In accordance with Department Order No. 2021-007 Series of 2021, the Department of Human Settlements and Urban Development issued the 2021 Revised Implementing Rules and Regulations of Republic Act No. 9904, otherwise known as The Magna Carta for Homeowners and Homeowners Associations.
What is a Homeowners’ Association (HOA) in the Philippines?
Section 4, Rule I of the Department Order defines homeowners association (HOA) as a non-stock, non-profit association registered with DHSUD, or one previously registered with HLURB, Home Insurance and Guaranty Corporation (HIGC, now Home Guaranty Corporation or HGC), or Securities and Exchange Commission (SEC), organized by and/or is primarily composed of:
- Owners or purchasers of a lot in a subdivision/ village or other residential real property located within the jurisdiction of the association;
- Awardees, usufructuaries, legal occupants and/or lessees of a housing unit and/or lot in a private, non government or government socialized or economic housing or relocation project and other urban estates;
- Underprivileged and homeless citizens as defined under existing laws who are in the process of being accredited as usufructuaries or awardees of ownership rights under 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; and
- Potential public housing beneficiaries living in contiguous areas, identified and duly accredited or recognized by, or organized with the assistance of the LGU, the Presidential Commission for the Urban Poor (PCUP), or the National Urban Poor Sectoral Council (NUPSC) for the purpose of availing of housing and/or resettlement programs or housing projects being implemented by the said LGU and/or the national government agencies (NGAs), in which case they will be initially authorized to organize a form of homeowners association known as a neighborhood association.
Homeowner, on the other hand, is defined under the same section as any of the following:
- An owner or purchaser of a lot or house and lot, in a subdivision/ village who acquired the same primarily for residential purposes.
- An awardee, usufructuary, or legal occupant of a unit, house and/or lot in a private, non government or government socialized or economic housing or relocation project and other urban estates.
- An informal settler in the process of being accredited as beneficiary or awardee of ownership rights under the CMP, LTAP, and other similar programs.
Composition of the Boards: Section 68
It provides for the composition of the board, wherein “The Board of Trustees or Directors shall be composed of at least five (5) but not more than fifteen (15) elected members of the association. In no case shall lessees constitute a majority of the Board.”
Election of the Member of the Board
Section 88, Rule XIII on Elections states that:
“An association shall hold regular elections on the date or schedule set forth in its Bylaws. The first election under the Bylaws shall be called by the Interim Board within six (6) months from the approval of the bylaws, and the elected trustees or directors shall only serve until the regular election as provided in the bylaws.”
However, only the incumbent Board and/or through the president or vice president are allowed to call the election as provided for in Section 89 thereof on the calling of an election. Failure to do so within thirty (30) days as indicated in fixed date in the bylaws, the following shall be done thereafter:
- Any member in good standing, in writing, may petition the incumbent Board to call an election, copy furnished the Regional Office where the association is registered.
- When the incumbent Board fails to take action thereon, or sits on the request to call an election within one (1) month from the receipt of the petition or letter, the member in good standing shall report the same to the Regional Office.
- The Regional Office shall take action on the report by directing the incumbent Board, under pain of sanction for non-compliance, to call an election and constitute an Election Committee that shall conduct the election within a specified period.
- Failure of the incumbent Board to call an election and/or constitute an Election Committee as above directed shall cause the Regional Office to create an Election Committee from among the association members who do not intend to run for any position. The members of the incumbent Board who refused to call an election shall be disqualified from running for any position.
- The election authorized and recognized by the Regional Office shall be deemed the official conduct of election of the association.
What Will Happen if the Election is Unauthorized?
If the election done was unauthorized as stated in Section 90 of the Department Order, the results shall not be recognized and shall be considered null and void by the DHSUD. Note, that a quorum as provided for in Section 91 of the same, must be had at the elections either by the member or through proxy. Elections shall be postponed or declared as a failure for reasons such as due to serious causes, lack of candidates, no quorum, or other such causes that hinder the election.
Note that within thirty (30) days from the postponement or failure of election, another election shall then be held. If the second call for elections was still not held, a notice of postponement of the regular or special election, and an affidavit of non-holding of election stating the reasons thereof shall be submitted to the Regional Office.
Need further information and assistance regarding New Rules on Homeowners Association (HOA) Election Procedures? Talk to our team at Duran & Duran-Schulze Law in BGC, Metro Manila, Philippines to know more about the requirements and process. Call us today at (+632) 8478 5826 or +63 917 194 0482, or send an email to info@duranschulze.com for more information.
30 Responses
Good day!
1. Which individuals can stand for election?
2. Can a family member run as an officer?
3. If he/she is not permanently residing in the building/Pabahay but is included as a family member? Can he/she be an officer?
4. Is it possible for a previously appointed NHA president, succeeded by a new one through election, to initiate a re-election?
Hi! According Section 69 of the 2024 IRR of R.A. 9904 or the Magna Carta for Homeowners and Homeowners Associations:
“Section 69. Association Officers. Unless otherwise provided in the Bylaws, an association shall have the following executive officers who shall be responsible for the management of the association’s business: president, vice president, secretary, treasurer, and auditor who must all be Filipino citizens. No one shall act as president and secretary, or as president and treasurer at the same time. Non-resident members and lessees are not qualified to be elected or appointed as president and treasurer of the association.
Unless the association officers are directly elected by the members pursuant to its Bylaws, the officers shall be elected by the Board among themselves during the organizational meeting or the first meeting of the Board immediately after the election. The term of office of the officers shall be coterminous with the term of office of the directors or trustees.”
Section 10, on the other hand, defines the qualifications of an association member. In Paragraphs 1 and 2,
“Section 10. Qualifications of a Member. Every homeowner shall be qualified to be a member of the association.
Except for members of associations organized to avail of the benefits of the CMP, LTAP, and government housing and/or resettlement programs or projects, a homeowner may designate any of his/her family member or lessee as his/her representative to apply for membership in the association and act on all matters related thereto; Provided, that the homeowner executes a Special Power of Attorney (SPA) in favor of his/her representative who shall exercise all rights, obligations, and prerogatives of membership, and agree to be bound by the consequences of the representative’s actions and/or omissions; Provided, further, that the representative complies with all the requirements of membership under the Bylaws and the law.”
Finally, under Section 22 (a) and (b),
“Section 22. Bylaws. The Bylaws shall be adopted by a simple majority of the association members regardless of standing. Consistent with the provisions of this Rules, it shall provide for the following:
a. The qualifications, rights, duties, and obligations of members;
B. The circumstances under which membership is acquired, maintained, and lost;”
While this response is provided for informational purposes only and does not constitute legal advice, nor does it create an attorney-client relationship, we strongly encourage you to consult with our lawyers at Duran & Duran-Schulze Law for legal advice tailored to your specific circumstances. Email us at info@duranschulze.com.
Due to the failure of election, an Interim board was duly constituted as well as the EleCom. The EleCom called for the election of the regular Board of Directors which again resulted to a failure of election. Can the Interim Board continue to function as the HOA board? Should the failure of election be reported to DHSUD for its appropriate action? Thank you for your assistance.
Hi Alice! According to the 2024 IRR of R.A. 9904 or the Magna Carta for Homeowners and Homeowners Associations,
“Section 94. Failure of Election. When a regular or special election cannot be held or conducted due to lack of candidates or the number of qualified candidates did not reach a number as to constitute the majority of the entire Board, or for any other serious causes such as holding a free, orderly and honest election is impossible, the Election Committee shall declare a failure of election and shall notify the Regional Office of such declaration within fifteen (15) days from the date of the failed election.
“Section 95. Effect of failure of election. The power and authority of the incumbent Board notwithstanding the declaration of failure of election shall be deemed functus officio by the expiration of their term of office, regardless of whether the failure of election is reported or not. No member of the incumbent Board shall be allowed to exercise any authority in hold-over capacity of whatever nature. Under these circumstances, the Regional Office shall appoint five (5) members in good standing based on the latest list of members on file with the Regional Office to act as the Interim Board until the conduct of a successful election.
Within thirty (30) days from the appointment, the interim Board shall call for an election and conduct a special general assembly for the purpose of electing the members of the Election Committee. The Election Committee shall then conduct an election within sixty (60) days from the date of the special general assembly.”
While circumstances may vary, it is important that you seek a formal legal advice. Our lawyers at Duran & Duran-Schulze Law (“DDS Law”) can be reached via email at info@duranschulze.com. Thank you.
Question – are foreigners allowed to hold the president position on the board of directors for a Homeowners Association in the Philippines?
Hi Dan! Thank you for reaching out. Generally, no. While a foreigner can typically be a member of the Board of Directors (typically based only in proportion to their allowable equity or interest), they are generally prohibited from holding the position of President (or other executive management roles) in a Philippine Homeowners Association (HOA). This restriction arises from a combination of the Anti-Dummy Law and the specific nature of HOAs, which often manage lands (nationalized resources) or public utilities reserved for Filipinos.
If you wish to consult with our lawyers or require further information, please contact us at (02) 8478-5826 (landline) or +63 917 194 0482 (mobile), or email us at info@duranschulze.com.
Creating new HOA by laws and guidelines approved by the interim officers can imposed and declared members in good standing or deliquient member.
Hi Gerald! Thank you for reaching out. May we ask for more details about your inquiry so we can better assist you? If you would like to consult with our legal experts, please feel free to call us at (+632) 8478 5826 or +63 917 194 0482, or email us at info@duranschulze.com.
We recently conducted our HOA election, and I noticed some questionable actions.
1. Elecom head & members were not elected by HOA members but were all appointed by the outgoing HOA execom, and the Elecom were not HOA members. However, outgoing execom called for a general assembly only to announce to the members that Elecom has been selected already and did not specify to the HOA members that they needed to elect Elecom members.
2. As part of the qualifications for any candidate running for the HOA BOD, one must be of good standing and must be updated in paying the HOA monthly dues. But after the election and the protest period had lapsed, it came to light that several newly elected BOD members who were also part of outgoing officials have not paid their respective dues by saying they have made a board resolution exempting all HOA officers from paying the monthly dues since officers have no compensation for the duration of their term. And they deliberately did not disclose that during the assembly, and cannot provide a copy of said board resolution. Is this grounds for disqualification? If so, can we still file for a protest?
3. One of the newly elected officer, also part of the outgoing officials, has tendered a resignation before the election of Elecom, only to give way to the outgoing president, who ranked #16 from the latest election. Can this be allowed?
4. Members of BOD comprised of 7 members from each opposing group and 1 independent total of 15 BODs. Since the opposing groups have an equal number of members, electing the executive committee from Pres to Auditor cannot have a quorum. As a recourse, can the BOD take into consideration the voting ranks they earned during the recent election to identify who will be seated as executive officers?
Hi HOA BOD! Thank you for reaching out. Given the complexity of your inquiry, we highly recommend scheduling a consultation with one of our in-house lawyers for tailored legal advice and assistance. Please feel free to call us at (+632) 8478 5826 or +63 917 194 0482, or email us at info@duranschulze.com.