Below is a comprehensive discussion of issues surrounding an increase in condominium dues when there is no legitimate board (or when the board’s legitimacy is in serious doubt). This article is provided for informational purposes, focusing on Philippine laws and regulations. It is not intended as legal advice. For specific concerns, you should consult a qualified attorney.

1. Overview of Philippine Condominium Law

1.1 The Condominium Act (Republic Act No. 4726)

The primary legal framework governing condominiums in the Philippines is Republic Act No. 4726, commonly known as the “Condominium Act.” This law provides the basic definition of condominium concepts, the rights and obligations of unit owners, and certain procedural requirements that condominium corporations (or associations) must follow.

1.2 Relevant Provisions of Other Statutes and Regulations

Corporation Code of the Philippines (Republic Act No. 11232) – Governs the formation, operation, and dissolution of corporate entities in the Philippines, which includes condominium corporations.
Civil Code of the Philippines – Contains general provisions on contracts, obligations, and property ownership that might impact how condominium associations function and how their internal rules affect unit owners.
Rules and Regulations of the Housing and Land Use Regulatory Board (HLURB) – Although restructured under the Department of Human Settlements and Urban Development (DHSUD), the HLURB (and now the HLURB’s successor offices at DHSUD) has historically been the administrative/government body that oversees disputes on subdivision and condominium projects. Its circulars and guidelines remain reference points for dispute resolution, including matters on dues and association governance.

2. Condominium Dues: Purpose and Legal Basis

2.1 What are Condominium Dues?

Condominium dues are the regular (often monthly) fees collected from unit owners to cover the operational and maintenance costs of common areas and shared facilities. This may include:

Security and safety (e.g., guards, CCTV systems)
Common area utilities (e.g., water, electricity for hallways and lobby)
Repair and maintenance of shared facilities (e.g., elevators, swimming pools)
Administration costs (e.g., management office expenses)

2.2 Power to Assess and Increase Dues

Under most condominium by-laws (or master deeds), the power to assess and increase condominium dues is typically vested in the condominium corporation’s board of directors/trustees. This is aligned with corporate governance rules under the Corporation Code:

Board Authority – The board generally has the authority to pass resolutions regarding the operational needs of the condominium, which include setting the budget and allocating costs among unit owners.
By-Laws and Master Deed – The by-laws and/or master deed usually lay out the procedures on how dues are calculated or increased and the conditions required (e.g., notice to members, approval thresholds, etc.).

3. Requirements for a Legitimate Board

3.1 Composition of the Board

Under the Corporation Code and typical condominium corporate by-laws:

Directors/Trustees – A condominium association is governed by a board made up of individuals elected by the unit owners or their proxies.
Qualifications – By-laws often require board members to be unit owners (or designated representatives of unit owners in case of corporate owners).

3.2 Election Procedures

Regular elections must be held (often annually) during the annual meeting of unit owners:

Quorum Requirements – Generally, a quorum of the membership, as defined in the corporate by-laws, must be present (physically or by proxy) before official elections and business transactions can be conducted.
Majority Vote – The by-laws specify how many votes are required to elect a director or trustee. Typically, it is a plurality or majority, depending on the by-laws.
Proper Notice – Notices must be sent out to unit owners in advance of the meeting, following the time periods mandated by the by-laws or the Corporation Code (often at least 2 weeks in advance).

3.3 Corporate Registration and Annual Filings

To maintain legitimacy, the condominium corporation should file annual reports with the Securities and Exchange Commission (SEC). These filings reflect any updates to the board and officers. Failure to file may cast doubt on the board’s status.

4. When There Is No Legitimate Board

4.1 Potential Causes of Illegitimacy

Invalid Election – No properly convened annual meeting, lack of quorum, or failure to follow proper voting procedures.
Expired Terms – The existing directors’ terms have expired without valid elections, leaving the board in a “holdover” capacity or completely vacant.
Questionable Appointment – Directors were appointed or installed by a developer or another entity without following the by-laws and/or statutory requirements.

4.2 Implications of Having No Legitimate Board

If the board is not legitimately constituted, then:

No Binding Resolutions – Board resolutions, including those that increase condominium dues, may be considered invalid or subject to legal challenge.
Liability Concerns – Individuals acting as directors without legitimate authority could face legal action from unit owners who dispute the validity of the board’s decisions.
Regulatory Intervention – The HLURB (or DHSUD) can intervene if a complaint is lodged by unit owners, potentially nullifying the board’s acts and ordering new elections.

5. Validity of Dues Increase Without a Legitimate Board

5.1 Key Legal Considerations

Authority to Increase Dues – As a rule, the power to increase dues rests exclusively with a validly constituted board (subject to any membership approval requirements specified in the by-laws).
Due Process – If a board attempts to raise dues without giving proper notice or following procedural requirements (e.g., itemizing the budget for which the increase is needed, holding a meeting to explain the increase to unit owners), this can be deemed an infringement of unit owners’ rights.
By-Laws Provisions – The by-laws or master deed typically state the manner for imposing or revising dues. Without a valid board to implement these procedures, the increase is susceptible to legal challenge.

5.2 How Unit Owners Might Respond

Refusal to Pay – Some owners may withhold payment, asserting that the increase is unauthorized. However, withholding payment can have consequences if a later decision validates the board’s actions.
Filing a Complaint – Unit owners can file a formal complaint before the HLURB (now under DHSUD) alleging that the board is not legitimate and challenging the new dues.
Requesting Mediation – HLURB rules encourage mediation between parties to seek an amicable settlement.
Court Action – In extreme cases, owners may resort to filing civil cases in the regular courts, although the HLURB or DHSUD remains the primary venue for most condominium disputes.

6. Steps to Ensure a Valid Board and a Properly Imposed Increase

6.1 Conducting a Special Membership Meeting

If the current board’s legitimacy is in dispute:

Call a Special Meeting – A certain percentage of unit owners (as specified by the by-laws) can petition to call a special membership meeting for the purpose of electing a new board.
Compliance with Notice Requirements – Proper notice of the meeting must be sent to all unit owners, specifying the agenda (i.e., election of new board members).
Hold the Election – Upon reaching a quorum, hold the election following the procedures in the by-laws.

6.2 Ratification of Past Acts

If the condominium dues were raised by an allegedly illegitimate board, a newly and validly elected board (or the membership at a duly called meeting) could:

Ratify the Increase – Adopt a resolution endorsing or adjusting the increase if it is found to be justified.
Nullify the Increase – In cases where the increase is found to be without basis or improperly implemented, the membership may revoke it or demand its reduction or restructuring.

6.3 Documentation and Transparency

Proper documentation of any decision regarding dues is essential:

Board Resolutions – Must clearly outline the rationale for the increase and the breakdown of costs.
Minutes of Meetings – Important to show proper quorum, voting procedures, and results.
Communication to Unit Owners – Written notices or bulletins are critical in keeping everyone informed, minimizing disputes.

7. Remedies and Dispute Resolution

7.1 Administrative Complaints with HLURB/DHSUD

Unit owners may file an administrative complaint if:

The board was never properly elected.
There are breaches of the condominium’s master deed or by-laws.
Dues increases are imposed without legal authority or due process.

The HLURB (or DHSUD) can:

Order the conduct of a valid election.
Declare the nullity of unauthorized fee increases.
Impose fines or penalties where there are violations of HLURB rules.

7.2 Mediation and Arbitration

Many condominium by-laws encourage or even require mediation and arbitration before resorting to court litigation. Mediation can be facilitated by HLURB offices, private mediation centers, or even the condominium association itself (through committees).

7.3 Judicial Action

As a last resort (or if administrative remedies fail), unit owners may pursue court action. However, because condominium disputes generally fall under the primary jurisdiction of the HLURB/DHSUD, courts often require exhaustion of administrative remedies before accepting a case.

8. Practical Tips for Unit Owners

Check Association Documents
Review your condominium’s master deed and by-laws to understand the proper process for calling meetings, voting, and the scope of the board’s powers regarding dues.
Verify the Board’s Legitimacy
- Ensure the board has conducted elections regularly and with the required quorum.
- Check SEC records (e.g., General Information Sheets) to confirm updated board members.
Ask for a Detailed Budget
If a dues increase is announced, you have the right to request a line-item budget or financial statement explaining why the increase is necessary.
Communicate with Other Unit Owners
Organizing and collectively raising concerns can prompt the board or developer to remedy governance issues.
Remain Current with Payments (While Challenging Legitimacy)
Even if you dispute the board’s authority, it is often advisable to pay under protest, marking the payment as “under protest,” to avoid penalties or disruption of services. You may recover any overpayment if the increase is later declared invalid.
Seek Legal Advice Early
Condominium disputes can be complex. Consulting an attorney specializing in condominium or real estate law can help clarify your rights and possible strategies.

9. Conclusion

A legitimate and regularly elected board is crucial for the orderly governance of any condominium. In the Philippines, the authority to impose or increase condominium dues typically rests with a validly constituted board of directors/trustees, following the procedures in the condominium by-laws, the Condominium Act, and the Corporation Code. If there is no legitimate board, or if the board’s legitimacy is in serious question, dues increases can be deemed invalid or unenforceable.

Unit owners have options to challenge and rectify such situations, primarily through the HLURB (now under DHSUD) or through the courts if necessary. Where a board has acted beyond its lawful authority, the remedy generally involves calling a special membership meeting, holding valid elections, and either ratifying or nullifying any improperly levied dues. Throughout the process, transparency, thorough documentation, and strict adherence to legal requirements are key to ensuring fair and legal governance in condominiums.

Disclaimer: The above discussion is a general overview based on Philippine law and practice. For specific advice or particular legal situations, consult a qualified lawyer to assess and address your individual circumstances.