QuestionsQuestions (Republic Act No. 9904)
RA 9904 declares the State policy to uphold and promote the rights of people to form nongovernmental, community-based organizations, specifically recognizing and respecting homeowners and homeowners’ associations in serving their legitimate collective interests within participatory democracy.
It refers to a homeowners’ association as a nonstock, nonprofit corporation registered with the HLURB (or previously registered with HIGC/SEC), organized by owners/purchasers in a subdivision/village or other residential property, or related groups such as awardees, usufructuaries, legal occupants/lessees in socialized/economic housing or relocation projects, and underprivileged/homeless citizens under certain programs.
They are services/facilities benefiting all homeowners that no homeowner may reasonably be excluded from—e.g., security, street lights, street maintenance/repairs/cleaning, garbage collection/disposal. The homeowner’s right is subject to payment of necessary fees and pertinent charges.
A homeowner includes: (1) owners or purchasers of lots in a subdivision/village; (2) awardees/usufructuaries/legal occupants in government socialized/economic housing or relocation projects and other urban estates; and (3) informal settlers in the process of being accredited as beneficiaries under CMP/LTAP and similar programs. This qualification is tied to membership rights as defined by the Act and the association’s governing documents.
They have the right upon written consent/authorization from the owner. Until revoked in writing, the owner is deemed to have waived rights under Section 7 except subsection (b) (which can be enjoyed by both owner and lessee). Lessees in certain government socialized housing/underprivileged/homeless communities qualify without needing written consent.
Includes: enjoying basic community services/common areas; inspecting books and records and receiving annual reports/financial statements; participating/voting and being eligible for office subject to bylaws qualifications; demanding and receiving required deposits when conditions are met; participating in meetings/elections/referenda while membership subsists; and other rights in the bylaws.
To pay membership fees, dues, and special assessments; attend meetings; and support and participate in association projects/activities.
By requiring bylaws to provide guidelines/procedures for determining delinquent status and prescribing administrative sanctions, while ensuring due process when sanctions are imposed.
Among others: adopting/amending articles and bylaws (with consultation and simple majority approval), regulating common areas and access roads (with specified consultative and legal requirements), contracting managing agents, and acquiring/encumbering/conveying property (subject to simple majority, except limited personal property). The recurring voting threshold is “simple majority” (50% + 1).
To regularly maintain an accounting system using generally accepted accounting principles, keep books open for inspection by homeowners and authorized government representatives upon request during reasonable hours; and comply with requirements for availability and posting of financial statements and record-keeping.
Adoption/amendment of articles of incorporation and bylaws require consultation and simple majority approval. Acquisition/holding/encumbrance/conveyance of real or personal property in the association’s name generally requires consultation and simple majority approval, with an exception for personal property not exceeding 10% of association cash holdings for normal operations.
Under Section 13, removal is through a signed petition of a simple majority of members in good standing, subject to verification/validation by the HLURB. If a majority of the board is removed, it is treated as dissolution of the entire board (Section 14). Under Section 14, dissolution of the board requires petition of two-thirds of members, verified/validated by HLURB, after which HLURB conducts an election and may appoint an interim board not eligible to run.
Bylaws must include, among others: rights/duties of members; circumstances for membership loss/acquisition; meeting schedules/venue/manner, quorum, and proxies; board qualifications/powers/terms and election/removal procedures; officers’ qualifications and terms; powers and delegation; grounds/procedure for removal and dissolution; rules limiting/broadening/denying voting rights; election and grievance/audit committees; and conciliation/mediation mechanisms for amicable dispute settlement.
Members may vote in person or by proxy. Proxies must be in writing, signed, and filed before the scheduled meeting with the secretary. Unless otherwise provided, a proxy is valid only for that meeting, and it cannot be valid for more than three (3) years at any one time unless earlier revoked.
Associations must keep sufficiently detailed financial and other records; keep funds in accounts in the association’s name; make records involving association affairs available for examination by owners and mortgage holders (subject to consent); prepare an annual financial statement within 90 days from end of the accounting period by an auditor/treasurer/independent CPA, posted in conspicuous places and submitted to HLURB.
Associations must complement and support LGUs and help implement local policies/programs/ordinances. They are encouraged to cooperate, and where LGUs lack resources, associations may tap means to provide basic services. Association dues and income derived from rentals of facilities are tax-exempt, provided such income/dues are used for cleanliness, safety, security, and other basic services, including maintenance of subdivision facilities.
It prohibits acts such as compelling homeowners to join the association without basis; depriving homeowners of basic community services where dues/fees are paid; preventing paid homeowners from inspecting books/records; preventing members in good standing from participating in meetings/elections/referenda; denying due process in imposing sanctions; exercising certain powers without required consultation/approval; unreasonably failing to provide basic services; and failing to comply with record requirements.
Violators intentionally or by gross negligence face a fine of not less than Php5,000 nor more than Php50,000 and permanent disqualification from being elected/appointed as board member/officer/employee, without prejudice to criminal/civil liability under other laws. If the violation is committed by the association, members/officers/directors/trustees who actually participated, authorized, or ratified are liable; if committed by employees/agents in gross violation, the officers/directors/trustees or incorporators may be jointly and severally liable with the offending employees/agents/association.