QuestionsQuestions (HLURB MEMORANDUM CIRCULAR NO. 04, S. 2014)
Under Section 20(b) of Republic Act No. 9904, HLURB is mandated to formulate and publish a Code of Ethics and Ethical Standards for officers/board members of HOAs, including prohibited conflicts of interest.
No application for registration or accreditation with HLURB shall be allowed unless the Code is incorporated or appended to the HOA’s By-Laws as an integral part. Existing HOAs must append the Code; failure despite notice may result in suspension of the Certificate of Registration until compliance or revocation if refused.
Conflict of Interests occurs whenever an officer/board member’s integrity, trustworthiness, or impartiality is potentially undermined due to inconsistent or competing personal or professional interests, or those of the member’s family/relatives up to the fourth civil degree of consanguinity or affinity.
Perceived Conflict of Interests occurs when an officer/board member has committed or is committing acts likely to cast doubt on integrity, trustworthiness, or impartiality—placing the association’s general interest behind personal/professional interests.
They must strive for the common good of the association, forego personal/professional interests, make decisions in the association’s best interest, avoid real or perceived conflicts of interest in sworn duties, and avoid acting individually unless exigent to prevent conflicts.
They should fully disclose in writing to the Board at the earliest opportunity the conflict-of-interest.
The officer must inhibit and withdraw from participating in negotiation/approval, may only provide inputs if requested, must refrain from influencing other board members, and must abstain from voting. The abstention and reasons must be entered in the minutes.
Yes, but only to provide inputs relative to the transaction when so requested by other board members; otherwise, they must inhibit and withdraw from participation.
Any dealings where the officer abstained must be made known and disclosed to the homeowners and members according to the procedure in the HOA’s Articles of Incorporation and/or By-Laws.
Partisan politics must be avoided; officers cannot use their positions/resources for partisan activities; the board/association cannot make contributions to parties/candidates; HOA properties/facilities cannot be used/leased/rented for campaigning or to give advantage to a particular candidate or party.
Upon assuming office, the officer must disclose in writing and submit to the board any such business enterprise/entity/undertaking/activity where they have direct or indirect financial/pecuniary interest.
The Code prohibits them from providing/rendering professional services for the association if doing so is likely to result in a real or perceived conflict of interests.
No officer/board member, spouse, agent, employee, immediate family member, or related relative by affinity/consanguinity up to the fourth civil degree may enter into a personal service contract with the association without prior disclosure of such relation/interest to the Board.
No officer/board member may use or allow use of their position to promote or enhance personal/professional interests through direct or indirect recommendation/endorsement of vendors, suppliers, or contractors; transactions must observe transparency.
No officer/board member shall accept, request, or solicit any gift, favor, percentage/commission, loan, or thing of monetary value if it tends to influence or is intended to influence board actions/decisions on official matters.
First, the Board forms an investigation committee for a preliminary determination on whether there is sufficient evidence of probable commission; proceedings are confidential. If no probable cause, dismiss. If probable cause, refer to the Board to inform the charged officer/member, who must inhibit, then accept evidence. If insufficient evidence, dismiss; if substantial evidence exists, impose appropriate sanctions per the Code and association rules.