Subdivision Roads

Here's an interesting fact about the roads inside a subdivision...

After completing the construction, some developers donate the roads inside the village to the local government. They do this for several reasons:

1. To avoid paying real property tax on the roads; and

2. To pass on the maintenance of these roads to the local government (LGU).

These would effectively lower the annual homeowners association (HOA) fees.

How is this relevant to home buyers?

When deciding to buy a house, knowing who owns the roads may affect your decision process.

For example, if the LGU owned the roads, expect the maintenance to be less ideal than if the HOA owned them. Conversely, if the HOA owned the streets, expect higher HOA fees.

Another reason why this may matter to home buyers is due to security.

A few years ago, a subdivision in Quezon City came out in the news when the LGU demolished its gates so the public could use its roads and effectively lessen the traffic in the area. The LGU argued that the subdivision's roads were the government's and should be open to the public. Of course, the residents disagreed and demanded the gates be put back. Ultimately, the residents won, and the gates were put back. But assuming the residents had less clout over the government, the story could have gone the other way.