What Condo Dues Actually Cover in Davao, and Why Every Published Band Is Invented

Every guide to condo dues does the same thing: it hands you a peso-per-square-metre band and moves on, as if it were a published rate you could check. It is not. The Condominium Act sets no dues figure anywhere. It does not even make the per-square-metre method the default. Once you see that, the whole topic reorganises: the number is not a fact to be looked up but a decision each building makes, and the useful questions are about your building’s own deed and its own books, not about a city average that does not exist.

What the statute actually says about the amount

Read RA 4726 for a dues rate and you will not find one. There isn’t one. Section 9(d) lists assessments among the things a declaration of restrictions “may also provide” for — permissive, not mandatory — and puts exactly two limits on the amount: they must be “reasonable” and “to meet authorized expenditures.” No cap. No formula. No per-square-metre anything, and no vote threshold on the size of a levy. The Act sets a standard and leaves the number to each building.

Then there is the detail that quietly undercuts every band you have ever seen. The statutory default is not per square metre at all.

So when a small unit pays less than a large one down the hall, that is the master deed choosing a per-area split, not the Condominium Act requiring one. And because each deed makes that choice independently, there is no reason the resulting rates should agree building to building — which is exactly why they do not.

Why every band, including ours, is an estimate

Follow that logic and a slightly uncomfortable conclusion arrives. If the rate is set per building, in a private deed, then no honest city-wide per-square-metre figure exists, and every publisher printing one — this site included — is assembling scattered observations and smoothing them into a band. On LiveDavao that shows up as a spread rather than a single number: roughly ₱50–70 per square metre in older Bajada and Matina buildings, ₱60–80 in Lanang, and ₱110–150 at a master-planned address, a gradient that runs three to one across the city. That spread is the honest shape of it. Anyone quoting you a tidy single “Davao rate” is averaging away the only thing that matters, which is what your building’s deed sets.

What dues may cover, and the profit they may not make

The spending side the statute is clear about. Section 9 lets dues cover maintenance of the common areas, security, utilities and gardening for shared spaces, staff salaries, legal and accounting services, taxes on the common areas, and reconstruction after damage. That is the list. And there is a hard outer limit the Supreme Court has enforced: a condominium corporation is “prohibited by law from transacting its properties for the purpose of gainful profit.” Dues are pooled to maintain the building, not to earn a surplus. That principle is what settled the tax question below.

The 12% VAT that is not there

One specific error travels far enough to correct on its own. Several guides tell condo buyers that association dues carry 12% VAT. They are wrong. They are citing a BIR circular a court threw out. In First E-Bank Tower Condominium Corp., decided January 2020, the Supreme Court held that RMC 65-2012 — which had subjected dues to VAT and income tax — “illegally imposes value-added tax on association dues,” because dues “are collected purely for the benefit of the condominium owners” to maintain the building, and are not profit or gain. The circular was struck down. A page still quoting 12% VAT on your Davao dues is quoting a rule that lost in court. The honest way to state it is that the Court invalidated the circular in 2020; if you need the current tax position for a filing, confirm whether any later issuance changed it, rather than trusting either the old circular or a blog.

The wrong statute everyone reaches for

When a dues fight starts, owners and half the internet reach for the “Magna Carta for Homeowners,” RA 9904. It is the wrong law entirely. RA 9904 governs homeowners’ associations in subdivisions and villages — its full text does not contain the word “condominium” even once, and its definitions are lot-and-subdivision shaped. A condominium is governed by RA 4726 and, because a condo corporation is a corporation, by the Revised Corporation Code. Citing the homeowners’ law at a condo board is citing something that does not apply to them, and they know it.

Your actual leverage, and the court that hears it

Here is what a unit owner can really do. None of it comes from RA 9904. Because the condo corporation is a corporation, the Revised Corporation Code gives every member real tools.

And if it goes to a formal dispute, it goes to a specific forum. A quarrel with your condo corporation over the validity of dues is an intra-corporate controversy, and under Medical Plaza Makati Condominium Corp. v. Cullen it belongs in the Regional Trial Court sitting as a designated Special Commercial Court — not the housing adjudication commission, whose condominium jurisdiction covers buyer-versus-developer disputes, and not a regular court branch. One more thing worth knowing: an unpaid assessment becomes a lien on the unit only when the corporation registers a notice of assessment, and that lien is superior to everything except the real property tax, so arrears are not a paperwork nicety.

Before you sign or pay

The renter’s side of this — whether a tenant can be made to pay the owner’s dues at all — is worked in the flagship guide to condo dues in Davao and what renters actually pay, which also carries the amenity-graded ranges. If you are buying rather than renting, the note on what happens to your lease when the landlord sells covers the tenancy that may come with the unit, and the rental yield tool folds a dues estimate into an investor’s return so you can test how sensitive the maths is to a figure nobody can pin down. And the recurring question of whether your lease has to be notarised has an answer most condo tenants get wrong.