Right to Information on Condominium Dues and Application of Payments in the Philippines
(A comprehensive Philippine-law primer for condominium unit owners, corporations, developers, and property managers)
1. Concept of “Condominium Dues”
| Item | Typical label in statements | Legal/contractual basis |
|---|---|---|
| Operating fund contributions | “Regular dues,” “association dues,” “condo dues” | Master Deed & By-Laws; §17 RA 4726; Art. 22 HLURB IRR |
| Special assessments | “Special levy,” “one-off assessment” | §15 RA 4726; resolutions of the board & unit-owner majority |
| Sinking fund | “Reserve fund,” “capital expenditures fund” | HLURB Res. No. 33-2010 §2; good-housekeeping practice |
| Penalties & interest | “Late fee,” “interest on arrears” | Art. 2209 Civil Code; board resolution disclosed to owners |
| Re-billables | “Utility charges,” “real-property tax share” | Individual service contracts; §12.3 National Building Code IRR |
Key point: The dues are not taxes; they are contractual/corporate assessments. Statutory authority merely enables the condominium corporation to collect what is spelled out in its governing documents.
2. Statutory Sources of the Right to Information
| Law / Issuance | Provision | What a unit owner may demand |
|---|---|---|
| RA 4726 (Condominium Act) | §10 (j), §13, §17 | Annual financial statement (AFS); itemized income–expense schedule; schedule of assessments |
| Revised Corporation Code (RCC), RA 11232 | §73–§74 (inspect books); §37 (right to information) | Original and current By-Laws, resolutions, board minutes, ledgers, vouchers, contracts |
| HLURB/DHSUD rules (e.g., HLURB Res. 836-09, 921-14; DHSUD Circ. 2020-01) |
§§4–6 | Certified schedule of dues; computation worksheet; approved budget; prior-year audited reports |
| Civil Code | Arts. 1159 (obligations are contracts), 1315–1319 | Contractual transparency principles |
| 1987 Constitution | Art. III §7 (right to information); Art. XVI §6 (consumer protection) | Public-interest angle when government-regulated amenities involved |
The RCC inspection right extends both to the condominium corporation and to the homeowners’ association if the project uses a dual-entity structure.
3. Documents Usually Requested (and Legitimately Withheld)
Must be provided within 5–10 working days upon written demand (reasonable cost of reproduction may be charged):
- Audited Financial Statements (AFS) for the past fiscal year.
- Interim Management Reports (cash flow, budget vs. actual).
- Detailed Schedule of Assessments and Collections per unit.
- Board Resolutions fixing dues, penalties, or approving special assessments.
- List of Payables and Contracts (security, housekeeping, elevators, utilities).
- Bank Statements / Passbooks for operating and sinking-fund accounts.
- Minutes of Annual and Special Members’ Meetings.
May be redacted or refused if the request:
- Reveals personally identifiable information about another owner (Data Privacy Act, RA 10173).
- Exposes pending litigation strategy or privileged communications (Rule 130, Rules of Court).
- Seeks proprietary vendor proposals still under bidding (RCC §37 “business secrecy” exception).
4. Procedure for Enforcing the Right
| Step | Description | Timeline |
|---|---|---|
| 1. Written request | Cite RCC §73 and RA 4726; state specific books and dates; choose in-person inspection or certified copies. | Anytime during office hours |
| 2. Corporate secretary’s action | Must annotate the request in the Stock and Transfer Book (STB) or Membership Register. | Within 5 days |
| 3. Inspection / reproduction | Owner or representative (with SPA) may photocopy or photograph. | Within 10 days |
| 4. Denial or non-action | Secretary must state reasons in writing; silence = implied denial. | After 5–10 days |
| 5. Remedies | (a) File a petition with the DHSUD-HOA Adjudication Board (in Metro Manila, HLRB Adjudication Office); (b) Penal sanctions under RCC §161 (P50 000–P200 000 fine + contempt); (c) Derivative action vs. directors for breach of fiduciary duty. | 15 days from denial |
5. Application of Payments: Civil-Law Mechanics
5.1 When the Debtor (Unit Owner) Specifies
Art. 1252 Civil Code – The debtor may declare, at the time of payment, to which of several debts the payment shall apply.
In a condominium context, if an owner states “Apply this ₱20 000 to current dues only,” the corporation must honor that designation unless:
- The debt is not yet due, or
- Acceptance would prejudice lawful penalties previously accrued.
5.2 When the Debtor Is Silent
- The condominium corporation may choose the application, but must inform the debtor (Art. 1252 ¶2).
- Art. 1253 – “Interest shall be deemed paid before principal.” Thus, if penalties/interest exist and owner pays a lump sum without instructions, the corporation legitimately applies to interest first.
5.3 Contractual Overrides
- The Master Deed, By-Laws, or Collection Policy may provide that all payments are first applied to the oldest unpaid principal, then interest, then penalties.
- Such stipulations are valid if disclosed to owners and lodged with DHSUD. Secret or retroactive policies are void for being contrary to transparency and fair-dealing standards (Art. 24, Civil Code).
6. Jurisprudence Snapshot
| Case | G.R. No. / Date | Doctrine |
|---|---|---|
| Loyola Grand Villas HOA v. CA | G.R. 117188, March 7 1995 | HOAs/condo corps are corporations imbued with public interest; subject to visitorial power of housing regulator. |
| United Paragon Mining v. CA | G.R. 126298, Sept 19 2006 | Stockholder’s right of inspection is “absolute” except for bad faith or intent to harm the corporation. |
| Sun Valley HOA v. Dionisio | HLURB Case REM-071213-1241, 2014 | Imposition of dues must be supported by an approved budget; failure to disclose budget voids special assessment. |
| St. Francis Tower Condominium Corp. v. Sunstar Manila | HLURB CASE No. HV-030309-1045, 2011 | Board cannot apply payment to future dues without written consent. |
(HLURB decisions are administrative and persuasive but not jurisprudence in the strict Supreme-Court sense.)
7. Penalties for Non-Compliance by the Condominium Corporation
- Administrative fines – Up to ₱50 000 per offense under DHSUD guidelines.
- Civil liability – Actual and moral damages for bad-faith withholding (Art. 19-21 Civil Code).
- Criminal liability – RCC §162 penalizes willful violation of the Code or By-Laws with fines and/or imprisonment up to 2 years.
- Removal of directors/officers – DHSUD may order recall elections or direct appointment of an administrator.
8. Best-Practice Checklist for Boards & Property Managers
- ☑ Adopt a written Collection and Application-of-Payments Policy approved by the board and ratified by the majority of unit owners.
- ☑ Publish annual budgets and quarterly financial snapshots on the lobby bulletin board and the resident portal.
- ☑ Maintain separate bank accounts for operating funds and the sinking fund; reconcile monthly.
- ☑ Issue Official Receipts that clearly show ledger application (e.g., “Apr 2025 Reg. Dues,” “Interest Mar 2025”).
- ☑ Respond to document requests within five (5) working days; keep a logbook of requests.
- ☑ Undergo an external audit every year and present highlights at the annual meeting.
9. Practical Tips for Unit Owners
- Always write the purpose of your payment on the check or transfer slip (e.g., “May 2025 regular dues”).
- Ask for the computation sheet when a special assessment is announced; you are entitled to see the detailed cost estimate.
- Use e-mail so your information request is timestamped; cc the DHSUD regional office for extra pressure.
- Propose a resolution at the annual meeting to institutionalize transparent posting of monthly financials.
- Band together—collective action by at least 5% of unit owners may call a special meeting under RCC §49.
10. Frequently-Overlooked Nuances
- VAT and Withholding Tax: Condo corporations are generally non-VAT on dues but VAT liable on commercial rentals; transparency lets owners see if dues subsidize tax exposure.
- Mixed-use projects: Hotel or mall component alters cost allocation; the Master Deed must have an unequivocal “allocation matrix.”
- Developer-controlled boards: Within the 7-year turn-over window, the developer still answers to both DHSUD and the owners for disclosure of dues computation.
- Digital Records Act (E-Commerce Act, RA 8792): Electronic ledgers/receipts are admissible, but the corporation must ensure integrity and accessibility.
Conclusion
The Philippine legal environment strongly favors the right of unit owners to see, verify, and challenge condominium dues and the way their payments are applied. The governing principles flow from the Condominium Act, the Revised Corporation Code, housing-regulator issuances, and core Civil-Code doctrines on obligations and contracts.
For boards and property managers, proactive transparency is not merely good governance—it is a statutory duty, the breach of which invites fines, litigation, and reputational damage. For owners, knowing the legal levers—from a simple written request to full-blown administrative or derivative action—empowers them to guard against misuse of common funds and to ensure that every peso collected truly supports condominium living.