THE REALTTORNEY

Insights of a Real Estate Attorney

Is Membership in a Homeowners’ Association Voluntary?

Posted by Atty. Jojo on March 13, 2010

OG emailed me a very interesting question on my birthday last Wednesday. She asked whether membership in a HOA is still voluntary under RA 9904?

Apparently, like most people living in a gated community (village or subdivision) that is not well maintained and poorly managed, OG does not know where her monthly dues are being spent. She has great mistrust towards the members of the Board of Directors. And if she can have it her way, then she does not want to be a part of the HOA and just pay for the benefit she shares with the HOA, like the operation of street lights. In her opinion, their “subdivision is far from looking like a private subdivision and [she] believe that basic needs like street lights, road improvement, garbage collection must be shouldered by the barangay

OG points out that Section 5 of HLURB Resolution No. 770, Series of 2004 (Framework for Governance of Homeowners Association) provides the following:

“Sec. 5. Nature of Membership. – Membership in an Association should be voluntary unless –
a. the same is required under the deed restrictions annotated on the title of the property;
b. is stipulated under the contract for the purchase of a lot in the subdivision project; or
c. is a requirement for an award under a Community Mortgage Program project or similar tenurial arrangement.”

Does the passage of RA 9904 change the nature of the membership in HOAs as indicated in the above-quoted Board Resolution of the HLURB?

To answer this query, we should first look at the basic law that protects the rights of buyers in a subdivision project – Presidential Decree No. 957, otherwise known as “The Subdivision and Condominium Buyers’ Protective Decree.” Section 30 of P.D. 957 introduced us to the concept of “homeowners’ association.” It provides the following:

“Sec. 30. Organization of Homeowners Association. – The owner or developer of a subdivision project or condominium project shall initiate the organization of a homeowners association among the buyers and residents of the projects for the purpose of promoting and protecting their mutual interest and assist in their community development.”

Notice the use of the word “shall”. This connotes that the developer of a subdivision project is mandated by law to initiate the formation of a homeowners’ association from “among the buyers and residents of the projects for the purpose of promoting and protecting their mutual interest and assist in their community development.” Note, not only are the lot (or house and lot) buyers to be organized but also RESIDENTS OF THE PROJECT as well. This is why, under certain conditions, lessees are allowed to become members of the HOA. (See Section 6 [Qualification of Member] of RA 9904; and Section 4 of Resolution No. 770, Series of 2004)

Pursuant to Sec. 30, PD 957, it is very typically for developers to include in their contracts of sale a provision which stipulates that the buyer in a subdivision project automatically becomes a member of the homeowners’ association of the particular subdivision project. Or, the developer places such condition in the deed restriction annotated to the title of the property.

It must be emphasized that under Section 6 of RA 9904 “a homeowner…shall be qualified to be a member of an association.” All homeowners must first be qualified to become a member of the HOA. However, the presence of contract stipulation or provision in the deed restriction annotated to the title becomes the automatic qualification of the lot buyer to the HOA.

What does this all mean? Membership in a HOA is still voluntary under RA 9904 with certain exceptions, which are enumerated in Section 5 of HLURB Resolution No. 770, Series of 2004. Remember that membership in organizations or associations will forever be voluntary in nature by reason of the basic constitutional right to freedom of association enshrined in Section 8, Article III of the 1987 Constitution. But, the best evidence we have that memberships in a HOA is voluntary can be found in Section 22(a) of RA 9904. The law makes it unlawful for any person to compel a homeowner to join the association, without prejudice to the exceptions indicated in the said provision.

Now, what is interesting is that the exceptions mentioned in Resolution No. 770 does not really force an individual to maintain his/her membership in the HOA. Once you have been qualified to become a member then you may opt out as a member, just like what OG wants to do in her case. The next question is can OG opt out as a member of her HOA without fear of being denied the basic community services and facilities? YES, of course she can opt out as a member of her HOA similar to a person who can stop being a member of a labor union. But, unlike a non-union member who becomes “unprotected” and is denied certain benefits, a homeowner is assured his/her “right to enjoy the basic community services and facilities, provided that he/she pays the necessary fees and other pertinent charges.” (Section 5, RA 9904)

Section 5 assures all homeowners – both members and non-members – that they will not be denied the use and enjoyment of basic community services (like security, garbage collection and water service) and facilities (parks, playgrounds and other community facilities inside the subdivision) PROVIDED that they will pay the fees and charges determined by the HOA’s Board of Directors.

In Section 5 (c) of HLURB Resolution No. R-771, Series of 2004 (Rules on the Registration and Supervision of Homeowners Association) the powers and attribute of the HOA are those stated in its by-laws which include the following:

“(c) To impose and collect reasonable fees on members and non-member residents who avail of or benefit from the facilities and services of the associaiton, to defray the necessary operational expenses, subject to the limitations and conditions imposed under the law, regulations of the Board and the association by-laws;” (underscoring mine for emphasis)

So it is quite clear that the HLURB allows for the presences of non-member residents in a subdivision’s HOA. But, in my experience the fees and charges collected by the HOA are levied on both members and non-members alike. If ever there will be a dichotomy of fees and charges to be collected then I would suppose that the members will have lower and discounted rates vis-a-vis with the fees and charges imposed on non-members. This is but natural in order to encourage membership in the HOA and to show that there are extra benefits when one is a member.

Without the IRR in place then there is still no clear cut guideline on what has been discussed above, especially opting out of the membership of a HOA. As far as I know, there are no existing guidelines issued by the HLURB that tackles this matter. But, it is safe to say that the nature of the membership will always be voluntary. Because to be otherwise would violate the Bill of Rights, as mentioned earlier.

Hence, if you are disgusted and totally dissatisfied with the officials of your HOA then you have the choice to become disassociated or opt out of the membership. Or, you could become involve and try to make right the things that are being done wrong by the current officials of the HOA.

We must recall that HOAs are mandated to be formed for the purpose of promoting and protecting their mutual interest and assist in their community development. The same theme is embodied in the Declaration of Policy (Section 2) of RA 9904. No man is an island. Therefore, it is best to be involved in community affairs. Do your part, however, small or minute it may be to improve your community.

If our first choice when faced with adversity, poor governance, and mismanagement is to opt out of our membership in a HOA, then what does it say about our choice when it comes to our country?

Think about it…

Next time, we will discuss the concept of “ratification” as used in corporations and specifically, by the Board of Directors of a HOA.

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23 Responses to “Is Membership in a Homeowners’ Association Voluntary?”

  1. Robert said

    No it is not voluntary – the only way to avoid it is to not buy in an HOA.

    I moved into an HOA almost 3 years ago – after I thought I had checked things out thoroughly. Boy, was I wrong.

    I’ve developed an informational website to help others check out benefits, issues and potential problems before they buy. I hope everyone that sees this comment will visit it: http://www.CeresGleannLife.info .

    Thanks and good luck with your HOA experience,

    Robert

  2. Mike said

    Hi Atty Jojo,

    Provided there is a way to opt our of the membership in a HOA as enshrined in the constitution which I totally agree, how can then we access our properties considering that these gated communities have guards? Can they prevent us from our basic right to ingress and egress? How about the delivery of construction materials?

    Thanks,

    Mike

  3. Dear Atty,

    It was just an accident that i came across with your comment regarding the issue on “voluntary membership” with HOA. I am presently the President of Sto Nino Homeowners’ Association, Phase 3 B located in Perez, Meycauayan, Bulacan. Our dilemma here now is our Barangay hall was constructed inside our subdivision without any general assembly or consultation with the homeowners. Since then, our subdivision becomes worst in terms of cleanliness, orderliness and safety and peacefulness because they allowed the operation of sidecar association inside our subdivision where they receive daily profit; they gave permit for the construction of wet market inside our subdivision and establishments of any type of business in our major road that’s why where on earth can you find a subdivision which is congested and with traffic that cause stress to all the homeowners. They operate business now inside our subdivision by collecting taxes from all these establishments without any benefit to the homeowners and our subdivision facilities like roads and the like.My question is, is it legal for a barangay hall to be constructed inside our subdivision; to collect taxes and fees from the establishments and to allow the construction of wet market inside our subdivision and even allowing vendors in our sidewalks? Your comments on these queries will be greatly appreciated so we the homeowners’ association of different phases in our subdivision can make a legal move against this barangay officials who benefits from all these businesses.

  4. Apolonio Calibod said

    I am also confused because RA 9904 was passed after publication of HLURB Resolution 770. There been an ongoing dispute among our board members about HLUEB Resolution 770 section Article IV section 21 which basically states that proxies are not allowed at board meetings. Likewise, there is nothing in our by-laws giving the board such authority. Now there are board members stating that RA 9904 supersedes HLURB Resolution 770 and since the Magna Carta does not prohibit board meeting proxies, they can now allow them. This seems absurd since the proxies are always verbal or by text message, and a few members sometimes use the proxies to run the entire association. Can you help us clarify the situation?

  5. Bert Ungab said

    Sect. 28 of RA 9904 requires that HLURB shall formulate and promulgate the Implementing Rules and Regulations to implement the provisions of this ACT within six (6) months of its effectivity. RA 9904 was approved and signed into Law by PGMA on January 07, 2010, hence the APPROVED IRR should have already been available by this time, which we urgently need for our proper guidance as we are currently facing disputes with the Board of Directors of our association.

    What we have found on the web is only a DRAFT of the IRR.

    We would be grateful if you can provide us the APPROVED IRR.

    Thank you and best regards.

  6. maya said

    Atty Jo,

    I was brought to your page when I was searching about the powers, roles and functions of HOA. I live in a subdivision in Pasig called Somerset Place – developed by Duraville. see -http://duraville.com/projects.do?category_id=2615 In the advertisements and when we bought the properties, we were told that first few lots near Gate 1 are assigned as commercial lots – see subdivision plan – http://www.pinoyrealty.com/somerset.htm

    Last year, the Developers proposed to already organize an HOA but homeowners resisted because many of the amenities (especially the open spaces and gardens) including commercial amenities have not been completed. Developer also collected fees for Metering (Meralco and Manila/Maynilad Water). Up to now, all residents do not have Manila Water meters but submeters. Meralco meters also took so long a time. In my case, 10 months. Some residents are already 3 years over. I paid total 28K for Meralco and Maynilad/Manila Water connection to developer.

    Last month homeowners found out that the lots assigned as commercial space are being taken over by another developer which will develop 3 5-storey residential/commercial buildings – http://www.portobellomansion.com/.
    We worry about – security, water distribution, parking and traffic congestion and overall lowered investment value. (our properties have value of over 3M na and this new development will sell units at 900K). There will be 122 residential units in Portobello plus 15 commercial units..

    I was reading and saw whether provisions of PD 957 (sections 19, 22 and 27) are applicable.

    What is your take in this? Thanks

  7. cir sia said

    What are the requirements in order that a subdivision be turnover to municipal government? What are the advantages and disadvantages?

  8. dbantilan2000@yahoo.com said

    Dear Atty Jojo;
    What remedies if there’s any for HOA to compel those delinguent members to pay their dues and other special assessments.

  9. Peping said

    Dear Atty Jojo;

    Is the HOA of a subdivision already turned over to the city government still required to register under the HLRUB pursuant to RA 9904?

    If the HOA is not registered ( officials duly elected by homeowners), can it legally assert authority over homeowners and non homeowners alike in the subdivision?

    • attyjojo said

      Hi Peping,

      First of all, the HOA of a subdivision is not the one that is turned over to the LGU. The roads and open spaces are the ones that are turned over to the LGU. Having said this, RA 9904 requires all HOAs to be registered with the HLURB. Thus, if the HOA is not registered then it has no powers to assert any authority over he members of the HOA in the subdivision project.

      Best wishes to you,

      Atty. Jojo

  10. E. Holl said

    Is RA 9904 published and thus law?

  11. glenda said

    Dear Atty Jo,
    I am thankful that i came accross with your article as to whether the HOA membership is voluntary or not. I have been facing problems with our community in forcing us to join their HOA which we refused to for various reasons. Nothing is shown to us that their Association is registered thru the HLURB. our community is so small but no improvements have been made, no garbage collector, roads not asphalted, no provisions of water, etc. No its very clear to me what they are doing is merely monkey business and harassments to home owners.

    More power to you and please continue to enlighten us with the aspects of legality.

    Kind regards,
    Glenda

  12. I have a lot in Better Living, Paranaque. Now, I want to build a home. But the HOA says that I can not build a home if I do not pay the association fee. They say I have to pay the ff: a) the monthly dues for my lot even if I have never visited it for several years, and that they only approved this HOA law recently, b) a fee/ permit for me to be able to build a home. Are these legal. Why should I pay for HOA fees if I have not yet even begin constructing my home?

  13. noel pe said

    atty jojo,
    RA9904 protects HOA and that all open spaces are for the common use and enjoyment of homeowners. However, laws enacted prior to RA9904 states that roads and open spaces shall be turned-over to LGU.
    our subd was turned-over early 1990′s and based on record, open spaces were given to HOA as per deed of donation. Now LGU is trying to abuse their power by constructing a public school inside our private subd which we believe an intrusion to our privacy. What law shall apply and what would be the remedy of HOA on this matter? Has LGU the power to forcefully by using its power and influence construct public school on our small area of open space?

  14. Ann Olar said

    para saan po ba ang home loans?kailangan po ba naming sumali sa ganyan o kung gus2 namin?thanks po

  15. Ovette said

    Good pm Atty. Jojo.

    As elected officers of our homeowners association (HOA), do we have the right to stop the ongoing renovation of a unit owner who allows his architect/contractor to alter the structural facade and the two (2)-story townhouse into a two (2)-story with roof deck, becoming its 3rd floor, without the permission of the HLURB and the consent of the HOA?

    The majority of the members of our HOA, due to non-action to our pleadings by the unit owner to revert back its construction alteration to the original two (2)-story design after 2 general meetings with the unit owner and 2 letters from the HOA president signed by the majority, fears that if such would not be stopped, then the HOA could no longer stop other unit owners to do the same, altering also their facade and constructing even 4th and 5th floors as they like, while others cannot; thus, the devaluation/depreciation of our townhouses.

    This may also have a negative implication in our HLURB case with the developer since the subdivision and its amenities have not been properly turned over yet to the HOA.

    Can we not compel the contractor to stop the work by not letting his workers enter the subdivision, more so the delivery of their materials, in the absence of a written court order from the duly constituted authorities like the city government or the HLURB, due to the fact that the unit owner owns the property and is therefore entitled to exercise his right to improve it to his own liking and satisfaction? The contractor proceeded with the construction without coordinating with the HOA and without getting a work permit. The contractor is invoking the provisions of PD No. 1096 or the National Building Code that because the city building official has issued them a building permit, that alone is enough requirement for them to push thru with the construction and that the plans may not be subjected to evaluation and approval by the HOA.

    We are opting to file a complaint against the unit owner and its contractor with the HLURB on the following grounds:

    (1) Section 22 of PD 957 which states that: “No owner or developer shall change or alter the roads, open spaces, infrastructures, facilities for public use and/or other form of subdivision development as contained in the approved subdivision plan and/or represented in its advertisements, w/o the permission of the Authority and the written conformity or consent of the duly organized homeowners’ association…”; and

    (2) Section 49(j) of RA No. 9904 on the rights and powers of the association which states that an association shall….”cause compliance with regard to height regulations, easements, use of homes, buildings, edifices or structures that may be built within the subdivision, in accordance with the National Building Code, zoning laws, HLURB rules and regulations, existing local ordinances, and existing deeds of restriction”.

    Given the above situation, are our grounds enough for us to get the HLURB decision in our favor with our prayer of asking for an urgent cease and desist order to the ongoing construction?

    Thank you for your important inputs and advices to us regarding this problem. May we hear from you soon. Thank you so much.

    Ovette

  16. kristine said

    Atty Jojo,

    our subdivision imposed a law of no move out if homeowners association fees are unpaid. we are only tenants, we don’t pay our dues for some reasons.are tenants obliged and can be obliged to pay for the dues? isn’t this the responsibility of the landlords?

    thanks

  17. Hi Atty,

    We just recently moved-in to a new subdivision in Pasig. We would like to form a HOA, how many residents living in the subdivision needed to form a HOA?

    Maraming Salamat Po.

    Choy

  18. TAS said

    hi there Atty.Jojo.
    Kudos and gratitude to you for your very informative articles. This is indeed a helpful tool for us to decipher the pros and cons in the HOA. May I know also the roles of the developer? You know, our developer is itching to turnover the village to the HOA. We, the villagers, are not inclined to entertain such proposal because we have observed a lot of problems in the village which we believe that developer is obligated to rectify it prior to turnover, such as drainage problem, undeveloped common parks, water clarity (recurring distastefull flavors and discoloration). cracks on the roads, etc.

    Please assist us on this.

    Many thanks and more power!

  19. Atty Jojo,

    Thank you for your clarification. Further to my email( our subd. is 51 years old). Section 5( I pasted the said paragraph as follows)

    “Section 5 assures all homeowners – both members and non-members – that they will not be denied the use and enjoyment of basic community services (like security, garbage collection and water service) and facilities (parks, playgrounds and other community facilities inside the subdivision) PROVIDED that they will pay the fees and charges determined by the HOA’s Board of Directors.”

    We in the Board of Trustees have no problem with those who will opt not to become members. We are assessing the same dues to members and “non-members”( although nobody yet in our big-1500 plus residents, indicated their choice of becoming non-members).

    Our provided is the phrase- PROVIDED that they will pay the fees and charges determined by the HOA’s Board of Directors”– What do we do with those who have been provided the basic needs like street lighting, garbage collection, water connection by Manila Water, security( still wanting because our subdivision sa many entry and exit points, albeit illegal, which we are addressing by closing them to the chgrin of those non residents who want access to our subdivision to do business with us and also to ROB some of our residents?

    Can we file a Collective case against those who do not pay?

    We are in a quandary on what to do.

    Please advise.

    Also, I have been tasked to formulate methods on how to collect or grant amnesty (selective) to those who are really not able to pay the dues. Will our granting of amnesty legal? How do I go about it? Will I ask those people to apply and prove that they really are not in a position to pay. OR WILL I APPLY THE DUES TO ALL AND ENCUMBER the titles via a collective case( as advised by other lawyers)

    Thanks for your time

  20. apuranollie said

    Sir, I need to present this lengthy mail to discuss about the homeowners association. To begin with, as provided in P.D.957, appearing therein “the owner or developer shall initiate…. to form a homeowner association”. The owner/developer on December 9, 2012 called a meeting wherein only 46 (though it was lesser than 39) had attended out of 120 homeowners actually residing inside the subdivision.hence the number have not met the required number of “simple majority”. There was no notices served to some homeowners that includes me. I was able to produce a copy of that notice, printed therein an agenda about Security and Garbage. None about “initiators”. Likewise, the meeting could not have proceeded by reason there was no quorum, but since the meeting was supervised and controlled by owner/developer the meeting continued. The owner/developer appointed 20 “initiators”, wherein I didn’t know what was the meaning and function of “initiators”. On December 16, 2012, another meeting for initiators was called, out of those 20 initiators, only 10 appeared. Funny thing was, through the insistence of the owner/developer, alleged election was held, elected among themselves, 10 of them, officers of the association. Clearly, without the participation of homeowners. To bluntly say this, the alleged elected President was a puppet president subservient to the Owner/developer. The alleged Vice-President was the son of the General Manager of the Owner/developer. Meaning, the alleged election was a sarsuela. What is so annoying was when I attended lately a December 29, 2012 meeting, presenting my views but seemingly some of the officials got agitated that they resorted to personal attacks. To say it again, the last meeting also failed to comply “simple majority”, but the notices state that it was a Christmas Party, in truth and in fact,they decided among themselves an amount of P200.00 as monthly dues. The majority who failed and refused to attend did not know all about the decision of the alleged officers.
    Here now are my question:
    1. Am I obligated to pay the monthly dues? It was contrary to P.D.957, Sec. 27… which states, only by a properly organized association and only with the approval of the majority of homeowners. .
    2. Even if the alleged association was illegitimate, can the officers impose rules and regulations?, for example, the subdivision is a gated subdivision. While I am out, the gate are closed, indirect harassment or inconvenience are applied on me to refuse entry by reason I am not a member of the association. Similar case was decided by the Supreme Court, 3rd Division, under G.R. No. 141961, entitled Sta. Clara Homeowners Association as petitioners versus Spouses Victor and Lydia Gaston.
    3. But what I am concerned of if I can file a case against this abusive alleged officers without spending too much money? The pressure of filing a case is all about money. I can’t afford filing a case.

  21. This is very informative information since I also don’t want to be part of our Home Owners Association.

  22. Excellent article. I will be going through some of these issues as
    well..

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