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(NAR) VOL. III NO. 1 / JANUARY - MARCH 1992
[ HIGC, December 21, 1989 ]
REVISED RULES ON REGISTRATION OF HOMEOWNERS ASSOCIATIONS
To implement the provisions of Executive order No. 535 transferring to the Home Insurance and Guaranty Corporation (HIGC), formerly the Home Financing Corporation, the powers, authorities and responsibilities of the Securities and Exchange Commission (SEC) with respect to the registration and regulation of homeowners associations, the following rules relative thereto are hereby promulgated:
Rule I
Definition of Terms and
Interpretation of Rules
SECTION 1. Meaning — Unless otherwise clearly indicated, the following shall mean:
a. HIGC — the Home Insurance and Guaranty Corporation, formerly Home Financing Commission and thereafter, Home Financing Corporation, a government owned and controlled corporation created under R.A. 580, as amended by Executive Order No. 535 and renamed under Executive Order No. 90.
b. Homeowners Association (HOA) is any housing or community association composed primarily of present or future homeowners/awardees/occupants of private or government housing project, subdivision and urban estates organized for the purpose of facilitating the delivery of adequate housing, social and other related services to improve the quality of life of its members.
c. Homeowners/Awardees refers to: (i) the legal owners or present or future awardees or actual occupants of the housing units in a private or government housing project, subdivision or urban estate, or
(ii) beneficiaries of the Community Mortgage Program (CMP), or
(iii) members of any association organized for the primary purpose of home ownership, who have met all the qualifications and none of the disqualifications set forth by the Articles of Incorporation, By-Laws or rules and regulations of such housing projects, subdivisions housing estate, or associations.
d. Order — any directive of HIGC or such other officer, body, or committee created or designated by HIGC to act in its steads.
e. Rules on Registration of Homeowners — the foregoing Rules issued by HIGC governing the organization, registration and supervision of homeowners associations.
f. Certificate — Certificate of Incorporation issued or to be issued to a homeowners association which has completed all the requirements for registration.
SECTION 2. Interpretation — The Rules shall be liberally construed to carry out the objectives of R.A. 580 and Executive Orders No. 535 and 90 in relation to the Corporation Code of the Philippines and other related laws.
Rule II
Requisite Documents for Registration
SECTION 1. Registration Documents — For purposes of registration, the following documents shall be submitted:
a. Articles of Incorporation signed by all incorporators consisting of not less than five (5) nor more than fifteen (15) natural persons, together with the filing fee.
b. By-Laws signed by all the incorporators appearing in the Articles of Incorporation, together with the filing fee. The By-Laws must be submitted together with the Articles of Incorporation.
c. Written undertaking to: (1) Change corporate name in the event that another person, firm or entity has acquired a prior right to the use of said name or one similar to it.
2) Comply with the rules and regulations issued by HIGC, specifically with all its reportorial requirements.
d. Information Sheet.
e. Certification as to the existence of an association within the subdivision, community, etc.
Rule III
Registration
SECTION 1. Place of Registration — The homeowners association shall submit its incorporation papers for registration referred to in the foregoing rule, at the principal office of HIGC or at the office designated by it.
SECTION 2. Filing Fee and Entries in the Registry Book — The HIGC or the office designated by it shall require the payment of filing fees for the articles of incorporation and the by-laws and shall record in the registry the docket number, corporate name, and principal office of the association, and the date of submission of the incorporation papers.
SECTION 3. Certificate of Incorporation — After examination, and finding that the documents presented are in accordance with the law, rules and regulations governing establishment of homeowners associations, HIGC or the office designated by it shall cause to be prepared a Certificate of Incorporation for the signature of the Head of HIGC or any of its duly authorized signatories.
SECTION 4. Release of Certificate — After the certificate is signed, it shall be referred back to the office where the incorporation papers were originally received for the release of said certificate. That office shall record in the registry book the following additional entries:
a. The number appearing in the certificate;
b. Date of release of certificate; and
c. The name of person to whom it was released.
SECTION 5. Certificate of Filing of By-Laws — A certificate evidencing submission of the by-laws in accordance with the prescribed form shall be issued at the same time that the Certificate of Incorporation is issued. The date of submission of the by-laws shall likewise be recorded, as an additional entry in the appropriate registry.
SECTION 6. Refusal and Denial of Application for Registration — The application for registration or incorporation may be denied or refused for failure of the registrant association to comply with the requirements of these Rules and of the Corporation Code or for any of the grounds enumerated on paragraph (b) of Section 1, Rule VIII.
SECTION 7. Effect of Registration — Upon registration, the homeowners association shall become a body corporate with a personality separate and distinct from that of its individual members.
Rule IV
Amendment/s of Articles of
Incorporation and By-Laws
SECTION 1. Amendment of Articles or By-Laws — At any time after incorporation, the Articles of incorporation and By-laws of Homeowners Associations may be amended upon submission to HIGC of the following:
a. Amended Articles of Incorporation together with Directors’ Certificate under oath and filing fee.
b. Amended/new By-laws together with directors’ certificate under oath and filing fee.
c. In case the amendment refers to change in corporate name of the association, a written undertaking to change corporate name in the event that another person, firm, or entity has acquired a prior right to the said name or one similar to it.
Rule V
Submission of Reports and Penalties
SECTION 1. Required Reports — The Home-owners Association is required to submit the following reports:
a. Annual Report containing its financial statement within 120 days from the end of the fiscal year as specified in the by-laws of the association.
b. Association Books —
Date of Submission: Within 30 days from the date of the issuance of Certificate of Incorporation.
c. Information Sheet (as of the date of annual meeting) within 30 days from the date of annual meeting.
d. Minutes of the annual meeting of the members for the election of the Board of Directors/Trustees within 30 days from the date of annual meeting.
f. Minutes of the meeting of the Board for the election of officers of the association within 30 days from the date of meeting.
g. Notice of Postponement of annual meeting within 30 days prior to the date of annual meeting.
h. Affidavit of non-holding of annual meeting, together with the general information sheet within 30 days from the date of annual meeting.
i. Board Resolution of non-operation to be submitted within 30 days from the date of annual meeting.
j. Such other reportorial requirements as may be imposed by HIGC.
SECTION 2. Penalties — The HIGC shall have the power to assess and collect penalties for late filing of any of the aforementioned reportorial requirements.
Rule VI
Association Funds
SECTION 1. Contributions and Fees — Resolutions requiring contributions or fees from members other than those provided in the by-laws must state the purpose for which the funds are to be used, the necessity therefor, and the manner in which the same shall be spent. The association shall issue official receipts duly registered with the BIR for all funds received by it.
SECTION 2. Treasurer’s Bond — The treasurer must be adequately bonded in such amount as the Board of Directors/Trustees may determine.
Rule VII
Grounds for Dissolution of Homeowners
Associations and for Suspension or
Revocation of Certificate of Registration
SECTION 1. Grounds for Dissolution — Homeowners Associations may be dissolved under any of the following grounds, circumstances and conditions:
a. Shortening corporate term by complying with the following requisites:
a. Fraud or misrepresentation in procuring its certificate of registration;
b. Serious misrepresentation as to what the association can do or is doing;
c. Refusal to comply with or defiance of any lawful order of HIGC or its hearing officer;
d. Misuse of a right, privilege, or franchise conferred upon it by law, or when the association has exercised a right, privilege, or franchise in contravention of law;
e. Commission or omission of an act which amounts to a surrender of its corporate rights, privileges or franchises;
f. Commission of an offense against a provision of these Rules or of the Corporation Code of the Philippines, whenever the same is applicable;
g. Continuous inoperation or inactivity for a period of at least five (5) years; and
h. Failure to file required reports in appropriate forms as determined by the HIGC within the prescribed period;
Rule VIII
Regulatory and Incidental Powers
SECTION 1. Regulatory Powers — In the exercise of its power to regulate and supervise the organization and operation of homeowners association, the HIGC through its duly authorized representatives shall have the following powers:
a. To impose fines and/or penalties for violation of these rules and related regulations, its orders, decisions and/or rulings.
b. To pass upon, refuse, or deny the application for registration of any association, if its establishment, organization, or operation will be contrary to law or to the declared purposes, policies and guidelines of HIGC.
c. To suspend or revoke certificate of registration of the association upon any grounds provided under Sec. 2 of Rule VII of these Rules.
SECTION 2. Incidental Powers — The HIGC shall also have the following powers:
a. To enlist the aid and support of any and all enforcement agencies of the government, civil, or military; and
b. To exercise such other powers as may be implied, necessary or incidental to carry out the express powers granted to it or to achieve the objectives and purposes of its charter and the provisions of Executive Order No. 535 in relation to the Corporation Code of the Philippines and related laws.
Rule IX
Supervisory Powers
SECTION 1. Supervisory Powers — In addition to whatever powers have been stated in the foregoing provisions, the HIGC or its duly authorized representative or agent shall have the following powers, duties and responsibilities:
1. Conduct, whenever necessary, an on-the-spot inspection, audit, examination and investigation of the books, accounts and financial conditions of the HOAs and other associations.
2. Monitor compliance with the requirements relative to the submission of reports as indicated in Rule V above and impose penalties for violations therefor as provided for in the attached schedule of fees and penalties.
3. If warranted, to act as observer during election of directors/officers of the association upon request of such association.
4. Supervise/oversee the conduct of general elections whenever circumstances warrant the same.
5. Call a special election and set the rules that should govern the conduct of said special elections in case of unjustified refusal of the incumbent/hold-over officers/directors to call the same.
6. To issue and enforce the necessary guide-lines, policies, rules and regulations relative to the management and administration of homeowners associations.
Rule X
Fees and Penalties
SECTION 1. Fees and Penalties — The schedule of fees and penalties as referred to in these rules are provided for in Annex “A” hereof.
Rule XI
Amendments
SECTION 1. Amendments — These Rules may from time-to-time be amended or modified by the HIGC.
Rule XII
Effectivity
SECTION 1. Effectivity of Rules — The foregoing rules shall take effect after its approval and publication in any newspaper of general circulation, whichever comes earlier.
Adopted: 21 Dec. 1989
Certified Correct:
Definition of Terms and
Interpretation of Rules
SECTION 1. Meaning — Unless otherwise clearly indicated, the following shall mean:
a. HIGC — the Home Insurance and Guaranty Corporation, formerly Home Financing Commission and thereafter, Home Financing Corporation, a government owned and controlled corporation created under R.A. 580, as amended by Executive Order No. 535 and renamed under Executive Order No. 90.
b. Homeowners Association (HOA) is any housing or community association composed primarily of present or future homeowners/awardees/occupants of private or government housing project, subdivision and urban estates organized for the purpose of facilitating the delivery of adequate housing, social and other related services to improve the quality of life of its members.
c. Homeowners/Awardees refers to: (i) the legal owners or present or future awardees or actual occupants of the housing units in a private or government housing project, subdivision or urban estate, or
(ii) beneficiaries of the Community Mortgage Program (CMP), or
(iii) members of any association organized for the primary purpose of home ownership, who have met all the qualifications and none of the disqualifications set forth by the Articles of Incorporation, By-Laws or rules and regulations of such housing projects, subdivisions housing estate, or associations.
d. Order — any directive of HIGC or such other officer, body, or committee created or designated by HIGC to act in its steads.
e. Rules on Registration of Homeowners — the foregoing Rules issued by HIGC governing the organization, registration and supervision of homeowners associations.
f. Certificate — Certificate of Incorporation issued or to be issued to a homeowners association which has completed all the requirements for registration.
SECTION 2. Interpretation — The Rules shall be liberally construed to carry out the objectives of R.A. 580 and Executive Orders No. 535 and 90 in relation to the Corporation Code of the Philippines and other related laws.
Requisite Documents for Registration
SECTION 1. Registration Documents — For purposes of registration, the following documents shall be submitted:
a. Articles of Incorporation signed by all incorporators consisting of not less than five (5) nor more than fifteen (15) natural persons, together with the filing fee.
b. By-Laws signed by all the incorporators appearing in the Articles of Incorporation, together with the filing fee. The By-Laws must be submitted together with the Articles of Incorporation.
c. Written undertaking to: (1) Change corporate name in the event that another person, firm or entity has acquired a prior right to the use of said name or one similar to it.
2) Comply with the rules and regulations issued by HIGC, specifically with all its reportorial requirements.
d. Information Sheet.
e. Certification as to the existence of an association within the subdivision, community, etc.
Registration
SECTION 1. Place of Registration — The homeowners association shall submit its incorporation papers for registration referred to in the foregoing rule, at the principal office of HIGC or at the office designated by it.
SECTION 2. Filing Fee and Entries in the Registry Book — The HIGC or the office designated by it shall require the payment of filing fees for the articles of incorporation and the by-laws and shall record in the registry the docket number, corporate name, and principal office of the association, and the date of submission of the incorporation papers.
SECTION 3. Certificate of Incorporation — After examination, and finding that the documents presented are in accordance with the law, rules and regulations governing establishment of homeowners associations, HIGC or the office designated by it shall cause to be prepared a Certificate of Incorporation for the signature of the Head of HIGC or any of its duly authorized signatories.
SECTION 4. Release of Certificate — After the certificate is signed, it shall be referred back to the office where the incorporation papers were originally received for the release of said certificate. That office shall record in the registry book the following additional entries:
a. The number appearing in the certificate;
b. Date of release of certificate; and
c. The name of person to whom it was released.
SECTION 5. Certificate of Filing of By-Laws — A certificate evidencing submission of the by-laws in accordance with the prescribed form shall be issued at the same time that the Certificate of Incorporation is issued. The date of submission of the by-laws shall likewise be recorded, as an additional entry in the appropriate registry.
SECTION 6. Refusal and Denial of Application for Registration — The application for registration or incorporation may be denied or refused for failure of the registrant association to comply with the requirements of these Rules and of the Corporation Code or for any of the grounds enumerated on paragraph (b) of Section 1, Rule VIII.
SECTION 7. Effect of Registration — Upon registration, the homeowners association shall become a body corporate with a personality separate and distinct from that of its individual members.
Amendment/s of Articles of
Incorporation and By-Laws
SECTION 1. Amendment of Articles or By-Laws — At any time after incorporation, the Articles of incorporation and By-laws of Homeowners Associations may be amended upon submission to HIGC of the following:
a. Amended Articles of Incorporation together with Directors’ Certificate under oath and filing fee.
b. Amended/new By-laws together with directors’ certificate under oath and filing fee.
c. In case the amendment refers to change in corporate name of the association, a written undertaking to change corporate name in the event that another person, firm, or entity has acquired a prior right to the said name or one similar to it.
Submission of Reports and Penalties
SECTION 1. Required Reports — The Home-owners Association is required to submit the following reports:
a. Annual Report containing its financial statement within 120 days from the end of the fiscal year as specified in the by-laws of the association.
b. Association Books —
| Membership Book | Cash Book | |
| Minutes Book | Ledger and Journal |
Date of Submission: Within 30 days from the date of the issuance of Certificate of Incorporation.
c. Information Sheet (as of the date of annual meeting) within 30 days from the date of annual meeting.
d. Minutes of the annual meeting of the members for the election of the Board of Directors/Trustees within 30 days from the date of annual meeting.
f. Minutes of the meeting of the Board for the election of officers of the association within 30 days from the date of meeting.
g. Notice of Postponement of annual meeting within 30 days prior to the date of annual meeting.
h. Affidavit of non-holding of annual meeting, together with the general information sheet within 30 days from the date of annual meeting.
i. Board Resolution of non-operation to be submitted within 30 days from the date of annual meeting.
j. Such other reportorial requirements as may be imposed by HIGC.
SECTION 2. Penalties — The HIGC shall have the power to assess and collect penalties for late filing of any of the aforementioned reportorial requirements.
Association Funds
SECTION 1. Contributions and Fees — Resolutions requiring contributions or fees from members other than those provided in the by-laws must state the purpose for which the funds are to be used, the necessity therefor, and the manner in which the same shall be spent. The association shall issue official receipts duly registered with the BIR for all funds received by it.
SECTION 2. Treasurer’s Bond — The treasurer must be adequately bonded in such amount as the Board of Directors/Trustees may determine.
Grounds for Dissolution of Homeowners
Associations and for Suspension or
Revocation of Certificate of Registration
SECTION 1. Grounds for Dissolution — Homeowners Associations may be dissolved under any of the following grounds, circumstances and conditions:
a. Shortening corporate term by complying with the following requisites:
- Amended Articles Incorporation.
- Directors Certificate under oath.
- Filing fee.
- Publication of notice of dissolution shortening the term of its existence in a newspaper of general circulation once a week for three (3) consecutive weeks.
- Where creditors are not affected, dissolution is effected by resolution of 2/3 of the members of the association and majority of its Board of Directors/Trustees by complying with the following requisites:
a) Resolution of the association’s members authorizing the dissolution certified by majority of the Board of Directors/Trustees and countersigned by the Corporate Secretary.
b) Filing fee.
c) Publication of notice of time, place and object of meeting once a week for three (3) consecutive weeks in a newspaper published in the place where the principal office of said association is located; and if no newspaper is published in such place, then in a newspaper of general circulation in the Philippines and after sending such notice to each member either by registered mail or by personal delivery at least thirty (30) days prior to said meeting. - Where creditors are affected, dissolution is effected by a petition filed with HIGC conforming to the following:
a) Petition signed by a majority of the Board of Directors/Trustees or other officers having the management of its affairs, verified by its President or Secretary or one of its directors or trustees setting forth all claims and demands against it and that its dissolution was resolved by the affirmative vote of at least 2/3 of the members at a meeting of the member called for that purpose.
b) Filing fee.
c) Publication of copy of HIGC order reciting the purpose of the petition and fixing the date when objections thereto may be filed by any person once a week for three (3) consecutive weeks in a newspaper published in the place where the principal office of the association is situated, or if there be no such newspaper, then in a newspaper of general circulation in the Philippines and a similar copy shall be posted for three (3) consecutive weeks in three (3) public places in the municipality or city where the principal office of the association is located.
Thereafter, HIGC shall hear the petition and render judgment dissolving the association.
- Upon the initiation of the Office of the Solicitor General’s Office through the filing of a verified complaint with HIGC.
- Payment of filing fee.
- After proper notice and hearing on grounds provided by existing laws, rules and regulations, the association is dissolved by HIGC.
a. Fraud or misrepresentation in procuring its certificate of registration;
b. Serious misrepresentation as to what the association can do or is doing;
c. Refusal to comply with or defiance of any lawful order of HIGC or its hearing officer;
d. Misuse of a right, privilege, or franchise conferred upon it by law, or when the association has exercised a right, privilege, or franchise in contravention of law;
e. Commission or omission of an act which amounts to a surrender of its corporate rights, privileges or franchises;
f. Commission of an offense against a provision of these Rules or of the Corporation Code of the Philippines, whenever the same is applicable;
g. Continuous inoperation or inactivity for a period of at least five (5) years; and
h. Failure to file required reports in appropriate forms as determined by the HIGC within the prescribed period;
Regulatory and Incidental Powers
SECTION 1. Regulatory Powers — In the exercise of its power to regulate and supervise the organization and operation of homeowners association, the HIGC through its duly authorized representatives shall have the following powers:
a. To impose fines and/or penalties for violation of these rules and related regulations, its orders, decisions and/or rulings.
b. To pass upon, refuse, or deny the application for registration of any association, if its establishment, organization, or operation will be contrary to law or to the declared purposes, policies and guidelines of HIGC.
c. To suspend or revoke certificate of registration of the association upon any grounds provided under Sec. 2 of Rule VII of these Rules.
SECTION 2. Incidental Powers — The HIGC shall also have the following powers:
a. To enlist the aid and support of any and all enforcement agencies of the government, civil, or military; and
b. To exercise such other powers as may be implied, necessary or incidental to carry out the express powers granted to it or to achieve the objectives and purposes of its charter and the provisions of Executive Order No. 535 in relation to the Corporation Code of the Philippines and related laws.
Supervisory Powers
SECTION 1. Supervisory Powers — In addition to whatever powers have been stated in the foregoing provisions, the HIGC or its duly authorized representative or agent shall have the following powers, duties and responsibilities:
1. Conduct, whenever necessary, an on-the-spot inspection, audit, examination and investigation of the books, accounts and financial conditions of the HOAs and other associations.
2. Monitor compliance with the requirements relative to the submission of reports as indicated in Rule V above and impose penalties for violations therefor as provided for in the attached schedule of fees and penalties.
3. If warranted, to act as observer during election of directors/officers of the association upon request of such association.
4. Supervise/oversee the conduct of general elections whenever circumstances warrant the same.
5. Call a special election and set the rules that should govern the conduct of said special elections in case of unjustified refusal of the incumbent/hold-over officers/directors to call the same.
6. To issue and enforce the necessary guide-lines, policies, rules and regulations relative to the management and administration of homeowners associations.
Fees and Penalties
SECTION 1. Fees and Penalties — The schedule of fees and penalties as referred to in these rules are provided for in Annex “A” hereof.
Amendments
SECTION 1. Amendments — These Rules may from time-to-time be amended or modified by the HIGC.
Effectivity
SECTION 1. Effectivity of Rules — The foregoing rules shall take effect after its approval and publication in any newspaper of general circulation, whichever comes earlier.
Adopted: 21 Dec. 1989
Certified Correct:
(Sgd.) LOURDES FEMA A. GALINATO
Acting Corporate Secretary
Acting Corporate Secretary