Liability for Unpaid HOA Fees of Previous Owners

A comprehensive Philippine-law primer

1. The setting

Whenever you buy a subdivision lot or condominium unit in the Philippines you step into a web of “real-community obligations.” The most visible of these are the regular dues and special assessments approved by the homeowners’ association (HOA) or condominium corporation to keep the common areas running. Because these charges are treated as liens that “run with the land,” the key question is: who shoulders arrears that the seller left behind?

Short answer: the property itself remains answerable, so the new owner must pay first and then sue or demand reimbursement from the seller. Below is the long answer—statutes, regulations, Supreme Court rulings, enforcement mechanics, defences, and practical check-lists.

2. Statutory framework

Instrument	Core provisions on dues	Effect on successors
Republic Act 9904 – Magna Carta for Homeowners & HOAs	§ 8(a) makes every member liable for “membership fees, dues and special assessments.” The 2021 Revised IRR defines “association dues” and allows the board to declare a member “delinquent” after due notice and hearing. (Studocu, Legaldex)	Although RA 9904 itself is silent on lien language, most subdivision deeds of restriction—recorded on the title—expressly declare that all unpaid assessments constitute a lien enforceable against the lot, thereby binding transferees.
Republic Act 4726 – Condominium Act	§ 20: “An assessment upon any condominium … shall be an obligation of the owner at the time the assessment is made. Unpaid assessments become a lien enforced ‘in the same manner as a real-estate mortgage.’” (Studocu)	Because the lien is statutory, a buyer is charged with notice even if the annotation has not yet been registered.
PD 957 – Subdivision & Condominium Buyer’s Protective Decree	§ 20 compels developers to organize an HOA/condo corporation and transfer common areas; § 22 recognises the obligation of owners to share in upkeep costs. (Respicio & Co.)	Grounds the expectation that dues follow the lot/unit once the project is turned over.

Other relevant sources

Civil Code art. 1623 (succession to obligations attached to immovables)
Local Government Code – real-property tax enjoys first priority; HOA liens are junior to taxes but senior to later mortgages unless contractually subordinated.

3. Nature of the lien

Real, not personal. The lien attaches to the property, not merely to the payor.
Preferred status. Under RA 4726 the HOA lien is next only to real-property tax.
Perfection. For condominiums, the corporation must file a “Notice of Assessment Lien” with the Registry of Deeds. For subdivisions, the lien language in the duly recorded Deed of Restrictions usually suffices; annotation strengthens enforceability but is not indispensable.

Failure to perfect the lien affects priority but not existence. The Supreme Court confirmed this in Ferndale Homes HOA v. Spouses Abayon, G.R. 230426 (28 Apr 2021), holding that unpaid dues “constitute liens on the property – liens which the buyers are deemed to have assumed.”

4. Jurisprudence roundup

Case	Take-away
Ferndale Homes HOA v. Abayon, G.R. 230426 (2021)	Buyers were compelled to pay ₱ 300 k in arrears dating before they acquired four lots. SC said lien follows the land. It did, however, slash interest from 24 % to a more “conscionable” 12 %.
Welbit Construction Corp. v. Heirs of De Castro, G.R. 210286 (23 Jul 2018)	Upheld extra-judicial foreclosure of a condo unit for five-year unpaid assessments; condo corporation may bid at auction under § 20, RA 4726. (Jur.ph)
HLURB / DHSUD line of rulings	Consistently recognise that “association dues are liens that survive transfers,” but will strike down penalties not authorised by by-laws or that violate RA 9904 due-process notice rules. (RESPICIO & CO., Respicio & Co.)

5. Enforcement mechanics

Internal remedies first. Board resolution → written Statement of Account → demand with at least 30 days to cure → declaration of “delinquent member.” (Respicio & Co.)
Administrative complaint. Collection suits up to ₱400 k may be filed with the DHSUD Adjudication Boards; above that, regular courts.
Lien remedies.
- Annotation on TCT/CCT.
- Judicial or extra-judicial foreclosure (same rules as mortgage; one-year equity of redemption applies).
- Refusal to issue HOA clearance when owner sells or seeks building permit.
Suspension of privileges. Temporary denial of pool access, parking stickers, voting rights—but never basic services (water, electricity, ingress/egress); doing so is a “prohibited act” under RA 9904 IRR. (Legaldex)

6. Defences & buyer remedies

Scenario	Possible buyer arguments	Reality check
Lien not annotated on title	Invoke Art. 1626 Civil Code (transferee in good faith)	“Constructive notice” still exists where Deed of Restrictions is referenced on title or disclosed in due-diligence papers. Courts lean toward HOA.
Excessive interest / penalties	Usury law repealed, but SC strikes rates that are “unconscionable” (Ferndale)	Buyer may win reduction but not erase principal arrears.
Statute of limitations	Action on written contracts: 10 yrs (Art. 1144); open account: 6 yrs	Lien enforcement clock runs from each assessment’s due date; partial payments interrupt.

7. Transactional best practices

Always demand a Certificate of No Outstanding Dues (or latest SOA) before signing the Deed of Sale.
If buying at auction or from a bank, ask for a dues ledger and insist that the bid price factors in arrears.
Add a contract clause: “Seller shall settle all HOA arrears as of closing; any unpaid amount discovered within 12 months shall be reimbursed on demand.”
For condominiums, confirm that no “Notice of Assessment Lien” is annotated on the CCT; if one exists, require its cancellation upon payment. (File Docs Phil)
Use an escrow to hold part of the purchase price until the HOA issues clearance.

8. What if you already bought and the HOA is chasing you?

Ask for documentation – board resolution fixing the rate, ledger of charges, proof of notice to previous owner.
Negotiate a payment plan; most HOAs will waive penalties in exchange for lump-sum settlement.
Pay under protest if you must obtain clearance quickly; you can still file a reimbursement case against the seller (Civil Code arts. 1397, 1599).
Challenge unreasonable charges before DHSUD; cite Ferndale precedent.

9. Interaction with foreclosures & taxes

Real-property tax sale – extinguishes junior liens, including HOA liens; the association must file a claim against the tax-sale proceeds (rarely successful).
Bank mortgage foreclosure – HOA lien is normally subordinate to the earlier mortgage but survives and binds the purchaser (usually the bank) up to the amount allowed in the master deed or by-laws. (RESPICIO & CO.)

10. Prescriptive periods & record-keeping

Claim	Prescriptive period	Practical tip
Personal action to collect dues	10 years if based on written by-laws; 6 years if based on account only	HOA should issue demand within one year of delinquency to avoid waiver arguments.
Foreclosure of lien	10 years counted from registration of the Notice of Lien	Renew annotation before lapse.

11. Key take-aways

Liens run with the land – buyer inherits arrears.
Due diligence saves money – get an HOA clearance every time.
Penalties must be reasonable – challenge rates beyond market norms.
Pay first, claim later – it is usually cheaper to settle and then sue the seller.
Use the right forum – DHSUD for smaller amounts, courts for big claims or foreclosure.

Disclaimer: This primer is for informational purposes only and is not a substitute for tailored legal advice. Laws and regulations cited are in force as of 30 May 2025. Always consult Philippine counsel for specific transactions or disputes.