Tenant Liability for Subdivision Fees in Rental Agreements in the Philippines

Executive summary

In Philippine residential leases located in subdivisions or gated villages, the default rule is that the property owner (lessor) is the one directly liable to the homeowners’ association (HOA) for assessments and “subdivision fees.” A tenant (lessee) becomes liable only if the lease expressly shifts some or all of those charges—or if the tenant voluntarily undertakes to pay on the owner’s behalf. Even then, the HOA’s legal recourse typically remains against the owner; the owner’s recourse is against the tenant under the lease.

This article explains the legal framework, typical fee categories, enforceability limits, drafting guidance, and practical dispute handling—so both landlords and tenants know who pays what, and why.

The legal framework (Philippine context)

1) Civil Code (lease obligations)

Freedom of contract governs Philippine leases: parties may allocate expenses as they agree, so long as stipulations don’t violate law, morals, good customs, public order, or public policy.
Baseline allocation absent stipulation:
- Owner bears ownership-related burdens (e.g., property taxes, HOA assessments, major repairs necessary to keep the dwelling fit).
- Tenant bears consumption-based charges (e.g., electricity, water actually used) and must use the premises with due care.

2) Magna Carta for Homeowners and Homeowners’ Associations (RA 9904)

Membership and primary liability for assessments rest with lot/unit owners in subdivisions/villages.
Associations ordinarily bill and enforce against owners, not tenants. A tenant may pay if authorized/required by the lease, but the HOA’s claim typically runs to the owner.

3) Condominium Act (RA 4726) vs. subdivisions

While this article focuses on subdivisions, it helps to note that under the Condominium Act, unit owners are liable for common expenses; tenants may pay only by agreement. Subdivision HOAs function similarly: assessments attach to ownership, not tenancy.

4) Rent Control laws (if applicable)

For covered residential rentals, statutes cap deposits/advances and regulate rent increases. They do not forbid separately itemized, properly disclosed charges (e.g., utilities, HOA pass-throughs) if these are clearly stipulated and not used to evade rent caps or to impose unconscionable terms.
Always verify if the unit falls under current rent control coverage and ensure fee clauses are transparent and not a disguised rent increase.

What “subdivision fees” usually include—and who pays by default

Fee type	Nature	Default legal bearer	Can a lease pass it to tenant?	Typical practice
HOA regular dues (security, common-area upkeep)	Ownership-based assessment	Owner	Yes, via express clause (tenant pays or reimburses)	Many owners pass through; HOA still looks to owner if unpaid
Special assessments (capital projects)	Ownership-based, non-recurring	Owner	Yes, but must be explicit; often shared or excluded	Often excluded or cost-shared due to size/one-off nature
Gate/vehicle/barcode stickers, IDs	Access/admin fees	Owner (membership) but user-specific	Yes (user pays for their own sticker/ID)	Typically tenant pays for their own access items
Move-in/move-out fees	Operational/admin	Not fixed by law	Yes	Commonly tenant pays (as the mover)
Garbage/solid waste fee	Sometimes via HOA; sometimes LGU	Varies	Yes	If consumption-like or per-household, tenant usually pays
Water/sewer from HOA utility	Consumption-based	User (tenant)	N/A	Tenant pays per meter/billing
Common area penalties (e.g., HOA fines for violations)	Ownership-based, triggered by occupant conduct	Owner vis-à-vis HOA	Yes, lease may shift to tenant if the tenant caused the violation	Best practice: tenant reimburses if at fault
Real property tax (RPT)	Tax on ownership	Owner	Yes, but must be clear and is more common in commercial leases	For residential, usually owner pays

Key point: Even where the lease makes the tenant pay, the HOA’s primary legal claim nearly always remains against the owner; the owner then enforces the lease against the tenant (e.g., deduction from deposit or separate collection).

Enforceability limits and fair practice

Clarity and specificity control. Courts construe ambiguities against the drafter. If an owner wants a tenant to shoulder HOA dues, special assessments, or penalties, the lease must say so plainly.
No unlawful or unconscionable terms. A clause cannot be used to defeat rent control or impose surprise charges. Itemize fees, define how they’re computed, and attach HOA schedules if available.
No double-charging. Avoid charging a fee both as “part of rent” and “separately.”
Transparency on increases. If HOA dues fluctuate, the lease should state how adjustments flow through (e.g., “payable at actual HOA rate as billed from time to time, with copy of HOA invoice”).
Receipts and proof. If the tenant pays on behalf of the owner (e.g., HOA dues), the tenant should receive (and the owner should provide) proof of application of payment to the correct account.
Security deposit use. Deposits may answer for unpaid obligations expressly covered by the lease and for damage. If you want HOA-related arrears or penalties to be deductible, the lease must expressly include them under deposit coverage.
Access control vs. legal liability. HOAs may control access to amenities (e.g., no sticker, no entry to certain facilities) but that does not shift legal liability from owner to tenant unless the lease or a tenant registration with the HOA makes the tenant the payer.

How to draft the lease: practical guidance

A. If the owner wants the tenant to pay HOA dues (pass-through model)

State the rule: “Lessee shall pay the following subdivision-related charges…”
Attach or reference the current HOA rate and note it may change.
Payment routing:
- Option 1: Tenant pays directly to HOA (with OR copy to landlord).
- Option 2: Tenant reimburses the landlord within X days of landlord’s proof of payment.
Nonpayment consequences: Late interest mirrors HOA’s; access stickers suspended by HOA do not excuse rent.

Sample clause (illustrative only):

Lessee shall, at its sole cost, pay the regular homeowners’ association dues applicable to the Leased Premises, presently ₱____ per month as may be amended from time to time by the HOA. Lessee shall pay such dues directly to the HOA under Owner’s account no. ______ and shall furnish Owner a copy of each official receipt within five (5) days of payment. If the HOA bills any special assessment, Owner shall remain primarily liable to the HOA; provided, Lessee shall reimburse Owner for any special assessments attributable to Lessee’s occupancy, if and only if such assessment is expressly identified in this Lease as Lessee’s responsibility.

(You can tailor “special assessments” to include/exclude capital projects.)

B. If the owner will keep paying HOA dues (all-in rent model)

Make rent inclusive of regular HOA dues and specify what’s not included (e.g., tenant’s stickers, penalties caused by tenant, utilities).
Clarify that rent already covers regular dues so the tenant is not double-billed.

Sample clause (illustrative only):

Base Rent is inclusive of regular HOA dues as of the Commencement Date. Lessee remains responsible for consumable utilities (water, electricity, internet), personal access items (IDs, vehicle/barcode stickers), and any HOA penalties arising from Lessee’s acts or omissions.

C. Security deposit clause

Spell out that the deposit may be applied to unpaid rent, utilities, and HOA charges allocated to Lessee by this Lease, plus reasonable costs of collection if lawful.
Require final statement and proof of any deductions and a timeline to return the balance.

Common scenarios & how liability plays out

Lease is silent; HOA dues unpaid.
- HOA → Owner for payment.
- Owner cannot force tenant to pay absent a lease basis (though the parties can agree later).
- Practical fix: owner pays; consider amending lease or adjusting rent upon renewal.
Lease says tenant pays dues; tenant doesn’t.
- HOA → Owner (primary).
- Owner → Tenant under lease: collect, deduct from deposit, or declare default (per terms and law).
HOA fines for tenant’s violation (e.g., noise, parking).
- HOA → Owner; Owner → Tenant to reimburse if lease allocates penalties tied to tenant’s conduct (best practice: include).
Special assessment for subdivision road overhaul.
- Ownership-based and often sizable; clarify in lease whether (a) owner absorbs; (b) cost-share; or (c) pass-through (less common for residential). Absent clarity, disputes are likely—default expectation: owner.

Documentation checklist (before move-in)

Copy of HOA house rules, fee schedules, and billing cycle.
Statement in the lease on who pays:
- Regular HOA dues
- Special assessments
- Stickers/IDs/access credentials
- Move-in/out fees
- Garbage/solid waste fees
- Violations/penalties and causation standard
Payment route (direct to HOA vs. reimbursement) and proof required.
Deposit clause specifying what charges it can cover.
Cap or estimate for variable charges if needed to avoid surprises.
Notice-and-cure periods for any nonpayment.

Frequently asked questions

Q: Can an HOA refuse gate access to a tenant if the owner hasn’t paid dues? A: HOAs can enforce internal access rules (e.g., no sticker, no entry to certain facilities) but the legal debt is still the owner’s. Tenants should coordinate with owners to avoid being caught in owner–HOA disputes.

Q: Is it legal to make a tenant pay the owner’s real property tax (RPT)? A: Yes, if expressly agreed. It’s unusual for residential leases but not illegal. If used, keep it transparent and avoid using it to circumvent rent caps.

Q: Are subdivision fees part of “rent” under rent control? A: Properly documented pass-throughs for third-party charges (e.g., utilities, HOA dues) are generally treated separately from base rent. However, authorities may scrutinize fee structures that effectively function as hidden rent increases. Itemize and disclose.

Q: Who gets billed by the HOA if the lease says the tenant pays? A: Typically the owner remains the named member and receives the bill; the lease then requires the tenant to pay or reimburse. Some HOAs allow tenant billing arrangements upon owner’s authorization.

Q: Can the owner deduct unpaid HOA dues from the tenant’s deposit? A: Only if the lease expressly includes HOA dues (or related penalties) within deposit coverage. Keep detailed statements and receipts.

Practical tips for both sides

Owners: If you want pass-throughs, say it clearly and require proof of payment. Register the tenant with the HOA if direct payment is intended.
Tenants: Ask for HOA schedules and history of rate changes. If fees are pass-through, insist on copies of official HOA bills/ORs.
Both: Avoid vague “all fees” language. Define the list, who pays, how much, how it changes, and what happens on nonpayment.

Bottom line

By default, owners are liable to the HOA for subdivision dues and assessments.
Tenants pay only if the lease clearly shifts those charges (or if they choose to pay on the owner’s behalf).
Clear drafting, transparent billing, and documented payments prevent most disputes.

This article provides general information on Philippine residential leasing in subdivisions and is not a substitute for tailored legal advice for your specific contract and facts.