1) The practical problem

Many buyers start paying “HOA dues,” “association dues,” “maintenance fees,” or “monthly dues” before the subdivision/condominium project is formally “turned over” to the homeowners (or to an owner-controlled board). Disputes usually fall into one (or more) of these patterns:

Who has authority to collect? Developer? A “provisional HOA”? A property manager?
What exactly is being charged? Legitimate common-area operating costs, or costs that the developer must shoulder under law and under the project approvals?
Were buyers properly informed? Was the basis, rate, and scope disclosed in the contract and HOA documents?
Where did the money go? No audited statements, unclear accounting, commingling with developer funds.
What can homeowners do if the collections are unauthorized, excessive, coercive, or misused?

Because different rules apply to subdivisions and condominiums, and because “turnover” can mean different things in practice, the legality depends on documents + timing + what the fees fund + who is collecting and how.

2) Key Philippine legal framework (high-level)

A. Homeowners associations (subdivisions, residential communities)

Republic Act No. 9904 (Magna Carta for Homeowners and Homeowners’ Associations) governs HOAs: rights of members, dues/assessments, records inspection, elections, remedies, and governance requirements.
Implementing rules and agency issuances (formerly HLURB; now under the housing bureaucracy) structure registration, supervision, and dispute handling.

B. Subdivision and condominium project regulation

Presidential Decree No. 957 (Subdivision and Condominium Buyers’ Protective Decree) and related regulations govern developer obligations, licenses to sell, completion of facilities, and buyer protections.
Batas Pambansa Blg. 220 often applies to economic and socialized housing projects (with its own standards and obligations).

C. Condominium governance (condo corporations, unit owners)

Republic Act No. 4726 (The Condominium Act) and the condominium’s Master Deed/Declaration of Restrictions and By-Laws govern assessments and management, including developer control periods and the transition to unit-owner control.

D. General principles that always matter

Contracts (Contract to Sell/Deed of Sale), plus the project’s restrictions, by-laws, and house rules define what was agreed—subject to mandatory protections under housing laws.
Civil Code principles on obligations and contracts, unjust enrichment, damages, and abuse of rights.
Katarungang Pambarangay (barangay conciliation) often applies as a pre-filing step for certain disputes, depending on parties and location, with important exceptions.

The “right” answer is usually document-driven: what your contract and HOA/condo documents say, what the project approvals require of the developer, and what the law requires regardless of contract wording.

3) What “turnover” means (and why it matters)

A. Subdivision context (HOA turnover)

“Turnover” is often used loosely to mean one or more of these events:

Turnover of individual lots/houses to buyers (physical delivery/acceptance).
Operational turnover of common area management (developer stops directly managing; HOA or property manager takes over).
Organizational turnover (homeowners elect a board not controlled by the developer; HOA becomes functional).
Asset turnover (titles/rights to common areas, equipment, facilities, and/or documents are delivered to the HOA or proper entity; open spaces may be for LGU depending on approvals).

Legality of dues before turnover is usually argued around whether:

the HOA already exists legally (registered; with by-laws; proper officers),
the collector has authority (board resolution/contract),
the charges are truly for common services actually provided, and
the developer is improperly shifting its own obligations onto buyers.

B. Condominium context (unit owner control)

In condominiums, dues typically start when:

a unit is turned over/accepted or occupied (depending on by-laws/contract), because common expenses begin, and
assessments are usually authorized by the condo corporation’s governing documents.

But “turnover” disputes arise when the developer (still controlling the board due to unsold unit votes) sets high dues, fails to account, or charges for items the developer should have delivered/shouldered.

4) The core question: Are HOA monthly dues collectible before turnover?

The short legal logic

Collections can be lawful before turnover if there is a valid legal basis and the fees are proper in amount and use. Collections are vulnerable to challenge when they are imposed without authority, without transparency, or to fund obligations that legally belong to the developer.

The “before turnover” label is not, by itself, dispositive. The decisive issues are:

Authority: Who is collecting, and under what authority?
Basis: Where is the obligation written (contract, by-laws, restrictions, board resolution, approved budget)?
Purpose: What costs are being funded, and are those costs legitimate common expenses vs. developer obligations?
Process & transparency: Were homeowners informed, consulted as required, billed properly, and given access to records?
Reasonableness & legality: Are charges consistent with RA 9904 / PD 957 / Condo Act / regulations and not contrary to public policy?

5) Lawful bases for pre-turnover collections (what makes them defensible)

A. Buyer’s contract explicitly provides for association dues upon occupancy/acceptance

If the Contract to Sell/Deed of Sale states that the buyer must pay association/maintenance dues starting upon turnover of the unit, occupancy, or a specified event, that supports collectability—but it still must comply with mandatory buyer protections and cannot be used to shift non-transferable developer obligations.

B. The HOA (or condo corporation) exists and is authorized to levy assessments

Under RA 9904, an HOA operates through its governing documents and board/member actions. Pre-turnover collections are stronger legally when:

the HOA is properly organized/registered,
there is a budget and board authority to collect,
assessments are properly determined (often requiring member participation/approval per by-laws), and
funds are segregated and accounted for as HOA funds.

C. Fees correspond to actual common-area services currently being delivered

Fees are easier to justify when they directly fund:

security guards actually assigned,
street lighting power bills,
garbage collection,
water for common areas/irrigation,
maintenance of clubhouse/pool already operating,
property management services with a disclosed contract,
repairs and upkeep of areas already enjoyed by residents.

D. The collector is a property manager with a valid contract from the HOA/condo corp (or developer acting as authorized interim manager)

Even before turnover, developers commonly engage property management. This can be lawful when:

the management contract is valid,
the payer can identify who the principal is (HOA/condo corp vs developer),
billing is transparent, and
collections are not commingled with developer funds.

6) When pre-turnover collections are legally vulnerable (common grounds to challenge)

A. No real authority: “HOA” is not properly organized, or collector lacks board authority

Red flags:

No proof of HOA registration/recognition, by-laws, or board resolutions.
Developer or property manager collects “HOA dues” without identifying the legal entity that owns the funds.
No member-approved budget process (as required by the governing documents/RA 9904 norms).

Legal angle: Assessments generally require an authorized association/corporation acting through its board and in line with its by-laws. Collections by an unauthorized actor can be attacked as improper exaction and can support refund/damages in appropriate cases.

B. Fees fund developer obligations (cost shifting)

Disputes often arise where “dues” pay for items the developer must deliver or shoulder, such as:

completion or correction of project defects,
promised amenities not yet completed but “maintained” on paper,
expenses tied to the developer’s compliance requirements for licenses/permits,
security/maintenance necessitated by the developer’s ongoing construction operations (mixed-use of roads by construction traffic),
marketing-related or turnover processing costs.

Legal angle: Under buyer-protective housing laws (notably PD 957 in many contexts), developers carry obligations regarding completion and delivery. Charges that effectively make buyers pay for the developer’s statutory/contractual duties are contestable and may be treated as unfair or contrary to mandatory protections.

C. Lack of disclosure / surprise charges / unclear scope

Red flags:

Dues imposed even before unit turnover/occupancy despite no clear contract basis.
Sudden rate increases without process, notice, or explanation.
“Special assessments” without a defined project, budget, or approval.
Charges applied inconsistently, selectively, or punitively.

Legal angle: Apart from contract rules, RA 9904 emphasizes governance, participation, and transparency. Surprise fees can be attacked as lacking basis or as abusive.

D. Poor accounting: no statements, commingling, or misuse

Red flags:

No periodic financial statements, no receipts, no breakdown.
HOA funds deposited to a developer’s corporate account.
Refusal to allow inspection of books and records.
No independent audit or no explanation of variances.

Legal angle: RA 9904 recognizes members’ rights to access association records and to demand accountability. Misuse can trigger administrative liability and, in extreme cases, civil/criminal exposure depending on facts.

E. Coercive collection tactics

Examples:

Denial of essential services without due basis (e.g., access gate entry, vehicle stickers) as leverage.
Penalties not provided in by-laws/contract, or excessive interest/charges.
Threats to block title release or deed processing unless dues are paid (especially if dues are disputed and not clearly tied to title release obligations).

Legal angle: Remedies may lie under association law principles, contract law, and abuse-of-rights doctrines; depending on facts, coercion can strengthen claims for damages or regulatory intervention.

7) Special topic: “Membership” and whether you’re bound pre-turnover

Subdivision HOAs (RA 9904)

Generally, homeowners become members pursuant to the association’s governing documents and the nature of their ownership/occupancy. However, enforceability of dues often hinges on:

whether the HOA is the proper association for the project,
whether the buyer was given and bound by the restrictions/by-laws (often incorporated into contracts),
whether the dues were validly imposed under the by-laws and applicable rules.

Condominiums (RA 4726)

Unit owners are typically members of the condominium corporation (or association) as defined in the master deed/by-laws. Assessments are often a built-in incident of ownership, and collection authority is usually clearer—though still challengeable for abuse, lack of accounting, or improper purpose.

8) What homeowners should demand (practical legality checklist)

If dues are being collected pre-turnover, homeowners can demand these in writing:

Identity of the legal entity collecting dues (HOA name/registration, condo corp SEC registration, etc.).
Governing documents: by-laws, declaration of restrictions, house rules, policies on dues and penalties.
Board authority: board resolution approving the budget and assessment rate; proof of quorum/valid election where applicable.
Budget and basis: line-item annual budget; how the rate was computed (per lot size, per unit, equal share, etc., as provided).
Service contracts: property management contract, security contract, landscaping, waste hauling—who signed, term, and cost.
Accounting: bank account in the association’s name, monthly/quarterly financial statements, receipts, disbursement vouchers.
Turnover status: timeline and documents for turnover—what remains with developer; what has been transferred.

When these are refused or cannot be produced, homeowners’ objections become substantially stronger.

9) Homeowners’ remedies (Philippines): from least to most escalated

A. Internal HOA/condo remedies (document-based)

Invoke inspection rights under RA 9904 principles and the by-laws: request books, minutes, budget, and contracts.
Call for a meeting (special meeting provisions often exist in by-laws).
Challenge unauthorized acts via internal dispute procedures if provided (grievance committee, mediation).

Best use: when the HOA/condo corp is functional enough that governance mechanisms work and homeowners can organize quickly.

B. Barangay conciliation (Katarungang Pambarangay), where applicable

Many disputes between residents/association officers/collectors can be required to undergo barangay conciliation first, depending on:

parties’ residence/location,
nature of the dispute,
statutory exceptions and jurisdictional rules.

Best use: low-cost pressure point for document production, accounting, and negotiated settlements.

C. Administrative/regulatory complaint in the housing adjudication system

For many HOA and subdivision/condo disputes historically under HLURB’s adjudication, the housing adjudication bodies (now within the reorganized housing framework) typically handle:

disputes involving subdivision/condo projects,
HOA governance and assessments issues (depending on the specific dispute and agency rules),
developer obligations and buyer complaints tied to project delivery and compliance.

Relief commonly sought:

injunction/cease-and-desist against unauthorized collections,
accounting and audit,
refund/return of improper assessments,
directives to comply with turnover obligations and governance requirements,
damages and penalties where authorized.

Best use: when the dispute is systemic (developer-driven collections, lack of turnover, large sums, refusal to account).

D. Civil action (courts) for refund, damages, injunction, accounting

Possible causes of action depending on facts:

collection without basis (refund),
breach of contract,
unjust enrichment,
abuse of rights / damages (Civil Code),
injunction to restrain unlawful collection or coercive enforcement.

Best use: when administrative forum is not available, not adequate, or when damages and judicial relief are central (subject to jurisdictional rules and forum selection).

E. Criminal remedies (only when facts justify)

If funds were collected under a fiduciary arrangement and misappropriated, complaints sometimes allege crimes like estafa or violations tied to misuse of entrusted funds. This is highly fact-specific and requires careful evidence: the nature of entrustment, demand, and misappropriation.

Best use: only where there is strong proof of intentional misappropriation, not merely poor management.

10) Evidence that wins disputes (what to gather)

Contracts: Contract to Sell, Deed of Absolute Sale, Reservation Agreement, disclosures, brochures (if incorporated), turnover notices.
Billing records: statements of account, demand letters, penalty computations, proof of payment, receipts.
Communications: emails, Viber/FB group posts, memos about dues and enforcement.
HOA/condo documents: by-laws, restrictions, house rules, budget, board resolutions, minutes.
Developer documents: project approvals, promised deliverables list (as stated in marketing materials and contract), turnover schedules.
Service proof: guard logs, incident reports, waste hauling schedules, maintenance reports—useful to show whether services existed at all.
Bank/account proof: where payments were deposited; whether the account name matches the HOA/condo corp.

11) Typical outcomes and legal theories applied in practice

Scenario 1: Dues stated in contract; services provided; accounting reasonable

Likely outcome: collections upheld; homeowner must pay; disputes focus on rate reasonableness and documentation.

Scenario 2: “HOA dues” collected but HOA not functional/authorized; no documents; commingling

Likely outcome: strong case for accounting, audit, restraint on collection, and potential refunds depending on proof.

Scenario 3: Dues used to finish developer deliverables or correct defects

Likely outcome: high vulnerability for developer/collector; homeowners often obtain directives to stop improper charging and to compel developer compliance.

Scenario 4: Condo corporation controlled by developer votes; dues high; owners excluded; no transparency

Likely outcome: dues may remain collectible in principle, but owners can challenge governance abuses, demand records, and seek regulatory/judicial intervention for accounting and fairness.

12) Practical guidance on paying “under protest”

When homeowners fear penalties or access restrictions but dispute legality/amount, a common strategy is to:

pay under written protest, and
simultaneously demand accounting and reserve the right to seek refund/offset.

This is not a magic shield, but it can:

reduce immediate retaliation risk,
preserve documentary proof that payment was not voluntary acceptance of the charge,
frame the dispute around documentation and legality rather than mere nonpayment.

Whether “pay under protest” helps depends on your documents and the forum, but it is often better than silence.

13) Bottom line rules of thumb

Pre-turnover HOA/association dues are most defensible when:

there is a clear contractual and documentary basis,
the collecting entity is legally organized and authorized,
dues match actual common expenses benefiting residents,
budgeting, notices, and accounting are transparent.

Pre-turnover collections are most attackable when:

the “HOA” is a label without proper authority,
the developer is shifting its legal/project obligations to buyers,
there is no budget process, no disclosure, no records access,
funds are commingled or unaccounted for,
enforcement is coercive and not grounded in by-laws or law.