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Removal of Lien or Annotation on Condominium Titles Due to Unpaid Dues

Removal of Lien or Annotation on Condominium Titles Due to Unpaid Dues

Being a condominium unit owner entails obligations that you have to pay for the continuous maintenance and enjoyment of the amenities and facilities.  This convenience is part and parcel of the reason why you chose to go the condominium living route. 

Monthly condominium fees are being collected by the management of the condominium for every unit resident. However, there are those who are unable to keep up in paying their monthly dues. What happens then? The amount that needs to be paid ends up ballooning up due to interests, charges, penalties, and other applicable fees. 

Section 20 of Republic Act No. 4726 or The Condominium Act  provides that. “An assessment upon 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. 

The notice shall state the amount of such assessment and such other charges thereon a may be authorized by the declaration of restrictions, a description of the condominium, unit against which same has been assessed, and the name of the registered owner thereof. Such notice shall be signed by an authorized representative of the management body or as otherwise provided in the declaration of restrictions. Upon payment of said assessment and charges or other satisfaction thereof, the management body shall cause to be registered a release of the lien. 

This means the  Condominium association has the right to annotate a lien on the condominium title to prevent the unit owner from selling the property without having this lien settled. This is on top of the suspension of rights and privileges accorded to a condominium unit owner if he is delinquent or remiss in paying his association dues.

The lien mentioned shall be treated as a superior lien as stated in the provision. Thus, the law provides that, “Such lien shall be superior to all other liens registered subsequent to the registration of said notice of assessment except real property tax liens and except that the declaration of restrictions may provide for the subordination thereof to any other liens and encumbrances.

The way of enforcing such lien shall either be through judicial or extra-judicial foreclosure. The last paragraph of the provision mentions that, “Such liens may be enforced in the same manner provided for by law for the judicial or extrajudicial foreclosure of mortgages of real property. 

Unless otherwise provided for in the declaration of restrictions, the management body shall have power to bid at foreclosure sale. The condominium owner shall have the same right of redemption as in cases of judicial or extrajudicial foreclosure of mortgages.

This is further explained in the case of  First Marbella Condominium Association, Inc. vs. Gatmaytan  (GR No. 163196, July 4, 2008), where jurisprudence states that,While the law also grants petitioner the option to enforce said lien through either the judicial or extrajudicial foreclosure sale of the condominium unit, Section 20 does not by itself, ipso facto, authorize judicial and extrajudicial foreclosure of the condominium unit. Petitioner may avail itself of either option only in the manner provided for by the governing law and rules. As already pointed out, A.M. No. No. 99-10-05-0, as implemented under Circular No. 7-2002, requires that petitioner furnish evidence of its special authority to cause the extrajudicial foreclosure of the condominium unit.” 

Of course, you do not want to wait until the Condominium Association enforces its rights against you just to collect your association dues. As much as possible, you want the lien removed, if financially capable. Note however, that you’ll need to go through the condominium association to have this lien removed. As the power to annotate carries also the power to remove. 

Consequently,  if the assessments and charges have been paid, the lien may be released upon notice and/or application with the registry of deeds. This is based on the same provision mentioned above, stating: “Upon payment of said assessment and charges or other satisfaction thereof, the management body shall cause to be registered a release of the lien.”

You are likely going to be charged with additional fees for the removal of the annotation. The requirements to annotate a lien on account of failure to pay association dues is more or less the same as the requirements to remove the lien. Read back on our annotation of lien for failure to pay association dues on this  link.

Need further information and assistance regarding the removal of unpaid condominium dues in the Philippines?  Talk to our team at  FILEDOCSPHIL  to know more about the requirements and process. Call us today at(+632) 8478 5826or send an email toinfo@filedocsphil.comfor more information.

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