In the Philippines, the governance of Homeowners’ Associations (HOAs) is primarily anchored in Republic Act No. 9904, otherwise known as the Magna Carta for Homeowners and Homeowners’ Associations, and its Implementing Rules and Regulations (IRR). For owners of multi-unit rental properties—such as apartment complexes, row houses, or subdivided lots within a gated community—understanding how dues are computed is essential for both legal compliance and financial planning.

The Legal Basis for HOA Dues

The authority of an HOA to collect fees is derived from its bylaws and the master deed of the subdivision or building. Under Section 10 of RA 9904, homeowners have the obligation to pay necessary fees, dues, and assessments. These funds are used for:

Maintenance of common areas (roads, parks, streetlights).
Security services.
Garbage collection.
Administrative expenses of the association.

Computation Methods for Multi-Unit Properties

There is no single "government-mandated" formula for the exact amount of dues; rather, the law allows the HOA's Board of Directors to propose a budget and a corresponding fee structure, which must be approved by the majority of the association members. In the context of multi-unit rentals, three primary methods are commonly employed:

1. Per Square Meter Basis

This is the most common method used in subdivisions and condominiums. The dues are calculated by multiplying a fixed rate by the total lot area or floor area of the property.

Application: If a landlord owns a 300-square-meter lot containing a four-door apartment, the HOA may charge based on the total 300 square meters, regardless of the number of units or tenants.

2. Per Unit Basis

Some HOAs opt for a "per door" or "per unit" assessment. This is often justified by the increased "burden" on community resources (e.g., more garbage generated, higher security risk, more vehicles using the roads).

Application: If the rate is ₱500 per unit and the property has five rental units, the total monthly due would be ₱2,500. This method is frequent in smaller communities where utility usage is the primary concern.

3. Fixed Rate per Household/Member

Under this method, every "member" pays a flat fee. However, for multi-unit properties, the definition of "member" can become a point of contention. While the owner is technically the member, the HOA may argue that each separate household constitutes a beneficiary of the services, leading to a hybrid computation.

Rights of the Landlord vs. Rights of the Tenant

A common point of confusion is who is legally responsible for the payment.

Primary Liability: The HOA generally recognizes the owner (lessor) as the person liable for dues because the owner is the registered member of the association.
Contractual Pass-Through: In a lease agreement, the landlord and tenant may agree that the tenant will shoulder the HOA dues. While this is valid between the parties, the HOA can still hold the owner liable if the tenant fails to pay.
Voting Rights: Even if a tenant pays the dues, the right to vote in HOA affairs remains with the owner, unless the owner provides a written proxy to the tenant.

Limitations and Regulatory Oversight

The Department of Human Settlements and Urban Development (DHSUD), which took over the functions of the Housing and Land Use Regulatory Board (HLURB), serves as the regulatory body for HOAs.

Reasonableness: Assessments must be "reasonable." If an HOA suddenly spikes the dues for multi-unit owners without a clear budgetary justification, the owners may contest this before the DHSUD.
Delinquency: Failure to pay dues can result in the owner being declared a "member not in good standing." This may lead to the suspension of basic services (like sticker issuance for vehicles) or the filing of a collection case.
No "Profit" Motive: HOAs are generally non-stock, non-profit corporations. The dues collected should be commensurate with the actual and projected expenses of the community.

Key Considerations for Property Owners

Review the Bylaws: Before constructing or converting a property into a multi-unit rental, check the HOA's bylaws. Some associations prohibit multi-unit rentals entirely or have specific "commercial/rental" surcharges.
Segregation of Utilities: Ensure that HOA dues are clearly separated from water or electricity bills in rental contracts to avoid disputes over what the "rent" actually covers.
Transparency: Multi-unit owners have the right to demand financial statements from the HOA to ensure that the dues computed for their properties are being utilized for the intended communal purposes.