G.R. No. 211353 - William G. Kwong Management, Inc. vs. Diamond Homeowners and Residents Association

Background of the Case
Diamond Subdivision is a residential area in Balibago, Angeles City, Pampanga, which also has several commercial establishments such as beer houses, karaoke bars, night clubs, and other drinking joints.
These businesses allowed patrons and customers unrestricted access, leading to a rise in security concerns such as robbery, burglary (akyat-bahay), prostitution, rape, and loud noise disturbances until late at night.
Diamond Homeowners & Residents Association (Diamond Homeowners), the legitimate homeowners' association, sought to address these peace and security concerns by appealing to the Angeles City Council.

Ordinance No. 132, Series of 2003
The Angeles City Council reclassified Diamond Subdivision from Residential 2 (R-2) to Residential 1 (R-1) to prohibit the establishment of new businesses, except those already existing.
The Ordinance acknowledged security problems adversely affecting residents and property values.
It exempted Arayat and S.L. Orosa Streets and the service road from the new classification.
The Ordinance prohibited transfer of existing business rights except by hereditary succession.

Continued Security Concerns and Petitioner’s Proposal
Despite the Ordinance, more businesses continued to proliferate, and security issues persisted.
William G. Kwong (Kwong), a 38-year resident and owner of three motels in the subdivision, proposed guard posts with telephone lines at his street’s entry and exit points to screen visitors.
Kwong offered to shoulder substantial costs for security enhancements and requested neighbors to share monthly fees.

The "No Sticker, No ID, No Entry" Policy
Diamond Homeowners introduced the “No Sticker, No ID, No Entry” Policy to regulate passage throughout the entire subdivision for security reasons.
The Policy required visitors on vehicles to surrender ID cards to guards, reclaimable upon exit; residents with vehicles were to obtain stickers to avoid surrendering IDs.
The Policy was approved in December 2006 and scheduled for implementation by March 2007.

Petitioners’ Legal Challenge
Kwong contested the Policy, filing a complaint with the Housing and Land Use Regulatory Board Regional Office (HLURB-RO), arguing that subdivision roads had been donated to the City of Angeles since 1974, making them public roads open to the public.
Kwong claimed that the Policy’s visitor screening would disrupt his motel business.
The HLURB-RO issued a Cease and Desist Order and Temporary Restraining Order in favor of Kwong.

Administrative and Judicial Proceedings
Housing and Land Use Regulatory Board Arbiter lifted the Cease and Desist Order, upholding the Policy citing security priorities over commercial convenience.
HLURB Board of Commissioners reversed the Arbiter, declaring the Policy void as it converted public roads into private roads and violated public access rights.
The Office of the President affirmed the Board of Commissioners’ decision.
Diamond Homeowners appealed to the Court of Appeals (CA), which set aside the Office of the President’s decision and upheld the validity of the Policy, highlighting the homeowners' association’s authority under existing laws.
Kwong’s motion for reconsideration was denied, and he filed a Petition for Review on Certiorari with the Supreme Court.

The roads are public and should remain open without restrictions or private control.
Only local government units (LGUs) have authority to regulate public roads, and such authority cannot be delegated to private entities like homeowners’ associations without compliance with legal requisites.
The Policy unduly infringes on rights and lacks compliance with procedural requirements such as public consultations and approvals.
Ordinance No. 132 does not authorize the Policy, and there are no actual security issues.

The Policy is valid under Section 10(d) of Republic Act No. 9904 (Magna Carta for Homeowners and Homeowners’ Associations), granting the association authority to regulate access for security and welfare purposes.
The Policy does not convert subdivision roads into private roads or infringe upon local government ownership.
It was necessary to address rampant crime and was supported by the majority of residents.
The residents have a duty to support association projects that promote community welfare.
The Policy is consistent with existing laws, jurisprudence, and past decisions.

Whether the factual findings of the Housing and Land Use Regulatory Board (HLURB) are entitled to respect.
Whether the security concerns within Diamond Subdivision that justify regulation of access were sufficiently established.
Whether the Diamond Homeowners & Residents Association was authorized to issue the "No Sticker, No ID, No Entry" Policy despite the subdivision roads having been donated to the Angeles City government.