Ferndale Homes Homeowners Association v. Spouses Harlin Cast. Abayon

Summary

This consolidated case involved a dispute between homeowners and their association over liability for dues that accrued before property acquisition and the validity of interest/penalty rates. The Supreme Court held that unpaid association dues constitute property liens under the Deed of Restrictions, making new owners liable for predecessors' unpaid dues. However, the Court reduced excessive interest rates from 24% to 12% and penalties from 8% to 6% per annum under Article 1229 of the Civil Code. The decision establishes important precedents on property liens in subdivision developments and the judicial power to reduce unconscionable contractual penalties while upholding the validity of homeowners association rules and regulations.