Implementing Rules
and Regulations of RA 9904 – The Magna Carta For Homeowners and Homeowners’
Associations
After the full text of Republic Act No. 9904, otherwise
known as The Magna Carta For Homeowners and Homeowners Associations, here is
the Implementing Rules and Regulations or IRR. The RA 9904 IRR took a long time
to get approved, almost a year and a half after RA 9904 was signed into law.
Republic of the Philippines
Office of the President
Housing and Urban Development Coordinating
Council
HOUSING AND LAND
USE REGULATORY BOARD
BOARD RESOLUTION
NO. 877
Series of 2011
IMPLEMENTING RULES
AND REGULATIONS OF REPUBLIC ACT NO. 9904, OTHERWISE KNOWN AS THE MAGNA CARTA
FOR HOMEOWNERS AND HOMEOWNERS ASSOCIATIONS.
Pursuant to Section 28 of Republic Act No. 9904, otherwise
known as the Magna Carta for Homeowners and Homeowners Associations, the
following Rules and Regulations are hereby promulgated by the Housing and Land
Use Regulatory Board (HLURB).
RULE 1
PRELIMINARY
PROVISIONS
Section 1. Title. – This Rules
shall be known as the Implementing Rules and Regulations of RA 9904 (IRR – RA
9904).
Section 2. Declaration of Policy. – Mindful
of the Constitutional principles directing the State to encourage, promote, and
respect nongovernmental, community based, and the people’s right to form
organizations and initiate associations in serving their legitimate collective
interests in our participatory democracy, it is the policy of the State:
a. To uphold the rights of the people to form associations;
b. To recognize and promote the rights and the roles of
homeowners as individuals and as members of the society and of homeowners,
associations;
c. To make available resources and assistance that will help
them fulfil their roles in serving the needs and interests of their
communities; and,
d. To complement the efforts of Local Government Units
(LGUs) in providing vital and basic services to their citizens, and in helping
implement local and national government policies, programs, rules and ordinances
for the development of the nation.
Section 3. Construction. – This
Rules shall be construed and interpreted liberally in order to carry out the
objectives and principles of Republic Act No. 9904.
Section 4. Definition of Terms. – As
used in these Implementing Rules and Regulations, the following
terms shall mean:
a. Act refers to Republic Act No. 9904, An Act
providing for a Magna Carta for Homeowners and Homeowners
Associations, and for other purposes
b. Accounting period refers to the fiscal or
calendar year adopted by a homeowners association in the recording
and reporting of its fiscal transactions.
c. Adjudicatory mechanism refers to the
procedure in settling disputes involving the registration of two or
more associations established within the same subdivision/village, community
area, or housing project.
d. Approved subdivision plan refers to a plan
drawn to scale showing the divisions of a piece of land intended
for subdivision development delineating its open space and individual lots,
bearing the signature of a licensed professional, and the stamp of approval of
the NHA, HLURB, LGU or any appropriate government agency.
e. Association refers to the homeowners
association which is a non-stock, nonprofit association registered with the
Housing and Land Use Regulatory Board (HLURB), or one previously registered
with the Home Insurance Guarantee Corporation (now Home Guaranty Corporation)
or the Securities and Exchange Commission (SEC), organized by –
[1] Owners or purchasers of a lot in a
subdivision/village or other residential real property located within the
jurisdiction of the association;
[2] Awardees, usufructuaries, legal occupants
and/or lessees of a housing unit and/or lot in a government socialized or
economic housing or relocation project and other urban estates;
[3] Underprivileged and homeless citizens as
defined under existing laws in the process of being accredited as
usufructuaries or awardees of ownership rights under the Community Mortgage
Program (CMP), Land Tenure Assistance Program (LTAP) and other similar programs
in relation to a socialized housing project actually being implemented by the
national government or the LGU.
f. Association Member refers to a homeowner who
is a member of the association where the housing unit or lot is
situated and those defined in the articles of association and by-laws of the
association
g. Basic community services and facilities refer
to services and facilities that redound to the benefit of all homeowners and
from which, by reason of practicality, no homeowner may be excluded such as,
but not limited to: security; street and vicinity lights; maintenance, repairs
and cleaning of streets; garbage collection and disposal; and other similar
services and facilities.
h. Board refers to the board of directors
or trustees of the association which has primary authority to
manage the affairs of the association.
i. By-laws refer to rules of action adopted
by the association for its internal government and for the
government of its members and those having the direction, management and
control of its affairs in their relation to the association and as among
themselves.
j. Community Mortgage Program (CMP) refers to a
mortgage housing program of the Social Housing Finance Corporation
(SHFC) which assists legally organized associations of underprivileged and
homeless citizens to purchase and develop a tract of land under the concept of
community ownership.
k. Common areas refer to property owned or
otherwise maintained, repaired or administered in whole or in part
by the association including, but not limited to, roads, parks, playgrounds and
open spaces as provided in Presidential Decree No. 1216.
l. Common expense refers to costs incurred by
the association in the exercise any of the powers provided for in
RA 9904.
m. Confederation refers to an association of
federated homeowners associations.
n. Contiguous area refers to two or more
subdivisions or community housing projects or phases thereof that
are physically related or linked by a shared infrastructure and well-defined
adjoining or common boundaries, whether fully or partially.
o. Subdivision/Village refers to a tract or
parcel of land partitioned into individual lots, with or without
improvements thereon, primarily for residential purposes.
p. Delinquent member or a member not in
good standing refers to a member of the association who
has been declared as such for the grounds and in accordance with the procedures
under the by-laws of the association.
q. Economic housing refers to a type of housing
project with lower interest rates and longer amortization periods
provided to moderately low income families as defined under existing laws,
rules and regulations.
r. Election contest refers to any controversy or
dispute involving title or claim to any elective office in a
homeowners association, the validation of proxies, the manner and validity of
elections, and the qualifications of candidates, including the proclamation of
winners, to the office of director, trustee or other officer directly elected
by the members of the association where the articles of association or by-laws
so provide.
s. Federation refers to an organization of
homeowners associations created and registered to pursue common
goals beneficial to the interests of the constituent associations and members
thereof.
t. Governing document refers to the articles of
association, by-laws, conditions, rules and regulations of the
association, or other written instrument by which the association has the
authority to exercise any of the powers provided for in RA 9904.
u. HLURB refers to the Housing and Land Use
Regulatory Board.
v. Homeowner refers to any of the
following:
[1] An owner or purchaser of a lot in a
subdivision/village;
[2] An awardee, usufructuary, or legal occupant
of a unit, house and/or lot in a government socialized or economic housing or
relocation project and other urban estates;
[3] An informal settler in the process of being
accredited as beneficiary or awardee of ownership rights under the CMP, LTAP,
and other similar programs.
w. Intra-association dispute refers to a
controversy which arises out of the relations between and among
members of the association; between any or all of them and the association of
which they are members; and between such association and the State insofar as it
concerns their individual franchise or right to exist. It refers also to a
controversy which is intrinsically connected with the regulation of
associations or dealing with the internal affairs of such entity.
x. Inter-association dispute refers to a controversy
which arises out of the relations between and among two or more
associations.
y. Lessee refers to a person renting a
residential unit in a subdivision/ village. For purposes of CMP or
similar government social housing projects, the term shall refer to a
beneficiary as referred to under Section 6 of RA 9904.
z. Simple majority refers to fifty percent (50%)
plus one (1) of the total number of association members or those
present in the meeting constituting a quorum.
aa. Socialized housing refers to housing
programs and projects covering houses and lots or home lots only
undertaken by the government or the private sector for the underprivileged and
homeless citizens which shall include sites and services development, long-term
financing, liberalized terms on interest payments, and other benefits in
accordance with the provisions of Republic Act No. 7279, otherwise known as the
Urban Development and Housing Act of 1992 (UDHA).
bb. Subdivision/Village refers to a tract
or parcel of land partitioned into individual lots, with or without
improvements thereon, primarily for residential purposes.
cc. Usufructuary refers to a person who has been
given the right to enjoy the property of another with the
obligation of preserving its form and substance.
RULE 2
HOMEOWNERSHIP
Section 5. Commencement of Homeownership. – Homeownership
begins:
a.By owning a lot in a subdivision/village;
b. By purchasing a lot in a subdivision/village;
c. By being awarded, or by being a usufructuary, or by
legally occupying, a unit, house, and/or lot in a government socialized or
economic housing or relocation project and other urban estates; and
d. By being listed as a prospective beneficiary or awardee
of ownership rights under the Community Mortgage Program, Land Tenurial
Assistance Program, and other similar programs.
Section 6. Termination of
Homeownership. – Homeownership ends by:
a. Terminating ownership through conveyance of the property
by sale, assignment or donation; or
b. Any other legal transfer of ownership, which shall automatically
authorize the association to deny homeowner rights to the transferee under this
section.
Section 7. Rights of Every Homeowner. –
Every homeowner has the right to enjoy the basic community services and
facilities provided that the homeowner pays the necessary fees and other
pertinent charges.
Section 8. Duties and Responsibilities of
Homeowners. – Every homeowner must pay the necessary fees, charges
pertaining to basic community services, and other special assessments such as
but not limited to construction bond and stickers.
RULE 3
MEMBERSHIP IN THE
ASSOCIATION
Section 9. Membership. –
Unless otherwise provided in the Contract to Sell, Deed of Sale, or other
instruments of conveyance, or annotated in the title of the property,
membership in the association is optional.
Section 10. Qualifications of a Member. –
Every homeowner shall be qualified to be a member of the association.
A lessee of a member under a contract with a term of at
least one (1) year may qualify to be a member and shall have the rights of a
member upon procurement of a written consent/authorization from the owner of
the lot/housing unit. Until the written consent or authorization is revoked in
writing, the owner of the lot/housing unit is deemed to have waived the rights
of an association member except the right to inspect association books and
records.
A lessee of a homeowner under a contract with a term of at
least one (1) year may qualify to be a member and shall have the rights of a
member upon complying with the requirements of membership under the by-laws and
the law.
Section 11. Rights of a Member. – A
member in good standing shall have the right to –
a. Avail of and enjoy all basic community services and the
use of common areas and facilities;
b. Inspect association books and records during office hours
and to be provided upon request with annual reports, including financial
statements;
c. Participate, vote and be eligible for any elective or
appointive office of the association subject to the qualifications as provided for
in the by-laws;
d. Demand and promptly receive deposits required by the
association as soon as the condition for the deposit has been complied with or
the period has expired;
e. Participate in association meetings, elections and
referenda, as long as bona fide membership subsists; and,
f. To enjoy all other rights as may be provided in the
by-laws of the association.
Section 12. Duties of a
Member. – A member shall have the following duties:
a. To pay membership fees, dues and special assessments;
b. To attend meetings of the association; and,
c. To support and participate in projects and activities of
the association.
Section 13. Delinquent Member. –
Unless otherwise provided in the by-laws, a member who has failed to pay three
(3) cumulative monthly dues or membership fees, or other charges/assessment
despite demands by the association, or has repeatedly violated the
association’s by-laws and/or declared policies, may be declared delinquent by
the Board of Directors in accordance with the procedure in the succeeding
section.
Section 14. Procedure in Declaring a Member
Delinquent. – The Board or a committee assigned by the Board shall
observe the following procedure in declaring a member delinquent or not in good
standing:
a. The Board or the committee shall determine whether a
member [1] failed to pay at least three (3) cumulative monthly dues, fees or
other charges based on the report of the treasurer or as reflected in the
association’s financial records, or [2] repeatedly or grossly violated the by-laws
or policies of the association as reflected in the book of records of the
association;
b. The President or the designated officer of the
association shall forthwith notify the said member in writing of the violation
and require him to explain in writing, within fifteen (15) days from receipt of
notice, why he should not be declared delinquent.
c. After the lapse of fifteen (15) days, with or without a
written explanation, the President or the designated officer shall submit the
matter to the Board or committee for hearing and deliberation.
d. Thereafter, the member may be declared delinquent by
majority vote of all members of the Board.
Section 15. Sanctions for a Delinquent Member. – The rights and privileges of a member as provided in Section 11 is suspended upon the declaration of delinquency by the Board.
Section 15. Sanctions for a Delinquent Member. – The rights and privileges of a member as provided in Section 11 is suspended upon the declaration of delinquency by the Board.
Section 16. Reinstatement of a Delinquent Member.
– The Board shall, by majority vote of all members, reinstate the membership of
the delinquent member, provided that unpaid dues, fees or charges are paid or
the sanctions imposed are satisfied.
Nothing in this Rules shall prevent the association from
imposing other sanctions against the delinquent member in accordance with the
by-laws.
RULE 4
ARTICLES OF
ASSOCIATION AND BY-LAWS
Section 17. Contents of the Articles
of Association. – The Articles of Association shall substantially
contain the following matters:
a. Full association name;
b. Specific purpose or purposes for association. Where the
association has more than one stated purpose, the articles of association shall
state the primary and secondary purposes;
c. Complete office address;
d. Term of existence of the association not exceeding fifty
(50) years;
e. Names, nationalities and residences of the incorporators;
f. Number of directors or trustees, which shall not be less
than five (5) nor more than fifteen (15) directors or trustees;
g. Names, nationalities and residences of persons who shall
act as directors or trustees until the first regular directors or trustees are
duly elected and qualified;
h. Amount of capital, if any, and names, nationalities and
residences of the incorporators as well as the amount of contributions by each;
and,
i. Such other matters not inconsistent with law and which
the incorporators may deem necessary and convenient.
Section 18. Contents of the By -laws. –
The by-laws of an association shall be adopted by a simple majority of all the
members of the association regardless of standing. It shall provide for the
following:
a. The rights, duties, and obligations of members;
b. The circumstances under which membership is acquired,
maintained, and lost;
c. The schedule, venue, and manner of conducting the
regular, special, and emergency meetings of the general membership, the
required quorum, and allowable proxies in such meetings;
d. The number, qualifications, powers and duties, terms of
office, manner of electing and removing the board and the filling of vacancies
in the board: Provided, That the term of office of the members of the board
shall not exceed two (2) years;
e. The qualifications, positions,
duties, election or appointment, and compensation of
other officers and employees of the association: Provided, That the term of
office of the other officers shall not exceed two (2) years: Provided, further,
That no officer of the association holding a rank of director or trustee shall
be entitled to any compensation;
f. The schedule, venue, and manner of conducting the
regular, special, and emergency meetings of the board, the required quorum, and
allowable proxies in such meetings;
g. Such powers that the board may delegate to a managing
agent, if any, or to other persons;
h. The officer/s authorized to prepare, execute, certify and
record amendments to the governing documents on behalf of the association;
i. The grounds and procedure for removal of director or
trustee, and the manner of filling up vacancies in the board, consistent with
Section 13 of RA No. 9904;
j. The grounds and procedure for dissolution of the board, and the manner of reconstituting the board, consistent with Sections 13 and 14 of RA No. 9904
j. The grounds and procedure for dissolution of the board, and the manner of reconstituting the board, consistent with Sections 13 and 14 of RA No. 9904
k. The actions for limiting, broadening or denying the right
to vote, and the extent thereof;
l. The designation of the presiding officer at meetings of
directors or trustees and members;
m. The time for holding the regular election of directors or
trustees and the mode or manner of giving notice thereof;
n. The creation of election, grievance and audit committees,
and such other committees which the association may deem necessary; as well as
a conciliation or mediation mechanism for the amicable settlement of disputes
among members, directors or trustees, officers and committee members of the
association
o. The dues, fees, and special assessments to be imposed on
a regular basis, and the manner in which the same may be imposed and/or
increased;
p. The procedure in the adoption, amendment, repeal and
abrogation of the by-laws;
q. The list of acts constituting a violation by its officers
and the corresponding penalties therefore;
r. The penalties for violation of particular provisions of
the by-laws; and,
s. Such other matters necessary for the proper or convenient
transaction of its corporate business and affairs.
Section 19. Amendment of Articles of Association
and By-laws. – An association may file with the Regional Office of the
HLURB a written application to amend its articles of association and/or its
by-laws.
a. The application to amend the articles of association
shall be accompanied by the following:
[1] The articles as amended indicating the
amendment/s;
[2] Notarized certificate of the board of
directors or trustees attesting that the amendment was approved by majority
vote of the board;
[3] Notarized certificate of the secretary of
the association attesting that the amendments were approved by a majority vote
of the members thereof; and,
[4] Minutes of the meetings of the Board and the
General Assembly called for the purpose.
b. The application to amend the by-laws shall be accompanied
by –
[1] The original and the amended or new by-laws;
[2] Notarized certificate of the board of
directors or trustees attesting that the amendment of or the new by-laws was
approved by a majority vote of the board;
[3] Notarized certificate of the secretary of
the association attesting that the amendment or new by-laws was approved by a
majority vote of the members thereof; and,
[4] Minutes of the
meetings of the Board and the
General Assembly called for the purpose.
c. Issuance of amended certificate of registration.If the
application to amend the articles of association and/or its by-laws is not
contrary to law or public policy and does not adversely affect any interest,
the Regional Office shall issue the appropriate amended certificate of
association or certificate of filing of amended by-laws as the case may be.
When a change in the corporate name is approved, the
Regional Office shall issue an amended certificate of association under the
amended name.
RULE 5
REGISTRATION OF
HOMEOWNERS ASSOCIATION
Section 20. Number of
Associations. – As far as practicable, only one (1)
homeowners association shall be established and registered with HLURB in each
subdivision, except in cases where the subdivision consists of two (2) or more
phases. In case two (2) or more associations are registered or applying for
registration within the same subdivision, the HLURB shall decide which
association shall be registered after the procedures for adjudicatory mechanism
as provided in this Rules are observed.
Section 21. Mandatory Registration. –
It is mandatory for all associations to register solely with the HLURB. All
associations whose purpose, among others, is to promote and protect their
mutual interest and assist in their community development as homeowners are
considered homeowners associations.
Associations previously registered with the Home Insurance
Guaranty Corporation (HIGC) or the Securities and Exchange Commission (SEC)
shall be respected and recognized: Provided, that they register with HLURB;
and, provided, further, that no penalty shall be charged.
Section 22. Procedure for Registration of New
Homeowners Association. – An association shall, upon payment of the
prescribed fees, submit to the proper Regional Office of HLURB its Articles of
Association, duly notarized and signed on each and every page thereof by all
the incorporators consisting of not less than five (5) nor more than fifteen
(15) natural persons.
The articles shall be accompanied by the following
documents:
a. Notarized undertaking by the association to –
[1] Change the name of the association in the
event that another person, firm or entity has acquired a prior right to the use
of the name or one similar thereto; and,
[2] Comply with the rules and regulations;
b. Information Sheet;
c. List of the members of the association with the members’
corresponding signatures;
d. Certification as to the existence or absence of any other
association in the subdivision/village; and the name and address of the nearest
association, if any;
e. Authorization by the incorporators for the representative
of the association to transact/follow-up its registration application with
the HLURB; and,
f. Approved Subdivision/Development Plan indicating the area
covered by the association.
Section 23. Additional Requirements. –
a. If the application is a self-help housing project or one
undertaken under the Group Land Acquisition and Development program (GLAD),
Community Mortgage Program (CMP), or other similar land tenurial assistance
programs, the applicant shall, in addition to the documents mentioned in
Section 3 above, submit the following:
[1] Location plan and vicinity map of the
project, whether on-site or off-site, duly signed and certified by a geodetic
engineer;
[2] Notarized list of officers and members
stating the nature of their occupancy, whether as owner or tenant;
[3] Certified true copy of the original or transfer
certificate of title issued not later than thirty (30) days before the date of
application;
[4] Duplicate original copies of the notarized
letter of intent to sell, contract to sell, deed of absolute sale, or
memorandum of agreement between the landowner and association;
[5] List of beneficiaries as certified by the
proper settlement office of the local government unit (LGU) or Urban Poor
Affairs Office (UPAO);
[6] Certification that it is the only proposed
association that is seeking to apply for a Community Mortgage Program (CMP)
loan in order to acquire the parcel/s of land; and,
[7] Alteration approval of subdivision plan from the local
government units (LGUs) for homeowners associations intending to avail of
community mortgage program (CMP) if located within existing subdivision
projects.
b. For NHA projects, certification that it is the HOA
recognized by NHA.
c. If the applicant intends to segregate from a mother
association the following requirements shall be complied with:
[1] A sworn statement that –
The area of the project or the membership of the existing
association has reached a size or number that renders it extremely difficult or
impracticable to provide efficient delivery of services to all its members;
i. The applicant’s members are residents of a contiguous
area;
ii. The existing association is serving several or all
phases of a subdivision project and the petitioners are residents of one phase
or two or more contiguous phases of said project: Provided, that, where the
facilities of the subdivision project are commonly shared by all the phases of
a subdivision project, the existing and proposed associations shall have the
right to use the facilities but shall proportionately share in the expenses for
its maintenance and the earnings derived or losses incurred from the operation
thereof; and, provided, further, that the remaining members of the existing
association reside in a contiguous area.
[2] A written agreement
between the mother and separating associations defining the obligations and
liabilities among them with respect to:
i. The use, maintenance, repair, replacement, modification
and improvements of common areas and facilities;
ii. Access to or passage through the subdivision/
village gates, main interconnecting and other roads, alleys and sidewalks
within the subdivision;
iii. Delivery of basic community services; and,
iv. Such other matters necessary for the proper governance
and operation of both associations.
Section 24. Procedure
for SEC or HIGC Registered Homeowners
Associations. –
a. The HLURB shall issue a certificate of registration to an
association previously registered with the SEC or HIGC upon compliance with the
following:
[1] The applicant association shall submit
certified true copies of the certificate of registration, articles of
association and by-laws previously submitted to the HIGC or SEC;
[2] When so required by the HLURB, the applicant
shall amend its articles of association and by-laws to conform to the
requirements of this Rules and submit such other documents;
[3] Payment of necessary fees.
b. An association that fails to register within a period of
one (1) year from the effectivity of this Rules shall have no legal standing to
sue before the HLURB or avail of its support services. It may nevertheless be
sued before the HLURB by its members or other interested parties and the
officers may be held personally liable for the obligations and liabilities
incurred by the association.
Section 25. Certificate of Registration. –
a. Upon finding that the requirements for registration are
in order, and that the articles of association and by-laws contain the
provisions required by this Rules, the HLURB shall issue a Certificate of
Registration to the applicant. The issuance of the Certificate of Registration
shall confer upon the association a juridical personality separate and distinct
from those of its members.
b. If the application for registration is incomplete, the
same shall be returned to the applicant. If any of the documents submitted are
defective, the Regional Office shall notify the applicant of the defective
submissions.
c. If the applicant fails to comply with the requirements
stated in the notice of deficiency within sixty (60) days from receipt thereof,
the application shall be deemed denied and the documents shall be returned to
the applicant.
Section 26. Adjudicatory Mechanism in the
Registration of Association. – In case two or more associations are
organized within the same subdivision/village and both applied for registration
with HLURB in accordance with this Rules, the HLURB shall register only one
association in accordance with the following procedures:
a. The association which submitted first its registration
papers and complied with all the requirements of the HLURB shall be registered;
b. In case there are two (2) associations registered with
the SEC or HIGC, then the association which was registered earlier shall be
recognized; and,
c. In case one (1) of the associations is registered with
the SEC and the other with the HLURB, the one earlier registered shall prevail
and the registration of the other shall be revoked, provided the requirements
under Section 24 are submitted within a period of one (1) year of the
effectivity of this Rules.
Nothing in this Rules shall prevent the HLURB from taking
into consideration other factors in determining whose association shall be
registered and recognized.
RULE 6
MERGER,
CONSOLIDATION, AND FEDERATION
Section 27. Plan of Merger, Consolidation, or
Federation. – The board of directors or trustees of two (2) or more
associations may each approve, by majority vote, a plan of merger,
consolidation or federation setting forth the following:
a. Names of the associations that will merge, consolidate or
federate, which are hereinafter referred to as the constituent associations;
b. Terms of the merger, consolidation or federation and the
mode of carrying the same into effect;
c. Statement of the changes, if any, in the articles of
association of the surviving association, in case of merger; and, with respect
to consolidation, all the statements required to be set forth in the articles
of association
d. Statement in the articles of association of the
federation specifying the commonality of purpose and interests of the
constituent associations, as well as the rights, obligations, and extent of
powers of the federation over the said associations;
e. Vicinity map showing that the territory of the
associations proposing to merge or consolidate are contiguous to one another;
and,
f. Such other provisions with respect to the proposed
merger, consolidation or federation as are deemed necessary or desirable.
Section 28. Approval of Plan by Homeowners
Association Members. – After the approval by majority
vote of each of the board of directors or trustees of the
constituent associations of the plan of merger, consolidation or federation,
the same shall be submitted for approval by the members of each association at
separate meetings duly called for the purpose. The notice of such meetings
shall be given to all the members of the respective associations at least two
(2) weeks prior to the date of the meeting, either personally or by registered
mail. The notice shall state the purpose of the meeting and shall include a
copy or a summary of the plan of merger, consolidation or federation. The
affirmative vote representing a majority of the total membership of each
association shall be necessary for the approval of such plan.
Section 29. Amendment of Approved Plan of
Merger, Consolidation or Federation. – An approved
plan of merger, consolidation or federation may be amended
by majority vote of the respective board of directors or trustees of all the
constituent associations and ratified by the affirmative vote of majority of
the members of each constituent association. The plan, together with any
amendment, shall be considered as the agreement of merger, consolidation or
federation.
Section 30. Articles of Merger,
Consolidation or Federation. – After the approval by
the members as required by the preceding Sections, the articles of merger,
consolidation or of federation, as the case may be, shall be executed by each
of the constituent associations, and signed by the president or vice-president
and certified by the secretary or assistant secretary of each association.
Section 31. Contents of Articles of Merger,
Consolidation or Federation. – The articles of merger,
consolidation or federation shall set forth the following:
a. The plan of the merger, consolidation or federation;
b. The number of constituent associations; and,
c. The number of members of each constituent association
voting for and against such plan, respectively.
Section 32. Submission of Articles of
Merger, Consolidation or Federation. – The articles of
merger, consolidation or federation, signed and certified as
herein above required, shall be submitted to the Regional Office in three
copies for approval, together with the following:
b. The records of the approval by majority vote of each of
the board of directors or trustees of the constituent associations of the
plans.
Section 33. Issuance of Certificate of
Merger, Consolidation or Federation. – If the merger, consolidation
or federation of the associations is not inconsistent with
existing laws, the Regional Office shall issue a certificate of merger,
consolidation or federation shall be deemed effective.
However, if the proposed merger, consolidation or federation
is contrary to or inconsistent with existing laws, the Regional Office shall
set a hearing to give the associations concerned the opportunity to be heard.
The notice of hearing shall be given to each constituent association at least
two (2) weeks before the hearing. The Regional Office shall thereafter proceed
to determine whether or not to approve the merger, consolidation or federation.
Section 34. Effects of Merger,
Consolidation, or Federation. – The merger,
consolidation or federation shall have the following effects:
a. The constituent associations shall become a single
association which, in the case of merger, shall be the surviving association
designated in the plan of merger; and in the case of consolidation, the
consolidated association designated in the plan of consolidation.
b. The separate existence of the constituent associations
shall cease, except that of the surviving or the consolidated homeowners
association.
c. The surviving or the consolidated association shall
possess all the rights, privileges, immunities and powers of each of the
constituent associations and all property, real or personal, and all
receivables due on whatever account, and other choses in action, and all and
every other interest of, or belonging to, or due to its constituent
association, shall be deemed transferred to and vested in the surviving or
consolidated association without further act or deed.
d. The surviving or consolidated association shall be
responsible and liable for all the liabilities and obligations of each of the
constituent associations in the same manner as if such surviving or
consolidated association had itself incurred such liabilities or obligations;
and any pending claim, action or proceeding brought by or against any of the
constituent association may be prosecuted by or against the surviving or
consolidated association. The merger or consolidation shall not impair the
rights of creditors or liens upon the property of any of the constituent
association.
e. The federation shall have a separate and distinct legal
personality from that of its constituent associations and shall have such
powers over its member associations as may be set forth in its approved
articles of association and by-laws. However, the creation of a federation
shall not affect the juridical personality of the constituent associations.
Section 36. Memorandum of Disaffiliation. – Upon
receipt of the notice of disaffiliation by a constituent
association, the Regional Office shall enter a memorandum thereof in the
records of the federation and the disaffiliating association, a copy of which
shall be furnished the concerned parties.
Section 37. Effects of Disaffiliation. – Upon
disaffiliation, the federation loses its powers and privileges as
set forth in the articles of association and by-laws over the disaffiliating
association, while the latter loses its entitlement to the rights and
privileges arising from membership in the federation. The disaffiliation shall
be without prejudice to the settlement of any obligation incurred by the
federation and constituent associations against each other.
RULE 7
DISSOLUTION OF THE
ASSOCIATION
Section 38. Methods of Dissolution. – A
homeowners association may be dissolved voluntarily or
involuntarily.
Section 39. Voluntary Dissolution
where No Creditors are Affected. – If the dissolution of an
association does not prejudice the rights of any creditor having a claim
against it, the dissolution shall be effected as follows:
a. The issuance of a Board Resolution authorizing the
dissolution of the association:
[1] Notice sent to all members of the Board, in
accordance with the notice requirements of the by-laws, setting a date for a Meeting
for the purpose of the dissolution of the association;
[2] In the meeting called for the purpose, a
majority of all the members of the Board shall be necessary for the approval of
the Board Resolution dissolving the association;
[3] The Board Resolution shall likewise state
the date of the General Assembly which shall consider the dissolution of the
association;
b. A majority vote of all the members, duly notified
beforehand, shall be required to dissolve the association. The Notice shall be
–
[1] Personally served or sent by registered mail
to the members at least thirty (30) days before the scheduled meeting;
[2] Published once a week for two (2)
consecutive weeks in a newspaper of local circulation where the principal
office address of the association is located, or, if there is none, in a
newspaper of general circulation once a week for two (2) consecutive weeks;
[3] Posted at the bulletin board of the
association and in other strategic and conspicuous places within its
territorial boundaries.
c. The Regional Office shall be furnished copies of the
Resolutions of the board of directors/trustees and the general assembly of
members dissolving the association, both of which shall be signed and certified
as correct by a majority of the members of the Board of Directors/Trustees and
countersigned by the Secretary.
d. The Regional Office shall issue the certificate of
dissolution upon determination that the application has complied with all the
foregoing requirements and that it is not contrary to law.
Section 40. Voluntary
Dissolution where Creditors are affected. – Where
the dissolution of an association may prejudice the rights of any creditor, the
following procedure shall be followed:
a. The association shall conduct the meetings and all
solemnities required for the notice as stated in the first two (2) subsections
of the immediately preceding section;
b. Upon completion of the foregoing, a petition for
dissolution shall be filed with the Regional Office which shall have the following
requirements:
[1] The petition shall be signed by a majority
of its board of directors or trustees or other officers of the association
having the management of its affairs;
[2] The petition shall be verified by its
president or secretary or one of its directors or trustees, and shall set forth
all claims and demands against it, and that its dissolution was resolved upon
by the affirmative majority vote of its members at a meeting called for that
purpose;
[3] The resolutions of the board and the general
membership attesting to the consent of the majority of both the members of the
Board and the general membership shall be attached to the petition, including
proof of publication of the notice, its personal service or service by
registered mail to all members and posting;
c. If the petition is sufficient in form and substance, the
Regional Office shall, by an order reciting the purpose of the petition, fix a
date on or before which objections thereto may be filed by any person, which
date shall not be less than thirty (30) days nor more than sixty (60) days
after the entry of the order. Before such date, a copy of the order shall be
published at least once a week for three (3) consecutive weeks in a newspaper
of local circulation in the municipality or city where the principal office of
the association is situated, or if there is no such newspaper, then in a
newspaper of general circulation in the Philippines, and a similar copy shall
be posted for three (3) consecutive weeks in three (3) public places in such
municipality or city and in the bulletin board of the association.
d. Upon five (5) day’s notice, given after the date on which
the right to file objections as fixed in the order has expired, the Regional
Office shall proceed to hear the petition and try any issue made by the
objections filed; and if no such objection is sufficient, and the material
allegations of the petition are true, it shall render judgment dissolving the
association and ordering such disposition of its assets as justice requires,
and may appoint a management committee to collect such assets and pay the debts
of the association.
Section 41. Dissolution by Shortening Corporate
Term. – A voluntary dissolution may be made by
amending the articles of association to shorten the term of the existence of
the association. A copy of the amended articles of association shall be
submitted to the Regional Office in accordance with these rules. Upon approval
by the Regional Office of the amended articles of association or expiration of
the shortened term, as the case may be, and upon such terms as may protect the
rights of creditors whose claims against the association may be affected, the
association shall be deemed dissolved without any further proceedings.
Section 42. Involuntary Dissolution. – The
association may be dissolved by the Regional Office upon the filing
of a verified complaint and after proper notice and hearing on the grounds
provided by existing laws, rules and regulations.
RULE 8
POST-REGISTRATION
Section 43. Requirements after registration. – Within
thirty (30) days from the issuance of the certificate of
association, the homeowners association shall submit the following to the
Regional Office:
a. Tax Identification Number;
b. BIR Certification/Official BIR stamps or receipts; and,
c. Updated master list of members and their authorized
representatives, if any, with their corresponding signatures as attested by the
association secretary.
Section 44. Books Required for Stamping. – In
addition to the preceding requirements and within the same period,
the association shall submit the following books in blank forms to the Regional
Office for stamping or marking as official association books:
a. Cash Receipts Book (CRB) and Cash Disbursement Book (CDB)
duly registered with the Bureau of Internal Revenue (BIR); and,
b. Ledger and journal duly registered with the Bureau of
Internal Revenue (BIR).
Section 45. Books to be kept. – Every
association shall keep and carefully preserve a record of all
transactions and minutes of meetings of the general membership and the board of
directors or trustees, setting forth, in detail, the date, time and agenda,
proof of notice, whether the meeting was regular or special, and the
significant acts done or ordered in the meeting.
Section 46. Annual Reports. – Within
ninety (90) days from the close of the fiscal period, the
association shall submit to the Regional Office the following books and
documents concerning its operations during the preceding accounting period:
a. General information sheet detailing the names of the
members of the board of directors or trustees, including the executive and
other accountable association officers;
b. Latest financial statement certified correct by the
treasurer and auditor of the association and attested to by the Chairman of the
Board or the President, and externally audited, preferably, by an independent
Certified Public Accountant; and,
c. Certified true copy of the master list of members and the
compiled resolutions duly certified by the association secretary and attested
to by the Chairman of the Board or the President.
Section 47. Resolutions Delisting or Expelling
Association Members in Land Tenurial Projects. – In
cases of CMP, GLAD and other similar land tenurial
projects/arrangements, the resolution delisting/expelling members from the
association, and the corresponding substitutions, if any, shall be submitted to
the HLURB, within thirty (30) days from its adoption. Otherwise, the delisting
or expulsion of members shall not be enforceable.
Section 48. Financial and Other Records. – The
association is enjoined to observe the following, with regard to
its funds, financial and other records:
a. The association or its managing agent shall keep
financial and other records sufficiently detailed to enable the association to
fully declare to each member the true statement of its financial status. All
financial and other records of the association including, but not limited to,
checks, bank records and invoices, in whatever form these are kept, are the
property of the association. Each association’s managing agent shall turn over
all original books and records to the association immediately upon termination
of the management relationship with the association, or upon such other demand
as is made by the board. An association’s managing agent is entitled to keep
association records. All records which he managing agent has turned over to the
association shall be made reasonably available for the examination and copying
by the managing agent;
b. All records involving the affairs of the association
shall be available for examination by all owners, holders of mortgages on the
lots, and their respective authorized agents upon reasonable advanced notice,
during normal working hours at the office of the association: Provided, That holders
of mortgages on lots may have access to the information about the property held
in mortgage with the consent of the registered owner;
c. A financial statement of the association shall be
prepared annually by an auditor, the treasurer and/or an independent certified
public accountant within ninety (90) days from the end of the accounting period
to be posted in the association office, bulletin boards, or other conspicuous
places within the subdivision/village, and to be submitted to the HLURB; and,
d. The funds of the association shall be kept in accounts in
the name of the association and shall not be joined with the funds of any other
association, or any person responsible for the custody of such funds.
RULE 9
THE HOMEOWNERS
ASSOCIATION
Section 49. Rights and Powers of the Association.
– An association shall have the following rights and
powers:
a. Subject to consultation and with the approval of a simple
majority of the members, adopt and amend the articles of association and
by-laws, rules and regulations, pursuant to existing laws and regulations;
b. In behalf of its members, institute, defend, or intervene
in litigation and/or administrative proceedings affecting the welfare of the
association and the subdivision/village as a whole, excluding, however,
disputes that are not the responsibility of the association;
c. Regulate the use, maintenance, repair, replacement and
modification of common areas and cause additional improvements to be made part
of the common areas: Provided, that the aforementioned do not contradict the
provisions of the approved subdivision plan;
d. Regulate access to, or passage through the
subdivision/village roads for purposes of preserving privacy, tranquility,
internal security, safety and traffic order: Provided, that: [1] public
consultations are held; [2] existing laws and regulations are met; [3] the
authority of the concerned government agencies or units are obtained; and, [4]
the appropriate and necessary memoranda of agreement are executed among the
concerned parties;
e. Hire, discharge or contract managing agents and other
employees, agents and independent contractors to ensure the full functioning
and operation of the association;
f. Subject to consultation with and the approval of a simple
majority of the association members, acquire, hold, encumber and convey in its
own name any right, title to or interest in real or personal property: Provided, that
such approval of a simple majority of the association members shall not be
required for the acquisition, holding, encumbrance and conveyance of personal
properties in amounts not exceeding ten percent (10%) of the association’s cash
holdings for its use in the course of its normal operations;
g. Ensure the availability of quality water services at a
reasonable price and, at its option, after consultation with the general
membership, administer and manage the waterworks system of the subdivision;
h. Upon consultation, grant easements, leases, concessions
and authority to use common areas and petition for or consent to the vacation
of streets and alleys: Provided, that the said grant of easements, leases,
concessions and authority shall not be applicable to access roads, main
interconnecting roads, alleys and sidewalks within the subdivision;
i. Impose or collect reasonable fees for the use of open
spaces, facilities, and services of the association to defray necessary
operational expenses, subject to the limitations and conditions imposed under
the law, the regulations of the board and the association’s by-laws;
j. Cause compliance with regard to height regulations,
easements, use of homes, buildings, edifices, or structures that may be built
within the subdivision, in accordance with the National Building Code, zoning
laws, HLURB rules and regulations, existing local ordinances, and existing
deeds of restriction;
k. Subject to consultation and with the approval of a simple
majority of the association members, allow the establishment of certain
institutions such as, but not limited to, schools, hospitals, markets, grocery
stores and other similar establishments that will necessarily affect the
character of the subdivision/village in terms of traffic generation, and/or
opening the area to outsiders which may result in the loss of privacy,
security, safety, and tranquility to its residents, in accordance with the
National Building Code, zoning laws, existing local ordinances, HLURB rules and
regulations, and existing jurisprudence: Provided, That such prior approval
shall not be necessary for the establishment of sari-sari stores, home
industries and similar small-scale business enterprises within the
subdivision/village classified as socialized housing;
l. Suspend privileges of and services to and/or Impose
sanctions upon its members for violations and/or noncompliance with the association’s
by-laws, rules and regulations;
m. Petition for the creation of a separate barangay,
independently or together with neighboring subdivisions: Provided, that all the
requirements of the Local Government Code of 1991 are met; and,
n. Exercise any other powers conferred by the by-laws and
the HLURB necessary for the governance and operation of the association.
Section 50. Composition of the Board. – Unless
otherwise provided in the by-laws, the board shall be composed of
at least five (5) but not more than fifteen (15) elected members of the
association.
Section 51. Association Officers. – Unless
otherwise provided in the by-laws, an association shall have the following
executive officers who shall be responsible for the management of the
association’s business: president, vice-president, secretary, treasurer and
auditor. The board may create other management positions in the association as
may be necessary.
Section 52. Qualifications of Officers. – A
director and officer of an association –
a. Must be legal age;
b. Must be a member in good standing;
c. Must be an actual resident of the subdivision, housing or
relocation project for at least six (6) months as certified by the association
secretary or in default thereof, by a member having personal knowledge thereof;
and,
c. Has not been convicted by final judgment of an offense
involving moral turpitude.
The legitimate spouse of a member may be a candidate in lieu
of the member.
Section 53. Disqualifications of Officers. – The
by-laws shall provide for reasonable disqualifications of
candidates for director and/or officer to protect the association and its
members from interests inimical or inconsistent with its purpose, or practices
detrimental to the welfare thereof, such as but not limited to the following:
a. Those found guilty of having committed fraud,
falsification, defalcation, or any other act inimical to the interests of the
association;
b. Former officers and directors of the association who have
not turned over the books, monies and records of the association during their
term, in the interest of enforcing faithful discharge of their duties,
transparency and accountability; or,
c. Those who refused to comply with the lawful
orders of the HLURB.
a. Regularly maintain an accounting system using generally
accepted accounting principles, and keep books of accounts, which shall be open
for inspection to any homeowner and duly authorized representatives of
government agencies upon request, during reasonable hours on business days;
b. Collect reasonable fees, dues and assessments that may be
provided for in the by-laws and approved by a majority of the members;
c. Collect reasonable charges for assessments, and after due
notice and hearing by the board in accordance with the procedures as provided
in the by-laws, and rules and regulations adopted by the board, charge
reasonable fines for late payments and for violation of the by-laws, rules, and
regulations of the association, in accordance with a previously established
schedule adopted by the board and furnished to the homeowners;
d. Propose measures to raise funds and the utilization of
such funds and submit the same for consideration of the members of the
association; and,
e. Undergo a free orientation by the HLURB or any other
competent agency deputized by it on how to conduct meetings, preparation of
minutes, handling of accounts, laws and pertinent rules and regulations within
thirty (30) days after election or appointment.
f. Discharge the duties and responsibilities provided for in
the association’s by-laws; and,
g. Exercise such other powers as may be necessary and proper
in accordance with this Act and for the accomplishment of the purposes for
which the association was organized.
The board shall act in all instances on behalf of the
association, except to amend the articles of association, to dissolve the
association, to elect members of the board or to determine the qualifications,
powers and duties, or terms of office of the board, and other instances that
require the vote or approval of the members themselves. In the performance of
their duties, the officers and members of the board shall exercise the degree
of care and loyalty required by such position.
Section 55. Relationship with LGUs. – Homeowners
associations shall complement, support and strengthen LGUs in providing
vital services to their members and help implement local government policies,
programs, ordinances, and rules.
a. Associations are encouraged to actively cooperate with
LGUs in furtherance of their common goals and activities for the benefit of the
residents of the subdivisions/villages and their environs;
b. Where the LGUs lack resources to provide for basic
services, the associations shall endeavor to tap the means to provide for the
same. In recognition of the associations’ efforts to assist the LGUs in
providing such basic services, association dues and income derived from rentals
of their facilities shall be tax-exempt: Provided, that such income and dues
shall be used for the cleanliness, safety, security and other basic services
needed by the members, including the maintenance of the facilities of their
respective subdivisions/villages;
c. LGUs shall, upon due notice, hold public consultations
with the members of the affected associations, through their officers and
directors, where proposed rules, zoning and other ordinances, projects and/or
programs affecting their jurisdiction and surrounding vicinity are to be
implemented prior to the effectivity or implementation of such rules, zoning,
ordinances, projects or programs: Provided, that in cases of zonal
reclassification within the subdivision/village, the views of the simple
majority of homeowners shall be obtained;
d. Such public consultations shall conform to the manner as
specified in Rule XI, Article 54 of the
Implementing Rules and Regulations of Republic Act N0.
7160, otherwise known as the Local Government Code of 1991.
Section 56 . Relationship with
National Government Agencies. – The associations shall
complement, support and strengthen the efforts of the National Government Agencies
in providing vital services to their members and help implement the national
government policies and programs.
a. Associations are encouraged to actively cooperate with
National Government Agencies (NGAs) in the furtherance of their common goals
and activities for the benefit of the residents of the subdivisions and its
environs; and,
b. NGAs shall consult the associations where proposed rules,
projects and/or programs may affect their welfare.
RULE 10
ELECTIONS
Section 57. Holding of Elections. – A
homeowners association shall hold regular membership meetings or
elections on the time or date set forth in its by-laws.
Section 58. Proxies. – Association
members may vote in person or by proxy in all meetings of members.
Proxies shall be in writing, signed by the member and filed before the
scheduled meeting with the association secretary. Unless otherwise provided in
the proxy, it shall be valid only for the meeting for which it is intended. No
proxy shall be valid and effective for a period longer than three (3) years at
any one time unless earlier revoked by the member.
Section 59. Failure of Election. –
a. When a regular or special election cannot be held or
conducted due to lack of quorum as defined under the association by-laws or for
any other serious cause such as violence, terrorism, force majeure, and other
analogous causes of such a nature that the holding of a free, orderly and
honest election should become impossible, the ElectionCommittee shall call for
another election within a period of thirty (30) days from the date of the
failed election or the cessation of the cause for such failure of election.
[1] Notice of postponement of the regular or
special membership meeting; and,
[2] Affidavit of non-holding stating
categorically the reasons why no election was conducted in accordance with the
provisions of the association by-laws.
The notice or affidavit shall be executed by the Secretary
and attested to by its President and shall be filed with the Regional Office
within five(5) days from the date of the scheduled election.
c. If the reasons stated in the affidavit of non-holding of
election are found to be without merit, the Regional Office shall order the
director/ trustee and officers of the association to immediately call for the
conduct of the election within fifteen (15) days from receipt of the Order. The
director/trustees and officers who failed to comply with the order of
the Regional Office shall be held, jointly and severally, liable
therefore.
The Regional Office shall designate its responsible
officials to supervise the conduct of the special election with the
participation of the Federation as observer. Within ten (10) working days after
the date of the election, said election supervisor shall submit a report to the
Regional Office stating, among others, the following:
[1] Whether the special election was held as
scheduled;
[2] Time of the commencement and end of
election; and,
[3] The following information as appearing in
the report of the committee on election of the homeowners association: [a]
number of qualified voters; [b] Number of votes cast; [c] Number of votes
received by individual candidates; d) Protest registered on the day of
election, if any; and, e) such other information relevant and necessary in the
conduct of election.
Section 60. Hold-Over. – Where there
is failure to elect a new set of directors or officers, the
incumbent directors/trustees/officers shall be allowed to continue in a
hold-over capacity until their successors are elected and qualified, subject to
compliance with the preceding sections of this Rule on the non-holding or
postponement of regular and special elections. In no case shall the hold-over
term of the officers/directors/trustees exceed two (2) years.
Section 61. Election Contests. – Election
contests and their resolutions shall be governed by the by-laws of
the association. Unless otherwise provided by the Association’s by-laws, the
election contest shall be in writing and filed by any of the aggrieved
candidate/s within five (5) days after the proclamation of the winning
candidates, specifically stating the grounds thereof. The duly constituted
Election Committee of the Association shall decide on the controversy brought
before it within the non-extendible period of five (5) days.
The aggrieved candidate/s may file the necessary complaint
before the HLURB Regional Office within ten (10) days from receipt of the
decision of the Election Committee. The complaint shall be accompanied by a
certification that the dispute was referred to, and resolved by the appropriate
committee duly constituted by the association.
In the absence of an Election Committee and Grievance
Committee or refusal to issue the certification, an affidavit attesting to this
fact shall be made further stating that complainant has exhausted
administrative remedies, which shall be attached to the complaint.
Section 62. Turnover of Records and Properties by
Outgoing Directors/ Officers. – To ensure the orderly
turnover of the management of an Association, the outgoing
directors and officers of an Association shall turn over all Association books,
records, properties and other assets, to the new set of directors and officers
within sixty (60) days from the election of the new Board.
Section 63. Election Reports. – Within
fifteen (15) days from the date of any regular or special election,
the association shall submit the following to the Regional Office:
a. Proof of notice of election;
b. A copy of the notice sent to the members or posted in
conspicuous places stating the time, date and place of the election;
c. Attendance sheet signed by the members and attested by
the Secretary;
d. Notarized minutes of elections prepared and signed by the
committee which supervised the election of the association;
e. Election returns duly certified by the committee which
supervised the election of the association; and,
f. Master list of qualified voters as certified by the
association secretary and treasurer.
RULE 11
DUTIES AND RESPONSIBILITIES
OF THE HLURB
Section 64. Duties and Responsibilities of the
HLURB. – In addition to the powers, authorities and
responsibilities vested in it by Republic Act No. 8763, Presidential
Decree No. 902-A, Batas Pambansa Blg.
68 and Executive Order No. 535, Series of 1981, as amended,
the HLURB shall:
a. Regularly conduct free orientation for officers of
homeowners associations or deputize another competent agency to conduct the
orientation;
b. Formulate and publish a Code of Ethics and Ethical
Standards for board members detailing prohibited conflicts of interest;
c. Register all associations, federations, confederations or
umbrella organizations of the associations;
d. Hear and decide intra-association and/or
inter-association controversies and/or conflicts, without prejudice to filing
civil and criminal cases by the parties concerned before the regular
courts: Provided, That all decisions of the HLURB are
appealable directly to the Court of Appeals;
e. Formulate the rules or manner of verification and
validation of petitions for the removal of director/s or trustee/s of the
association or dissolution of the board;
f. Exercise the same powers over federations, confederations
or umbrella organizations of the associations;
g. Formulate, in consultation with the representatives of
associations, federations, confederations or umbrella organizations of the
associations, standard nomenclatures to be used for the associations’ books of
accounts, and a standard articles of association and by-laws for homeowners
association for reference purposes;
h. Formulate, in consultation with the representatives of
associations, federations, confederations or umbrella organizations of the
associations, the guidelines in regulating the kinds of contributions and fees
that may be charged and/or collected by associations; and,
i. Call upon the Philippine National Police, other law
enforcement agencies, and other instrumentalities of the government, if
necessary, for the enforcement of its functions.
Section 65. Verification and Validation of
Petition for Removal of Director or Trustee. – The
following procedure shall be observed in case of removal of
a director or trustee of an association
a. A director or trustee may be removed from office,
through a verified petition duly signed by the majority members of an
association, for any cause provided in the by-laws of the association;
b. The duly signed petition, subscribed and sworn to before
a notary public, shall be submitted to the Regional Office of the HLURB for purposes
of verification and validation. Within five (5) days from receipt of the
petition, the Regional Office shall determine whether the petition complies
with the required formalities and based on any of the grounds or causes for
removal provided under the by-laws. Upon being satisfied that the petition is
sufficient in form and substance, the Regional Office shall determine, based on
its record, whether the petition is signed by majority of the members of the
association concerned;
c. If the Regional Office determines that the petition is
not signed by the required number of the members of the association, it shall
then dismiss the petition and shall inform the member who filed the petition of
its decision, furnishing a copy thereof to the board and the director or
trustee subject of the petition;
If, on the other hand, the petition is signed by the
required number of the members of the association, the Regional Office shall
then proceed with the validation of the petition. The Homeowners Association
Administration Division of the Regional Office shall compare the signatures
appearing in the petition with the records on file with the Regional Office;
d. The Homeowners Association Administration Division
shall then prepare a report on the conduct of validation and submit the same to
the Regional Officer/Director. The Regional Director/Officer shall then issue
an order validating the petition and the removal of the director or trustee,
furnishing a copy thereof to the director/trustee concerned and the board;
e. Within sixty (60) days from the receipt of the order from
the Regional Director/Officer, an election shall be called by the remainder of
the board for the purpose of determining who shall hold office for the
unexpired term of the removed director or trustee;
f. The director or trustee who has been removed shall have
the right to question his removal on the sole ground of the validity of the
cause relied upon by the members of the association, through a petition filed
before the Regional Office within fifteen (15) days from receipt of the order
of his removal; and,
g. The pendency of the petition filed by the director or
trustee shall not prevent the board from conducting the special election called
for the purpose of filling up the vacancy. In the event the HLURB decides that
the removal is invalid, the removed director or trustee shall then be
reinstated to his former position and serve the remainder of his term. The
tenure of the person who replaced the removed director from the time of his
election up to the time of the reinstatement of the latter shall be respected.
Section 66. Dissolution of the Board. – In
the event two-thirds (2/3) of the association’s members submit a
verified petition for the dissolution of the board, the following procedure
shall be observed:
a. The petition for the dissolution of the board shall be
based solely on the grounds or causes provided in the association’s by-laws;
b. The procedure provided in subsections (b) to (g) of the
immediately preceding Section shall be observed;
c. Until the new board members shall have been elected and
qualified, the HLURB shall designate an interim board: Provided, That such
board shall be composed of association members in good standing: Provided,
further, That such interim board members shall not be eligible to run in the
election called for the purpose of replacing the members of the dissolved
board.
This procedure shall also be adopted if a majority of the
members of the board is removed, which shall be considered as a dissolution of
the entire board.
Section 67. Monitoring. – The
Regional Office may, motu proprio or upon report
or request of an interested party, inspect and examine documents, books and
records, and investigate transactions and activities of the association for the
purpose of ascertaining and enforcing its compliance with laws, rules and
regulations being implemented by HLURB, and in proper cases, impose appropriate
sanctions.
Section 68. Examination of Financial
Transactions. – After the submission by the
association of the annual reports required to be submitted, the Regional Office
shall conduct an examination and evaluation thereof within fifteen (15) days
from receipt and shall complete the review and evaluation within an equal
period of fifteen (15) days.
If the Regional Office finds that the documents submitted
are incomplete or inconsistent with generally accepted accounting principles,
the Regional Office shall issue a notice to the association for the submission
of the pertinent books and records, including but not limited to its audited
balance sheet or income statement, cash book, ledger and journal, or cash flow
statement. For this purpose, the Regional Office may also conduct its own
examination and evaluation of the required reports of the association in its
designated administrative office upon prior notice to the concerned association
when circumstances warrant.
Section 69. Show Cause Order. – If,
after investigation or upon evaluation of the reports, it appears
that a violation of existing laws, rules and regulations of HLURB has been
committed by the homeowners association, the Regional Office shall require the
association, its directors/trustees and officers to submit a sworn statement
explaining why no sanctions should be imposed for the reported violation within
ten (10) days from receipt thereof.
Section 70. Evaluation. – Upon
receipt of the sworn statement, the Regional Office shall determine
if any violation exists. If the Regional Office determines that no violation
was committed, it shall issue an order considering the matter as terminated.
If the BOD/Trustees and officers fail or refuse to submit
the sworn statements as required herein, the Regional Office may make a
determination on the basis of the records at hand and shall apply the penalties
and sanctions provided under Section 23 of the RA No. 9904.
Section 71. Independent Audit; when necessary. – If,
upon evaluation, the Regional Office finds ambiguity or
inconsistency in the documents submitted, it may require the board of directors
of the association to engage, at its own expense, the services of an
independent auditor who shall conduct and review the said financial records,
and finish the same within thirty (30) days from receipt of the HLURB order.
The independent auditor shall be an accredited CPA of the Board of Accountancy
and the Securities and Exchange Commission (SEC). Thereafter, the association
shall submit the report of the independent auditor.
RULE 12
FINAL PROVISIONS
Section 72. Prohibited Acts. – It
shall be prohibited for any person:
a. To compel a homeowner to join the association,
without prejudice to the provisions of the deed of restrictions, its extensions
or renewals as approved by the majority vote of the members or as annotated on
the title of the property; the contract for the purchase of a lot in the
subdivision project; or an award under a CMP project or a similar tenurial
arrangement;
b. To deprive any homeowner of the right to avail of or
enjoy basic community services and facilities provided that the dues, charges,
and other fees for such services have been duly paid;
c. To prevent any homeowner who has paid the required fees
and charges from reasonably exercising the right to inspect association books
and records;
d. To prevent any member in good standing from participating
in association meetings, elections and referenda;
e. To deny any member due process in the imposition of
administrative sanctions;
f. To exercise rights and powers as stated in Section 10 of
the Act in violation of the required consultation and approval of the required
number of homeowners or members;
g. To unreasonably fail to provide basic community services
and facilities and maintain, repair and replace their residential abode.
Section 73. Penalties and Sanctions. – Any
person who, intentionally or by gross negligence, violates any
provision of law, rules and regulations, fails to perform duties and functions
mandated by law and/or violates the rights of the members, shall be punished
with a fine of not less than Five Thousand Pesos (Php5,000.00) but not more
than Fifty Thousand Pesos (Php50,000.00) and permanent disqualification from
being elected or appointed as member of the board, officer or employee of the
association, without prejudice to being charged before a regular court for
violations of the provisions of the Revised Penal Code, Civil Code and other
pertinent laws.
If the violation is committed by the association, the
members, officers, directors or trustees of the association who have actually
participated in, authorized, or ratified the prohibited act shall be held
liable.
If the violation is committed by the employees and agent who
acted in gross violation of the provisions of the Act, the officers, directors
or trustees, or incorporators of the association shall be jointly and severally
liable with the offending employees, agents, and the association.
Section 74. Application of HLURB Rules of
Procedure. – The existing HLURB Rules of Procedure, insofar
as not inconsistent with this Rules shall govern the adjudication process
involving the associations, its members, officers and directors or trustees.
The provisions of the Corporation Code of the Philippines
and the Rules of Court, as amended, shall be applied in suppletory
character.
Section 75. Amendments. – This Rules, or
any provision thereof, may be amended by the HLURB.
Section 76. Separability Clause. – If
any provision of this Rules is declared invalid or unconstitutional, the
remainder of the Rules shall remain valid and subsisting.
APPROVED, this 24th day of June ,
2011, Quezon City.
(Sgd.) HON. JEJOMAR C. BINAY
Vice-President of the Philippines
and Chairman, HUDCC
(Sgd.) JOSE VICENTE; SALAZAR
Undersecretary, DOJ
Ex Officio Commissioner
|
(Sgd.) ANTONIO M. BERNARDO
Chief Executive Officer
and Commissioner
|
(Sgd.) AUGUSTO B. SANTOS
Deputy Director-General, NEDA
Ex Officio Commissioner
|
(Sgd.) RIA CORAZON A. GOLEZ-CABRERA
Commissioner
|
(Sgd.) JAIME A. PACANAN
Undersecretary, DPWH
Ex Officio Commissioner
|
(Sgd.) FELIX WILLIAM B. FUENTEBELLA
Commissioner
|
(Sgd.) DOMNINA T. RANCES
Representative, DILG
Ex Officio Commissioner
|
(Sgd.) LUIS A. PAREDES
Commissioner
|
Attested By:
(Sgd.) CHARITO B. LANSANG
Board Secretary
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