BOARD RESOLUTION NO. 877 Series of 2011 IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 9904, OTHERWISE KNOWN AS THE MAGNA CARTA FOR HOMEOWNERS AND HOMEOWNERS ASSOCIATIONS.

BOARD RESOLUTION NO. 877
Series of 2011

IMPLEMENTING RULES AND REGULATIONS OF
REPUBLIC ACT NO. 9904, OTHERWISE KNOWN AS
THE MAGNA CARTA FOR HOMEOWNERS AND
HOMEOWNERS ASSOCIATIONS.

Pursuant to Section 28 of Republic Act No. 9904, otherwise known as
the Magna Carta for Homeowners and Homeowners Associations, the
following Rules and Regulations are hereby promulgated by the Housing and
Land Use Regulatory Board (HLURB).

RULE 1

PRELIMINARY PROVISIONS

Section 1. Title. - This Rules shall be known as the Implementing Rules
and Regulations of RA 9904 (IRR - RA 9904).

Section 2. Declaration of Policy. - Mindful of the Constitutional
principles
directing
the
State to encourage,
promote,
and
respect
nongovernmental, community based, and the people's right to form organizations
and initiate associations in serving their legitimate collective interests in our
participatory democracy, it is the policy of the State:

a. To uphold the rights of the people to form associations;

b. To recognize and promote the rights and the roles of homeowners as
individuals and as members of the society and of homeowners
associations;

c. To make available resources and assistance that will help them fulfill
their roles in serving the needs and interests of their communities; and,

d. To complement the efforts of Local Government Units (LGUs) in
providing vital and basic services to their citizens, and in helping
implement local and national government policies, programs, rules and
ordinances for the development of the nation.

Section 3. Construction. - This Rules shall be construed and interpreted
liberally in order to carry out the objectives and principles of Republic Act No.
9904.

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Section 4. Definition of Terms. - As used in these Implementing Rules
and Regulations, the following terms shall mean:

a. Act refers to Republic Act No. 9904, An Act providing for a Magna
Carta for Homeowners and Homeowners Associations, and for other
purposes

b. Accounting period refers to the fiscal or calendar year adopted by a
homeowners association in the recording and reporting of its fiscal
transactions.

c. Adjudicatory mechanism refers to the procedure in settling disputes
involving the registration of two or more associations established within
the same subdivision/village, community area, or housing project.

d. Approved subdivision plan refers to a plan drawn to scale showing
the divisions of a piece of land intended for subdivision development
delineating its open space and individual lots, bearing the signature of
a licensed professional, and the stamp of approval of the NHA,
HLURB, LGU or any appropriate government agency.

e. Association refers to the homeowners association which is a non-
stock, nonprofit association 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),
organized by -

[1] Owners or purchasers of a lot in a subdivision/village or
other residential real property located within the jurisdiction
of the association;

[2] Awardees, usufructuaries, legal occupants and/or lessees of
a housing unit and/or lot in a government socialized or
economic housing or relocation project and other urban
estates;

[3] Underprivileged and homeless citizens as defined under
existing laws in the process of being accredited as
usufructuaries or awardees of ownership rights under the
Community Mortgage Program (CMP), Land Tenure
Assistance Program (LTAP) and other similar programs in
relation to a socialized housing project actually being
implemented by the national government or the LGU.

f. Association Member refers to a homeowner who is a member of the
association where the housing unit or lot is situated and those defined
in the articles of association and by-laws of the association

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g. Basic community services and facilities refer to services and
facilities that redound to the benefit of all homeowners and from which,
by reason of practicality, no homeowner may be excluded such as, but
not limited to: security; street and vicinity lights; maintenance, repairs
and cleaning of streets; garbage collection and disposal; and other
similar services and facilities.

h. Board refers to the board of directors or trustees of the association
which has primary authority to manage the affairs of the association.

i. By-laws refer to rules of action adopted by the association for its
internal government and for the government of its members and those
having the direction, management and control of its affairs in their
relation to the association and as among themselves.

j. Community Mortgage Program (CMP) refers to a mortgage housing
program of the Social Housing Finance Corporation (SHFC) which
assists legally organized associations of underprivileged and homeless
citizens to purchase and develop a tract of land under the concept of
community ownership.

k. Common areas refer to property owned or otherwise maintained,
repaired or administered in whole or in part by the association
including, but not limited to, roads, parks, playgrounds and open
spaces as provided in Presidential Decree No. 1216.

l. Common expense refers to costs incurred by the association in the
exercise any of the powers provided for in RA 9904.

m. Confederation refers to an association of federated homeowners
associations.

n. Contiguous area refers to two or more subdivisions or community
housing projects or phases thereof that are physically related or linked
by a shared infrastructure and well-defined adjoining or common
boundaries, whether fully or partially.

o. Subdivision/Village refers to a tract or parcel of land partitioned into
individual lots, with or without improvements thereon, primarily for
residential purposes.

p. Delinquent member or a member not in good standing refers to a
member of the association who has been declared as such for the
grounds and in accordance with the procedures under the by-laws of
the association.

q. Economic housing refers to a type of housing project with lower
interest rates and longer amortization periods provided to moderately
low income families as defined under existing laws, rules and
regulations.

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r. 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 qualifications
of candidates, including the proclamation of winners, to the office of
director, trustee or other officer directly elected by the members of the
association where the articles of association or by-laws so provide.

s. Federation refers to an organization of homeowners associations
created and registered to pursue common goals beneficial to the
interests of the constituent associations and members thereof.

t. Governing document refers to the articles of association, by-laws,
conditions, rules and regulations of the association, or other written
instrument by which the association has the authority to exercise any
of the powers provided for in RA 9904.

u. HLURB refers to the Housing and Land Use Regulatory Board.

v. Homeowner refers to any of the following:

[1] An owner or purchaser of a lot in a subdivision/village;

[2] An awardee, usufructuary, or legal occupant of a unit, house
and/or lot in a government socialized or economic housing or
relocation project and other urban estates;

[3] An informal settler in the process of being accredited as
beneficiary or awardee of ownership rights under the CMP,
LTAP, and other similar programs.

w. Intra-association dispute refers to a controversy which arises out of
the relations between and among members of the association;
between any or all of them and the association of which they are
members; and between such association and the State insofar as it
concerns their individual franchise or right to exist. It refers also to a
controversy which is intrinsically connected with the regulation of
associations or dealing with the internal affairs of such entity.

x. Inter-association dispute refers to a controversy which arises out of
the relations between and among two or more associations.

y. Lessee refers to a person renting a residential unit in a subdivision/
village. For purposes of CMP or similar government social housing
projects, the term shall refer to a beneficiary as referred to under
Section 6 of RA 9904.

z. Simple majority refers to fifty percent (50%) plus one (1) of the total
number of association members or those present in the meeting
constituting a quorum.

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aa. Socialized housing refers to housing programs and projects covering
houses and lots or home lots only undertaken by the government or
the private sector for the underprivileged and homeless citizens which
shall include sites and services development, long-term financing,
liberalized terms on interest payments, and other benefits in
accordance with the provisions of Republic Act No. 7279, otherwise
known as the Urban Development and Housing Act of 1992 (UDHA).

bb. Subdivision/Village refers to a tract or parcel of land partitioned into
individual lots, with or without improvements thereon, primarily for
residential purposes.

cc. Usufructuary refers to a person who has been given the right to enjoy
the property of another with the obligation of preserving its form and
substance.


RULE 2

HOMEOWNERSHIP

Section 5. Commencement of Homeownership. - Homeownership
begins:

a. By owning a lot in a subdivision/village;

b. By purchasing a lot in a subdivision/village;

c. By being awarded, or by being a usufructuary, or by legally occupying,
a unit, house, and/or lot in a government socialized or economic
housing or relocation project and other urban estates; and

d. By being listed as a prospective beneficiary or awardee of ownership
rights under the Community Mortgage Program, Land Tenurial
Assistance Program, and other similar programs.

Section 6. Termination of Homeownership. - Homeownership ends by:

a. Terminating ownership through conveyance of the property by sale,
assignment or donation; or

b. Any other legal transfer of ownership, which shall automatically
authorize the association to deny homeowner rights to the transferee
under this section.

Section 7. Rights of Every Homeowner. - Every homeowner has the
right to enjoy the basic community services and facilities provided that the
homeowner pays the necessary fees and other pertinent charges.

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Section 8. Duties and Responsibilities of Homeowners. - Every
homeowner must pay the necessary fees, charges pertaining to basic community
services, and other special assessments such as but not limited to construction
bond and stickers.

RULE 3

MEMBERSHIP IN THE ASSOCIATION

Section 9. Membership. - Unless otherwise provided in the Contract to
Sell, Deed of Sale, or other instruments of conveyance, or annotated in the title of
the property, membership in the association is optional.

Section 10. Qualifications of a Member. - Every homeowner shall be
qualified to be a member of the association.

A lessee of a member under a contract with a term of at least one (1) year
may qualify to be a member and shall have the rights of a member upon
procurement of a written consent/authorization from the owner of the lot/housing
unit. Until the written consent or authorization is revoked in writing, the owner of
the lot/housing unit is deemed to have waived the rights of an association
member except the right to inspect association books and records.

A lessee of a homeowner under a contract with a term of at least one (1)
year may qualify to be a member and shall have the rights of a member upon
complying with the requirements of membership under the by-laws and the law.

Section 11. Rights of a Member. - A member in good standing shall have
the right to -

a. Avail of and enjoy all basic community services and the use of
common areas and facilities;

b. Inspect association books and records during office hours and to be
provided upon request with annual reports, including financial
statements;

c. Participate, vote and be eligible for any elective or appointive office of
the association subject to the qualifications as provided for in the by-
laws;

d. Demand and promptly receive deposits required by the association as
soon as the condition for the deposit has been complied with or the
period has expired;

e. Participate in association meetings, elections and referenda, as long
as bona fide membership subsists; and,

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f. To enjoy all other rights as may be provided in the by-laws of the
association.

Section 12. Duties of a Member. - A member shall have the following
duties:

a. To pay membership fees, dues and special assessments;

b. To attend meetings of the association; and,

c. To support and participate in projects and activities of the association.

Section 13. Delinquent Member. - Unless otherwise provided in the by-
laws, a member who has failed to pay three (3) cumulative monthly dues or
membership fees, or other charges/assessment despite demands by the
association, or has repeatedly violated the association's by-laws and/or declared
policies, may be declared delinquent by the Board of Directors in accordance with
the procedure in the succeeding section.

Section 14. Procedure in Declaring a Member Delinquent. - The Board
or a committee assigned by the Board shall observe the following procedure in
declaring a member delinquent or not in good standing:

a. The Board or the committee shall determine whether a member [1]
failed to pay at least three (3) cumulative monthly dues, fees or other
charges based on the report of the treasurer or as reflected in the
association's financial records, or [2] repeatedly or grossly violated the
by-laws or policies of the association as reflected in the book of
records of the association;

b. The President or the designated officer of the association shall
forthwith notify the said member in writing of the violation and require
him to explain in writing, within fifteen (15) days from receipt of notice,
why he should not be declared delinquent.

c. After the lapse of fifteen (15) days, with or without a written
explanation, the President or the designated officer shall submit the
matter to the Board or committee for hearing and deliberation.

d. Thereafter, the member may be declared delinquent by majority vote of
all members of the Board.

Section 15. Sanctions for a Delinquent Member. - The rights and
privileges of a member as provided in Section 10 is suspended upon the
declaration of delinquency by the Board.

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Section 16. Reinstatement of a Delinquent Member. - The Board shall,
by majority vote of all members, reinstate the membership of the delinquent
member, provided that unpaid dues, fees or charges are paid or the sanctions
imposed are satisfied.

Nothing in this Rules shall prevent the association from imposing other
sanctions against the delinquent member in accordance with the by-laws.

RULE 4

ARTICLES OF ASSOCIATION AND BY-LAWS

Section 17. Contents of the Articles of Association. - The Articles of
Association shall substantially contain the following matters:

a. Full association name;

b. Specific purpose or purposes for association. Where the association
has more than one stated purpose, the articles of association shall
state the primary and secondary purposes;

c. Complete office address;

d. Term of existence of the association not exceeding fifty (50) years;

e. Names, nationalities and residences of the incorporators;

f. Number of directors or trustees, which shall not be less than five (5)
nor more than fifteen (15) directors or trustees;

g. Names, nationalities and residences of persons who shall act as
directors or trustees until the first regular directors or trustees are duly
elected and qualified;

h. Amount of capital, if any, and names, nationalities and residences of
the incorporators as well as the amount of contributions by each; and,

i. Such other matters not inconsistent with law and which the
incorporators may deem necessary and convenient.

Section 18. Contents of the By-laws. - The by-laws of an association
shall be adopted by a simple majority of all the members of the association
regardless of standing. It shall provide for the following:

a. The rights, duties, and obligations of members;

b. The circumstances under which membership is acquired, maintained,
and lost;

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c. The schedule, venue, and manner of conducting the regular, special,
and emergency meetings of the general membership, the required
quorum, and allowable proxies in such meetings;

d. The number, qualifications, powers and duties, terms of office, manner
of electing and removing the board and the filling of vacancies in the
board: Provided, That the term of office of the members of the board
shall not exceed two (2) years;

e. The qualifications, positions, duties, election or appointment, and
compensation
of
other
officers
and
employees
of
the
association: Provided, That the term of office of the other officers shall
not exceed two (2) years: Provided, further, That no officer of the
association holding a rank of director or trustee shall be entitled to any
compensation;

f. The schedule, venue, and manner of conducting the regular, special,
and emergency meetings of the board, the required quorum, and
allowable proxies in such meetings;

g. Such powers that the board may delegate to a managing agent, if any,
or to other persons;

h. The officer/s authorized to prepare, execute, certify and record
amendments to the governing documents on behalf of the association;

i. The grounds and procedure for removal of director or trustee, and the
manner of filling up vacancies in the board, consistent with Section 13
of RA No. 9904;

j. The grounds and procedure for dissolution of the board, and the
manner of reconstituting the board, consistent with Sections 13 and 14
of RA No. 9904

k. The actions for limiting, broadening or denying the right to vote, and
the extent thereof;

l. The designation of the presiding officer at meetings of directors or
trustees and members;

m. The time for holding the regular election of directors or trustees and the
mode or manner of giving notice thereof;

n. The creation of election, grievance and audit committees, and such
other committees which the association may deem necessary; as well
as a conciliation or mediation mechanism for the amicable settlement
of disputes among members, directors or trustees, officers and
committee members of the association;

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o. The dues, fees, and special assessments to be imposed on a regular
basis, and the manner in which the same may be imposed and/or
increased;

p. The procedure in the adoption, amendment, repeal and abrogation of
the by-laws;

q. The list of acts constituting a violation by its officers and the
corresponding penalties therefore;

r. The penalties for violation of particular provisions of the by-laws; and,

s. Such other matters necessary for the proper or convenient transaction
of its corporate business and affairs.

Section 19. Amendment of Articles of Association and By-laws. - An
association may file with the Regional Office of the HLURB a written application
to amend its articles of association and/or its by-laws.

a. The application to amend the articles of association shall be
accompanied by the following:

[1] The articles as amended indicating the amendment/s;

[2] Notarized certificate of the board of directors or trustees
attesting that the amendment was approved by majority vote
of the board;

[3] Notarized certificate of the secretary of the association
attesting that the amendments were approved by a majority
vote of the members thereof; and,

[4] Minutes of the meetings of the Board and the General
Assembly called for the purpose.

b. The application to amend the by-laws shall be accompanied by -

[1] The original and the amended or new by-laws;

[2] Notarized certificate of the board of directors or trustees
attesting that the amendment of or the new by-laws was
approved by a majority vote of the board;

[3] Notarized certificate of the secretary of the association
attesting that the amendment or new by-laws was approved
by a majority vote of the members thereof; and,

[4] Minutes of the meetings of the Board and the General
Assembly called for the purpose.

c. Issuance of amended certificate of registration.

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