Pay association dues or lose your condo unit

“While Section

20 of the Condominium Act mentioned ‘extra-judicial foreclosure’, it does not automatically authorize the condominium to foreclose the unit without any special authority.

It is not uncommon to miss a payment of association dues in condominiums every now and then. But a few unit owners are aware that the continuous failure to pay the association dues can ultimately lead to losing their condominium units.

Condominiums customarily collect association dues from unit owners for the maintenance and preservation of its facilities and common areas and security, among others. Association dues are usually collected every month.

Unit owners, however, sometimes neglect payment of association dues. The unpaid amount can easily balloon if interests, penalties, and other charges attached to the association dues accumulate.

Given the importance of association dues, the law gives condominiums teeth in collecting them. Section 20 of the Condominium Act pertinently provides that an assessment of any condominium made in accordance with a duly registered declaration of restrictions shall be an obligation of the owner thereof at the time the assessment is made. The amount of any such assessment plus any other charges thereon, such as interest, costs (including attorney’s fees), and penalties, as such may be provided for in the declaration of restrictions, shall be and become a lien upon the condominium assessed when the management body causes a notice of assessment to be registered with the Register of Deeds of the city or province where such condominium project is located.

Thus, the association dues, if provided for in the condominium’s duly registered declaration of restrictions, may be a lien upon the unit assessed. And such lien may be registered with the appropriate Register of Deeds, which would be reflected on the unit’s title.

Once the lien is registered, it is considered superior to all other subsequent liens, except tax liens or unless the declaration of restriction provides for the subordination thereof to any other liens or encumbrances.

Then, the condominium may enforce the lien by filing a judicial or extra-judicial foreclosure of a mortgage of real property. Once the unit is foreclosed, the condominium may bid in the foreclosure sale. Note,

however, that in the case of

First Marbella

Condominium

Association Inc.

vs Gatmaytan

(G.R. 163196,

4 July 2008),

the Supreme

Court clarified

that while Section 20 of the Condominium Act mentioned “extra-judicial foreclosure,” it does not automatically authorize the condominium to foreclose the unit without any special authority. Act No. 3135, which prescribes the procedure for the extra-judicial foreclosure of real properties, requires the mortgagee to have the special power of authority to foreclose.

Another way of enforcing the lien is by filing an ordinary action in court to collect the unpaid assessments. In case of favorable judgment and the unit, the owner is unable to satisfy the judgment award, the condominium may ask the court to levy the unit to satisfy the judgment.

“Given the importance of association dues, the law gives condominiums teeth in collecting them.