especially if it’s not clearly mandated by national law or if the amount is locally fixed), the absence of an ordinance creates a strong argument that the collection is ultra vires (beyond authority).

VI. The Complication: When National Law Itself Authorizes Collection

This is where disputes usually turn.

A. If national law/valid regulations fix the fee schedule

If the authority to charge, and the schedule/amount, can be traced directly to national law or valid national implementing rules, then the LGU is arguably:

not “imposing” a local revenue measure,
but administering a nationally-defined regulatory program.

In that situation, a local ordinance may be helpful (for local adoption/implementation and clarity), but it may not be strictly necessary to validate collection of those nationally-prescribed fees—because the legal basis is already national.

B. If the LGU sets the amount or adds charges beyond the national schedule

Once the LGU:

modifies the schedule,
increases rates,
creates add-on charges labeled as “processing,” “system fee,” “facilitation,” “inspection,” “sticker,” “certification,” “service fee,” etc.,
bundles unrelated charges into building permitting,

then the charge looks like a local fee/charge that must rest on an ordinance.

VII. A Working Test: “Where did the fee come from?”

Ask these in order:

Is there a national law or valid national regulation that expressly authorizes the fee?
Does that national authority prescribe the amount or a definite schedule/method?
Is the LGU merely collecting what national law prescribes—without changing it?
Or did the LGU create/adjust the fee, determine the amount, or invent a new category?

If the LGU created it, altered it, or set its amount → ordinance is normally required. If the fee is national, fixed, and merely implemented locally → collection is easier to defend even without an ordinance.

VIII. “No Ordinance” Scenarios and Likely Outcomes

Scenario 1: No ordinance; LGU collects core building permit fees using a national schedule

Defensibility: Moderate to strong, if the LGU can prove the fee schedule is directly grounded in national authority and is faithfully applied.
Risk: If challenged, the LGU must show it is not exercising independent local taxing power but implementing national regulation.

Scenario 2: No ordinance; LGU collects “additional” fees (e.g., local “processing,” “system,” “sticker,” “certification,” or “expedite” charges)

Defensibility: Weak.
These look like locally invented charges. Without an ordinance, they are vulnerable as unauthorized exactions.

Scenario 3: There is an ordinance—but it was not properly enacted/published/posted

Defensibility: Depends on compliance with procedural requirements for effectivity (publication/posting and other statutory steps). A defective ordinance can be attacked as ineffective.

Scenario 4: The fee is reasonable and used for inspections, but still no ordinance

Defensibility: Reasonableness helps against an argument that it’s a disguised tax, but it does not substitute for legal authority. An executive office cannot cure lack of legislative basis by claiming good purpose.

IX. Remedies and Practical Actions for Taxpayers/Applicants

If you are charged building permit fees and believe there is no valid ordinance (or the fee is an unlawful add-on), common legal and administrative approaches include:

A. Request the legal basis (paper trail)

Ask for:

the ordinance number/title and effective date, if any,
the fee schedule basis,
the official issuance adopting the schedule.

This is often decisive—either the LGU produces a valid ordinance or it cannot.

B. Pay under protest (practical protection)

Even when you believe the charge is void, it is often safer to:

pay under written protest to avoid project delays,
explicitly reserve the right to seek refund and question legality.

Some refund regimes are strict on protest/administrative exhaustion; paying under protest strengthens later claims.

C. Seek refund / restitution

If the collection is unauthorized, theories used in disputes include:

refund of illegal exaction,
restitution/return of amounts unduly paid (akin to solutio indebiti principles),
COA disallowance issues on the government side.

D. Challenge through appropriate forums

Depending on the nature of the claim, actions may involve:

administrative claims with the LGU,
suits questioning ordinance validity or legality of collections,
disputes that implicate audit rules (COA) when public officers collect without authority.

(Forum choice is fact-specific; the correct path depends on whether you are challenging an ordinance’s validity, a void collection without ordinance, or a refund after payment.)

X. Risks for the LGU and Officials When Collecting Without Authority

If an LGU collects fees without valid legislative or national legal basis, consequences can include:

refund exposure,
audit disallowances,
personal/liability implications under public accountability rules,
findings of ultra vires acts.

Even if funds were used for public services, public funds must be collected and disbursed according to law.

XI. Best Practices (What a Legally Sound LGU Typically Does)

To avoid legal vulnerability, LGUs usually:

Enact an ordinance adopting a building permit fee schedule (especially for any local components),
Ensure compliance with procedural requirements for effectivity,
Maintain a clear distinction between:
- nationally-prescribed regulatory fees, and
- locally-created charges,
Avoid “invented” add-ons unless properly legislated and justified as regulatory.

XII. Bottom Line

If the building permit fee is a locally created or locally adjusted charge, an ordinance is generally required. Without it, the collection is highly vulnerable as an unauthorized exaction.
If the fee is directly authorized and fixed by national law/valid national regulations and the LGU is merely implementing it, collection is more defensible even without a local ordinance—but the LGU must be able to show that the authority and schedule truly come from national sources and that it did not “add” anything.

If you want, I can also draft:

a legal opinion template arguing illegality of collection without ordinance (for a demand letter or position paper), or
an LGU compliance checklist for ordinances and fee schedules in the building permit process.