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Perks and woes of membership in homeowners’ associations

"These organizations should be reminded to promote harmony, not discord."

 

Living in a subdivision, village or government socialized housing comes with both benefits and troubles. There are neighbors who disagree with each other, while there are others who blatantly violate the deeds of restriction on such things as the height of the house, color, design, distance from the perimeter, and floor area requirements, among others. There are those who refuse or neglect to pay association dues but nonetheless like to enjoy the common services and facilities like 24-hour security, garbage collection, and use of the clubhouse and sports facilities.

There are also associations which prevent homeowners from inspecting the association books and records. They can also impose excessive fines, charges and sanctions without observing due process. Sometimes, the association fails to provide basic community services and omit the maintenance, repair, replacement, and improvement of facilities.

The homeowners’ association is a non-stock, non-profit corporation registered with the Housing and Land Use Regulatory Board (HLURB), or one previously registered with the Home Insurance Guarantee Corporation (now Home Guaranty Corporation) or the Securities and Exchange Commission (SEC). It is composed of (a) owners or purchasers of a lot in a subdivision/village or other residential real property; or (b) awardees, usufructuaries, legal occupants and/or lessees of a housing unit and/or lot in a government socialized or economic housing (Section 3(b), Chapter I, Republic Act 9904).

The underprivileged and homeless citizens, defined under existing laws as being in the process of accreditation as usufructuaries or awardees of ownership rights under the Community Mortgage Program (CMP), Land Tenure Assistance Program (LTAP) and other similar programs of the national government or the LGU, may also form associations (Section 3(b), Chapter I, Republic Act 9904). This contradicts the notion that only the privileged who live in affluent subdivisions and villages can form a homeowners’ association.

Every association of homeowners shall be required to register with the Housing Land Use Regulatory Board (HLURB). This registration shall serve to grant juridical personality to all such associations that have not previously acquired the same by operation of the General Corporation Law or by any other general law (Section 4, Chapter I, Republic Act 9904). The existence of associations previously registered with the Home Insurance Guarantee Corporation or the SEC shall be respected when they register with the HLURB after the effectivity of the Magna Carta for Homeowners or Homeowners’ Association (Section 4, Chapter I, Republic Act 9904).

The association member has the right to enjoy the basic community services and facilities so long as he or she pays the necessary fees and other pertinent charges (Section 5, Republic Act 9904). The homeowner also has the right to inspect association books; to be provided, upon request, with annual reports, including financial statements; to participate in association meetings, elections and referenda; and to vote and be voted or be appointed to any office in the association (Section 7, Chapter II, Republic Act 9904).

The Board of the association shall have the following duties and responsibilities: (a) to maintain an accounting system, and keep books of accounts, which shall be open for inspection to any homeowner and duly authorized representatives of government agencies; (b) to collect the fees, dues and assessments; (c) to charge reasonable fines for late payments and for violation of the bylaws, and rules and regulations of the association; (d) to propose measures to raise funds and the utilization of such funds; and (e) to undergo a free orientation by the HLURB or any other competent agency deputized by it within thirty (30) days after election or appointment (Section 12, Chapter III, Republic Act 9904).

The association, in behalf of its members may institute, defend and intervene in the litigation and/or administrative proceeding affecting its welfare and the association and the subdivision/village as a whole (Section 10, Chapter III, Republic Act 9904). In case of disputes or controversies arising out of the corporate relation between and among members of the homeowners association, or between any or all of them and the homeowners association of which they are members, the action or suit shall be instituted in the HLURB (Section 2, Rule 1, Revised Rules of Procedure of the HLURB).

Disputes of this nature may include election contests, inspections of books and records of the homeowners association and/or requests to be furnished with the financial statements, dissolutions of the Board of the association, and removals of the trustee or director, non-compliance with association by-laws and regulations, collections of association dues and fees for the use of open spaces. The most controversial dispute, to my mind, is an election contest.

An election contest refers to any controversy or dispute involving title or claim to any elective office in a homeowners association, the validation of proxies, the manner and validity of elections, and the qualification or disqualification of candidates, including the proclamation of winners and assumptions to the office of directors, trustees or other officers elected by the members of a homeowners association where the articles of incorporation or by-laws so provide (Section 75, Rule 20, Revised Rules of Procedure of the HLURB).

While hearing the dispute, the HLURB may create a management committee for the homeowners association to carry out the day-to-day operations of the association until a set of officers is elected. The members of the management committee are considered as agents of the HLURB (Section 53, Rule 16, Revised Rules of Procedure of the HLURB). No application for creation of the management committee shall be granted unless it is established that there is no adequate remedy available and the same is necessary (Section 53, Rule 16, Revised Rules of Procedure of the HLURB).

The grounds for its creation are: (a) to avert dissipation, loss, wastage or destruction of assets or other properties of the association; (b) to prevent paralysis of operations; or (c) when the election has been declared null and void (Section 54, Rule 16, Revised Rules of Procedure of the HLURB). The members of the management committee shall not be subject to any action, claim or demand in connection with acts performed or committed by them in good faith in the exercise of their powers and functions (Section 57, Rule 16, Revised Rules of Procedure of the HLURB)

Disputes may also arise between and among two or more homeowners associations. These are known as inter-association disputes and shall be filed in the HLURB (Section 2, Rule 1, Revised Rules Procedure of the HLURB). Examples are: refusals to allow access to, or passage through subdivision/village roads; or granting of easements, leases, concessions and authority to use common areas (Section 10 (h), Chapter III, Republic Act 9904).

In the HLURB, every action or proceeding must be prosecuted and defended in the name of the real party-in-interest (Section 8, Rule 3, Revised Rules of Procedure of the HLURB). The party may be represented by counsel or a representative. A non-lawyer who represents a party shall attach to the pleading a special power of attorney if he represents an individual, or a board resolution if he represents a corporation (Section 11, Rule 3, Revised Rules of Procedure of the HLURB). A party who is not represented by a counsel shall use the complaint and answer forms appended to the HLURB Rules (Section 12, Rule 3, Revised Rules of Procedure of the HLURB).

Our home is a place to rest and recharge after a hard day’s work. Hence, those who can still selflessly serve in the homeowners’ association as officers, trustees, and directors must be commended. However, there are those who use, abuse and misuse their position of power in the association to oppress and sow seeds of conflict instead of pursuing peace. Homeowners’ associations should be reminded to promote harmony and not discord. 

Topics: Tranquil G.S. Salvador III , homeowners’ associations , Housing and Land Use Regulatory Board , HLURB
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