Homeowners Association Dues are usually seen in two very different ways: a part of the monthly payment in one’s condominium unit or house that one can’t be bothered with or a pesky additional item on the bill that is nothing but another fee one has to pay. Either way, it seems like a very little margin of people fully understand what these dues are about and why there is a need for them to continue paying them. Well, it’s about time to study these dues and know what they’re all about:
So, what are Homeowners’ Association Dues really?
These are dues paid by homeowners or leaseholders paid on a monthly basis. Despite its name, the fees are neither collected by nor paid to the Homeowners’ Association, a group of residents who speak about the welfare of their community and who plan activities for other residents, but to the administration of the condominium, subdivision or village.
What does this monthly fee expense cover and what it doesn't?
Generally, these dues are paid for the maintenance of the residential area’s amenities and services. These include, but are not limited, to the maintenance and occasional repair of common areas (pools, clubhouses, gardens, roads) and the salary of the employees (administration, security guards, janitors, etc.) Depending on the regulations of your condominium or village, the use of certain facilities (such as the swimming pool or gym) may cost you a certain amount, even if you are a homeowner. Most of the time, though, only guests are asked to pay for the use of these services. Should you want to use a common area (i.e., club house) for a private function, you may need to pay extra. Again, this depends on the regulations set,
The village/condominium administration claims that these fees are taxable. Is this true?
Yes. Recently, BIR has declared these fees taxable, so you would have to pay VAT. There are some exceptions, though, so it is best to consult BIR or your accountant.
Can you go around paying these dues?
No. As a homeowner (or resident), you are required to pay your Homeowners’ Association Dues since you are entitled to the use of all services and amenities in your village or condominium. It is then recommended to frequent the gym or swim in your pool on a regular basis. Using the amenities and services that you can avail through the fees you are paying is the best way to get your money’s worth. If you find paying on a monthly basis a hassle, ask about paying annually. Most are open to that option and some even give a discount when fees are paid on a yearly basis.
The answers we have provided are very basic information about Homeowners’ Association Dues as these fees are bound by regulations which vary based on where you live. For more specific questions, it is always best to consult your residence’s administration office that will surely be more than happy to assist you.