Code of Ethics for HOA Officers

Legal basis and governance mandate

Section 20(b) of Republic Act No. 9904 mandates the HLURB to formulate and publish a Code of Ethics and Ethical Standards for Board Members, detailing prohibited conflicts of interest.
Republic Act No. 9904 is identified as the “Magna Carta for Homeowners and Homeowners’ Associations.”
HLURB Board Resolution No. R-911, Series of 2013 was promulgated to implement the ethics mandate under Republic Act No. 9904.

Policy, purpose, and binding commitment

The Code is adopted to guide officers/board members in performing duties toward serving the majority interests of the members.
The Code is aimed at achieving governance through proactive, responsive, nonpartisan and immediate basic services delivery.
The Code frames governance in an atmosphere of self-help, volunteerism, rule of law, and transparency in local association affairs.
Officers/board members declare they are bound by the ethical standards and norms during incumbency in office, freely, voluntarily and without reservation.

Coverage and definitions of key terms

Section 23 provides that the Code applies to and covers all homeowners associations pursuant to and within the scope of Republic Act No. 9904.
Section 1 defines “Officers” as members duly elected to executive positions (including Chairman/President, Vice Chairman/Vice President, Business Manager, Secretary and Treasurer) pursuant to the association’s by-laws/internal rules.
Section 2 defines “Board Members” as executive officers duly elected as Board of Directors/Trustees in accordance with the association’s by-laws/internal rules.
Section 3 defines “Conflict of Interests” as a situation where integrity, trustworthiness, or impartiality is potentially undermined, compromised, or impaired by inconsistent or competing personal/professional interests and welfare, or those of family/relatives up to the fourth civil degree of consanguinity or affinity.
Section 4 defines “Perceived Conflict of Interests” as acts tending or likely to cast doubt on integrity, trustworthiness, or impartiality by putting the association’s general interest over and above personal/professional interests and welfare.
Section 5 defines “Disputes Mechanism” as the Grievance Committee that conducts mediation for peaceful settlement of disputes within the association as provided in the by-laws or internal rules.
Section 6 defines “Board” as the board of directors/trustees of the association.
Section 7 defines “HLURB” as the Housing and Land Use Regulatory Board.
Section 8 defines “Internal rules” as circulars, orders, regulations, and resolutions other than the by-laws promulgated by the association’s board.

Ethical standards and required conduct

Section 9.1 (Primacy of the Interests of the Association) requires officers/board members to strive for the association’s common good, foregoing personal/professional interests; decisions and representations must be made with the association’s best interests; sworn duties must avoid conflicts of interest.
Section 9.2 prohibits officers/board members from using or taking advantage of their position, or knowingly allowing another to do so, to advance personal/professional interests and gain; conduct must be above reproach and free of any appearance of impropriety in procurement, board meetings, accounting, and interactions with vendors/contractors/subcontractors/homeowners.
Section 9.3 requires officers/board members to act collectively as a body in discharging sworn duties; unless demanded by the exigency of a situation, a board member must avoid acting and deciding individually to avoid real or perceived conflicts of interest.
Section 10.1 requires written disclosure at the earliest opportunity when an officer/board member encounters or anticipates a conflict of interest arising from transactions, engagements, employment, or hiring by the association involving a personally or professionally related person/entity, or one with whom the officer/board member stands to benefit in any way.
Section 10.2 requires inhibition and withdrawal from participation in negotiation when a conflict exists, except to provide inputs when requested by other board members; it prohibits persuading, endorsing, or influencing other officers/board members to favorably act; it requires abstention from voting on the transaction; abstention and the reasons must be recorded in the minutes of the voting.
Section 10.3 requires disclosure to homeowners and members of dealings in which abstention occurred in accordance with the association’s Articles of Incorporation and/or by-laws procedure.
Section 11 prohibits partisan political activity by using or taking advantage of the association’s position, power, and resources; it prohibits board/association contributions to any political parties or political candidates; it also prohibits use/lease/rental of association properties and facilities for campaigning or giving advantage to any particular political candidate or party.
Section 12.1 requires officers/board members, upon assuming office, to disclose in writing and submit to the board any business enterprise/entity/activity with which they have direct or indirect financial or pecuniary interest.
Section 12.2 prohibits an officer/board member who practices a profession from providing professional services for the association when performance is likely to result in a real or perceived conflict of interests.
Section 13 prohibits officers/board members, including their spouse, agent, employee, immediate family member, and relatives by affinity or consanguinity up to the 4th civil degree, from entering into a personal service contract with the association without previous disclosure of the relationship/interest to the board.
Section 14.1 requires transparency in association business dealings, transactions, and negotiations.
Section 14.2 prohibits using or allowing others to use one’s position to promote/enhance/serve personal/professional interests through direct or indirect recommendation or endorsement of vendors/suppliers/contractors.
Section 15 prohibits accepting, requesting, or soliciting (directly or indirectly) any gift, favor, percentage, commission, loan, or any other thing of monetary value that tends to influence or is made with the intent to influence board decisions or actions on any official matter.
Section 16 requires officers/board members to respect and uphold the association’s constitution, by-laws, and other internal rules.
Section 17 requires regular attendance and active participation in scheduled association meetings; it requires civil decorum and professional courtesy in discussions; it requires respect for majority decisions in policy making and resolutions; and it requires dissent to be expressed professionally and politely.
Section 18.1 requires attendance at information/educational campaigns when invited by a national or local government agency or other non-government organization on matters pertaining to the association and the rights, duties, and obligations of members and officers, and requires “trickle down” of information to members.
Section 18.2 requires informing oneself of public advocacy programs pertaining to or affecting the nation, community, and the association and its officers/members, and encouraging member participation.
Section 19.1 requires cooperation during investigation, censure, discipline, or dismissal of a fellow member/officer.
Section 19.2 requires an officer/board member charged with an offense by the board to voluntarily take an official leave of absence during investigation and until cleared.
Section 19.3 requires that disputes exhaust the association’s disputes mechanism (under the by-laws/internal rules) before filing appropriate action in the proper forum.
Section 20 requires respect, obedience, and submission to lawful order or final judgment of competent authorities and government agencies/instrumentalities in legal controversies involving the homeowners association.
Section 21 establishes a public complaints investigative process that may use either formal written complaints or anonymously through unsigned written complaints.

Complaint investigation and sanctions framework

Section 21.1 requires, upon receipt of a complaint, the Board of Directors to form an investigation committee to make a preliminary determination whether there is sufficient evidence to warrant a finding that the alleged offense was probably committed by the officer or board member accused; committee proceedings are strictly confidential.
Section 21.1 further provides that violation of confidentiality is subject to sanctions and is considered a violation of the conflicts of interest rule.
Section 21.2 requires dismissal of the complaint when the investigation committee finds absence of probable cause; when probable cause exists, the committee refers the matter to the Board of Directors, which informs the accused officer/member, requires the accused to inhibit from the proceedings, and permits proceeding to accept evidence on the charge.
Section 21.3 requires the Board to dismiss the complaint if there is not sufficient evidence to warrant a finding of guilt; if substantial evidence exists, the Board imposes appropriate sanctions against the culpable officer/member.
Section 21.4 requires protection of witnesses’ rights at all stages, including measures to secure their safety and well-being.
Section 22.1 provides that violation of any Code provision constitutes misconduct by the board member/officer; when proven guilty, the responsible board member/officer is sanctioned by the association under its by-laws or internal rules.
Section 22.2 provides a default penalty when by-laws/internal rules are silent on imposable sanctions/penalties: a fine of not less than Five Thousand Pesos (Php5,000.00) but not more than Fifty Thousand Pesos (Php50,000.00), plus permanent disqualification from being elected or appointed as member of the board, officer, or employee of the association; this is without prejudice to disciplinary action that the HLURB may deem appropriate upon a proper complaint filed with HLURB.

Registration requirement, by-laws incorporation, and discipline effect

The Code is promulgated to be effective upon publication in the HLURB website and adoption by homeowners associations.
No application for registration or accreditation with the HLURB is allowed unless the Code is incorporated or appended to the by-laws and made an integral part thereof.
Homeowners associations already registered or accredited must append the Code to their by-laws; failure to do so despite notice causes the suspension of the Certificate of Registration until compliance or revocation if refused.
Section 25 provides that the Code shall be signed by all present and future officers and members of the Board of Directors and is effective immediately upon adoption, binding all officers/board members whether or not they sign, and continuing to bind subsequent officers/board members.
Section 24 provides a separability rule: if the effectivity of any provision is suspended, disapproved, or declared contrary to law, the unaffected provisions remain in force.

Scope and operative incorporation into association governance

Section 23 anchors coverage to homeowners associations within the scope of Republic Act No. 9904, thereby governing officers and board members operating under such associations.
Section 10 makes disclosure, inhibition/withdrawal, abstention, minutes entry, and disclosure to homeowners mandatory for conflict-of-interest transactions.
Section 21 creates a board-led investigative flow for public complaints, with confidentiality and witness protection requirements.
Section 22 establishes misconduct characterization and default sanctions, and it preserves HLURB disciplinary authority via proper complaint.