What You Need to Know About Homeowner Association Dues

A Homeowner’s Association (HOA) is a formed community within a property. The HOA is in charge of maintaining order and conduct within the property by implementing certain rules and regulations that the members of the community need to follow. Members of the HOA are usually composed of individuals who reside in properties within communities such as a village or subdivision.

Note that a HOA differs from a condominium corporation, which is a legal team that represents the best interests of the property owners and operates under the Condominium Act. These condo corporations are considered to be “management bodies” of the property but are in no way companies themselves. As its name implies, a condominium corporation covers residents in a condo.

See More: Condo Title Basics: Deeds and Ownership Types in the Philippines

In the simplest definition, HOA dues are monthly, quarterly, semi-annual, or annual payments made by residents of gated communities. These dues could be considered as contributions to the overall operational expenses of the property.

The amount to be collected varies on the amenities and services offered: the more lavish the amenities and facilities are, the higher the HOA dues become. The amount is computed on how much space the homeowner occupies in square meters. So naturally, the bigger the unit, the more expensive the HOA dues become. But you shouldn’t worry too much about the possible fees: according to real estate broker Jake Loria, HOA dues remain to be much lower compared to the fees of a condo corporation [1]. In simple terms, this is because HOA members pay for the upkeep of common areas while condo owners have to support both the maintenance of the building (which naturally includes their unit) and its common areas.

HOA dues are expected to be paid right after the unit has been turned over to the owner, whether he or she has already moved in or not. The fees are also subject to Value Added Tax in accordance to the Revenue Memorandum Circular No. 9-2013 by the BIR [2].

Contrary to your first instinct, your hard-earned money doesn’t go down the drain when you pay your HOA dues. In fact, these payments even make your life more convenient and pleasurable.

HOA dues generally cover the maintenance work needed for the property you’re living in. This includes the repairs and improvements that amenities like the swimming pool, gardens, and fitness gym might need. Together with the property’s amenities, the building facilities like the elevators, lobbies, and even the recycling system, are also covered by the HOA dues.

The wages of the property employees who do all the work also depend on the collection of these HOA dues. These employees include the security personnel, the maintenance staff, and even the management staff.

The HOA dues also include the purchase of security equipment for the property; purchase of environmental protection equipment; stickers for the vehicles of the property owners; fees that come from the delivery of mail, gas, and drinking water; and even for the legal defense fund in the event that the security of the property is ever jeopardized [3].

See More: 7 Tips for Budget Planning for Home Repairs

They say in order to get ahead in life, you might need to make a couple of shortcuts. And while this might seem true in some aspects, your bills and scheduled payments are things you cannot—and should not—run away from.

Not paying your HOA dues has serious consequences. For one, you might face a lawsuit. Since HOA members have to sign a contract to be part of the association, the terms of the contract will legally oblige them to make payments. You might also need to pay the accumulated fees altogether, which will hurt your pocket more than it should have.

This irresponsible action can also affect the bigger picture and not just yourself. If there is an inadequate collection of fees, the maintenance, repair, and refurbishing of amenities and facilities could suffer. Even worse, the wages of the property’s employees could also get affected because of this.

Bottom line: complying with the HOA dues is a responsibility you should be on top of as an adult. To avoid neglecting this adult obligation, best to think of it as a duty rather than a luxury.

HOA dues are an added responsibility you will need to tackle as you navigate through adulthood. And now that you know its basics, facing it head-on will become easier and less daunting.