New Rules on HOA Election Procedures | Duran & Duran-Schulze Law

New Rules on HOA Election Procedures

In accordance with Department Order No. 2021-007 Series of 2021, the Department of Human Settlements and Urban Development issued the 2021 Revised Implementing Rules and Regulations of Republic Act No. 9904, otherwise known as The Magna Carta for Homeowners and Homeowners Associations.

Table of Contents

 

What is an Homeowner’s Association in the Philippines: Section 4

An Association as defined under Section 4, Rule I of the Department Order shall refer to “a homeowner’s association which is a non-stock, non-profit association registered with DHSUD, or one previously registered with HLURB, Home Insurance and Guaranty Corporation (HIGC, now Home Guaranty Corporation or HGC), or Securities and Exchange Commission (SEC), organized by and/or is primarily composed of:

  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 private, non government or government socialized or economic housing or relocation project and other 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 LGU, the Presidential Commission for the Urban Poor (PCUP), or the National Urban Poor Sectoral Council (NUPSC) for the purpose of availing of housing and/or resettlement programs or housing projects being implemented by the said LGU and/or the national government agencies (NGAs), in which case they will be initially authorized to organize a form of homeowners association known as a neighborhood association.”

Homeowner, on the other hand, is defined under the same section as any of the following:

  1. “An owner or purchaser of a lot or house and lot, in a subdivision/ village who acquired the same primarily for residential purposes;
  2. An awardee, usufructuary, or legal occupant of a unit, house and/or lot in a private, non government or government socialized or economic housing or relocation project and other urban estates;
  3. An informal settler in the process of being accredited as beneficiary or awardee of ownership rights under the CMP, LTAP, and other similar programs.”

Composition of the Boards: Section 68

It provides for the composition of the board, wherein “The Board of Trustees or Directors shall be composed of at least five (5) but not more than fifteen (15) elected members of the association. In no case shall lessees constitute a majority of the Board.”

Election of the member of the Board

Section 88, Rule XIII on Elections: It states that “An association shall hold regular elections on the date or schedule set forth in its Bylaws. The first election under the Bylaws shall be called by the Interim Board within six (6) months from the approval of the bylaws, and the elected trustees or directors shall only serve until the regular election as provided in the bylaws.”

Note, however, that only the incumbent Board and/or through the president or vice president are allowed to call the election as provided for in Section 89 thereof on the calling of an election. Failure to do so within thirty days (30) as indicated in fixed date in the bylaws, the following shall be done thereafter:

  1. “Any member in good standing, in writing, may petition the incumbent Board to call an election, copy furnished the Regional Office where the association is registered.
  2. When the incumbent Board fails to take action thereon, or sits on the request to call an election within one (1) month from the receipt of the petition or letter, the member in good standing shall report the same to the Regional Office.
  3. The Regional Office shall take action on the report by directing the incumbent Board, under pain of sanction for non-compliance, to call an election and constitute an Election Committee that shall conduct the election within a specified period.
  4. Failure of the incumbent Board to call an election and/or constitute an Election Committee as above directed shall cause the Regional Office to create an Election Committee from among the association members who do not intend to run for any position. The members of the incumbent Board who refused to call an election shall be disqualified from running for any position.
  5. The election authorized and recognized by the Regional Office shall be deemed the official conduct of election of the association.”

What will happen if the election is unauthorized?

If the election done was unauthorized as stated in Section 90 of the department order, the results shall not be recognized and shall be considered null and void by the DHSUD. Note, that a quorum as provided for in Section 91 of the same, must be had at the elections either by the member or through proxy. Elections shall be postponed or declared as a failure for reasons such as due to serious causes, lack of candidates, no quorum, or other such causes that hinder the election.

Note that within thirty (30) days from the postponement or failure of election, another election shall then be held. If the second call for elections was still not held, a notice of postponement of the regular or special election, and an affidavit of non-holding of election stating the reasons thereof shall be submitted to the Regional Office.

Check the Department Order No. 2021-007 for HOA procedure.

Do you have any further questions that need to be addressed? Talk to our team at Duran & Duran-Schulze Law to know more.

You may reach us at (+632) 8478 5826 or email info@duranschulze.com for more information.

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