Law Summary
Definitions
- "Association": Registered HOA or those previously registered under certain agencies, including homeowners, lessees, awardees, occupants, and informal settlers under various housing programs.
- "Board": The collegial body that manages the HOA.
- "Director": A member of the board.
Registration and Legal Personality
- An HOA must register with HLURB to acquire juridical personality.
- Unregistered associations or unincorporated groups are liable personally for their obligations.
General Principles for HOAs
- Serve members through equity, transparency, accountability, and security.
- Establish vision, mission, policies, and objectives.
- Support and cooperate actively with local and national government agencies without partisanship.
Membership Qualifications
- Includes homeowners, lot buyers, mortgagees, lessees (with at least 3-year contracts and owner permission), occupants with usufruct rights, beneficiaries of government housing programs, and developers with unsold lots.
Membership Nature and Rights
- Generally voluntary except when required by deed restrictions, purchase contracts, or government programs.
- Members have rights to vote (in person or by proxy), inspect books, avail services, and other by-law provided rights.
Member Duties and Sanctions
- Pay dues and assessments, attend meetings, participate in activities, and comply with by-laws.
- Delinquent members to be identified through board guidelines and sanctioned with due process.
Board Composition and Duties
- Board size: 5 to 15 elected members; lessees, occupants or developers cannot form majority.
- Duties include preparing activities and budgets, adopting accounting systems, ensuring internal controls, legal compliance, member mobilization, and enforcing by-laws.
- Board may impose fees or bonds for use of association-maintained roads and facilities.
- Engage only in association-related business; avoid domination by individuals or small groups.
- Performance evaluations to be conducted.
Board Meetings
- Regular and special meetings with rules of procedure.
- Majority constitutes quorum; attendance in person required; proxies not allowed.
- Disclosure of number of meetings and attendance in annual report.
General Membership Meetings
- Annually at minimum; written notice with agenda required.
- Special meetings called as needed.
- Majority constitutes quorum; members may vote in person or by proxy.
- Proxies must be written, signed, validated, and limited in validity.
- Voting by mail may be allowed per by-laws.
- Certain key corporate acts require two-thirds vote.
Director Qualifications and Independence
- Directors should bring necessary competencies and be independent of conflicts of interest.
- Lessees, occupants, and developers cannot be majority.
- Disclosure of familial relationships among directors/officers required.
- Briefings provided for directors.
Officers of the Association
- Positions include president, vice-president, secretary, treasurer, auditor; others as needed.
- Clear division of responsibilities to avoid concentration of power.
- Secretary ensures proper procedures and access to directors; removal is board decision.
Special Committees
- Grievance Committee to resolve disputes within association.
- Audit Committee to review accounts and assets; members exclude directors and internal auditors.
- Election Committee oversees elections and resolves contests.
- Committee members drawn from the association members.
- Heads of committee to attend meetings when required; external auditors may assist.
Conflict of Interest
- Board defines conflict situations requiring approval.
- Directors/officers must avoid contracts with the association unless conditions ensuring fairness, proper approval, and disclosure are met.
- Contracts involving directors may be ratified by two-thirds membership vote.
Transparency Measures
- Maintain requisite books and records.
- Publish reports of collections and expenditures.
- Association funds kept in separate accounts.
- Annual reports to include director remuneration.
- Formal nomination procedures.
- Encourage dialogue and disclosure of material information.
Election Procedures
- Annual elections unless by-laws provide otherwise.
- By-laws include election procedures, dates, and frequency.
- Provide referendum, recall, and membership initiatives procedures.
- Candidate information to be disclosed sufficiently.
Conduct and Qualifications of Directors and Officers
- Must act with diligence, loyalty, accountability, fairness, and transparency.
- Must be legal age, member in good standing, resident, and without final conviction for moral turpitude.
- Secretary must be a Filipino citizen.
- By-laws may disqualify candidates to protect association interests.
- Directors and officers to receive orientation and training.
- Compensation limited to reasonable per diems.
- One person cannot hold two offices simultaneously.
- Annual elections mandated; holdover allowed until successors qualified.
- Outgoing officers must turn over all records.
Compliance and Penalties
- Associations must submit by-laws consistent with the Framework for HLURB registration.
- Previously registered associations must comply with Framework rules upon enrollment.
- Non-compliance subject to administrative sanctions.
Separability and Effectivity
- Invalidity of any provision does not affect others.
- Framework effective 15 days after publication.