How homeowners' associations can thrive during the pandemic

How homeowners’ associations can thrive during the pandemic

The new challenge that homeowners’ associations now face is navigating through the pandemic. While the main goal is to keep the communities safe and healthy, association leaders also need to recognize the impact of the Covid-19 on other aspects of their organization. In this regard, I’d like to provide some strategies that homeowners’ associations could use to thrive in the midst of the pandemic.

1. Partner with payment gateways—One of the biggest struggles of the homeowners’ associations even before the pandemic is collections. By partnering with payment gateways, you can provide more payment options to the homeowners online through credit, debit and prepaid cards. Consequently, it will be easier for them to pay anytime, anywhere and it will naturally encourage dues payments.

2. Apply for tax exemption from the BIR—During these times, it is important to manage the finances well and preserve cash. One of the ways associations can do that is by availing themselves of the tax exemption. Association dues and income from rentals of a homeowners’ association can be exempt from income and business tax. You can make this possible by complying with the following requirements under Republic Act 9904—Magna Carta For Homeowners And Homeowners’ Association:

a. Registration with the Housing and Land Use Regulatory Board.
b. Financial statements that show the delivery of basic community services (e.g., cleanliness, safety, security).
c. Certification from the Local Government Unit that the association funds the basic community services for its homeowners and that the LGU cannot cater to such services for lack of resources.

On a related topic, it is noted that the Supreme Court recently affirmed the tax exemption of condominium corporations formed for the residents of such dwellings. The SC has ruled that the Bureau of Internal Revenue cannot impose a 12-percent value-added tax and 32-percent income tax on association dues, membership fees, and other charges collected by condominium operators from members and tenants. The SC case involved the First E-Bank Tower Condominium Corp.

3. Improve the safety and health measures—Welfare of the homeowners is always the priority. Make them feel you’re keeping them safe by maintaining cleanliness in the streets and common areas. Homeowners must see and feel the value of being a member because this also motivates them to pay.

4. Cooperate with the government—While the government is doing its best to protect the people from the virus, we should continue to help in flattening the curve. We need to ensure strict implementation of preventive measures to stop the spread of the virus within our respective communities. Coordinate and always communicate with the barangay and LGUs.

The new normal is already here, and we need to adapt and make the necessary changes. Every community might be different from each other, but I encourage you to think about these strategies and how you can fit them into yours. The homeowners’ associations play a vital role in a community, especially when crises, like the current pandemic, occur. Thus, the association needs to be stable but flexible enough to effectively perform its duties to the homeowners.

If you have questions, feel free to message us at info@cgsinghcpas.com and one of our leaders will get in touch.

*This article was published in Business Mirror on July 29, 2020.

About the Author
Crystian Diamond G. Singh, CPA, CIA, CFE

Crystian Diamond G. Singh, CPA, CIA, CFE

Crystian is a Certified Public Accountant (CPA) who has been helping business leaders for more than a decade to save money on taxes legally and grow their business exponentially.

He helps entrepreneurs to attract more customers using strategies that have minimal to no risk to the Company.

He also helps them increase the residual value or the transaction size and employ strategies to ethically persuade customers to buy more often resulting to exponential growth to the businesses' revenues and profitability.

He appeared in various business publications such as Business Mirror and Marketing In Asia. He also appeared in Paladins of Law - a law firm specializing in labor and data privacy law.

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