The Legality of Raising Condominium Association Dues in the Philippines

Last updated: September 25, 2025 (Philippine context). This is general information, not legal advice.

1) Why monthly dues exist

Condominium living is a shared-ownership system. Each unit owner holds exclusive title to their unit and an undivided interest in “common areas” (lobbies, elevators, exterior walls, roofs, hallways, amenities, security, administration, etc.). Monthly dues—often called association dues, common charges, or assessments—fund the operation, repair, and long-term upkeep of these shared facilities. Without periodic collections (and occasional increases), buildings deteriorate, insurance lapses, and safety and compliance suffer.

2) The legal framework

Several Philippine laws inform when and how a condominium association (typically a non-stock, non-profit condominium corporation) may increase dues:

Republic Act No. 4726 (The Condominium Act). Establishes the condominium regime, the master deed with declaration of restrictions (MDDR), percentage interests in the common areas, and the association’s power to administer and maintain the project and collect assessments to cover common expenses.
Presidential Decree No. 957 (Subdivision and Condominium Buyers’ Protective Decree) and its rules. Governs developers, turnover, and management requirements for condominium projects, including the obligation to organize a management body and deliver common areas in good order.
Revised Corporation Code (R.A. 11232). Governs the condominium corporation’s juridical personality, board and member (unit owner) powers, meetings, notices, quorum, voting, rights to inspect corporate records, and the validity of board actions such as adopting budgets and levying assessments.
DHSUD/HSAC regime. Post-HLURB, regulatory supervision over housing and settlements lies with the Department of Human Settlements and Urban Development (DHSUD), while adjudication of many association-related disputes lies with the Human Settlements Adjudication Commission (HSAC). Contract/corporate disputes may also go to the regular courts, depending on the nature of the claim.
Local ordinances, building and fire codes, and the project’s own documents—the Master Deed and By-Laws—which are binding on owners and often set specific procedures and vote thresholds for budgets, special assessments, and increases.

3) Who can raise dues—and on what authority

A. The Board of Directors (or Trustees) In most projects, the board prepares and approves an annual operating budget for common expenses. The budget drives the regular monthly dues rate. Authority typically comes from:

The By-Laws (granting the board power to administer the condo and levy/collect assessments); and
The Master Deed/Declaration of Restrictions (requiring owners to contribute to common expenses in proportion to their percentage interest or another stated formula—commonly floor-area-based).

B. The Unit Owners (Members) For special assessments (e.g., large, non-routine capital expenditures like façade rehabilitation, major mechanical replacements, extraordinary hazard remediation, or mandated retrofits), many By-Laws require member approval—often a majority or supermajority of those present at a meeting with a quorum, or of all members entitled to vote. The exact threshold is document-specific.

Key principle:

Regular dues increases tied to an approved annual budget are usually within board authority (unless project documents say otherwise).
Special assessments for capital projects or deficits often require owner ratification.

4) Substantive limits: reasonableness, proportionality, and purpose

Even with authority, increases must meet baseline legal standards:

Reasonableness. Dues must reasonably relate to actual or budgeted common expenses (security, cleaning, utilities for common areas, elevator maintenance, management, insurance, permits, taxes directly attributable to the association, routine repairs, sinking fund allocations, etc.). Arbitrary or punitive increases are vulnerable to challenge.
Proportionality. Each unit’s share should follow the allocation formula in the Master Deed/By-Laws—commonly the unit’s percentage interest (often linked to floor area). A building cannot lawfully charge unequal rates without a valid basis grounded in the governing documents (e.g., different tiers for parking vs. residential if the documents so provide).
Proper purpose. Association funds must be used for common purposes. Funding developer obligations, private improvements, non-common expenses, or unrelated ventures is improper.
No discrimination. Dues or penalties cannot target a class of owners (e.g., short-term lessors) unless the governing documents lawfully distinguish them and the policy is uniformly applied, reasonable, and not contrary to law or public policy.

5) Procedural requirements: how increases are lawfully adopted

Budget preparation. Management and the treasurer compile next year’s operating/capital budget with supporting assumptions (vendor contracts, salary schedules, utility forecasts, statutory increases, reserve studies).
Board deliberation and approval. The board adopts the budget and the resulting dues schedule (e.g., ₱/sqm/month), or endorses both to the membership if required by the By-Laws.
Notice to owners. Owners should receive timely written notice of (a) the board or members’ meeting, with agenda indicating “Budget Approval / Assessment Increase,” and (b) the new rate, effective date, and rationale (summary budget). Notice periods follow the By-Laws and the Revised Corporation Code.
Member action, if needed. If the By-Laws require owner ratification for the budget or any special assessment, a valid meeting (or written assent procedure) with proper quorum and vote must occur. Minutes should reflect the action.
Implementation. After approval, management issues billing reflecting the new rate and the effective month. Transparency and open access to financials foster acceptance and reduce disputes.

6) Regular dues vs. special assessments vs. reserve (sinking) funds

Regular (operating) dues. Recurring monthly charges that fund ordinary, predictable common expenses. Typically adjustable by board approval aligned with the annual budget.
Special assessments. One-off or time-bound charges for significant capital repairs, unforeseen losses, code-mandated upgrades, or major shortfalls. Often require member approval per By-Laws.
Sinking / reserve fund. A dedicated fund for long-term capital replacements (roofs, elevators, chillers, façades). Healthy reserves reduce the need for abrupt special assessments and are considered best practice. Many By-Laws set a minimum reserve contribution (e.g., a percentage of the budget).

7) Notice, transparency, and owners’ rights

Owners generally have the right to:

Receive proper notice of meetings and increases.
Inspect corporate books and records (financial statements, budgets, contracts, minutes) at reasonable times for legitimate purposes, per the Revised Corporation Code and By-Laws.
Request an accounting and clarification of line items.
Participate and vote at meetings (unless voting rights are suspended for valid causes stated in the By-Laws, commonly material delinquency).
Challenge actions that are ultra vires (beyond corporate powers), adopted without required procedure, unreasonable, or contrary to the project documents or law.

8) Enforcement against delinquency (and legal boundaries)

If an owner fails to pay:

Interest, penalties, and collection fees may accrue if authorized by the By-Laws and reasonable in amount.
The association may suspend non-essential privileges (e.g., use of certain amenities) consistent with the By-Laws. However, essential services (e.g., water, electricity supplied by public utilities to a private unit) should not be cut off by the association, absent a lawful mechanism. (Associations typically do not control the owner’s contractual relationship with public utilities.)
Liens. Project documents often create an assessment lien on the unit for unpaid dues. Depending on the By-Laws and applicable law, the association may record/annotate the lien and pursue judicial action to collect. Some projects allow extra-judicial remedies if explicitly provided (seek counsel to ensure validity and due process).
Litigation/Adjudication. Claims may go to HSAC (for many association disputes) or the regular courts (especially corporate or contract matters). Attorney’s fees and costs may be recoverable if authorized and awarded.

Best practice: Adopt fair, written collection policies; apply them uniformly; offer reasonable payment plans for large special assessments.

9) Developer control, turnover, and early-years increases

During the pre-turnover phase, the developer or its nominees may control the board. Dues set in marketing materials are often estimates. After turnover to an owner-elected board, budget “true-ups” are common as real costs (utilities, security, maintenance, insurance) replace assumptions.

Legality tips in the developer phase:

The developer should subsidize promised services it contractually undertook (e.g., amenities finishing) rather than shifting developer costs into owners’ common expenses.
Early reserve funding should begin promptly to avoid future special assessments.
Turnover documents should include audited financials, vendor contracts, warranties, and as-built plans to support sound budgeting.

10) Tax and regulatory touchpoints (high-level)

Income tax/VAT. Condominium corporations are generally non-stock, non-profit, but tax treatment depends on actual activities. Historically, association dues have been the subject of shifting BIR guidance. The safest course is to treat dues strictly as cost-sharing for common expenses, avoid commercial activities in the association, and seek current tax advice for your specific setup.
Government filings. Keep SEC filings current, maintain a books-of-accounts trail, and ensure compliance with DHSUD and local permits for building operations.

11) Common owner questions (quick answers)

Can the board raise dues without a member vote? Often yes for regular operating dues, if the By-Laws give the board budget authority. Check your documents. Special assessments commonly require member approval.

Is there a cap on increases? There is no universal statutory cap. Any cap would come from the By-Laws or member-adopted policies. Regardless, increases must be reasonable and budget-justified.

Can the association charge different rates to different units? Only if the Master Deed/By-Laws provide for a lawful allocation (e.g., based on area, use type, or cost-causation). Arbitrary differentiation risks invalidation.

Can I refuse to pay because I disagree with the increase? Non-payment risks interest, penalties, liens, and collection actions. The safer route is to pay under protest and challenge through internal processes or the proper forum.

Can they cut off my water or electricity? Associations typically cannot disconnect essential public utilities to your unit. They may suspend amenities per policy. Review your project documents and local rules.

Where do I file a complaint? Depending on the issue, before the HSAC or the regular courts. Seek counsel to pick the proper forum and remedy (injunction, nullification of board action, damages, accounting, etc.).

12) Practical compliance checklist for a lawful dues increase

For Boards/Management

Map the authority in your By-Laws/Master Deed (regular vs. special assessment; required vote).
Prepare a transparent, line-item budget with a short owner-facing summary.
Give proper notice of meetings and proposed increases (agenda, rationale, effective date).
Observe quorum and voting requirements; keep detailed minutes.
Adopt/refresh collection and penalty policies; ensure they’re reasonable and uniformly applied.
Maintain audited financials, vendor contracts, and reserve studies; allow owner inspection per law.
Communicate early and often; consider town halls and Q&A to build consensus.

For Unit Owners

Read your Master Deed and By-Laws (focus on assessments, voting, and records-inspection rights).
Ask for the budget package and variance explanations (e.g., why security or utilities rose).
Confirm the allocation formula used in your billing (₱/sqm/month or percentage interest).
If you dispute legality or procedure, document your objections, consider paying under protest, and consult counsel on HSAC or court remedies.

13) Sample By-Laws language (illustrative only)

Assessments. The Corporation shall levy regular monthly assessments to cover common expenses based on the annual budget approved by the Board. Each unit’s share shall be proportional to its percentage interest as set forth in the Master Deed. The Board may recommend, and the Members may approve by majority of those present at a meeting with a quorum, special assessments for capital improvements or extraordinary expenses. Notices of any change in the assessment rate shall be sent to Members at least 15 days before effectivity and shall include a summary of the budget assumptions. Unpaid assessments shall bear interest at the rate set by Board policy, shall constitute a lien on the unit as provided in the Master Deed, and may be collected through appropriate proceedings.

(Your project’s actual documents should control; do not copy this wholesale.)

14) Bottom line

A Philippine condominium association can increase monthly dues lawfully if it:

Acts under proper authority (board vs. member approval as required),
Follows notice, quorum, and voting procedures,
Keeps increases reasonable, proportional, and for common purposes, and
Maintains transparency and due process in billing and collection.

If any of those pillars is missing, the increase is vulnerable to challenge—and in extreme cases, to being set aside by HSAC or the courts.

If you want, I can tailor this to your building’s actual Master Deed/By-Laws and draft a one-page owner notice explaining a proposed increase (with a simple budget explainer).