In the Philippine real estate landscape, the payment of Homeowners Association (HOA) dues or condominium dues is a frequent point of contention. While the amount may seem nominal compared to monthly rent, the legal implications of non-payment—ranging from the loss of basic utility services to the foreclosure of the property—make it a critical issue for both parties to understand.
Under Philippine law, the responsibility for these dues is governed by a combination of the Civil Code, the Homeowners Association (HOA) Laws (Republic Act No. 9904), and the Contract of Lease.
1. The General Rule: Ownership Responsibilities
Technically and legally, the Landlord (Owner/Member) is the party primarily liable to the Association.
Under Republic Act No. 9904 (The Magna Carta for Homeowners and Homeowners’ Associations), the "member" of the association is typically the owner of the lot or unit. The association’s primary legal recourse for unpaid dues is against the property owner. This is because:
- HOA dues are considered encumbrances upon the property.
- The owner’s membership in the HOA is mandatory and tied to the title of the property.
- The HOA can file a lien against the property or even initiate foreclosure proceedings if dues remain unpaid, regardless of who was "supposed" to pay under a private lease agreement.
2. The Principle of Autonomy of Contracts
While the Landlord is primarily liable to the Association, the Civil Code of the Philippines allows for the "Autonomy of Contracts." This means the Landlord and Tenant are free to stipulate who will physically shoulder the cost of the dues.
Scenario A: The Lease Agreement specifies the Tenant pays.
If the contract states that the Tenant is responsible for HOA dues, this is a valid and binding obligation. However, it is important to note that this is an internal agreement between the Landlord and Tenant. If the Tenant fails to pay, the HOA will still look to the Landlord for payment. The Landlord’s remedy would then be to sue the Tenant for breach of contract or deduct the amount from the security deposit.
Scenario B: The Lease Agreement is silent.
If the contract does not mention HOA dues, the burden generally falls on the Landlord. In Philippine jurisprudence, the lessor is obliged to maintain the lessee in the peaceful and adequate enjoyment of the lease. Since unpaid dues often lead to the cutting of water or restricted access to amenities, the Landlord must ensure these are paid to fulfill their obligation to the Tenant.
3. Rights of the Tenant vs. Rights of the Member
A common point of confusion is whether a Tenant, by paying the dues, acquires the rights of a "Member" in the HOA.
- Payment does not equal Membership: Even if a Tenant pays the dues directly to the Association, they do not automatically become a member of the HOA. Only the owner is the member.
- Voting Rights: The right to vote in HOA elections remains with the Landlord unless the Landlord provides the Tenant with a written proxy.
- Use of Facilities: Usually, the right to use the common areas (pool, gym, parks) is transferred to the Tenant upon the execution of the lease, provided the dues are current.
4. Consequences of Non-Payment
In the Philippines, HOAs have significant powers to enforce the collection of assessments. If dues are not paid:
- Delinquency Status: The member (Landlord) can be declared "delinquent," which strips them of voting rights and the right to run for office.
- Service Disruption: Many associations have bylaws allowing them to cut off "non-essential" services, such as water (if distributed by the HOA) or garbage collection.
- Restricted Access: Tenants may find themselves barred from using the clubhouse, swimming pools, or even denied "sticker" access for vehicles, causing significant inconvenience.
- Legal Action: The HOA can file a collection case before the Human Settlements Adjudication Commission (HSAC), the quasi-judicial body that handles HOA disputes in the Philippines.
5. Summary Table of Responsibilities
| Feature | Landlord / Owner | Tenant / Lessee |
|---|---|---|
| Primary Liability to HOA | Always Liable | Not Liable to HOA (unless specified) |
| Contractual Liability | Depends on Lease | Depends on Lease |
| Membership Rights | Retained | None (unless via Proxy) |
| Default Position | Pays if contract is silent | No obligation if contract is silent |
Conclusion
In the Philippine context, the question of who pays HOA dues is a matter of contractual agreement versus statutory liability. While the law holds the Landlord/Owner accountable to the Association, the Lease Agreement dictates the financial arrangement between the parties.
To avoid disputes, it is highly recommended that lease contracts explicitly state whether the "Monthly Rental" is inclusive or exclusive of HOA/Condominium dues. If the Tenant is to pay, the Landlord should ideally require proof of payment every month to ensure the property remains in good standing with the Association.