Condominium Dues Hike Without Unit Owner Vote: Rights Under the Condominium Act (Philippine Context)

This is general information for educational purposes and not a substitute for legal advice about your specific building or dispute.

Executive Summary (The “Short Answer”)

Can the board raise dues without a unit-owner vote? Often yes—if your Master Deed/Declaration and By-Laws give the condominium corporation’s board authority to approve the annual budget and levy regular assessments (“dues”) to cover common expenses.
When is a unit-owner vote required? When your governing documents expressly require member ratification for budgets or assessments, or for extraordinary/special assessments, or for amending the By-Laws/Declaration to change how dues are computed.
What can owners always insist on? Notice and transparency (access to budgets, contracts, and financial statements), proportionality (dues are charged according to each unit’s “percentage interest”), due process before penalties or suspensions, and lawful collection (no harassment or unlawful utility cut-offs).
If you disagree with a hike: Use internal remedies (information requests, a meeting, or member-called special meeting). If unresolved, escalate through demand letters, mediation, and adjudication before the Human Settlements Adjudication Commission (HSAC), or file suit for injunction/annulment of the board resolution.

The Legal Architecture in a Nutshell

Primary Law: The Condominium Act (Republic Act No. 4726).
- Creates the scheme of separate ownership of units + co-ownership of common areas.
- Recognizes a condominium corporation (non-stock, non-profit) that manages common areas and levies assessments to fund common expenses.
- Unpaid assessments typically constitute a lien on the unit.
Revised Corporation Code (RCC).
- Governs the condominium corporation (board powers, meetings, quorums, notices, member rights to inspect records and receive financial statements, calling special meetings, and derivative actions).
Your Governing Documents (Controlling in Practice).
- Master Deed/Declaration, By-Laws, House Rules, and Board Resolutions.
- These set the dues formula, percentage interest per unit, budget/assessment procedures, and whether member ratification is needed.
Regulatory/Quasi-Judicial Forum.
- HSAC has jurisdiction over many condominium disputes between owners and the association/board (e.g., assessments, penalties, and enforcement of the declaration/by-laws).

Regular Dues vs. Special Assessments

Regular (“Common”) Dues

Fund recurring common expenses: security, janitorial, utilities for common areas, insurance, admin, routine maintenance, and reserves.
Common rule: the board proposes and approves the annual budget and levies dues without a member vote—unless your By-Laws require owner ratification.

Special/Extraordinary Assessments

Fund non-routine or capital works not covered by the approved budget (elevator modernization, façade repairs, major waterproofing), or significant cost overruns.
Common rule: may require member approval at a special meeting, depending on your By-Laws/Declaration (typical thresholds range from majority to 2/3 of members present and voting or of total membership by interest).

Action point: Read your By-Laws for any clause like “The Board may approve the annual budget and levy assessments subject to ratification by the members” or “Special assessments require approval of a majority/2/3 of the members.”

Core Owner Rights When Dues Are Increased

Right to Notice (Substance and Timing).
- Reasonable prior notice of the budget and effective date of the new dues.
- Notice should explain what changed and why (inflation, wage adjustments, fuel/utilities, new service contracts, reserve funding, etc.).
Right to Transparency and Inspection.
- Annual financial statements and audited FS (where applicable).
- Access to books and records: budgets, bank statements, vendor contracts, minutes where the hike was deliberated, reserve studies, bids/proposals.
- Reasonable copying or inspection at the corporation’s principal office within business hours.
Right to Proportionality (Fair Apportionment).
- Dues must track each unit’s percentage interest in the common areas (often set in the Master Deed by floor area or value).
- Any change to the basis/formula generally requires an amendment to the Master Deed/By-Laws (member approval).
Right to Due Process Before Penalties.
- Late payment charges, interest, suspension of amenity privileges, or publication of delinquency must follow clear, pre-existing rules, reasonable notice, and an opportunity to contest billing errors.
Right to Lawful Collection Practices.
- The association may collect, charge interest/penalties per By-Laws, record a lien, and, in extreme cases, foreclose—but must follow due process and lawful procedures.
- Essential utilities (e.g., water/electricity individually contracted with public utilities) should not be cut off by the association for dues delinquency; associations may restrict non-essential amenities (pool, function rooms) if rules allow.
Right to Participate and Call Meetings.
- Attend the annual meeting; elect directors.
- Proxy voting is generally allowed unless restricted.
- Members holding at least the statutory or by-law threshold (commonly 20% by number or interest) can call a special meeting to question or reverse a board action.

Board Powers and Limits

The Board May:

Approve annual budgets and levy regular assessments to meet common expenses.
Impose reasonable penalties for late payment consistent with the By-Laws.
Create/maintain a reserve fund for major repairs/replacements.
Enforce liens and pursue legal remedies for collection.

The Board May Not:

Change the basis of your share (e.g., from floor area to equal shares) without amending the Master Deed/By-Laws via the required member vote.
Depart from due process in imposing penalties or suspending privileges.
Hide records or refuse reasonable inspection.
Engage in self-dealing or enter grossly disadvantageous contracts—these can be challenged as ultra vires, conflicted, or in breach of fiduciary duty.

Practical Tests for a Lawful Dues Hike

Was the budget approved in a valid board meeting?
- Proper notice, quorum, and minutes.
Is member ratification required by your By-Laws—and if so, was it obtained?
Is the computation consistent with each unit’s percentage interest?
Were proper notices sent with enough lead time and clarity?
Are the increases justified by documented cost drivers (contracts, wage hikes, utility increases, reserve study)?
Are penalties/interest within the caps and rules in the By-Laws/house rules?

Typical Owner Remedies (Escalation Ladder)

Information Request (Cordially, in Writing).
- Ask for: board resolution, budget, prior vs. current dues computation, vendor contracts, reserve study, audited FS, and minutes.
Internal Review/Appeal.
- Request an agenda slot at the next board meeting, or petition for a special meeting (attach member signatures meeting the threshold).
Member Action.
- Move for non-binding or binding ratification vote (if your By-Laws allow), propose budget amendments, or elect new directors at the AGM.
Demand Letter (Through Counsel if Needed).
- Identify legal bases (By-Laws clauses violated, proportionality errors, lack of notice), request status quo ante or interim relief.
Mediation/Conciliation.
- Many By-Laws mandate ADR first. Good for narrowing issues and agreeing on phased or conditioned increases.
HSAC Complaint or Court Action.
- Seek annulment of board resolution, injunction (to stop implementation), accounting, inspection, damages if warranted.
- For collections, the association may separately sue or foreclose; defenses include procedural defects, unreasonable penalties, or misapplied formula.

Special Situations

Developer-Controlled Boards (Turnover Stage).
- Scrutinize related-party contracts (property management, security, housekeeping) for conflicts or above-market rates embedded in the first budgets.
Mixed-Use Condominiums.
- Residential and commercial components may have different loadings for certain costs (e.g., HVAC, elevators). That differentiation must be documented and traceable to the Declaration.
Emergency Increases (Force Majeure/Calamity).
- Boards may pass interim assessments for urgent safety or repairs, but should later ratify or true-up at a member meeting, and sunset or reprice after the emergency.
Parking and Accessory Units.
- Check if parking slots/accessory units have separate percentage interests or bundled with main units; billing must follow the recorded scheme.

Penalties, Interest, Liens, and Foreclosure

Penalties/Interest must be reasonable and predetermined in the By-Laws or house rules (e.g., a monthly late charge and a monthly interest rate).
Lien: Unpaid assessments attach to the unit (plus interest/penalties).
Foreclosure: Possible only after procedural steps (final demand, board resolution, accounting, and compliance with foreclosure rules).
Set-Off/Withholding: Owners generally cannot withhold dues because of dissatisfaction with services; the remedy is to challenge the hike while paying under protest.

Governance Hygiene (For Boards and Owners)

Annual Calendar: Circulate budget drafts at least 30 days before effectivity; hold explanatory sessions.
Reserve Study: Update every 3–5 years and disclose funding policy (percent of full funding).
Contracting: Competitive bidding, conflict-of-interest disclosures, and board-approved procurement policy.
Financial Reporting: Issue quarterly snapshots and an annual report to members.
House Rules: Clear schedule for penalties, collection steps, and amenity suspensions with due process.

Owner Action Toolkit

A. Quick Checklist Before You Contest a Hike

Get the By-Laws and Master Deed (latest, stamped versions).
Obtain the board resolution and budget backing the increase.
Confirm whether member ratification is required and if it happened.
Recompute your share using your percentage interest—watch for math or input errors.
Check penalty/interest rules and caps.
Line-item compare old vs. new vendor contracts and headcount.
If applicable, verify reserve funding logic.

B. Sample Information-Request Letter (Template)

Subject: Request for Budget Documents and Records (Condominium Dues Increase) Dear Corporate Secretary/Property Manager: I acknowledge receipt of the notice increasing condominium dues effective [date]. Pursuant to the Condominium Act, the Revised Corporation Code, and our By-Laws, I respectfully request inspection/copies of: (1) the board resolution approving the increase; (2) the detailed annual budget and variance report; (3) vendor contracts/quotations underlying major line items; (4) the latest audited financial statements; (5) the minutes of the meeting where the budget was deliberated; and (6) the current schedule for penalties/interest and the reserve study or plan. I propose inspection on [date/time] at the principal office or to receive electronic copies. Thank you.

C. Sample Special-Meeting Petition (If Threshold Met)

Subject: Petition to Call Special Meeting of Members We, members holding at least []% of the outstanding membership/percentage interest, respectfully call a Special Meeting to deliberate and vote on Agenda: (1) Board Resolution No. ___ re: dues increase; (2) Motion to require member ratification for budget/assessments; (3) Formation of an Audit/Procurement Oversight Committee; (4) Other related matters. Proposed date/time: []. Venue: [__]. Kindly issue the corresponding notice.

Frequently Asked Questions

1) Our board raised dues mid-year without a vote. Is that allowed? If the By-Laws empower the board to revise the budget or levy supplemental assessments to meet necessary common expenses, it can be allowed. If the By-Laws require member ratification or classify the charge as a special assessment, a vote may be required.

2) The increase seems excessive. What’s a “reasonable” hike? Reasonableness is judged by evidence: vendor rates, minimum wage adjustments, utility tariffs, inflation, reserve needs, and competitive benchmarking. Owners can demand the paper trail.

3) Can the association cut off my water or electricity for non-payment? If those utilities are directly contracted with public utilities in your name, the association generally cannot cut them. It may suspend non-essential amenities per the rules, and it can collect through lawful means.

4) Can we reduce our share because we don’t use the pool or gym? No. Dues fund common expenses benefitting the entire project; non-use doesn’t excuse payment.

5) What if the formula in practice doesn’t match the Master Deed? You can seek recalculation, refunds/credits, and annulment of the implementing resolution. This is often a strong case if the documentary trail shows deviation.

Practical Strategy if You’re Facing a Sudden Hike

Pay under protest to avoid penalties/liens, while preserving your claim.
Form an owners’ working group to divide tasks (records review, vendor benchmarking, finance modeling).
Propose alternatives: phased increases, cost-cuts, rebidding services, adjusting service levels, reserve-fund schedule.
Document everything (emails, notices, minutes, computations).
Escalate methodically: info request → meeting → petition → demand → HSAC/court.

Key Takeaways

Your By-Laws and Master Deed are king: they say when a vote is required and how dues are computed.
Boards usually can raise regular dues without a vote to meet necessary common expenses, but they must respect notice, transparency, proportionality, and due process.
Owners have robust tools—inspection rights, special meetings, and HSAC remedies—to challenge unlawful or unreasonable increases.

Final Note

Every building’s documents are unique. If the sums are large or your building is mid-turnover or mixed-use, consider getting document-specific legal advice to review your By-Laws/Declaration, board resolutions, and the computation trail before you decide on litigation or a member-driven fix.