QuestionsQuestions (HLURB ADMINISTRATIVE ORDER NO. 05, S. 2005)
The framework cites Executive Order No. 648 (1981) as amended in relation to Republic Act No. 8763, Executive Order No. 535 (1979), and Presidential Decree No. 902-A, which empower HLURB to regulate and supervise the activities and operations of HOAs.
It takes effect fifteen (15) days from its date of publication in a newspaper of general circulation.
An HOA must register with HLURB in order to acquire juridical personality.
Officers/members of an unregistered HOA (or unincorporated group acting as an HOA) are personally liable for obligations and liabilities incurred by the de facto association.
A homeowner/lot owner/lot buyer (including mortgagee who becomes owner via foreclosure and consolidation), lessee under a ≥3-year term (if allowed in writing by owner), occupant with a subsisting usufruct in writing, a beneficiary/awardee under certain government housing programs (as listed by the financing institution), and the developer for unsold lots/units.
Membership should be voluntary unless required by deed restrictions annotated on title, stipulated in the lot purchase contract, or required for an award under a Community Mortgage Program or similar tenurial arrangement.
Rights include: (1) to vote in person or by proxy; (2) to inspect books and records and receive annual reports including financial statements; (3) to avail of Association services/facilities; and (4) other rights in the bylaws.
Duties include paying membership fees/dues/special assessments; attending meetings; supporting/participating in projects; and complying with bylaws/rules/regulations. Non-compliance may be a ground for sanctions per the bylaws.
Due process must be observed in cases where administrative sanctions are imposed on a delinquent member.
Board is composed of at least five (5) but not more than fifteen (15) elected members. Lessees, occupants, or developers may not constitute a majority of the board.
A director must attend board meetings in person and may not attend or vote by proxy at board meetings.
Unless bylaws/articles provide otherwise, a majority of directors as fixed in the articles constitutes quorum. A decision of at least a majority of directors present at a quorum meeting is valid, except election of officers which requires vote of a majority of all members of the board.
Quorum consists of the majority of members unless bylaws provide otherwise. For election of directors/officers, bylaws may provide that only members of good standing count in determining a quorum.
A proxy is valid only for the date of the meeting it is intended, and no proxy is valid/effective for more than five (5) years.
Examples include: amendment of articles; delegation to Board to amend/repeal bylaws or adopt new bylaws; sale/lease/exchange/mortgage/pledge/disposition of all or substantially all properties; incurring/creating/increasing bonded indebtedness; increase/decrease of member’s equity; merger/consolidation/ federation membership/disaffiliation/segregation; use of funds for non-regular or unapproved projects; ratification of adverse interest transactions by directors; extension/shortening of existence; and dissolution.
Unless bylaws provide otherwise, the officers should be president, vice-president, secretary, treasurer, and auditor. The board may create other management positions as necessary.
The board should specify instances needing approval regarding conflict of interests. For avoiding conflicts, members/officers generally should not contract with the HOA for services unless (a) their presence was not necessary for quorum, (b) their vote wasn’t necessary for approval, (c) contract is fair/reasonable, and (d) board previously authorized the contract; if (a) or (b) fails for a director-involved contract, it may be ratified only by a two-thirds (2/3) vote of total membership with full disclosure.
The HOA must maintain books/records required by HLURB rules; post/regularly disseminate income and expenditure reports; and keep Association funds in bank accounts in the Association’s name, without commingling with funds of directors/officers or other persons/associations.