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Things to know about Association Dues





Investing in real estate properties like a condominium unit doesn’t just entail solely buying it. The truth is, there are other things you need to take care afterwards. If you plan on generating a steady income with it, a host of other tasks should be considered like evaluating the would-be tenant, repair costs, rental payments, etc. But If you decide to live in it and moving in is also another story. Many are oblivious to a bill that needs to be settled monthly or annually – the association dues. What is the payment for? What happens if you don’t pay it? All you need to know about association dues will be answered here.


What is association dues and why do you need to pay for it?

Condominium owners have to pay for these monthly fees to enjoy the shared services for the entire property. The fees cover the overall operational expenses, which is usually mandated by the condo’s homeowners’ association. This includes payment for services such as maintenance, security, repairs, electricity, and water for the building. These items are what you call the property management costs. The condo fees are combined together to pay for the property management services of the building. They are held in trust for the unit owners. The condo corporation itself is not the contractor but the one hiring these services for the benefit of the unit owners or members of the association. Condo association dues are VAT-exempt under the 2018’s TRAIN law.  They are actually not considered as income for the organization that receives them.


When do you start paying for the association dues?

Has the unit been turned-over to you? Was the title transferred under your name? Was the “Deed of Absolute Sale” signed already? If your answer is YES to all these questions – then, you are required to pay the property’s association dues.


Whether you have moved in or not and no one else occupies the unit – you are obliged to pay the association dues if it has been turned-over by the developer to you. For example, if your unit was turned over in MARCH and you only moved in MAY – you still need to pay the association dues for the months of MARCH and APRIL. You start paying at the month of the unit’s turnover, not the moving-in month.


How much is the association dues?

For each property – the cost of association dues is not the same for all. Most of the time, the cost is dependent on its operating expenses. It is likely to be higher if your condo offers more than the basic amenities and facilities. How is it computed? It is usually based on the size, how your unit measures in square meters. So, if the association dues cost P100 per square meter and you own an 80 sq. m. unit – then you pay Php 8,000 per month. It also includes balcony space if your unit has one. The bigger the unit (with most likely two and three bedrooms), surely the higher payment it will require for you to pay the association dues.


How is payment collected?

The condo employs a property management team whose duty is to collect association dues plus other condo fees, if any. The team’s responsibility is to help the developer manage and maintain the building. What services do they provide? Basic services like security and maintenance personnel, janitorial services and other teams for the upkeep of the property.


Is there an advantage if you pay annually vs. monthly?

Most property developers will give discounts when you pay the association dues annually. If you pay annually, you can save on 1 month because total will just be 11 months in all. Some developers will even give you a 5-10% off when you pay the entire amount for a year. Isn’t that a good deal? If you have extra cash to spare – this is quite ideal considering the amount of money you will save and the convenience of not thinking of the payment every month.


What will happen if you fail to pay?

As in utility bills and credit cards, failure to pay in time will incur penalties. It is better to ask upfront what the developer’s rules on this once you decide to buy a unit. Each developer has a different procedure. Some would charge most probably a 3 or 4% interest. You will be treated as a delinquent account if you do not pay the dues altogether. Of course, no one would like this to happen. You will be restricted from using the shared facilities and amenities. They will even cut-off your basic utilities. If you do not pay your association dues dutifully, it means you are not interested in living in your unit or renting it out. As a good investor, you need to pay what’s due to maximize your condo investment.


We hope you’ve learned everything you need to know about association dues. As a reminder - it is best to check first on what you need to pay before, during and after while buying that condominium unit you’ve been longing for.

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