QuestionsQuestions (Republic Act No. 9904)
RA 9904 is titled the “Magna Carta for Homeowners and Homeowners’ Associations.” Its policy is to uphold the rights of people to form community-based organizations, recognize homeowners’ rights and roles individually and as members of homeowners’ associations (HOAs), and make resources available to help HOAs complement LGUs and help implement government policies and programs.
An association is a homeowners association (a nonstock, nonprofit corporation) registered with HLURB (or previously with HGIC/HGC or SEC), organized by owners/purchasers of lots in a subdivision/village or other residential properties; it can also include awardees/usufructuaries/legal occupants/lessees in government socialized/economic housing or relocation projects and other urban estates, and underprivileged/homeless citizens in CMP/LTAP or similar programs as they are being accredited.
A homeowner includes: (1) an owner or purchaser of a lot in a subdivision/village; (2) an awardee/usufructuary/legal occupant of a unit/house/lot in government socialized/economic housing or relocation project and other urban estates; and (3) an informal settler in the process of being accredited as beneficiary/awardee under CMP/LTAP. These persons may become HOA members as defined in the articles and bylaws, subject to the membership rules (including consent for lessees/occupants where required).
Every homeowner has the right to enjoy basic community services and facilities, provided that he/she pays the necessary fees and other pertinent charges.
Yes. They have the right to be a homeowner for membership purposes upon procurement of written consent/authorization from the lot/unit owner. Without such consent, the owner is deemed to have waived rights under Section 7 except subsection (b), when the consent is granted. However, lessees in government socialized housing projects/urban estates and those in underprivileged/homeless communities covered by RA 9904 are considered homeowners for membership without need of such written consent.
Major rights include: (a) enjoy basic community services and use of common areas/facilities; (b) inspect books and records during office hours and obtain annual reports/financial statements upon request; (c) participate, vote, and be eligible for elective/appointive office subject to bylaws qualifications; (d) demand promptly required deposits when conditions are met; (e) participate in meetings/elections/referenda while bona fide membership subsists; and (f) other rights in the bylaws.
The member must: (a) pay membership fees, dues, and special assessments; (b) attend meetings of the association; and (c) support and participate in HOA projects and activities.
The bylaws must provide guidelines/procedures for determining delinquency or not-in-good-standing and prescribe administrative sanctions. Due process must be observed when sanctions are imposed.
The HOA must comply with consultation and must obtain approval of a simple majority of the members.
Examples include: acquiring/holding/encumbering/conveying real or personal property (Section 10(f) for real property requires consultation and simple majority approval; personal property acquisition is limited to amounts not exceeding 10% of cash holdings without that specific requirement). The simple majority approval requirement protects members by ensuring collective consent for significant governance and asset decisions.
The Board must collect fees, dues, and assessments provided in the bylaws and approved by a majority of members. It may also collect reasonable charges and—after due notice and hearing per bylaws/rules—impose reasonable fines for late payments and violations, using a previously established schedule furnished to homeowners.
HOAs must maintain detailed books/records using generally accepted accounting principles; records must be property of the association; managing agent must turn over original books/records upon termination or demand; records involving affairs must be accessible for examination by owners and authorized representatives (subject to conditions); annual financial statements must be prepared and posted within 90 days from the end of the accounting period and submitted to HLURB; and association funds must be kept in the name of the association and must not be commingled with other persons/associations.
Prohibited acts include compelling homeowners to join without basis; depriving homeowners who paid fees from enjoying basic services; preventing access to books/records; preventing members in good standing from participating in meetings/elections/referenda; denying due process for sanctions; exercising certain HOA rights without required consultation/approval; unreasonably failing to provide services or to comply with records requirements; and violating any provision of RA 9904. They are significant because violations trigger penalties and possible civil/criminal liability.
Violators intentionally or by gross negligence may be punished with a fine of not less than PHP 5,000 but not more than PHP 50,000 and permanent disqualification from being elected or appointed as a board member/officer/employee of the association, without prejudice to court actions for Revised Penal Code/Civil Code violations. If committed by the association, members/officers/directors/trustees who participated/authorized/ratified may be liable. If committed by employees/agents, officers/directors/trustees or incorporators may be jointly and severally liable with the offending employees/agents and the association.
Removal of a director/trustee requires a signed petition of a simple majority of association members in good standing, subject to HLURB verification/validation; election must be called within 60 days by the remainder of the board. If removal results in removal of a majority of the board, it is treated as dissolution of the entire board under Section 14. Dissolution of the board requires petition by two-thirds (2/3) of association members, also subject to HLURB verification/validation; HLURB must call an election within 60 days and may designate an interim board composed of members in good standing, who cannot run in the election replacing the dissolved board.