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Department Circular No. 2 Q2 4 - 0 1 8
Series of 2024

THE 2024 REVISED 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, as amended by Section
5, paragraph IV(a) and Section 25, paragraph (c) of Republic Act No. 11201,
known as the Department of Human Settlements and Urban Development Act,
this 2024 RevisedImplementing Rules and Regulations of Republic Act No.9904
or the "Rules" is hereby promulgated:

Rule I
PRELIMINARY PROVISIONS

Section 1. Title. This shall be known as the 2024 Revised Implementing Rules
and Regulations of Republic Act No. 9904.

Section 2. Declaration of Policy. Cognizant 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 provicling

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.

Section 4. Definition of terms. As used in this Revised Im~enting Rules

and Regulations, the terms hereunder shall mean as follows: \

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 a. Accounting period shall refer to the fiscal or calendar year adopted by an
association in the recording and reporting of its fiscal transactions.

b. Administrative determination shall refer to the procedure through which

DHSUD, in the exercise of regulatory powers, settles and resolves intra-
association disputes between or among members of the association or the
members of the Board; or inter-association disputes involving two {2) or
more associations established within the same subdivision/village, defined
community, or housing project.

c. Approved subdivision plan shall refer to a plan drawn to scale showing the
divisions of a piece of land intended for subdivision development projects,
including off-site Community Mortgage Program (CMP), delineating its
open space and individual lots, bearing the signature of a licensed
professional, and the stamp of approval of the National Housing Authority
(NHA),Housing and Land Use Regulatory Board (HLURB) now Department
of Human Settlements and Urban Development (DHSUD), LGUconcerned
and/or any appropriate government agency.

d. Association shall refer to a homeowners association which is a non-stock,

nonprofit association registered with DHSUD, or one previously registered
with HLURB, Home Insurance and Guaranty Corporation (HIGC), or
Securities and Exchange Commission (SEC), organized by and/ or is
primarily composed of:

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 such urban estates;

3. 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,

4. Potential public housing beneficiaries living in contiguous areas,

identified and duly accredited or recognized by, or organized with the
assistance of the local government unit (LGU), the Presidential
Commission for the Urban Poor (PCUP), DHSUD, and its key shelter
agencies (KSAs) for the purpose of availing of government housing
and/or resettlement programs/projects being implemented by the
said LGU and/ or other national government agencies (NGAs), in
which case they will be initially authorized to organize a form of
homeowners association known as a neighborhood association.

e. Association dues shall refer to the amounts charged to the members on a

regular basis primarily intended to defray the expenses incurred by the
association. '
page:Z o/57
f. Association member shall refer to a homeowner who is a member of the
association where the unit, house and/ or lot is situated and those defined
in the Articles of Incorporation/ Association and Bylaws of the association.

g. Basic community services and facilities shall 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. Beneficial users shall refer to homeowners and residents within the

subdivision/village, who are not members of the association, and to
subdivision owners/ developers who hold a property or properties in the
subdivision not for the purpose of residing therein but as part of their
inventory for the purpose of sale to the public.

i. Beneficial user fees shall refer to the amounts charged to beneficial users
as payment or contribution for the basic community services extended to
them by the association.

j. Board shall refer to the board of directors or trustees of the association

which has primary authority to manage its affairs.

k. Bylaws shall refer to the association's primary rules of governance, the

institution and limitation of powers of its directors or trustees, and officers,
and the establishment of rights and obligations of homeowners and
association members consistent with Republic Act No. 9904 and its
implementing rules and regulations, guidelines, and pertinent provisions
of the Deed of Restrictions.

1. Calendar year shall refer to a consecutive twelve (12)-month period which

begins on the first day of the year and ends on the last day of the year.

m. Certificate of Incorporation shall refer to the document issued by DHSUD

to an association that has completed all the requirements for registration.
The term includes Certificates of Registration/Incorporation previously
issued to an association by HLURB,now DHSUD,as well as those issued
by the SEC and the HIGCprior to the effectivityof Republic Act No. 9904.

n. Common areas shall refer to property owned or otherwise maintained,

repaired, or administered in whole or in part, by the association, LGUor
subdivision owner/developer, as the case may be, including, but not
limited to, roads, parks, playgrounds, and open spaces as provided in
Presidential Decree No. 1216 and its amendments, if any.

o. Common expense shall refer to costs incurred by the association in the

exercise of any of the powers provided in Republic Act No. 9904.

p. Community Mortgage Program (CMP) shall refer to a mortgage financing

program of the Social Housing Finance Corporation (SHFC)which assists
legally organized associations of underprivileged and homeless citizens trf
page3of57
 purchase and develop a tract of land under the concept of community
ownership.

q. CMP off-site project shall refer to a defined comm.unity where the

beneficiaries come from other identified communities.

r. CMP on-site project shall refer to a defined community where the

beneficiaries actually and physically occupy the land they purchased or
intend to purchase.

s. Confederation shall refer to an organization of federated homeowners

associations created and registered to pursue common goals beneficial to
the interests of the constituent associations and the members thereof.

t. Consolidation shall refer to the union of two (2) or more registered

associations in contiguous areas resulting in the termination of their
respective existence for the purpose of the creation of a new association or
the consolidated association.

u. Constituent associations shall refer to registered associations which are

parties to a merger, consolidation or federation.

v. Contiguous area shall refer to two (2) or more subdivisions/villages 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.

w. Delinquent member or member not in good standing shall refer to a member

who has been declared as such after due notice and hearing on the basis
of the grounds and in accordance with the procedures set forth under the
Bylaws and/or existing policies of the association or, in lieu thereof, under
this Rules.

x. Detrimental conduct shall refer to conduct that is contrary or harmful to

the interest of the homeowners; those that breach the trust and confidence
reposed upon the board members and/ or officers; and any other conduct
inimical to the peaceful living of the community.

y. Economic housing shall refer 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.

z. Election contest shall refer to any controversy or dispute involving the

validation of proxies, the manner or process of elections, the qualification
and/ or disqualification of candidates and voters and other election-related
issues or controversies arising prior to the conduct of election.

aa. Election protest shall refer to any controversy or dispute involving title or
claim to any elective office in an association, the validity of elections, and
the proclamation of winners to the office of Director or Trustee, and/ or
other officer directly elected by the association members where the Articles
of Incorporation and/or Bylaws so provide, and other election-relater

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 issues or controversies arising after the proclamation of winning
candidates.

bb. Extraordina,y circumstances shall refer to instances that are not

reasonably foreseeable or beyond the control of the association, such as,
but not limited to, force majeure, disaster, occurrence of an emergency,
pandemic, prohibition on mass gatherings, and other analogous causes of
such a nature that the holding of on-site or face-to-face meetings and/or
voting cannot be conducted.

cc. Federation shall refer to an organization composed of at least two (2) or

more registered homeowners and/or neighborhood associations created
and registered to pursue common goals beneficial to the interests of the
constituent associations and members thereof.

dd. Fiscal Year shall refer to a consecutive period of twelve ( 12) months which
is used for calculating and preparing financial statements for the year. It
may start any day of the year and ends exactly three hundred sixty-five
(365) days later.

ee. General Information Sheet (GIS) shall refer to a document that contains,
among other data, the name of the association, its principal officeaddress,
contact number and officialemail address, if any, the names of its directors
or trustees, its officers and their positions, and their respective addresses,
duly submitted to the DHSUD or its predecessors as part of the annual
reportorial requirements.

ff. Governing documents shall refer to the Articles of Incorporation, Bylaws,

deed of restrictions, conditions, rules and regulations of the association,
or other written instruments by which the association exercises any of the
powers and authority provided in Republic Act No. 9904.

gg. Government housing and/ or resettlement programs/ projects shall refer to

housing programs or projects owned, managed and/ or funded by the
government and/ 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 such
other benefits.

hh. Homeowner shall refer to any of the following:

1. An owner or purchaser of a lot or house and 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; or

3. An inform.al settler in the process of being accredited as beneficiary

or awardee of ownership rights under the CMP, LTAP, and other
government housing and/ or resettlement programs or projects1

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 ii. Independent auditor shall refer to a licensed or Certified Public Accountant
(CPA) accredited by a professional organization, such as, but not limited
to, the Philippine Institute of Certified Public Accountants (PICPA) and
other related professional organizations.

jj. Key Shelter Agencies (KSAs) shall refer to the Home Development Mutual
Fund (HDMFor Pag-lBIG Fund), National Housing Authority (NHA), Social
Housing Finance Corporation (SHFC)and/ or the National Home Mortgage
Finance Corporation (NHMFC).

kk. Lessee shall refer to a person leasing or renting a residential unit in a

subdivision/village. For purposes of the Community Mortgage Program or
similar government socialized housing projects, the term shall refer to a
beneficiary as referred to under Section 6 of Republic Act No. 9904.

11. Membership fee shall refer to a one ( 1)-timepayment made by a homeowner

in consideration for membership in the association.

mm. Merger shall refer to the union of two (2) or more registered associations in
contiguous areas into a single association resulting in the survival of the
juridical existence of one (1) of the associations and the termination of the
others.

nn. Neighborhood association shall refer to a group of potential public housing

beneficiaries living in contiguous areas, recognized, identified and
accredited by or organized with the assistance of DHSUD, LGU, KSAs, or
PCUP for the purpose of availing of housing programs or projects being
implemented by the LGU or national government agencies. Neighborhood
association is deemed embraced within the term homeowners association
when organized for this purpose.

oo. Plan of Merger or Consolidation shall refer to a document containing the

proposed merger or consolidation of registered associations primarily the
terms and conditions thereof, duly approved by the majority of all members
of the Board and the members of each of the constituent association.

pp. Regional Office shall refer to the DHSUD office that has jurisdiction over
the region where the subdivision/village or community served by the
association is located.

qq. Si.mple majority shall refer to fifty percent (50%) plus one (1) of the total
number of association members or, when specified under the Bylaws or
this Rules, of the total number of members in good standing.

rr. Socialized housing shall refer to the housing programs and projects
undertaken by the government or by the private sector for the
underprivileged and homeless citizens, following the standards of Batas
Pambansa Big. 220 and other relevant laws, and price ceilings as
determined by the DHSUD and the National Economic and Development
Authority (NEDA). This shall include sites and services development, basic
services and community facilities, settlements upgrading, vertical housing

law1
development, long-term financing, liberalized terms on interest payments,
and such other benefits in accordance with

page 6of57
ss. Subdivision/ Village shall refer to a tract or parcel of land partitioned into
individual lots, with or without improvements thereon, primarily for
residential purposes.

tt. Usufru.ctuary shall refer to a person who has been given the right to enjoy
the property of another with the obligation of preserving its form and
substance.

RuleD
HOMEOWNERSHIP

Section 5. Commencementof homeownership. Homeownership begins:

a. By owning a lot in a subdivision/village and other real estate development

for residential purposes;

b. By purchasing a lot and/or unit in a subdivision/village and other similar

real estate development project for residential purposes;

c. By being an awardee, usufructuary, or legal occupant of a unit, house

and/ or lot in a government socialized or economic housing or relocation
and/ or resettlement program or project and other urban estates; and,

d. By being a prospective beneficiary or awardee of ownership rights under

the CMP, LTAP, and other government housing and/or resettlement
programs or projects.

Section 6. Termination of homeownership. Homeownership is terminated

by:

a. Transfer of ownership of the property through conveyance by conditional

or absolute sale, assignment, or donation; or

b. Any other legal transfer of ownership which shall authorize the association
to deny homeowner rights to the transferor under this Section.

c. In CMP, LTAP and other government housing and/or resettlement

programs or projects, expulsion from membership and/ or through an
approved substitution of a beneficiary, after due notice and hearing.

Section 7. Right and duty 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 for such
services.

Section 8. Duties and responsibilities of a homeowner. A homeowner shall

have the followingduties:

a. To timely pay beneficial user fees and other fees or charges pertaining to

bon,
basic community services, and other special assessments such as, but not
limited to, vehicle pass stickers, construction fees and/or

page 7of57
 b. To comply with the subdivision/village, and/ or government housing
and/ or resettlement program or project rules and regulations, policies,
and with the deed of restrictions and covenants annotated on the title or
attached or embodied in the contract to sell or deed of absolute sale; and,

c. To comply with the policies, rules and regulations, legal orders, directives
and other issuances of the DHSUD.

Rulem
MEMBERSHIPIN THE ASSOCIATION

Section 9. Nature of membership. Membership in the association is

voluntary unless -

a. Automatic or compulsory membership is provided in the contract to sell,

deed of sale, other instruments of conveyance, and/ or deed of restrictions
annotated on the title of the property, or attached to the aforementioned
documents; or

b. Membership in the association is a requirement for an award under the

CMP, LTAP, or government housing and/or resettlement programs or
projects.

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,
farther, that the representative complies with all the requirements of
membership under the Bylaws and the law.

When a homeowner owns more than one ( 1) lot, he/ she shall apply for
membership for each lot. In a lot with a multi-dwellingor apartment complex,
the homeowner may designate a representative to apply for membership in the
association and act on all matters related thereto; Provided, that the homeowner
executes an SPAin 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 omissions; Provided, farther,
that the representative complies with all the requirements of membership under
the Bylaws and the law.

In all cases, the SPA shall be valid until revoked. When the homeowner issues
an SPAfor the above purpose, he/ she is deemed to have waived the rights of an
association member except the right to inspect association books and records
which can be simultaneously exercised by both the homeowner and the
representative~

page8ofS7
Section. 11. Commencement of membership. Unless membership in the
association is automatic or compulsory, in which case it shall commence upon
homeownership, membership to the association shall become effectiveupon
acceptance by the Board of the application for membership, and payment of
membership fee.

Section 12. Termination of membership. Membership in the association is

terminated once the member ceases to be a homeowner or opts to terminate his
membership if the same is not automatic or compulsory. Termination of
membership shall extinguish all rights of a member under Republic Act No.
9904 and under this Rules.

Section 13. Rights of a member. A member shall have the followingrights:

a. Avail of and enjoy all basic community services and the use of common
areas and facilities;Provided, that the member is in good standing;

b. Inspect association books and records during office hours and to be

provided, upon request, with a copy of annual reports, including financial
statements, at the member's own expense;

c. Participate, vote and be eligible for any elective or appointive officeof the
association subject to the qualifications as provided in the Bylaws, and in
this Rules;

d. Participate in association meetings, elections and referenda; Provided, that

the member is in good standing, unless otherwise provided in the Bylaws,
and existing rules and regulations of DHSUD,or ordered in final decisions
of the Regional Director, Office of the Secretary, HLURBor the Human
Settlements Adjudication Commission (HSAC) or ordered by DHSUDwhen
acting as a special Election Committee under special circumstances;

e. Demand and promptly receive refund of deposits required by the

association such as construction bonds, as soon as the condition for the
deposit has been compliedwith or the period therefor has expired;

f. Terminate his/her membership in the association, except when

membership is compulsory or automatic; Provided, that the member is
clear of all his/her accountabilities in the association; and,

g. To enjoy all other rights as may be provided in the Bylaws of the

association, subject to the limitations as may be provided therein.

Section 14. Duties of a member. A member shall have the followingduties:

a. To timely pay monthly dues, fees and special assessments;

b. To attend meetings of the association, either in person or by proxy;

c. To support and participate in the community development programs,

projects and activities of the associatio,

page 9of57
d. To comply with all other duties as required by the association's Bylaws,
policies, rules and regulations, and deed of restrictions and covenants
annotated on the title or attached or embodied in the contract to sell or
deed of absolute sale;

e. To comply with the policies, rules and regulations, legal orders, directives
and other issuances of the DHSUD; and,

f. In case of beneficiaries of CMP, LTAP, or government housing and/or

resettlement programs or projects, to timely pay monthly amortizations
and comply with the conditions of the award or grant as provided in the
Lease Purchase Agreement (LPA) or other contracts governing their
transaction.

Non-compliance with the above and all other duties may be a ground for the
imposition of sanctions against a member subject to compliance with the
procedure laid down in the Bylaws or as provided in this Rules.

Section 15. Voting rights. Each member shall be entitled to such number of
votes in proportion to the number of membership in the association under
his/her name. A member may exercise his/her voting rights in person or by
proxy.

Section 16. Delinquent member or member not in good standing. A

member may be declared delinquent or not in good standing by the Board of
Directors on any of the following grounds:

a. Failure to pay at least three (3) cumulative monthly dues, fees and/ or other
assessments despite repeated demands by the association;

b. Finding of repeated violation of and non-compliance with, including, but

not limited to, final orders and directives, pertinent laws, rules and
regulations and policies issued by duly constituted authorities, and the
association's Bylaws, policies or rules and regulations;

c. Commission of conduct detrimental to the interest of the association

and/or the community as provided in the Bylaws and determined by the
Board from competent proof and after due notice and hearing, to have been
committed by the member;

d. Failure to attend membership meetings in person or by proxy without any

justifiable reason for at least three (3) consecutive general membership
meetings despite receipt of notice; and

e. In case of CMP, LTAP, or other government housing and/or resettlement

programs or projects, failure to pay at least three (3} monthly
amortizations, or as provided in the LPAor other contracts governing their
transaction.

A member who has been declared delinquent or not in good standing in

accordance with the procedure in the succeeding Section is not entitled to
exercise the rights of a member, except the right to inspect association boo1

page 10ofS7
and records, but is nevertheless obliged to pay all fees, dues, and other
assessments charged the members in good standing.

Section 17. Procedure in declaring a member delinquent or not in good

standing. The Board or the 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 preliminarily determine whether a

member may be declared delinquent or not in good standing on any of the
grounds provided in the Bylaws or as enumerated in the preceding Section.

b. The Board or the committee shall forthwith notify the said member in
writing of the violation and require him/her to explain in writing, within
fifteen (15) days from the receipt of the notice of violation, why he/she
should not be declared delinquent or not in good standing.

In case the violation was for non-payment of dues, fees, and/ or other
assessments, the notice shall state that the said member is given a grace
period of sixty (60) days reckoned from the receipt of the notice to pay the
subject arrearages. The member shall notify the Board or the committee of
his/her intention to avail of the grace period within fifteen (15) days from
receipt of the said notice.

c. After the lapse of fifteen (15)days, with or without a written explanation or

notice of intention to avail of the grace period, the Board or the committee
may conduct a hearing.

d. Within fifteen (15) days from the commencement of the hearing and
deliberations, or the termination thereof, whichever is earlier, the member
may be declared delinquent or not in good standing by a majority vote of
all the members of the Board, through a resolution issued to that effect.

e. The President shall notify the member concerned of the decision of the
Board and shall furnish him/her a copy of the board resolution.

f. The member declared delinquent or not in good standing may file a motion
for reconsideration with the Board within ten (10) days from the receipt of
the board resolution. The motion must be resolved by the Board within five
(5) days from the receipt thereof.

Section 18. Sanctions against a delinquent member or a member not in

good standing. The rights and privileges of a member are suspended except
the right to inspect the association books and records upon the declaration of
delinquency by the Board. In the event that the delinquent member is the
representative, such suspension shall extend to the homeowner and all those
residing in his/her property.

Nothing in this Rules shall prevent the association from imposing other
sanctions against the delinquent member in accordance with the law and the
Bylaws; Provided, that in the event the water system or other basic utility
services are operated by or under the control of the association; V Provided,
further, that bills for water consumption or other utility services are updated,
the cutting-off of water supply or other basic utility services shall not be imposef

page 11 o/57
as a sanction. The obstruction of ingress and egress in the subdivision, village,
and/ or community shall not in any case be imposed as a sanction.

Section 19. Reinstatement of a delinquent member or a member not in

good standing. The Board shall, by a majority vote of those present at a
meeting at which there is a quorum, reinstate the membership of the delinquent
member within ten (10) days from the receipt of proof of satisfaction of the
sanctions imposed. In the event that the Board fails to do so, through no fault
of the delinquent member, such as, but not limited to, the failure of the Board
to hold a meeting or muster a quorum, his/her membership shall be deemed
automatically reinstated and all rights restored.

If the delinquency is based on the failure to attend three (3) consecutive general
membership meetings, the submission of an undertaking to attend the next
general assembly shall result to the conditional reinstatement of the delinquent
member, while the issuance of a proxy in favor of a member of the Board chosen
by the delinquent member for the next general assembly shall restore his/her
membership in good standing.

When the declaration of delinquency is due to non-payment of dues, fees,

and/or other assessments or charges or, in case of CMP, LTAP or government
housing and/ or resettlement programs or projects, from non-payment of
monthly amortizations, the member shall notify the association, in writing, of
his/her payment of the unpaid dues, fees, charges and/or amortizations, and
present proof thereof. Full payment of the arrears shall automatically reinstate
his /her status of good standing on the day following the receipt by the
association of the notice and proof of payment.

Section 20. Expulsion and/or substitution of members-beneficiaries of

CMP, LTAP, or government housing and/or resettlement programs or
projects. The association shall submit the following to the Regional Office
within fifteen (15) days from its adoption:

a. Board resolutions expelling members from the association, and the

corresponding substitutions, if any;

b. Notice of approval of the substitution by the agency administering and/ or

managing the housing project and/ or the Government Financing
Institution extending end-user financing;

c. Proof of receipt of the resolution by the expelled member, or proof of service

of a copy of the resolution to the last known address of the expelled
member; and,

d. Proof of service of a copy of the resolution to the agency administering

and/ or managing the housing project and/ or Government Financing
Institution extending end-user financing.

Failure to comply herewith shall render the resolution unenforceably

page l2of57
 Rule IV
ARTICLES OF INCORPORATION AND BYLAWS

Section 21. Articles of Incorporation. The Articles of Incorporation, signed

by all incorporators on each and every page thereof, shall substantially contain
the following:

a. Name of the association;

b. Specific purpose or purposes of the association. Where the association has

more than one (1) stated purpose, the Articles shall state the primary and
secondary purposes;

c. Complete principal office address, contact number, and electronic mail

address, if any;

d. Term of existence;

e. Names, nationalities, and residences of the incorporators;

f. Names, nationalities, and residences of the interim directors or trustees

which shall not be less than five (5) nor more than fifteen ( 15}, who may or
may not be incorporators, until the first regular directors or trustees are
duly elected and qualified;

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

h. Amount of capital, if any, of the incorporators as well as the amount of

contributions by each; and,

i. Such other matters consistent with existing laws, rules and regulations
issued by DHSUD.

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;

c. The grounds and procedure by which members are declared delinquent or

not in good standing, the penalties and sanctions imposable on a
delinquent member or a member not in good standing, and the manner or
procedure through which the declaration may be lifted and the member
restored to good standing;

d. 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,

page 13 o/57
e. The date for holding the regular election of directors or trustees and the
mode or manner of giving notice thereof;

f. The number, qualifications, powers and duties, terms of office, manner of

electing and removing the Board, the filling of vacancies in the Board;
Provided, that the term of office of directors or trustees and/ or officers
shall not exceed two (2) years;

g. 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;

h. The grounds and procedure for removal of director or trustee, and the
manner of filling of vacancies in the Board, consistent with Section 13 of
Republic Act No. 9904;

i. The grounds and procedure for dissolution of the Board, and the manner
of reconstituting the Board, consistent with Sections 13 and 14 of Republic
Act No. 9904;

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

k. The officer(s) authorized to prepare, execute, certify and record

amendments to the governing documents on behalf of the association;

1. The designation of the presiding officer at meetings of the Board and of the
members;

m. Such powers that the Board may delegate to a managing agent, if any, or
to other persons or committees;

n. The creation of election, grievance, audit, disaster risk reduction and

management, and gender and development committees and such other
committees which the association may deem necessary, whose members
shall be in good standing; as well as the establishment of a conciliation or
mediation mechanism for the amicable settlement of disputes among
members, directors or trustees, officers and/or committee members of the
association, and homeowners.

The members of the election, grievance and audit committees shall not be
members of the Board;

0. The dues, fees, and other 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

Bylaws;

q. The list of acts constituting a violation by its directors or trustees and/ or

officers and the corresponding penalties therefor1

page 14ofS7
r. The imposable penalties for violation of particular provisions of the Bylaws;
and,

s. Such other matters necessary for the proper and/or convenient

transaction of its business and affairs.

Section 23. Amendment of the Articles of Incorporation and/or Bylaws.

The Articles of Incorporation and/ or Bylaws of the association may be amended
by a majority vote of all members of the Board, and majority of all association
members, regardless of standing, at a regular or special meeting called for the
purpose or as a result of a referendum.

The association shall file with the Regional Officean application for the approval
of the amended Articles of Incorporation and/ or its Bylaws, within forty-five(45)
days from the meeting at which the amendments were approved, accompanied
by the followingdocuments in duplicate copies:

a. Notarized Articles of Incorporation and/or Bylaws, as amended,

underscoring, or underlining the changes made;

b. Notarized Board Resolution approving and adopting the proposed

amendments, with the amendments clearly stated therein, that the same
were approved by the majority vote of all the Board members at a meeting
called for the purpose, and the fact of quorum, and the date of the said
meeting;

c. Notarized Secretary's Certificate attesting that the amendments were

approved by the majority vote of all association members, regardless of
standing, and stating therein the date of the members' meeting, and the
fact of quorum;

d. Minutes of the meetings of the Board, and of the general assembly called
for the purpose, both duly certified as true and correct by the association's
secretary;

e. Attendance sheet of the general assembly signed by the members present;

and indicating therein their corresponding votes; and,

f. Vote tally sheet showing the total number of members, the total number
of the members present and the outcome of the voting.

Failure to submit the foregoing within the prescribed period of forty-five (45)
days from the meeting at which the amendments were approved shall be a
ground for the denial of the application for the approval of the amended Articles
of Incorporation and/or Bylaws.

If the requirements are incomplete, the same shall be returned to the applicant
association. If any of the documents submitted are defective, the RegionalOffice
shall notify the applicant association of the defective submission~

page 15 of57
Ifthe applicant association fails to comply with the requirements stated in the
notice of deficiency within thirty (30) days from the receipt thereof, the
application shall be automaticallydenied.

Section 24. Amendment by initiative. The amendment of the Articles of

Incorporation and/or the Bylaws may be initiated by the members of the
association in good standing, without the approval of the Board of Directors as
follows:

a. The petition to amend shall be signed by at least thirty percent (30%) of

the members in good standing and submitted to the Election Committee.
If no Election Committee exists, the petition shall be submitted to the
Regional Office,and the latter shall create an Election Committee for this
purpose.

b. Within ten (10) days from the completion of the validation of signatures,
the Election Committee shall notify all members of the association of the
date, time, and venue of the special meeting for the purpose of deliberation
and approval or disapproval of the proposed amendments through any
available means. The notice of meeting and a copy of the proposed
amendments shall be posted at the bulletin board of the association, in at
least three (3) conspicuous places within the subdivision/village or
community, and in the official social media account of the association, if
any.

c. The vote of a simple majority of all members of the association, regardless

of standing, shall be necessary to approve the proposed amendments.
Within forty-five (45)days from the meeting at which the amendments were
approved, the Election Committee shall file with the Regional Office the
application for the approval of the amended Articles of Incorporation
and/ or Bylaws, attaching thereto the following, in duplicate copies:

1. Petition to amend duly signed by thirty percent (30%) of the members

in good standing;

2. Notarized Articles of Incorporation and/ or Bylaws, as amended,

underscoring or underlining the change/s made;

3. Notarized Certificate of the Election Committee attesting that the

amendments were approved by the majority vote of all members of
the association, regardless of standing, and stating therein the date
of the regular or special general assembly meeting called for the
purpose, and the fact of quorum;

4. Minutes of the special general assembly, and the attendance sheet

signed by the members present; and

5. Vote tally sheet showing the total number of members, the total
number of the members present and the outcome of the voting.

Failure to submit the foregoing within the prescribed period of forty-five (45)
days from the meeting at which the amendments were approved shall be~

page 16 o/57
ground for the denial of the application for the approval of the amended Articles
of Incorporation and/ or Bylaws

If the requirements are incomplete, the same shall be returned to the applicant
association. If any of the documents submitted are defective, the Regional Office
shall notify the applicant association of the defective submissions.

If the applicant association fails to comply with the requirements stated in the
notice of deficiency within thirty (30) days from the receipt thereof, the
application shall be automatically denied.

Section 25. Issuance of Certificate of Amended Articles of Incorporation

and/or Certificate of Amended Bylaws. If the amendments to the Articles of
Incorporation and/or Bylaws are found not contrary to law or public policy and
do not adversely affect any interest, the Regional Office shall issue the
appropriate Certificate of Amended Articles of Incorporation or Certificate of
Amended Bylaws within fifteen (15) days from the receipt of the application with
complete requirements.

When a change in the association name is approved, the Regional Office shall
issue an amended Certificate of Incorporation under the amended name, but
indicating in parenthesis the former name of the association.

The amendments shall take effect upon its approval by the DHSUD with the
issuance of a Certificate of Am.endedArticles of Incorporation or Certificate of
Amended Bylaws; Provided, that amendments on the term of office of directors
or trustees and/ or officers shall not apply to the incumbent.

RuleV
REGISTRATION OF HOMEOWNERS ASSOCIATIONS

Section 26. Number of associations. Only one (1) homeowners association

shall be established and registered with DHSUD in each subdivision/village or
defined community, except in cases where the subdivision consists of two (2) or
more contiguous phases but registered or licensed as one (1) project. In such
cases, each phase may organize and register an association. The registration of
each association shall bear the phase number or any other identification of the
project's phase.

In case two (2) or more associations are registered or applying for registration
within the same subdivision, the same shall be governed by the procedure for
administrative determination thereof as provided in Section 35 of this Rules.

Section 27. Mandatory registration. Allassociations whose purpose, among

others, is to promote and protect their mutual interest and assist in their
community development as homeowners are considered homeowners
associations. It is mandatory for all homeowners and/ or neighborhood
associations, federations, confederations or other umbrella organizations of
associations to register solely with DHSUD conformably with Republic Act No.
11201, except:

a. Homeowners associations that registered with HLURB;and1

page 17of57
b. Associations previously registered with the SEC or HIGC that have re-
registered with HLURBpursuant to the 2004 HLURB Rules on Registration
and Supervision of Homeowners Associations, the 2011 Implementing
Rules and Regulations of Republic Act No. 9904, or the 2021 Revised
Implementing Rules and Regulations of Republic Act No. 9904.

The registration with DHSUD 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. Upon full compliance
with the requirements for registration, the association shall be issued a
Certificate of Incorporation.

Section 28. Basic requirements for the registration of a new association.

The applicant association shall, upon payment of the prescribed fees, submit
the followingrequirements, in duplicate copies, to the RegionalOfficewhich has
jurisdiction over the area where the association is located:

a. Notarized Articles of Incorporation signed on each and every page thereof

by all the incorporators consisting of not less than five (5) nor more than
fifteen (15) natural persons;

b. Notarized Bylaws signed on each and every page thereof by all

incorporators or members of the interim Board consisting of not less than
five (5) nor more than fifteen (15) natural persons;

c. Except for registration of associations initiated by subdivision owners/

developers, the minutes of the general assembly meeting certified by the
interim secretary and attested to by the interim president, stating, among
others, the date of the meeting and the fact of quorum, together with the
attendance sheet signed by the members present and their corresponding
votes approving or disapproving the Bylaws;

d. Notarized General Information Sheet;

e. Certification issued by the president as to the territorial jurisdiction of the

association, and as to the existence or absence of any other association in
the subdivision/village or community; and the name and address of the
nearest association, if any;

f. Code of Ethics signed on every page by the members of the Board of

Directors or Trustees and officers of the association;

g. Notarized undertaking by the association president to change the name of

the association in the event that another person, firm or entity within the
same barangay, city or municipality has acquired a prior right to the use
of the name or one similar thereto, and to comply with pertinent rules and
regulations; and,

h. Authorization by the interim president for the representative of the

association to transact and/ or follow-up its application for registration
with the Regional Office~

page 18 o/57
If the requirements are incomplete, the same shall be returned to the applicant
association. If any of the documents submitted are defective, the RegionalOffice
shall notify the applicant association of the defective submissions.

If the applicant association fails to comply with the requirements stated in the
notice of deficiency within thirty (30) days from the receipt thereof, the
application for registration shall be automatically denied, and all documents
submitted shall be returned to the applicant association.

Section 29. Additional requirements.

a. For subdivision projects, the applicant association shall submit the

following:

1. Certified true copy of the approved subdivision or development plan

indicating the area covered by the association; and,

2. List of members with their corresponding signatures and addresses,

certified by the association secretary and attested to by the
association president.

b. For CMP,LTAPand other similar programs, the applicant association shall

submit the following:

1. Duplicate original copy of the notarized letter of intent to sell and

intent to buy, contract to sell, deed of absolute sale, or memorandum
of agreement between the landowner and association;

2. Certified true copy of the original or transfer certificate of title of the

lot occupied by the members of applicant association or of the lot
intended to be purchased, issued not later than sixty (60) days before
the date of filing of application;

3. List of members-beneficiaries with their corresponding signatures

and addresses, certified by the association secretary and attested to
by the association president. For non-ownership tenurial
arrangement, the list of members shall state the nature of occupancy;

4. If the site is located within a subdivision project, certification from

the existing association that it interposes no objection to the
organization of the association;

5. Vicinity map and schematic plan of the area covered by the

association signed by the association president; and,

6. For off-site subdivision projects, in addition to the foregoing, the

proposed subdivision plan signed and sealed by a Geodetic Engineer
in lieu of the schematic plan.

c. For NHAhousing programs or projects, the applicant association shall

submit the followin~

page 19of57
 1. NHA Certification attesting that the association is the only
association recognized and/ or accredited by the NHA; and,

2. List of members-awardees/beneficiaries of the program with their

corresponding signatures and addresses, certified by the association
secretary, attested by the association president and certified by the
NHA.

d. For national and/or local government housing and/or resettlement

programs or projects, the applicant shall submit the following:

1. Certification issued by the LGU or government agency implementing

the housing program or project, or by a Government Financing
Institution extending end-user financing to the beneficiaries,
attesting to the following:

a. The name and principal office address of the association;

b. The location or territorial jurisdiction of the association; and,

c. The association is the only association recognized and/ or

accredited in the community or area and there is no other
association existing in the same proposed project, or
community;

2. List of beneficiaries with their corresponding signatures and

addresses, certified by the LGU or government agency/unit
concerned or by the Government Financing Institution extending
end-user financing to the beneficiaries;

3. Lot plan and vicinity map showing the project site location; and

4. Approved building plan, subdivision plan or site development plan,

whichever is applicable and available; and

5. For off-site subdivision or resettlement projects, in addition to the

foregoing, the proposed subdivision plan or schematic plan signed
and sealed by a Geodetic Engineer.

Section 30. Organization of associations initiated by subdivision owners

and/or developers. Where the organization and registration of the association
was initiated by the subdivision owner/ developer pursuant to Sec. 30 of
Presidential Decree No. 957, in addition to the documents stated in Sections 28
and 29 (a) hereof, the applicant association shall submit the following
requirements, in duplicate copies:

a. Certification under oath by the applicant that the buyers have been duly
informed, and majority of the buyers consent to the project owner and/ or
developer's organization and registration of the homeowners association.

b. An undertaking under oath that the developer shall hold and conduct the
first regular election for the members of the Board of Directors under the
approved Bylaws and turnover the management of the association to {

page20of57
 duly elected Board when occupancy or possession by the buyers of the
subdivision lots has reached fifty-one percent (51%) or not later than two
(2) years from the date of registration of the association, whichever comes
first, unless the homeowners demand for earlier conduct of election upon
proper showing of capability to manage the association.

c. An undertaking that the interim Board shall turnover the management of

the association to the duly elected Board within thirty (30) days from their
proclamation.

In the event that the members refuse to hold an election or to accept the
turnover of the management of the association, the developer, as the
interim Board, may continue managing the affairs of the association upon
submission of an affidavit executed by the interim president stating that
the members refuse to hold an election and/or accept the turnover.

d. List of names of the buyers of the subdivision project.

Section 31. Re-registration of SEC or HIGC-regfstered associations. An

association that holds a Certificate of Incorporation issued by the SEC or HIGC
and has not re-registered with the HLURBshall re-register with the DHSUD.In
addition to the requirements under Section 28 (d-h) hereof, the association shall
submit the followingin duplicate copies:

a. Latest verified financial statement certified correct by the treasurer and

auditor of the association and attested to by the Chairperson of the Board
or the President. The financial statement shall be externally audited,
preferably, by a Certified Public Accountant, except for associations
organized for the purpose of availing of the benefits of the CMP, LTAP,and
other government housing and/ or resettlement programs or projects.

b. For associations that registered with SEC after 03 May 1979, the applicant
shall submit an affidavit attesting that the registration of the association
has not been revoked and that it is cleared of all penalties and other
accountabilities to the SEC.

c. For SEC-registered associations whose registration papers were not

transferred to HLURB/DHSUD, the association shall cause the transfer of
its records to the DHSUD. In the event there is no Bylaws on record, the
association shall be required to submit its Bylaws approved by the majority
of its members, regardless of standing.

Upon receipt of the application and payment of the required filing fees, the
Regional Office shall enter in its Registry Book the name of the association and
issue the corresponding Certificate of Re-registration.

When so required by the Regional Office, the association shall amend its Articles
of Incorporation and/ or Bylaws to conform to the requirements of this Rules
and submit such other documents.

Section 32. Effect of failure to re-register. The failure of an association to

re-register with the DHSUD within six (6) months from the effectivity of this
Rules shall result in the automatic suspension of the association's registration1

page2l o/57
which may be lifted if the association files for re-registration with the DHSUD
within one (1) year from the suspension; otherwise, it shall automaticallyresult
in the revocation of its registration.

Section 33. CertiJicate of Incorporation. Upon finding that the requirements

for registration are in order, and that the Articles of Incorporation and Bylaws
contain the provisions required by this Rules, the Regional Office shall, within
fifteen ( 15) days, issue a Certificate of Incorporation which shall confer upon the
association a juridical personality separate and distinct from those of its
members.

The Regional Office shall transmit an electronic copy of the Certificate of

Incorporation, together with the Articles of Incorporation and Bylaws to the
DHSUD Homeowners Association and Community Development Bureau within
five (5) days upon issuance thereof.

Prior to the release of the Certificate of Incorporation, the interim or incumbent

Board of Directors or Trustees and officers shall be required to attend an
orientation on Republic Act No. 9904 and its implementing rules and
regulations.

Section 34. Term of existence of associations. Homeowners associations

shall have perpetual existence.

Homeowners associations with Certificates of Incorporation or Certificates of

Registration issued prior to the effectivity of this Rules, and which continue to
exist upon the effectivity hereof, including those previously registered with the
SEC or HIGC and re-registered with DHSUD, shall have perpetual existence,
unless the association, upon a majority vote of all its members regardless of
standing, notifies the Regional Office, within one (1) year from the effectivityof
this Rules, that it elects to retain its original term of existence indicated in their
Articles of Incorporation. Failure to submit such notice to the Regional Office
within the one (1)-year period shall automatically result in the perpetual
existence of the association.

The rule on perpetual existence shall not cover or serve to revive associations
whose terms of existence have expired prior to the effectivityof this Rules.

Section 35. Administrative determination in the registration of

associations. In case two (2) or more associations applied for registration
and/or are organized within the same subdivision, village or community, and
both applied for registration with DHSUD, the followingrules shall apply:

a. The applicant or homeowners who submitted first its registration papers

and satisfactorily complied with all the requirements shall be registered;

b. In case there are two (2) or more associations registered with the SEC or
HIGC, or one was registered with the SEC and one with the
HLURB/DHSUD, the association which registered first shall be recognized,
and the registration of the other shall be revoked; Provided, that the
registration of the first registrant is still valid'f

page:12 o/57
Nothing in this Rules shall prevent the DHSUD from taking into consideration
other factors in determining which association shall be recognized and
registered.

Section 36. Grounds for the administrative suspension of the Certificate

of Incorporation. The Certificate of Incorporation may be suspended motu
proprio by the Regional Officeor upon the filing of a sworn statement or verified
petition with the Regional Office, on any of the grounds provided by law, rules
and regulations, including, but not limited to, the following:

a. Failure to submit the Bureau of Internal Revenue (BIR) Certificate of

Registration and Tax Identification Number within ninety (90) days from
the release of the Certificate of Incorporation as stated under Section 62
hereof;

b. Failure to comply with the final orders or directives issued by DHSUD,

and/ or any other appellate court;

c. Failure to modify,revise or amend the Bylawsto conform to the provisions

of this Rules within two (2) years from the effectivity of this Rules; or

d. Failure to re-register with the DHSUD within six (6) months from the
effectivity of this Rules.

The suspension of the registration of the association shall have the following
effects:

a. The association can no longer exercise the rights and powers under
Republic Act No. 9904 and this Rules;

b. The association can no longer avail of the support services of DHSUD; and

c. The association shall have no legal standing to sue before the HSAC.

It may nevertheless be sued before the HSAC by its members or other interested
parties for non-compliance with existing laws and regulations, and the directors
or trustees and/ or officers may be held personally liable for the obligations and
liabilities incurred by the association.

Section 37. Grounds for the administrative revocation or cancellation of

Certificate of Incorporation. The Certificate of Incorporation may be revoked
or cancelled motu proprio by the Regional Office or upon the filing of a sworn
statement or verified petition with the Regional Office, based on any ground
provided by law, rules and regulations, including, but not limited to, the
following:

a. Fraud or misrepresentation in procuring its Certificate of

Incorporation/ Registration;

b. Serious misrepresentation on the purposes and on what the association

can validly do or is doing; or~

page23of57
c. Non-submission of annual reports for three (3) cumulative years after
notices and/ or orders have been issued by the Regional Office and duly
received by the association.

Upon receipt of the sworn statement or verified petition, the Regional Office shall
order the association through its directors or trustees to comment on the
petition within a non-extendible period of fifteen ( 15) days from receipt of the
order. Thereafter, the Regional Office shall resolve the petition within five (5)
days from the lapse of the fifteen (15)-day period to submit comment on the
petition. When necessary, the Regional Office may call for a clarification
conference either in person or through remote or electronic means any time
prior to the resolution of the petition.

RULE VI
SEGREGATION

Section 38. Segregation from the existing association. A group of

association members residing in contiguous areas within the
subdivision/village or community may separate from the existing association
and form a new one through a verified petition on any of the followinggrounds:

a. The area of the project, or the membership of the existing association has
reached a size or number that renders it extremely difficult or
impracticable to provide efficient deliveryof services to all its members; or

b. The existing association is serving several or all phases of a subdivision

project and the petitioners are residents of one (1) or more contiguous
phases of the said project.

Section 39. Requirements for segregation. The members intending to

segregate from the existing association shall file with the Regional Office a
verified petition for segregation together with the following:

a. List of members intending to segregate from the existing association;

b. A certification stating that the remaining members of the existing

association reside in a contiguous area such that the segregation willnot
affect the territorial integrity of the association;

c. A certification stating that the petitioners do not exceed half of the

membership of the existing association;

d. Minutes of the meeting of all members intending to segregate;

e. Result of the referendum on segregation showing that majority of all the

members of the existing association agreed or consented to the
segregation;

f. The vicinity map of the subdivision/village or community showingthe area

sought to be segregated; and,

g. Where the facilities of the subdivision project are commonly shared by all
the phases of a subdivision project, a written agreement between tJvf
page24of5i
 existing association and the proposed association defining the obligations
and liabilities among them with respect to:

1. The expenses for its maintenance and the earnings derived or losses
incurred from the operation thereof;

2. The use, maintenance, repair, replacement, modification and

improvements of common areas and facilities;

3. Access to or passage through the subdivision/village gates, main

roads, interconnecting roads and other roads, alleys and sidewalks
within the subdivision;

4. Delivery of basic community services; and,

5. Such other matters necessary for the proper governance and

operation of both associations.

Section 40. Action on the petition for segregation. The verified petition
shall be granted by the Regional Office if it finds that the petitioners have
satisfactorilycomplied with the requirements for segregation, the segregation is
beneficial to the general welfare and interest of the members, and both the
existing association and the new association that may be formed can exist as
independent entities.

Upon receipt of the grant of the petition for segregation, the petitioners shall
have ninety (90) days within which to submit all the requirements for the
registration and incorporation of a new association pursuant to Sections 28 and
29 of this Rules.

If the petition is incomplete, the same shall be returned to the petitioners. If any
of the documents submitted are defective, the Regional Office shall notify the
petitioners of the defectivesubmissions. The Regional Officemay, however, call
for a conference for purposes of clarification.

If the petitioners fail to comply with the requirements stated in the notice of
deficiency within thirty (30) days from receipt thereof, the petition shall
automatically be denied.

If the proposed segregation is contrary to or inconsistent with existing laws, the

Regional Officeshall deny the application for segregation.

Rule VII
MERGER AND CONSOLIDATION

Section 41. Merger or consolidation of associations. Two (2) or more

registered associations in contiguous areas may merge into a single association
which shall be one of the constituent associations, or may consolidate into a
new single association which shall be the consolidated association.

Section 42. Plan of Merger or Consolidation. The plan or any similar

document embodying the agreement approved by the majority of the members?

page25of57
of the Board and by the majority of the members of each of the constituent
association shall set forth the following:

a. The purpose and terms of such merger or consolidation;

b. The names, addresses, and territorial jurisdiction of the associations

proposing to merge or consolidate;

c. In case of merger, the name and address of the surviving association, the
territorial jurisdiction of the merged associations; and, in case of
consolidation, proposed name, address, and territorial jurisdiction of the
consolidated association;

d, Statement of the changes, if any, in the Articles of Incorporation and

Bylaws of the surviving association in case of merger; and,

e. Such other provisions with respect to the proposed merger or consolidation

as are deemed necessary or desirable.

Section 43. Requirements for registration of the merged or consolidated

associations. Associations intending to merge or consolidate shall file the
following documents in duplicate with the Regional Office:

a. Plan of Merger or Consolidation;

b. Articles of Merger or Consolidation and Bylaws signed on each and every

page thereof by the president of each constituent association;

c. Notarized Board Resolution and Secretary's Certificate attesting that the

majority of the Board, and majority of all members of each association,
respectively, agreed to the proposed merger or consolidation;

d. List of members of the surviving association or of the consolidated

association, certified by the association secretary and attested to by the
president of the surviving or of the consolidated association;

e. Audited financial statements of each of the constituent association as of

the immediately preceding year;

f. Location or vicinity map showing that the territory of the associations

proposing to merge or consolidate are contiguous to one another;

g. For associations organized to avail of the benefits of the CMP, LTAP, or

government housing and/ or resettlement programs or projects,
certification under oath by the president of each of the constituent
association stating that the national government agency, key shelter
agency, or City or Municipal government concerned was informed of the
merger or consolidation, and no opposition was interposed;

h. Code of Ethics signed on every page by the members of the Board of

Directors or Trustees of the surviving or consolidated association;<(

page26of57
i. Notarized General Information Sheet signed by the secretary of the
surviving or consolidated association;

j. Notarized undertaking by the surviving or consolidated association to

change the name of the surviving or consolidated association in the event
that another person, firm, or entity has acquired a prior right to the use of
the name or one similar thereto, and to comply with existing laws, rules
and regulations;

k. Authorization for the representative of the survrving or consolidated

association to transact and/ or follow-up its registration with the Regional
Office;and,

1. Proof of payment of the filing fee.

If the application for merger or consolidation is incomplete, the same shall be

returned to the applicant. If any of the documents submitted are defective, the
Regional Office shall notify the applicant associations of the defective
submissions. The Regional Office may, however, call for a conference for
purposes of clarification.

If the applicant associations fail to comply with the requirements stated in the
notice of deficiency within thirty (30) days from the receipt thereof, the
application for merger or consolidation shall be automatically denied.

If the proposed merger or consolidation is contrary to or inconsistent with

existing laws, the Regional Office shall deny the application for merger or
consolidation.

Section 44. Certificate of Incorporation of the surviving association or

of the consolidated association. Upon finding that the requirements for
merger or consolidation are in order, and the merger or consolidation of
associations is not inconsistent with existing laws, rules and regulations, the
Regional Office shall issue the corresponding Certificate of Incorporation to the
surviving or consolidated association.

Prior to the release of the original copy of the Certificate of Incorporation of the
surviving association or of the consolidated association, the original copy of the
Certificates of Incorporation of all the constituent associations shall be
surrendered.

Section 45. Effects ofmsrger or consolidation. The merger or consolidation

shall have the following effects:

a. The constituent associations shall become a single association which, in

case of merger, shall be the surviving association designated in the Plan of
Merger; and in case of consolidation, a new or consolidated association is
created.

b. The separate existence of the constituent associations shall cease, except

that of the surviving association or the new consolidated association. r
page27of57
 c. The surviving or the consolidated association shall possess all the rights,
privileges, immunities, and powers of each of the constituent associations
and all property, real or personal, and all receivables due on whatever
account, and other choses in action, and all and every other interest of, or
belonging to, or due to its constituent associations, shall be deemed
transferred to and vested in the surviving or consolidated association
without further act or deed.

d. The surviving or consolidated association shall be responsible and liable

for all the liabilities and obligations of each of the constituent associations
in the same manner as if such surviving or consolidated association had
itself incurred such liabilitiesor obligations;and any pending claim, action
or proceeding brought by or against any of the constituent associations
may be prosecuted by or against the survivingor consolidated association.
The merger or consolidation shall not impair the rights of creditors or liens
upon the property of any constituent association.

Rule VID
FEDERATION

Section 46. Federation or alliance of associations. Registeredassociations

may form a federation; Provided, that their alliance with another association or
associations is not prohibited in the association's governingdocuments, deed of
restrictions or any contract of conveyance executed by the association members
with the subdivision owner/ developer.

Federations/ confederations may be established in accordance with existing

guidelines at the followinglevels:

a. Barangay federations, which shall be composed of associations within the

same barangay;

b. Municipal federations, which shall be composed of associations within the

same municipality;

c. City federations, which shall be composed of associations within the same

city;

d. Provincial confederations, which shall be composed of barangay,

municipal and city federations except those of independent component
cities, highly urbanized cities and Metro Manila cities which shall directly
join their respective regional confederations;

e. Regional confederations, which shall be composed of provincial

confederations, and, as above stated, those of independent component
cities, highly urbanized cities and Metro Manila cities; and,

f. Only one (1) national confederation which shall be composed of regional

confederations.

Section 47. AJ"filiating with a federation. A registered association may

affiliate with an existing federation; Provided, that no association shall affiliate
with a federation unless the affiliation is duly approved in a resolution by'(

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majority of the members of the association's Board of Directors, and the said
resolution is ratified by majority of all the members of the association.

Upon acceptance of the association to the federation, the latter shall make the
affiliation of record by sending to the Regional Office where the association is
registered of a notice of its affiliation to the federation, copy furnished the
association, together with an updated list of its affiliates.

Section 48. Plan of Federation. The plan or any similar document embodying
the agreement approved by the majority of the members of the Board and by the
majority of the members of each of the constituent association shall set forth
the following:

a. Names of the associations that will federate;

b. Terms of the federation;

c. A statement in the Articles of Incorporation of the federation specifying the

commonality of the purpose and interests of the constituent associations,
and the rights, obligations, and extent of powers of the federation over the
associations; and,

d. Such other provisions with respect to the proposed federation as are

deemed necessary or desirable.

Section 49. Requirel'IU!ntsfor registration of the federation. The applicant

federation shall submit the following documents in duplicate to the Regional
Office:

a. Approved Plan of Federation;

b. Notarized Articles of Incorporation and Bylaws signed on each and every

page thereof by the president of each constituent/member-association;

c. Notarized Board Resolution and notarized Secretary's Certificate attesting

that the majority of the members of the Board and the majority of all
members of each association agreed to affiliate;

d. List of constituent associations;

e. Notarized General Information Sheet signed by the federation secretary;

f. In cases of associations organized to avail of the benefits of CMP, LTAP, or

other government housing projects and/ or programs, a certification under
oath by the president of each of the constituent association stating that
the national government agency, KSA, City or Municipal government
concerned were informed of the federation, and no opposition was
interposed;

g. Notarized undertaking by the federation to change the name of the

federation in the event that another person, firm or entity has acquired a
prior right to the use of the name or one similar thereto, and to comply
with existing rules and regulations;4J
l page 29 of 57
h. Authorization for the representative of the applicant federation to transact
and/ or follow-up its application for registration with DHSUD; and,

1. Proof of payment of the filing fee.

If the application for registration of the federation is incomplete, the same shall
be returned to the applicant federation. If any of the documents submitted are
defective, the Regional Officeshall notify the applicant federation of the defective
submissions.

If the applicant federation fails to comply with the requirements stated in the
notice of deficiency within thirty (30) days from the receipt thereof, the
application for registration of the federation shall be automatically denied.

If the proposed federation is contrary to or inconsistent with existing laws, rules

and regulations, the Regional Office shall deny the application for registration
of the federation of associations.

Section 50. Certificate of Incorporation of the federation. Upon finding

that the requirements for federation are in order, and if the alliance or federation
of associations is not inconsistent with existing laws, the Regional Office shall
issue the corresponding Certificate of Incorporation to the federation.

The federation shall have a separate and distinct legal personality from that of
its constituent associations and shall have such powers over its constituent
associations as may be set forth in its approved Articles of Incorporation and
Bylaws. The creation of a federation shall not affect the juridical personality of
the constituent associations.

Section 51. Disafftliationfrom afederation. A constituent association of

the federation, by a resolution passed by the majority of its Board, and duly
approved by majority of all its members, may sever its membership from the
federation which shall take effect after a written notice of disaffiliation is filed
with the federation and with the Regional Office.

Section 52. Memorandum of disaffiliation. Upon receipt of the notice of

disaffiliation by a constituent association, the Regional Office shall enter a
memorandum thereof in the records of the federation and the disaffiliating
association, copy furnished the parties concerned.

Section 53. Effects of disaffiliation. Upon disaffiliation, the federation loses

its powers and privileges as set forth in its Articles of Incorporation and Bylaws
over the disaffiliating association, while the latter loses its entitlement to the
rights and privileges arising from membership in the federation. The
disaffiliation shall be without prejudice to the settlement of any obligation
incurred by the federation and constituent associations against each other.

Section 54. Confederations or umbrella organizations of associations.

The procedure for the organization of and disaffiliation from confederations and
other umbrella organizations of associations shall be the same as that provided
in the preceding Sections, except that the constituent associations 1
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confederations are federations, while those m umbrella organizations are
confederations.

Rule IX
DISSOLUTION OF AN ASSOCIATION, FEDERATION,
CONFEDERATION, OR UMBRELLA ORGANIZATIONS OF ASSOCIATIONS

Section 55. Methods of dissolution. An association, federation,

confederation or umbrella organization of associations (hereinafter referred to
as associations) may be dissolved voluntarily, involuntarily or automatically.

Section 56. Voluntary dissolution where no creditors are affected. If the

dissolution of an association does not prejudicethe rights of any creditor having
a claim against it, the dissolution shall be effected as follows:

a. Issuance of a Board Resolution authorizing the dissolution of the

association:

1. Notice sent to all members of the Board, in accordance with the notice
requirements of the Bylaws, setting a date for a meeting for the
purpose of the dissolution of the association.

2. In the meeting called for the purpose, a majority of all the members
of the Board shall be necessary for the approval of the Board
Resolution dissolving the association.

3. The Board Resolution shall likewise state the date of the General
Assembly which shall consider the dissolution of the association.

b. A majority vote of all association members, regardless of standing, shall be

required to dissolve the association. The notice of meeting shall be:

1. Personally served or sent by any available means to all association

members at least thirty (30) days before the scheduled meeting;

2. Published once a week for two (2) consecutive weeks in a newspaper

of local circulation where the principal office address of the
association is located, or, if there is none, in a newspaper of general
circulation once a week for two (2) consecutive weeks; and,

3. Posted at the office of the association, bulletin boards and in other

strategic and conspicuous places within its territorial boundaries,
and in the officialsocial media account of the association, if any.

c. The Regional Office shall be furnished with:

1. A copy of the notarized Board Resolution approving the dissolution of

the association signed by at least majority of the members of the
Board and, the notarized Secretary's Certificate attesting to the
consent of the majority of the general membership, and certified as
correct by the president of the association,

page 31 o/57
 2. Notarized certification that the association has no existing creditors;
and,

3. Proof of the publication and posting of the Notice of Meeting.

d. The Regional Office shall issue the Certificate of Dissolution upon

determination that the application is not contrary to law and has complied
with all the foregoing requirements.

Section 57. Voluntary dissolution where creditors are affected. Where

the dissolution of an association may prejudice the rights of any creditor, the
followingprocedure shall be observed:

a. The association shall conduct the meetings and comply with all the
solemnities required for the notice as stated in the first two {2) subsections
of the immediately preceding section.

b. Upon completion of the foregoing, a petition for dissolution shall be filed

with the Regional Office. The petition shall comply with the following
requirements:

1. The petition shall be signed by the majority of the Board of Directors

or Trustees;

2. The petition shall be verified by its president or secretary or one of its

directors or trustees, and shall set forth all claims and demands
against it, and that its dissolution was resolved upon by the
affirmative majority vote of its members at a meeting called for that
purpose; and,

3. Board resolution approving the dissolution of the association signed

by at least the majority of the Board and, the notarized Secretary's
Certificate attesting the consent of the majority of the general
membership, and certified as correct by the president of the
association.

c. If the petition is sufficient in form and substance, the Regional Officeshall,

by an order reciting the purpose of the petition, fix a date within which
objections thereto may be filed by any person, which shall not be less than
thirty (30) days nor more than sixty (60) days after the entry of the order.
Before such date, a copy of the order shall be published at least once a
week for three (3) consecutive weeks in a newspaper of local circulation in
the municipality or city where the principal office of the association is
situated, or if there is none, in a newspaper of general circulation. A copy
of the order shall likewise be posted for three {3) consecutive weeks in three
{3) public places in such municipality or city and in the bulletin board of
the association, and in the officialsocial media account of the association,
if any.

d. Upon a five (5)-day notice given after the date on which the right to file
objections, as fixed in the order, has expired, the Regional Office shall
proceed to hear the petition and resolve any issue raised in the objections
filed. If the material allegations of the petition are true and no objection<(

page32of57
 was interposed, the Regional Office shall render a resolution dissolving the
association and ordering such disposition of its assets as justice requires,
and may appoint a management committee to collect such assets and pay
the debts of the association.

Section 58. Dissolution by shortening corporate term. An association

may be dissolved by amending the Articles of Incorporation to shorten the term
of existence of the association. A copy of the amended Articles of Incorporation
shall be submitted to the Regional Officein accordance with this Rules.

Upon approval by the Regional Officeof the amended Articles of Incorporation,

or upon expiration of the shortened term, as the case may be, and upon such
terms as may protect the rights of creditors whose claims against the association
may be affected by shortening of its term, the association shall be deemed
dissolved without any further proceedings.

No application for amendment of the Articles of Incorporation to shorten its

term of existence shall be granted unless the association sought to be dissolved
has paid administrative fines previously imposed against it, and the incumbent
members of the Board execute a declaration under oath that, to the best of their
knowledge, the association has no existing financial liabilities, and that they are
willing to shoulder such liabilities in the event any valid claim is made by third
persons subsequent to the dissolution.

Section 59. Involuntary dissolution. The association may be dissolved upon

the filing of a verified petition before the Regional Office where the association,
federation, or confederation is located or registered.

Section 60. Automatic dissolution. An association shall be automatically

dissolved upon the expiration of the term of existence provided in its Articles of
Incorporation.

In cases of associations organized to avail of the benefits of the CMP, they shall
be deemed dissolved if they failed to submit an application to the SHFC within
five (5) years from the date of its registration.

For off-site government housing programs or projects, the association shall be

deemed dissolved on any of the followinggrounds:

a. Failure to file its loan application within six (6) months from the date of
issuance of the Certificate of Incorporation;

b. Failure to file an application for Development Permit within six (6) months
from the grant of the loan;

c. Failure to file an application for Certificate of Registration and License to

Sell within six (6) months from the issuance of the Development Permit; or

d. Denial of the application to avail of the benefits of the CMP, LTAP, or

government housing and/or resettlement programs or projects.r

page 33of57
The automatic dissolution of an association shall result in the revocation of its
Certificate of Incorporation. In all cases, the association shall be notified of its
dissolution.

Section 61. Winding-up period. Once dissolved, the association shall

continue to exist for one (1) year after the time it would have been so dissolved,
for the purposes of settling and winding-up of its affairs, prosecuting and
defending suits by or against it, collecting what is due the association, pay its
debts, and to dispose of and convey its property. However, it can no longer
conduct business for which it was established.

RuleX
POST-REGISTRATION

Section 62. Requirements after registration. Within ninety (90) days from
the release of the Certificate of Incorporation, the association, federation,
and/or confederation shall submit to the Regional Officeits BIR Certificate of
Registration and Tax Identification Number. Failure to comply thereto shall be
a ground for suspension of the association's registration.

Section 63. Association books to be kept. Everyassociation shall keep and

carefully preserve a membership book, cash receipt/ disbursement book,
ledgers, record of all transactions, and minutes of all general membership
meetings and of the Board of Directors or Trustees and/ or Officers, setting forth
in detail the date, time, and agenda for holding the meeting, the notice given,
those present and absent, and the significant acts done during the said meeting.

Section 64. Annual reports. On or before the end of every calendar year, the
Board of Directors or Trustees and/ or Officers shall strictly comply with the
submission of the followingto the Regional Office:

a. Notarized General Information Sheet detailing the names of the members

of the Board of Directors or Trustees, including the executive and other
accountable association officers;

b. Updated master list of members certified by the association secretary and

attested to by the president. In case of associations under govemment-
assisted housing programs or projects, the master list of qualified
beneficiaries shall be duly certified by the government agency or
instrumentality concerned;

c. Copy of board resolutions issued for the year pertaining to policies, rules
and regulations especially those imposing penalties, suspension,
expulsion, delisting, or substitution of members, and reinstatement of
membership of delinquent members or members not in good standing;

d. Minutes of the General Assembly prepared by the association secretary

and attested to by the association president with attendance sheet signed
by the members attested to by the secretary of the association; and,

e. For housing projects or programs under the CMP, LTAP and other
government housing programs or projects, certification from the r
page34of57
 government or private entity concerned on the status of the association's
application to avail of the program.

In addition to the above, the latest verified financial statement certified correct
by the treasurer and auditor of the association and attested to by the
chairperson of the Board or the president, attaching therein the summation of
expenses of the association, shall be submitted to the Regional Office within
ninety (90) days from the close of the immediately preceding accounting period.
Except for associations organized for the purpose of availing of the benefits of
the CMP, LTAP,and other government housing and/or resettlement programs
or projects, the financial statement shall be externally audited, preferably, by a
Certified Public Accountant.

Section 65. Financial and other records. The association is enjoined to

observe the followingwith regard to its funds, financial and other records:

a. The association or its managing agent shall keep financial and other
records sufficiently detailed to enable the association to fully declare to
each member the true statement of its financial status. All financial and
other records of the association including, but not limited to, checks, bank
records, and invoices, in whatever form these are kept, are the property of
the association. Each association's managing agent shall tum over all
original books and records to the association immediately upon
termination of the management relationship with the association, or upon
such other demand as is made by the Board. An association's managing
agent is entitled to keep association records. All records which the
managing agent has turned over to the association shall be made
reasonably available for the examination and copying by the managing
agent;

b. All records involving the affairs of the association shall be available for
examination by all owners, holders of mortgages on the lots, and their
respective authorized agents upon reasonable advance notice, during
normal working hours at the office of the association; Provided, that
holders of mortgages on lots may have access to the information about the
property held in mortgage with the consent of the registered owner;

c. A financial statement of the association shall be prepared annually by the

treasurer, attested to by the chairperson of the Board or the president,
audited by the auditor and/ or preferably a certifiedpublic accountant, and
submitted to the Regional Officewithin ninety (90) days from the end of
the immediately preceding accounting period, and to be posted in the
association office, bulletin boards, and other conspicuous places within
the subdivision/village or community, which shall include in sufficient
details, the total amounts collected, expenses, and funds or cash on hand;
and,

d. The funds of the association shall be kept and deposited in bank accounts
in the name of the association and shall not be joined or commingledwith
the fund of any other association, director or trustee, officer, or any other
person responsible for the custody of such funds.1

page35of57
Any reasonable expenses incurred by the Board, Directors or Trustees and/or
officers, directly in connection with and necessary for the conduct of official
activities may be reimbursed upon presentation of receipts and/ or other
documentary evidence in support of such claims.

Rule XI
HOMEOWNERS ASSOCIATION

Section 66. Rights and powers of the association. An association duly

registered in accordance with this Rules shall have the following rights and
powers:

a. Subject to consultation and with the approval of a simple majority of the

members, regardless of standing, adopt and amend the Articles of
Incorporation, Bylaws, rules and regulations, pursuant to existing laws
and regulations;

b. In behalf of its members, institute, defend, or intervene in litigation and/ or

administrative proceedings affecting the welfare of the association and the
subdivision/village or community as a whole, excluding, however, disputes
that are not the responsibility of the association;

c. Without prejudice to the responsibility of the subdivision

owners/ developers to maintain the road lots, open spaces, and other
facilities under Presidential Decree No. 1216 and its implementing rules
and regulations, regulate the use, maintenance, repair, replacement and
modification of common areas and cause additional improvements to be
made part of the common areas; Provided, that the aforementioned do not
contradict the provisions of the approved subdivision plan;

d. Regulate access to or passage through the subdivision/village roads of

non-members for the purposes of preserving privacy, tranquility, internal
security, safety and traffic order; Provided, that: (1) public consultations
are held; (2) existing laws and regulations are met; (3) the authority to
regulate access to or passage through subdivision roads and approval of
conditions and restrictions from the DHSUDhave been obtained. In cases
where subdivision roads have been donated to the LOU, authority to
regulate access to or passage through the subdivision roads must be
obtained from the LOU concerned; and, (4} where appropriate and
necessary, memoranda of agreement are executed among the concerned
parties.

As part of the association's authority to regulate access to or passage

through its subdivision roads, associations may impose and/ or collectfees
in accordance with DHSUDguidelines; Provided, that it is the association
which maintains the roads and/ or pays for the real property taxes thereon.

The association may require non-residents to procure vehicle stickers for

unimpeded access to its subdivision roads. In case of access to several
subdivisions, a unified sticker policy may be implemented; Provided, that
consultations with the other associations and its members were made, and
the amount of vehicle stickers assessed to non-members shall not exceed
twice the value of stickers assessed to the members; </
\ page 36 of 57
 e. Hire, discharge or contract managing agents and other employees, agents,
and independent contractors to ensure the full functioning and operation
of the association;

f. Subject to consultation with and the approval of the majority of the

members of the association, acquire, hold, encumber and convey in its own
name any right, title to, or interest in real or personal property; Provided,
that such approval of the majority of the members of the association shall
not be required for the acquisition, holding, encumbrance, and conveyance
of personal properties in amounts not exceeding ten percent ( 10%) of the
association's cash holdings for its use in the course of its normal
operations;

g. Where the association's water services are operated and maintained by the
subdivision owner/developer or a third-party provider, ensure the
availability of quality water services at a reasonable price and, at its option,
after consultation with the general membership, and subject to compliance
with existing laws, administer and manage the waterworks system of the
subdivision;

h. Upon consultation, grant easements, leases, concessions and authority to

use common areas and petition for or consent to the vacation of streets
and alleys; Provided, that the said grant of easements, leases, concessions
and authority shall not be applicable to access roads, main
interconnecting roads, alleys, and sidewalks within the subdivision/
village;

i. Impose or collect reasonable fees for the use of open spaces, facilities, and
services of the association to defray necessary operational expenses,
subject to the limitations and conditions imposed under the law,
regulations and the association's Bylaws;

j. 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/DHSUD rules and regulations, existing local ordinances, and
existing deeds of restriction;

k. Subject to consultation and with the approval of a simple majority of the

members of the association, allow the establishment of certain institutions
such as, but not limited to, schools, hospitals, markets, grocery stores,
and other similar establishments that will necessarily affect the character
of the subdivision/village in terms of traffic generation, and/ or opening
the area to outsiders which may result in the loss of privacy, security,
safety, and tranquility to its residents, in accordance with the National
Building Code, zoning laws, existing local ordinances, HLURB/DHSUD

stores, home industries, and similar small-scale business

within the subdivision/village classified as socialized housing;
f
rules and regulations, and existing jurisprudence; Provided, that such
prior approval shall not be necessary for the establishment of sari-sari
terprises

page37of57
1. Suspend privileges of and delivery of services to and/ or impose sanctions
against its members for violations and/ or noncompliance with the
association's Bylaws, policies, rules and regulations;

m. Petition for the creation of a separate barangay, independently or together

with neighboring subdivisions; Provided, that all the requirements of the
Local Government Code of 1991 are met; and,

n. Exercise any other powers conferred by the Bylaws and the DHSUD
necessary for the governance and operation of the association.

RULEXII
BOARD OF DIRECTORS/TRUSTEES
AND/OR OFFICERS

Section 67. Composition of the Board. The Board of Directors or Trustees

shall be composed of at least five (5) but not more than fifteen (15) elected
members of the association.

In all cases, except for the interim Board, majority of the members of the Board
shall be comprised of resident members. Non-resident members, if any, may
constitute only a minority of the Board and shall be determined by ranking in
the votes they received.

Section 68. Compensation. The members of the Board shall serve without
compensation in any form. The prohibition against receiving compensation does
not apply to other officers and employees of the association who are not
members of the Board.

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 from 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 officeof the directors or trustees.

Section 70. Qualifications of directors or trustees, and officers. A director

or trustee and/or officer of an association -

a. Must be a Filipino citizen;

b. Must be oflegal age;

c. Must not be declared delinquent or member not in good standing under

Section 17 hereof as of three (3) months prior to the date of the election,

i
regardless of any subsequent declaration of delinquency or disqualification
by the Board prior to the election;

page38of57
 d. Has not been convicted by final judgment of an offense involving moral
turpitude; and,

e. For CMP, LTAP or government housing and/or resettlement programs or

projects with similar tenurial agreements, must be identified and
recognized awardee thereof, must have updated monthly amortizations,
and compliant with the pertinent occupancy rules and regulations as
certified by the administering entity or agency and/ or Government
Financing Institution extending end-user financing.

The legitimate spouse, common law partner, or any of the children of a qualified
member, when qualified in his/her own right and not disqualified by his/her
own account, may be a candidate in lieu of the member. This excludes the
legitimate spouse, common law partner, or any of the children of the members
of the incumbent Election Committee.

The directors or trustees and/ or officers, during their term, shall continuously
possess all the qualifications and none of the disqualifications enumerated in
the immediately following section; otherwise, the Board is authorized to remove
them from office through a resolution approved by the majority of all its
members.

Section 71. Disqualifications of directors or trustees, and officers. A

director or trustee and/ or officer of an association shall not have any of the
following disqualifications:

a. Those who have been convicted by final judgment of fraud, falsification,

defalcation, and other similar violations;

b. Those who, directly or indirectly, have financial or pecuniary interest in

any business, contract, or transaction in connection with which he/ she
intervenes or takes part in his/her official capacity as director or trustee
or officer of the association;

c. Former or outgoing directors or trustees and/or officers who have been

issued final Order of Imposition of Administrative Sanction (OIAS) by the
Regional Office for failure to turnover books, funds, records, and properties
of the association to the newly elected Board in relation to Section 100
hereof. In such case, the disqualification shall be immediately executory
even pending appeal;

d. Those incumbent directors or trustees and/or officers who have been

found and declared by DHSUD as permanently disqualified for having
unreasonably or unjustifiably failed or refused to call for an election in
accordance with the Bylaws and/ or this Rules;

e. Those who unreasonably failed and/ or refused to comply with the orders
of DHSUD and/ or appellate courts;

f. Members who are directors or trustees and/ or officers of another

registered homeowners association\

page39of57
 g. Those who have been declared by DHSUD to have instigated, incited or
initiated the conduct of an unauthorized election in accordance with
Section 96 hereof, and those who have actively participated therein, either
as members of the Election Committee or as candidates;

h. Those who have been, by final judgment, imposed a penalty of permanent

disqualification in any case filed before the DHSUD, HSAC, and/ or regular
courts; or,

1. For CMP, LTAP and other government housing and/or resettlement

programs or project beneficiaries, those who failed to pay their monthly
amortizations for three (3) consecutive months as certified by the agency
administering and/ or managing the project or the Government Financing
Institution extending end-user financing.

Reasonable disqualifications of candidates for directors or trustees and/ or

officers may be provided in the association's Bylaws to protect the association
and its members from acts and practices detrimental to the welfare of the
association, in addition to those enumerated above.

Section 72. Term and assumption of office. The Board shall hold office for
a fixed term of two (2) years to provide adequate period to fulfill its duties and
responsibilities; Provided, that the two (2)-year fixed term shall not apply to the
incumbent Board with a one (1)-year term as provided in the governing
documents of the association subsisting at the time of their election. No
members of the Board shall serve for more than two (2) consecutive terms.

Assumption of office of the newly elected Board shall commence from the date
of expiration of the term of the outgoing Board, or thirty (30) days from the date
of their proclamation.

In all cases, no staggered term of office shall be allowed. Upon their election and
proclamation, the Board shall immediately convene for the purpose of electing
among themselves the chairperson and vice chairperson of the Board and,
unless directly elected by the members of the association, the president and vice
president, secretary, treasurer, auditor and other officers as may be provided in
the Bylaws.

When the election of the Board of Directors or Trustees is held later than the
date fixed in the Bylaws, the newly elected directors or trustees shall only serve
for the remainder of the fixed term of two (2) years.

Where the subdivision owners/developers initiated the organization and

registration of the association, the interim directors or trustees and/ or officers
shall hold officeuntil the first regular election among the members is held. Such
election shall be called and conducted not later than two (2) years from the date
of registration of the association.

Section 73. Duties and responsibilities of the Board. In addition to the

1
duties and responsibilities stated in the Bylaws of the association, the Board
which has primary authority to manage the affairs of the association shall have
the following duties and responsibilities:

page40o/57
a. Regularly maintain an accounting system using generally accepted
accounting principles, and keep books of accounts which shall be open for
inspection to any homeowner and duly authorized representatives of
government agencies upon request, during reasonable hours on business
days;

b. Collect reasonable fees, dues and assessments that may be provided in the
Bylaws and approved by the majority of the members of the association;

c. Collect reasonable charges for assessments, and after due notice and
hearing by the Board in accordance with the procedures as provided in the
Bylaws, and rules and regulations adopted by the Board, charge
reasonable fines for late payments and for violation of the Bylaws, rules,
and regulations of the association, in accordance with a previously
established schedule adopted by the Board and furnished to the
homeowners;

d. Propose measures to raise funds and the utilization of such funds and
submit the same for consideration of the members of the association;

e. Undergo a free orientation by the DHSUD or any other competent agency

deputized by it on how to conduct meetings, preparation of minutes,
handling of accounts, laws and pertinent rules and regulations within
thirty (30) days after election and/ or appointment;

f. Discharge the duties and responsibilities provided for in the association's

Bylaws;

g. The Board shall act in all instances on behalf of the association, except to
amend the Articles of Incorporation and Bylaws, to dissolve the
association, to elect members of the Board or to determine the
qualifications, powers and duties, and/ or terms of office of the Board, and
other instances that require the vote or approval of the members
themselves;

h. To have a working knowledge of the statutory and regulatory requirements

affecting the association;

1. Adopt a system of internal checks and balances to safeguard the integrity

of the operations of the association; and,

J. Exercise such other powers as may be necessary and proper for the
accomplishment of the purposes for which the association was organized.

In the performance of their duties, the members of the Board and officers shall
exercise the degree of care and loyaltyrequired by such position.

Section 74. Removal of a director or trustee and/or officer. A director or

trustee and/ or officer directly elected by the members of the association may be
removed from office through a petition duly signed by the majority of the
members in good standing, for any cause or causes provided in this Rules or
Bylaws of the association, subject to verification and validation of the Regional
Officer
page41 o/57
The following procedure shall be observed in case of removal of a director or
trustee or officer of an association:

a. The petition shall be submitted to the Regional Office for purposes of

verification and validation. Within ten (10) days from the receipt of the
petition, the Homeowners Association and Community Development
Division (HOACDD) of the Regional Office shall determine whether the
petition is signed by the majority of the members in good standing based
on the records on file with the Regional Office, and if the removal is based
on any of the grounds or causes for removal provided under the Bylaws or
this Rules;

b. If the HOACDDdetermines that the petition is not signed by the required

number of the members in good standing, it shall recommend to the
Regional Director the denial of the petition and shall inform the member
or members who filed the petition of its decision, furnishing a copy thereof
to the director or trustee or officer subject of the petition, and the Board;

c. If, on the other hand, the petition is signed by the required number of the
members in good standing, the HOACDD shall immediately proceed with
the validation and verification of the petition. The HOACDD shall compare
the signatures appearing in the petition with the records on file with the
Regional Office.

In cases where there are no specimen signatures of members on file with

the Regional Office, the HOACDD shall proceed to the subdivision/village
or community to personally verify from the members their signatures
affixed in the petition, either by conducting a house-to-house visit, calling
for an assembly of petitioners on-site, or other viable means;

d. The HOACDD shall report its findings to the Regional Director, and
recommend the grant or denial of the petition. The Regional Director shall
then issue an order granting or denying the petition, furnishing a copy
thereof to the petitioners, director or trustee or officer subject of the
petition, and the Board;

e. The remaining Board, if still constituting a quorum, may continue to

function as such until the expiration of their term. However, if the
remaining members of the Board opt to conduct a special election for the
effective management and operation of the association, they shall notify
the Regional Office within fifteen (15) days from the receipt of the order of
removal. The special election shall be conducted within sixty (60)days from
receipt of the order of removal. The elected replacement shall hold office
only for the unexpired term of the removed director or trustee or officer.

In the event that the majority of the members of the Board are removed, it
shall be considered as dissolution of the Board. In such case, the following
procedure shall be observed:

1. Within sixty (60) days from the receipt of the order approving the
removal of the majority of the Board, a special election shall be called
and conducted by the Regional Office for the purpose of electingr

page42of57
 directors or trustees who shall hold office for the unexpired term of
the removed majority members of the Board.

2. The pendency of the appeal filed by the dissolved Board shall not
prevent the HOACDD from conducting the special election.

3. Until the new Board members shall have been elected and qualified,
the Regional Office shall designate an interim board; Provided, that
such interim Board shall be composed of association members in
good standing; Provided, further, that such interim Board members
shall not be eligible to run in the election called for the purpose of
replacing the members of the dissolved Board.

f. The director or trustee or officer who has been removed shall have the right
to question the order of removal issued by the Regional Director within
fifteen ( 15) days from the receipt thereof to the Office of the Secretary by
filing a verified Appeal Memorandum with the Regional Office concerned;

g. The pendency of the appeal filed by the removed director or trustee and/or
officer shall not prevent the Board from conducting the special election
called for the purpose of filling the vacancy; and,

h. In the event that the DHSUD Secretary finds that the removal is invalid,
the removed directors or trustees or officers shall be reinstated to his/her
former position and shall serve the remainder of the term. The tenure and
actions of the person who replaced the removed director or trustee or
officer from the time of his/her election up to the time of the reinstatement
shall be respected.

Section 75. Dissolution of the Board of DI.rectors. The Board may be

dissolved through a petition signed by two-thirds (2/3) of the association
members, regardless of standing, for any cause or causes provided in this Rules
or the Bylaws of the association, subject to verification and validation of the
Regional Office.

The following procedure shall be observed in case of dissolution of the Board:

a. The procedure provided in subsections (a) to (d) of the immediately

preceding Section shall be observed.

b. Within sixty (60) days from receipt of the order approving the dissolution
of the Board, a special election shall be called and conducted by the
Regional Office for the purpose of electing directors or trustees who shall
hold office for the unexpired term of the dissolved Board.

c. The pendency of the appeal filed by the dissolved Board shall not prevent
the Regional Office from conducting the special election.

d. Until the new Board members shall have been elected and qualified, the
Regional Office shall designate an interim board; Provided, that such
interim Board shall be composed of association members in good standing;
Provided, further, that such interim Board members shall not be eligible tot
page43of57
 run in the election called for the purpose of replacing the members of the
dissolved Board.
Section 76. Grounds for removal of a director or trustee or and/or officer
or dissolution of the Board of Directors. A director or trustee, and/ or officer
if directly elected by the members, may be removed, or the Board may be
dissolved on grounds, such as, but not limited to, the following:

a. Breach of trust;

b. Conflict of interests;

c. Mismanagement, fraud or abuse of authority;

d. Tolerated the commission of fraudulent activities and other illegal acts

committed by a director or trustee, officer and/ or member;

e. Gross negligence in managing the affairs of the association;

f. Failed to perform their fiduciary duties and/ or responsibilities;

g. Any of the grounds enumerated in Section 71 hereof; or,

h. Any violation of Section 73 hereof.

Section 77. Vacancy in the offlce of the director or trustee and/or officers.
Any vacancy occurring in the Board of Trustees or Directors and/ or Officers if
directly elected by the members, not due to Sections 75 and 76, such as,
resignation, death, withdrawal, or incapacity, shall be filled in accordance with
the procedure under the association's Bylaws. In the absence of such procedure
in the Bylaws, the vacancy shall be filled by a majority vote of the members in
good standing in a special election called for the purpose by the Board, if still
constituting a quorum. The director or trustee and/or officer so elected shall
serve only the unexpired term of office of his/her predecessor in office.

If the officers are elected by the members of the Board among themselves, the
vacancy shall be filled by the votes of the majority of the total number of
directors or trustees.

Section 78. Relationship with Local Government Units. The associations

shall complement, support, and strengthen LGUs in providing vital services to
their members and help implement local government policies, programs,
ordinances, and rules.

a. Associations shall recognize and assist in the implementation of local

ordinances, including zoning ordinances, passed by the local government
unit;

b. Associations are encouraged to actively cooperate with LGUs in

furtherance of their common goals and activities for the benefit of the
residents of the subdivisions/villages, community and their environs;

c. Where the LGUs lack resources to provide for basic services, the
associations shall endeavor to tap the means to provide for the same. Irtq
page 44 of s7'
 recognition of the associations' efforts to assist the LGUs in providing such
basic services, association dues and income derived from rentals of their
facilities shall be tax-exempt; Provided, that such income and dues shall
be used for the cleanliness, safety, security and other basic services
needed by the members, including the maintenance of the facilities of their
respective subdivisions/villages; and,

d. LGUs shall, upon due notice, hold public consultations with the members
of the affected associations, especially their officers and directors or
trustees, where proposed rules, zoning and other ordinances, projects
and/ or programs affecting their jurisdiction and surrounding vicinity are
to be implemented prior to the effectivity or implementation of such rules,
zoning, ordinances, projects or programs; Provided, that in cases of zonal
reclassification within the subdivision/village, the approval of a simple
majority of homeowners shall be required. Such public consultations shall
conform to the manner as specified in Rule XI, Article 54 of the
Implementing Rules and Regulations of Republic Act No. 7160, otherwise
known as the LocalGovernment Code of 1991.

Section 79. Relationship with National Govemment Agencies. The

associations shall complement, support and strengthen the efforts of the NGAs
in providing vital services to their members and help implement the national
government policies and programs.

a. Associations are encouraged to actively cooperate with NGAs in the

furtherance of their common goals and activities for the benefit of the
residents of the subdivisions/villages and its environs; and,

b. NGAs shall consult the associations where proposed rules, programs

and/or projects may affect their welfare.

Rule XDI
MEETINGS

Section 80. Board meetings. The Board shall hold regular meetings in
accordance with the schedule set forth in the Bylaws. Special meetings may be
held at any time upon the call of the chairperson of the Board or by a majority
of the Board with notice to the chairperson. The chairperson or in his/her
absence, the vice-chairperson shall preside at all meetings of the Board.

Section 81. Attendance in Board meetings. A director or trustee shall

attend board meetings in person or through remote or electronic means of
communication.

Directors or trustees who cannot physically attend or vote at Board meetings

can participate and vote through remote communication such as
videoconferencing, teleconferencing, or other alternative modes of
communication that allow them reasonableopportunity to participate. Directors
or trustees cannot attend or vote by proxy at Board meetings.

=:
Section 82. Quorum in Board meetings. A majority of the number of
directors or trustees as fixed in the association's Articles of Incorporation shall
constitute a quorum to transact

page45of57
Every decision of at least a majority of the directors or trustees who actually
participated at a meeting shall be valid, except those acts that require the vote
of the majority of all the members of the Board.

Section 83. General assembly. Meetings of members shall be presided by the

president, or in his/her absence, the vice president. Meetings of members may
be regular or special.

Regular meetings shall be held annually on the date fixed in the Bylaws.

Special meetings shall be held at any time as may be called by the Board, the
president or Board chairperson as necessary, or as provided in the Bylaws, or
upon petition to the Board by thirty percent (30%) of the members in good
standing.

Regular and/ or special meetings may be held in person or through remote or

electronic means, or a combination of both.

Notice of assembly meetings shall be served to the members or any of the

member's household of legal age through any available means, at least two (2)
weeks prior to the date of the meeting, shall be posted at the association's office,
in at least three (3) conspicuous places within the subdivision/village or
community, and in the official social media account of the association, if any.

Section 84. Quorum in regular or special general assembly. A majority of

the members in good standing shall constitute a quorum to transact business.

Every decision of at least a majority of the members actually present at a

meeting where quorum is present shall be valid as a corporate act, except those
that require the vote of the majority of all the members of the association.

In the event of failure to obtain the required quorum after one (1) meeting, the
association shall hold a referendum within thirty (30) days from the date of the
last failed meeting; Provided, that the notice of the referendum together with an
executive brief, detailing information on the issues to be voted on, shall be sent
either personally or through electronic means to all members at least fifteen (15)
working days prior to the date of the referendum. The notice, together with the
executive brief, shall be posted at the association's office, in at least three (3)
conspicuous places within the subdivision/village or community, and in the
official social media account of the association, if any.

Section 85. Proxies in meetings. Association members may vote in person

or by proxy in all meetings of members. Proxies shall be in writing, signed by
the member and filed with the secretary of the association. In all cases, proxy
shall be issued for a specific purpose. No proxy shall be valid and effective for a

1
period longer than three (3) years from the date of its issuance unless earlier
revoked by the member

page46of57
 RULEXIV
ELECTIONS

Section 86. Holding of elections. An association shall hold regular elections

on the date set forth in its Bylaws. Election shall be conducted thirty (30) days
prior to the expiration of the term of the existing Board, to ensure smooth
transition of management from the outgoing Board to the incoming Board.

Except for owner/ developer-initiated homeowners associations, the Interim

Board shall, within one ( 1) month from the issuance of the Certificate of
Incorporation, conduct a special general assembly for the purpose of electing
the members of the Election Committee. Followingthis, the interim Board shall
call for the first regular election within one (1) month from the constitution of
the Election Committee. The elected directors or trustees shall only serve until
the regular election as provided in the Bylaws.

Sect.ion 87. Holding of elections under extraordinary circumstances.

Regular or special elections may be conducted through any alternative voting
system, such as electronic or online voting, or mobile ballot box voting, or a
combination of both; Provided, that the voting system to be used has been
approved by the Board of Directors.

The Election Committee shall send or deliver a notice of election to all members
through all possible means available, such as, but not limited to, electronic mail
or messaging through text messaging, Facebook Messenger or Viber, at least
five (5) days prior to the date of the election.

Section 88. Calling of an election. Only the incumbent Board, based on the
records on file with the Regional Office,is authorized to call for an election in
accordance with the association's Bylaws. The Board shall call for an election
ninety (90) days prior to the date of election as fixed in the Bylaws.

If the Board fails to call for an election pursuant to the preceding paragraph,
the following procedure applies:

a. Any member in good standing, in writing, may petition the incumbent

Board to call an election.

b. When the incumbent Board fails to take action thereon, or sits on the
request to call an election within fifteen ( 15) days from the receipt thereof,
the member in good standing shall report the same to the Regional Office.

c. The Regional Office shall take action on the report, within fifteen (15) days
from the receipt thereof, by directing the incumbent Board, under pain of
imposition of sanctions for non-compliance, to call for an election and
constitute an Election Committee that shall conduct the election within
fifteen (15) days from the receipt of the order of the Regional Office.

d. Failure of the incumbent Board to call for an election and/ or constitute an

Election Committee as above directed shall cause the Regional Office to

1
create an Election Committee from among the association members in
good standing who do not intend to run for any position. The members of
the incumbent Board who refused to call for an election shall be
page47of57
 disqualified by the Regional Office from running for any position in the
scheduled election under this Section.

e. The election authorized and recognized by the Regional Office shall be the
official conduct of election of the association. Thereafter, the succeeding
election shall be conducted on the date stipulated in the Bylaws.

Section 89. Creation of an Election Committee. The members of the Election

Committee may be elected during the annual general assembly or in a special
general assembly called by the Board, ninety (90) days prior to the date of the
election.

The members of the Committee must be members in good standing, not

members of the incumbent Board, and must have no intention to run for any
elective or appointive office during their term. The members of the Committee
shall hold office for a fixed term of two (2) years from the date of proclamation.

The Election Committee shall have the followingduties and responsibilities:

a. Formulate election rules strictly in accordance with the law, this Rules and
the association's Bylaws;

b. Conduct regular elections on the date fixed in the Bylaws and conduct
special elections and referenda, as may be necessary;

c. Ensure that all members are notified of the election rules and regulations,
the date, time, and venue of the election, and all election-related activities;

d. Screen and pass upon the qualifications of the voters and candidates
based on the latest list of members submitted to the Regional Office. The
final list of voters and candidates shall be posted on the bulletin board of
the association, in at least three (3) conspicuous places within the
subdivision, and in the social media account of the association, if any, not
later than twenty (20) days from the calling of an election;

e. Validate proxies;

f. Resolve all election-related issues within five (5) days from the receipt of
the election protest or contest. Failure of the Committee to resolve election
protests or contests shall be a ground for disqualification of its members
to hold any elective or appointive position in the association;

g. Proclaim the winning candidates;

h. Prepare and submit election reports to the Regional Officewithin fifteen

(15) days after the election; and,

i. Perform such other duties and responsibilities as may be necessary for an

orderly, peaceful and honest elections.

Section 90. Notice of Election. The Notice of Election must be served to all
members in good standing at least five (5) days prior to the scheduled date ol

page48of57
election. To prevent any failure of election due to absence of quorum, the
following shall be stated in the Notice:

a. A declaration that the recipient is a member in good standing of the

association;

b. A declaration of the member's intent to participate in the election, either

in person or by proxy; and,

c. A statement that the mere receipt of the Notice of Election shall suffice for
purposes of determining the existence of a quorum in the election,
regardless of whether the member participates in the election, either in
person or by proxy.

Section 91. Quo"'m in elections. A simple majority of members in good

standing shall constitute a quorum.

Mere receipt of the Notice of Election by the member or any member of his/her
household with sufficient discretion, shall be counted in determining the
existence of a quorum in the said election.

Section 92. Proxies in elections. Qualified members may vote in person or

by proxy in all elections. Proxies shall be in writing, signed by the member and
submitted to the Election Committee in accordance with the schedule provided
in the Bylaws or in the election guidelines, and validated by the said committee.
In all cases, the proxy shall be issued for a specific election. No proxy shall be
valid and effective for a period longer than one (1) year from the date of its
issuance unless earlier revoked by the member.

Section 93. Postponement of election. No postponement of regular or special

election shall be allowed except in cases of fortuitous event and/ or force
majeure. In such case, the Election Committee shall call for a special election
within a period of thirty (30) days from the initial date of the election or the
cessation of the cause for such postponement of election. Only one (1)
postponement shall be allowed, otherwise it will be considered as a failure of
election.

In order to conduct the special election, the Election Committee shall submit
the followingto the Regional Officeat least ten (10) days prior to the scheduled
date thereof:

a. Notice of postponement of the regular or special election; and

b. Affidavit of non-holding of election stating categorically the reasons why

no election was conducted. The affidavit shall be executed by the members
of the Election Committee.

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 the holding of a free, orderly and
honest election is impossible, the Election Committee shall declare a failure of'

page49of57
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 RegionalOfficeshall 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 their 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.

Section 96. Unauthorized election. An unauthorized election is either called

or conducted by any member or group of members, regardless of standing, in
an association other than by the incumbent Board on record with the Regional
Office. The results of unauthorized elections shall not be recognizedby DHSUD
and shall be deemed null and void in accordance with the guidelines issued by
the DHSUD.

All actions taken by the members who acted as directors or trustees and/or
officers arising from the unauthorized election shall be void ab initio and shall
be a ground for disqualification for succeeding elections without prejudice to
any further administrative and criminal liability of the said members.

Section 97. Conduct of election by the Regional Office. The Regional Office
shall conduct the election for the members of the Board upon dissolution of the
Board under Rule IX hereof, or upon final judgment, order or directive of the
Regional Director, Office of the Secretary, Office of the President, Court of
Appeals, Supreme Court, or whenever upon the determination of the Regional
Office, the circumstances so warrant.

Section 98. Election contests. Election contests, such as disqualification

of candidates and/or voters, validity of proxy, manner or process of election, or
any analogous controversy or dispute occurring prior to the election, shall be
filed with the Election Committee immediately upon discovery thereof, but not
later than forty-five (45) days prior to the date of election.

The Election Committee shall decide on the controversy brought before it within
a non-extendible period of five (5) days from the receipt of the contest. If the
Election Committee fails to decide within the five (5)-day period or if the
aggrieved party is dissatisfied with the decision of the Election Committee, the
aggrieved party may bring the matter to the Regional Office and request for the
conduct of a conciliation conference. The Regional Office shall conduct the
conciliation conference within three (3) days from the receipt of the aggrieved
party's request. If the controversy is not resolved within seven (7) days from
receipt thereof, the Regional Office shall issue a Certificate to File Action before({

page 50 of s7 I
the proper Regional Adjudication Branch of the HSAC pursuant to its Rules of
Procedure.

The pendency of the election contest shall not prevent the Election Committee
from conducting the election.

Section 99. Election protests. Election protests, such as controversies or

disputes involvingtitle or claim to any elective officein the association, validity
of election or proclamation of winners, or any analogous controversy or dispute
occurring after the proclamation of winning candidates shall be filed with the
Election Committee within five (5) days from the date of the proclamation. The
Election Committee shall decide on the controversy brought before it within a
non-extendible period of five (5) days from the receipt of the protest.

If the Election Committee fails to decide within the five (5)-day period or if the
aggrieved party is dissatisfied with the decision of the Election Committee,
he/she may file a complaint before the proper RegionalAdjudication Branch of
the HSACpursuant to its Rules of Procedure.

The pendency of the election protest shall not prevent the newly elected or
proclaimed directors or trustees from performing their functions as such.

Section 100. Turnover of association books, records, funds, and

properties by outgoing directors or trustees and/or officers. To ensure the
orderly turnover of the management of the association, the outgoing directors
or trustees and/ or officers of the association shall tum over all association
books, records, funds, properties, and other assets to the newly elected directors
or trustees and/or officers within fifteen (15) days, without the need of demand,
from the assumption of office of the newly elected Board or officers,
notwithstanding the pendency of an election protest before the HSAC, unless a
cease and desist order has been issued enjoining their assumption and/ or
performance of duties as such.

In the event the outgoing Board unjustifiably refuses to turnover the association
books, funds, records and properties, despite demands made by the newly
elected Board and/ or officers,the latter shall notifyin writing the RegionalOffice
of such failure to turnover. The Regional Office shall, if proper, order the
turnover of the association books, funds, records and properties, under pain of
imposition of sanction for non-compliance.

Section 101. Election reports. Within fifteen (15) days from the date of any
regular or special election, the Election Committee shall submit the followingto
the Regional Office:

a. Copy of the notice of election sent to the members and posted in

conspicuous places in the subdivision/village or community;

b. Proof of service and receipt, and posting of the notice of election, or

notarized certification issued by the Election Committee attesting that
notices of election were sent and/or delivered to all members, and that
said notices were posted at the office of the association, on bulletin boards

1
and other common areas, and in conspicuous places within the
subdivision/village or community;

page 51 of57
c. Master list of qualified voters as certified by the association secretary and
attested to by the treasurer;

d. List of members who participated in the election or the attendance sheet

with the corresponding signatures of the members present, certified by the
Election Committee;

e. Notarized Minutes of Elections prepared and signed by the Election

Committee stating, among others, the following:

1. Mode or modes of conducting the election;

2. Total number of qualified voters, the number of voters who cast their
votes or participated in the elections;

3. The number of votes garnered by each candidate, ranking and result

of the voting; and,

4. Copy of the election tally sheets certified by the Election Committee.

f. Notarized Updated General Information Sheet signed by the association

secretary.

RULE XV
PROHIBITED ACTS

Section 102. Prohibited acts. It shall be prohibited for any person or

association:

a. To compel a homeowner to join the association, without prejudice to the

mandatory membership provisions of the deed of restrictions, its
extensions or renewals as approved by the majorityvote of the members of
the association annotated on the title of the property, the contract for the
purchase of a lot in the subdivision project, or an award under a CMP
project or similar tenurial arrangement;

b. To deprive any homeowner of the right to avail of or enjoy basic community

services and facilities; Provided, that the dues, charges, and other fees for
such services have been duly paid;

c. To prevent any homeowner who has paid the required fees and charges
from reasonably exercising the right to inspect association books and
records;

d. To prevent any member in good standing from participating in association

meetings, elections, and referenda;

e. To deny any member due process in the imposition of administrative

sanctions\
pageS2ofS7
f. To exercise rights and powers as stated in Section 10 of Republic Act No.
9904 in violation of the required consultation and approval of the required
number of homeowners or members;

g. To unreasonably fail to provide basic community services, and to maintain,

repair, and replace or modify facilities administered by the association;

h. To implement association policies, rules and regulations, and deed of

restrictions which have not been ratified by the members of the
association;

1. To require the driver of any vehicle entering the subdivision/village or

community to surrender his/her driver's license;

J. To collect fees, toll, or any amount from any person for passage through
the subdivision roads except when it is the association that maintains the
roads and/ or pays for the real property taxes thereon;

k. To prevent access or entry to, or collect gate fees, toll or any amount for
such purpose, from any utility service or deliveryprovider in order to enter
the subdivision/village or community to deliver goods or services ordered
by the members or residents;

1. To prevent access or restrict the entry of utility service providers to the

subdivision, village or community in order to install their equipment,
system or facilities pursuant to a contract with or approved application by
a resident;

m. To prevent access to or restrict the entry of utility service providers to the

subdivision, village or community in order to disconnect services due to
violations of the contract by the resident-customer/ consumer;

n. . To impose any fees, including parking fees, usage fees and other similarly
purposed-charges, in the use of roads, streets, and other open spaces
within the subdivision except to impose reasonable regulations to insure
free and unhampered access thereto;

o. To require a buyer prior to purchasing a property within the subdivision/

village, or a subsequent homeowner to pay the dues and other charges left
unpaid by the former homeowner/ member unless there is a written
agreement for the purpose between the former homeowner/member and
buyer/new homeowner exists, or if unpaid association dues or fees
constitute a lien on the property;

p. To knowingly enact resolutions in contravention of existing laws, rules,

regulations and ordinances;

q. To commit other acts prohibited by existing laws, rules and regulations

promulgated by duly constituted authorities, and the association's Bylaws;
and,

r. To unreasonably fail to comply or violate any provision of Republic Act

No. 9904 and of this Rules.~

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 Rule XVI
POWERS, DUTIES AND RESPONSIBILITIES OF DHSUD

Section 103. Powers, authorities, and responsibilities of DHSUD.In

addition to the powers, authorities, and responsibilities vested in it by Republic
Act No. 11201, Republic Act No. 8763, Presidential Decree No. 902-A, Batas
Pambansa Blg. 68 and Executive Order No. 535, Series of 1979, the DHSUD
shall:

a. Register all homeowners associations, federations, confederations or

umbrella organizations of associations in subdivision projects and
government housing projects;

b. Regulate and supervise the activities and operations of registered

homeowners associations, federations, confederations or umbrella
organizations of the associations;

c. Regularly conduct free orientation for directors or trustees, officers and/ or

members of associations or deputize another competent agency or entity
to conduct the orientation;

d. Verify and validate petitions for removal of director or trustee and/or

officer if directly elected by the members, or dissolution of the Board of
Directors or Trustees;

e. Formulate the rules or manner of verification and validation of petitions

for the removal of director/ s or trustee/ s of the association or dissolution
of the Board;

f. Exercise the same powers over federations, confederations and/ or

umbrella organizations of the associations;

g. Impose fines and/ or penalties for violation of laws, rules, and regulations
being implemented by the DHSUD;

h. Formulate and publish a Code of Ethics and Ethical Standards for Board
Members detailing prohibited conflicts of interest;

i. Formulate, in consultation with the representatives of associations,

federations, confederations or umbrella organizations of the associations,
standard nomenclatures to be used for the association's books of
accounts, and a standard Articles of Incorporation and Bylaws for
homeowners association for reference purposes;

j. Formulate, in consultation with the representatives of associations,

federations, confederations and/ or umbrella organizations of the
associations, the guidelines in regulating the kinds of contributions and
fees that may be charged and/or collected by associations;

k. Call upon the Philippine National Police, other law enforcement agencies,
and other instrumentalities of the government, if necessary, for the
enforcement of its functions; and, (
page54of57
1. Exercise such other powers as implied, necessary or incidental to the
carrying out of the express powers granted to DHSUD or to achieve the
objectives and purposes of Republic Act No. 9904.

Section 104. Monitoring. The Regional Office may, motu proprio or upon
request or report of violations of the association by an interested party, inspect
and examine documents, books and records, and investigate transactions and
activities of the association for the purpose of ascertaining and enforcing its
compliance with laws, rules, and regulations being implemented by DHSUD.

a. Notice of Violation (NOV}. If, after investigation or upon evaluation of the

reports, it appears that a violation of existing laws, rules, and regulations
of DHSUD has been committed by the association, the Regional Office shall
order the association, its directors or trustees, officers and/ or members to
submit a sworn statement explaining or commenting on the reported
violation within fifteen (15) days from the receipt thereof. The NOVshall
clearly state the violations committed and the penalties and sanctions
imposable therefor. Failure to submit a sworn explanation or comment
within the said period shall render the findings as stated in the NOVfinal.

b. Evaluation. Upon receipt of the sworn statement or comment, the

Regional Office shall evaluate the explanation and/ or justification and the
documents submitted, and resolve the reported violation in accordance
with existing guidelines. When necessary, the Regional Office may call for
a clarificatory conference either face-to-face or through remote or
electronic means. With respect to financial records, the Regional Office
may require the Board of Directors or Trustees to engage the services of an
independent auditor who shall conduct and review the said financial
records, at the expense of the complaining member, should any ambiguity
or inconsistency in the documents submitted be found. Said expense shall
be reimbursed by the association to the complaining member should the
matters complained of be found valid. The independent auditor shall be
an accredited Certified Public Accountant of the Board of Accountancy
and/ or the SEC.

c. Order of Termination of Proceedings (OTP). Should the Regional Office

find the explanation and/ or justification satisfactory and the documents
submitted in order, the Regional Office shall issue an OTP declaring the
monitoring proceedings on the subject matter as closed and terminated.

d. Order of Imposition of Administrative Sanctions (OIASJ. When the

association, its Directors or Trustees, officers or members fail to submit a
sworn explanation within the prescribed period, or when the Regional
Office finds the sworn explanation or comment unmeritorious and it
appears that the alleged violations were actually committed, it shall issue
an OIAS. The OIAS shall be complied with or satisfied within fifteen (15)
days from the receipt thereof. Otherwise, a Final Notice to Comply (FNC)
shall be issued within three (3) days from the lapse of the fifteen (lS)~day
period. Failure to comply with the FNC within five (5) days from the receipt
thereof shall result in the issuance of a writ of execution; Provided, that no
motion for reconsideration or appeal has been timely filed1

page55of57
e. Motion for Reconsideration/Appeal from the OIAS/OTP. A party not
satisfied with or aggrieved by the issuance of the OIAS or OTP by the
Regional Office may file an appeal before the Office of the Secretary as
provided under Section 105 hereof.

Section 105. Appeal from an order or issuance of the Regional Director.

An appeal may be taken from an order or issuance of the Regional Director in
the exercise of regulatory functions, on any legal ground and upon payment of
the appeal fee, by filing an appeal memorandum, in triplicate, with the Regional
Officewithin fifteen (15) days from the receipt of the assailed order or issuance.
Within five (5) days from the receipt of the appeal memorandum, the Regional
Office shall elevate to the Officeof the Secretary, through the Legal Service, the
records of the association relevant to the issues involvedwith a summary of the
proceedings already taken on the subject matter of the investigation.

RULE XVII
FINAL PROVISIONS

Section 106. Penalties and sanctions. The followingpenalties and sanctions,

as provided under Republic Act No. 9904, shall be imposed, after due notice and
hearing:

a. Fine of not less than Five Thousand Pesos (P5,000.00) but not more than
Fifty Thousand Pesos (PS0,000.00); and
b. Permanent disqualification from being elected or appointed as member of
the Board, officer or employee of the Association, shall be imposed on
serious and grave offenses without prejudice to being charged before a
regular court for violations of the provisions of the Revised Penal Code,
Civil Code and other pertinent laws.

If the violation is committed by the association, the members, officers, directors

or trustees of the association who have actually participated in, authorized, or
ratified the prohibited act shall be held liable.

If the violation is committed by the employees and agents who acted in gross
violation of the provisions of Republic Act No. 9904 and of this Rules, the
officers, directors or trustees, officers, or incorporators of the association shall
be jointly and severally liable with the offending employees, agents, and the
association.

Section 107. Applicability. This Rules shall be deemed adopted by all

homeowners associations registered or re-registered with DHSUD upon the
effectivity hereof.

Section 108. Transitory provision. Upon the effectivity of this Rules, all
provisions in the respective Articles of Incorporation and Bylaws of all registered
homeowners associations inconsistent herewith are deemed modified, amended
and/ or revised in accordance with the provisions of this Rules.

All registered associations are given two (2) years within which to modify, revise,

f
or amend their respective Articles of Incorporation and Bylaws to conform to the
provisions of this Rules.

page 56of57
Further, all applications and petitions, including those currently being
processed and/or reviewed but not yet approved by the Regional Offices, shall
hereafter be processed and/ or reviewed in accordance with this Rules.

Section 109. Separability clause. If any provision of this Rules is declared

invalid or unconstitutional, the remainder of the Rules shall remain valid and
subsisting.

Section 110. Amendments. This Rules, or any provision thereof, may be

amended by the DHSUD.

Section 111. Repealing Clause. All other issuances, rules, and regulations,
or parts thereof inconsistent with this Rules are hereby repealed, modified or
amended accordingly.

Section 112. E.flecttvl.ty. This Rules shall take effect immediately after its
publication in a newspaper of general circulation and a certified true copy hereof
furnished the Office of the National Administrative Register of the University of
the Philippines Law Center in accordance with Sections 3 and 4 of Book VII,
Chapter 2, of Executive Order No.292, Series of 1987.

Approved, in consultation with lfil cr,ncemed sectors pursuant to Section 28

of Republic Act No. 9904, this day of V , 2024.

E GUZMAN, CPA
secre for HOACDB,
HRED , LS, DOTr-RIC PMO, Regional
Operations and 4PH PMO Head

~·
ATTY. MA. LORINALf-' RIGOR
Director for HOACDB

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