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Attached  herewith  is  HLURB  Board  Resolution  No.  R-965,  Series  of  2017, Revised Implementing Rules and Regulations to Govern Sections 3, 18 and 20 of Republic  Act  No.  7279,  Otherwise  Known  as  the  Urban  Development   and Housing Act of 1992, as Amended by Republic Act No. 10884, Otherwise Known as  “Balanced  Housing  Development  Program  Amendments”,  approved  by  the Board on 07 December 2017.

The  said  Board  Resolution  was  published  in  The  Philippine  Star,  today,  12
January 2018, and in accordance  with the pertinent provisions  of law, will take effect fifteen (15) days from its date of publication, on 27 January 2018.

Please be guided accordingly.


Attachment:


Pursuant to Section 3 of Republic Act No. 10884 (RA 10884), otherwise known as the “Balanced  Housing  Development  Program  Amendments”,  the following  rules and regulations  have been approved  and adopted  by the Housing  and Land Use Regulatory Board (HLURB):


Section 1. Scope and Coverage of Rules and Regulations. – These Rules and Regulations (“Rules”) shall cover all new residential subdivision and new residential condominium  projects, with applications  for approval or development  permit filed with the local government unit or HLURB upon the effectivity of RA 10884.

This  Rules  shall  likewise   cover  all  existing   residential   subdivision   and  existing residential  condominium  projects with applications  for expansion  or alteration resulting to an  increase  in  the  total  project  area  or  total  project  cost  of  the  original  residential subdivision  or residential  condominium  projects  filed  with  the  local  government  unit  or HLURB upon the effectivity of RA 10884.

Proposed residential subdivision or residential condominium  projects to be sold at the prevailing price ceiling for socialized housing, as may be jointly determined by the Housing and Urban Development Coordinating Council (HUDCC) and National Economic and Development Authority (NEDA), shall be exempt from the coverage of this Rules.

Section  2. Definition  of Terms.  – For purposes  of this Rules,  the terms or words used  herein  shall,  unless  the  context  indicates  otherwise,  mean  or  be  understood  as follows:

2.1      “Asset-Backed  Securities” refers to the certificates that may be issued by a special purpose entity in accordance  with Republic Act No. 9267 or the “Securitization  Act of 2004”, as originated or sold by any of the Housing Agencies.

2.2      “Balanced   Housing   Development”   refers   to  the   requirement   that   owners   or developers  of residential  subdivision  and condominium  projects  shall develop  an area for socialized housing equivalent to at least fifteen percent (15%) of the total subdivision project area or total subdivision project cost or five percent (5%) of condominium  area  or condominium  project  cost,  as prescribed  by Section  18 of Republic  Act No. 7279 (RA 7279),  otherwise  known  as the “Urban  Development and Housing Act of 1992, as amended by RA 10884. The balanced housing development  may  also  be complied  with  through  the other  manners  as may  be provided under the law and the rules and guidelines issued by the HLURB.

2.3      “Building   Adequate,   Livable,   Affordable   and   Inclusive   Filipino   Communities (BALAI)” refers to the housing program of the Housing and Urban Development Coordinating Council.

2.4      “Community  Mortgage  Program”  (CMP)  refers  to a financing  window  or scheme, funded  by  the  Government   through   the  Social  Housing   Finance   Corporation (SHFC), that provides long-term loans to a legally-organized  association consisting of the residents  of a blighted and depressed  community,  enabling the association and its qualified members to acquire ownership or tenurial security on the property and the land they occupy.

2.5     “Compliance”  refers  to  the  modes  and  manners  provided  by  Section  18  of  RA
7279,  as  amended  by  RA  10884,  the  implementing  rules  and  regulations,  and guidelines of the HLURB by which the developer of the main project can fulfill and satisfy the balanced housing development.

2.6      “Compliance Project” refers to entire or a portion of the socialized housing program or  socialized   housing   project   utilized   to  comply   with   the   balanced   housing development under Section 18 of RA 7279, as amended by RA 10884.

2.7      “Condominium  Area” refers to gross land area for development  of a condominium project plus the total gross floor area of the condominium building.

2.8      “Condominium  Project” refers to the entire parcel of real property divided or to be divided  for  residential  purposes  into  condominium  units,  including  all  structures thereon.

In the case of a mixed-use condominium  project, condominium  area refers to gross land area for development  of a condominium  project plus the aggregate floor area of the condominium  building less the aggregate  floor area of the commercial  units and the proportionate share thereof in the pertinent common areas.

2.9      “Condominium  Project Cost” refers to the total cost of: (i) raw land, based on the zonal value at the time of application for condominium  development permit, (ii) land development, and (iii) building construction.

In the case of a mixed-use  condominium  project, condominium  project cost refers to the total cost of: (i) raw land, based on the zonal value at the time of application for condominium development permit, (ii) land development, and (iii) building construction,  less the cost of the aggregate floor area of the commercial  units and the proportionate share thereof in the pertinent common areas.

2.10    “Developer” refers to the person, natural or juridical, who develops or improves the residential  subdivision  project or residential  condominium  project for and in behalf of the owner thereof.  The land owner who develops  a subdivision  project directly shall be considered as a developer.

2.11    “Housing   Agencies”   or  “Shelter   Agencies”   refers  to  the  Housing   and  Urban Development Coordinating Council (HUDCC), National Housing Authority (NHA), National Home Mortgage Finance Corporation (NHMFC), Social Housing Finance Corporation (SHFC), Housing and Land Use Regulatory Board (HLURB), Home Guaranty Corporation (HGC), and Home Development Mutual Fund (HDMF).

2.12    “Joint Venture” (JV) refers to the commitment or agreement between the developer of the main project and the local government  unit, any of the housing agencies, or another HLURB-accredited  developer or non-government organization, for which purpose  the  parties  thereto  combine  their  funds,  land  resources,  facilities  and services to comply with the balanced housing development of UDHA.

2.13    “Land  Development”   refers  to  land  clearing   and  grubbing,   road  construction, installation of power and water distribution system, construction of drainage and sewerage system, and other developments  contained in the approved plans and/or in the brochure and advertisement.

2.14    “Main Project” refers to the proposed residential subdivision or proposed residential condominium  project required to comply with Section 18 of RA 7279, as amended by RA 10884, and which shall be the basis for computing the balanced housing development.

2.15    “Manner of Compliance”  refers to the means through which the requirement  of the Balanced  Housing  Development  Program  will be accomplished  by the developer, either through self-development, joint venture with the local government, the other government housing agencies, or the private sector or participation.

2.16   “Mode of Compliance” refers to the option given to the developer regarding the percentage of the main project, either project cost or project area, which will be the basis for computing the area or cost of the compliance project.

2.17    “New  settlement”  refers  to communities  or developments  where  the  compliance project may be located and which are provided with or with access to basic facilities and  services,  and  livelihood  component  as  provided  in  Sections  21  and  22  of UDHA.

2.18    “Non-Performing  Socialized  Housing  Assets”  refers to socialized  housing  units or projects  owned  by  the  government  housing  agencies  or  LGU’s  needing rehabilitation  and  restoration  before  they  can  be  made  available  for sale  at the prevailing price ceiling for socialized housing.

2.19    “Socialized Housing” refers to housing programs and projects covering houses and lots  or  homelots   only,   or  residential   condominium   units,   undertaken   by  the Government  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  in  accordance   with  the provisions of RA 7279, as amended by RA 10884.

2.20    “Socialized  Housing Program” refers to on-site, urban renewal and resettlement  or relocation housing undertaken by the Government or the private sector which make available  various alternative  schemes  or secure tenure policies for the disposition of lands to the beneficiaries of the program.

2.21    “Socialized   Housing   Project”   refers   to   residential   subdivision    projects   and residential  condominium  projects,  undertaken  by  the  Government  or  the  private sector, that are sold at the prevailing price ceiling for socialized housing and which shall  comply   with  the  standards   under   Batas   Pambansa   Blg.  220  and  the applicable   provisions   and  implementing   rules  and  regulations   of  Presidential Decree No. 957.

2.22    “Solidary  Liability”  refers to the obligation  of the developer  of the main project  to comply  with  the  socialized  housing  standards  and  to  completely   develop  the required   compliance   project  if,  for  any  reason,   the  private  developer   of  the compliance project shall fail to do so.

2.23    “Subdivision  Project” refers to a tract or a parcel of land registered under the Land Registration  Act  (Act  No.  496)  which  is partitioned  for  residential  purposes  into individual  lots with or without improvements  thereon,  and offered to the public for sale, in cash or in installment terms.

2.24    “Total Subdivision  Area” refers to gross land area for development  of subdivision projects  without  housing  component;  or on gross land area for development  plus the aggregate floor area of all housing units of subdivision projects with housing components.

2.25    “Total Subdivision Project Cost” refers to the total cost of: (i) raw land, based on the zonal value at the time of application for subdivision development permit, (ii) land development, and (iii) housing component construction.

Section 3. Preferred Manner of Compliance.  – Developers  of proposed residential subdivision projects shall be required to develop an area for socialized housing equivalent to at least fifteen percent  (15%) of the total subdivision  area or total subdivision  project cost,  at  the  option  of  the  developer.  Developers  of  proposed  residential  condominium projects shall be required to develop an area for socialized housing equivalent to at least five percent (5%) of condominium area or project cost, at the option of the developer.

In  all  cases,  the  compliance  project  shall  be  developed  in  accordance  with  the standards set by HLURB and other existing laws.

Section 4. Other Manners of Compliance.  – The developers  may also choose any of the following manners of compliance,  subject to the pertinent guidelines, requirements, and procedures that may be promulgated by HLURB:

4.1  Development of socialized housing in a new settlement;

4.2  Joint-venture projects for socialized housing with any of the following:

4.2.1   The local government units for:

4.2.1.1    The   development   of   socialized   housing   program   or   socialized housing project;

4.2.2   Any of the housing agencies for:

4.2.2.1    The  development   of  socialized   housing   programs   or  socialized housing projects under the BALAI program of the HUDCC;

4.2.3   Another private socialized housing developer for:

4.2.3.1    The   development   of   socialized   housing   program   or   socialized housing project by its subsidiary of the main developer

Provided,  that  the  mother  company  owns  at  least  fifty  one  (51%)
percent of the subsidiary.

4.2.3.2    The   development   of   socialized   housing   program   or   socialized housing project by an accredited socialized housing developer

Provided, that if the developer of the compliance  project as provided under  4.2.3  hereof  shall  fail  to  complete  the  development  of  the project,  the  developer  of the  main  project  shall  be  solidarity  liable with  the  private   developer   to  the  extent   of  compliance   to  the balanced  housing  development,  regardless  of  the  provision  in  the joint venture agreement.

4.2.4   A non-government  organization  (NGO) engaged in the provision of socialized housing for:

4.2.4.1    The   development   of   socialized   housing   program   or   socialized housing project;

Provided, that if the developer of the compliance  project as provided under  4.2.4  hereof  shall  fail  to  complete  the  development  of  the project,  the  developer  of the  main  project  shall  be  solidarily  liable with the NGO to the extent of compliance to the balanced housing development,  regardless  of the provision  in the joint venture agreement.

4.3 Participation in a new project under the community mortgage program thru land development in a CMP project;

4.4  Participation   based  on  a  percentage   of  the  amount   of  investment   required   to undertake a new settlement for socialized housing project applicable as follows:

4.4.1   Thru a third party for the implementation  of land development,  installation  of water utility, or power utility; or
4.4.2   Construction,  thru a third party,  of non-salable  and non-recoverable  housing projects  on land owned  by the government  or donated  private  land such as housing for AFP personnel, public housing, rehabilitation of calamity-stricken communities,   housing  for  street  children,  indigent  elderly  and  people  with disability or other types of projects.

The developer participating under this provisions shall enter into a Memorandum of Agreement  with the HLURB, HUDCC and any Shelter Agency or Local Government Unit  as  proof  of  participation.  The  accredited  socialized  housing  developer  shall submit  to  HLURB  a  proposed  socialized  housing  project  or  program  for  HLURB evaluation and approval. The amount of participation required for socialized housing compliance  shall be deposited  by the private  developer  in an escrow  trust account with  Pag-lbig  Fund  and  such  funds  shall  be  subject  to  release  to  the  third  party contractor accredited by the HLURB in accordance with the terms and conditions of a work order or construction agreement. Upon remittance by the developer of its participation in escrow with the Pag-lbig Fund, as enumerated in the Memorandum  of Agreement,   a  Provisional   Certificate   of  Compliance   to  the   socialized   housing requirement  shall  be issued  in its favor.  A final  Certificate  of Compliance  shall  be issued in favor of the developer upon completion of the construction or installation intended for the remitted participation in escrow with the Pag-ibig Fund, indicating the specific construction  or installation  with the corresponding  geotagging  of the location of the project/installation  for easy verification.

Any form of joint venture agreement or participation  shall be annotated to the mother title  of  the  socialized  housing  project  with  geotagging  in  the  approved  Bureau  of Lands Locational Monument (BLLM).

4.5  Purchase or subscription  of “Asset-Backed  Securities”  issued or conveyed by any of the housing agencies for the purpose of raising funds for the development of new socialized housing projects, subject to the maximum amount to be set by the HUDCC and  National  Economic  and  Development  Authority  (NEDA).  The  actual  purchase price of the “Asset-backed  Security”  shall be evidenced  by an official receipt issued by  the  issuing  shelter  agencies  which  shall  be  reflected  in the  face  of the  Asset- Backed Security. Asset-backed  securities must be made in accordance  with existing laws.

Upon  registration  by the main  developer  of its subscription/purchase  of the Asset- Backed Security, a Provisional Certificate of Compliance to the socialized housing requirement   shall  be  issued  in  its  favor  by  the  HLURB.   A  final  Certificate   of Compliance shall be issued in favor of the main developer upon completion of the construction  of the socialized  housing  project  funded  by the asset-backed  security, with the corresponding geotagging of the location of the project for easy verification;

Considering  that the cost incurred  by the developer  under:  (a) 4.1; (b) 4.2.1.1;  (c) 4.2.2.1; (d) 4.2.3.1; and (e) 4.2.4.1; of this section is recoverable upon the payment of the socialized  housing units, the total cost of the socialized  housing project shall be equivalent  to Five percent (5%) of the project cost of the main condominium  project and Fifteen percent (15%) of the project cost of the main subdivision project.

Considering  that  the  cost  incurred  by  the  developer  under  4.5  of  this  section  is recoverable   upon  maturity  of  the  issued  bonds  with  payment  of  the  prescribed interest, the actual subscription  cost of the bond, as evidenced  by the official receipt issued by the issuing Shelter Agency, shall be equivalent to Five percent (5%) of the project cost of the main condominium  project and Fifteen percent (15%) of the project cost of the main subdivision project.

Considering  that the cost incurred by the developer under: (a) 4.3 and, (b) 4.4 of this section is non-recoverable,  the computation  of the required value of participation,  for purposes  of compliance,  shall  be in the  amount  equivalent  to at least  twenty  five (25%) percent of the total project cost of the socialized housing project in order to be credited the entire socialized housing project or program.

In all cases, the compliance  projects that may be developed  under Section 4 hereof shall comply with the standards  and requirements  of the HLURB and R.A. 9267, as the case may be, and other applicable laws and regulations.  The compliance  project shall be subject to the minimum design standards promulgated pursuant to Batas Pambansa Blg. 220 (BP 220), HLURB rules and regulations, and other related laws.

The Chief Executive Officer of the HLURB shall first approve all socialized housing projects or programs that will be used as compliance to the balanced housing development   before  developers   of  the  main  project  can  use  it  as  compliance; Provided,  approval or denial thereof shall be given by the Chief Executive  Officer of the  HLURB  within  ten  (10)  working  days  upon  receipt  by  the  Office  of  the  Chief Executive Officer of the HLURB, subject to existing laws and regulations. Grounds for the  denial  of  the  utilization  as  compliance  of  the  socialized  housing  projects  or programs shall be specified.

Section  5.  Location  of  Compliance  Project.  –  The  compliance  project  shall  be located in the same municipality or city where the main project is located, if feasible, of the main project. The location of the compliance  project shall be specified via geotagging  for easy verification.

Section 6. Non-Combination of Compliance.  – The developer  of the main project shall not be allowed to use a combination of project area and project cost as basis for computation of a single compliance.

Section 7. Registration  of the Compliance  Project. – Any new socialized housing program  undertaken  by an accredited  developer,  an accredited  non-government organization,  and by any shelter  agency  or any local government  unit under the BALAI program of HUDCC, shall have the same registration  for approval by the CEO of HLURB before the same can be used as a compliance project. Such compliance projects shall be subject to HLURB rules and guidelines, as may be issued pursuant hereto.

A Provisional Certificate of Compliance to the socialized housing requirement shall be issued in its favor by the HLURB. A final Certificate of Compliance shall be issued in favor of  the  main  developer  upon  completion  of  the  construction  of  the  socialized  housing project,   with  the  corresponding   geotagging   of  the  location   of  the  project   for  easy verification.

Section  8. Accreditation  of Developers  and Non-Government  Organizations.  – All developers  and non-government  organizations  with which the developer  of the main project will enter into a joint venture agreement under 4.2.3 and 4.2.4 above shall apply for accreditation in accordance with the guidelines issued by the HLURB.

Section 9. Incentives  for Private Sectors Participating  in Socialized  Housing. –
The HLURB shall coordinate with the appropriate government agencies for the purpose of:

9.1      Creation   of  one  stop  offices  in  the  different   regions   of  the  country   for  the processing, approval and issuance of clearances, permits and licenses;

9.2     Simplification of financing procedures; and

9.3     Exemption from the payment of the following:

9.3.1   Project-related  income taxes;
9.3.2   Capital gains tax on raw lands used for the project;
9.3.3   Value-added tax for the project contractor concerned;
9.3.4   Transfer tax for both raw completed projects; and
9.3.5   Donor’s  tax for lands certified  by the local government  units to have been donated for socialized housing purposes.

Section  10. Socialized  Housing  Certification.  – For the purpose  of availment  by the developer  of the incentives  under RA 7279 as amended  by RA 10884,  the HLURB shall issue a certification that the socialized housing program or socialized housing project has been registered  and/or  licensed  by HLURB.  Furthermore,  the developer  shall have the  option  to undertake  “Advanced  Compliance”  under  any  of the  allowable  modes  of socialized housing compliance which shall be applicable to future main projects of the developer subject to registration and certification guidelines of the HLURB.

Section  11.  Incentivized   Compliance.   –  The  HLURB,  in  coordination   with  the HUDCC, hereby grants additional incentives in the availment and utilization of the manner of compliance by way of participation per Sections 3, 18 and 20 of Republic Act No. 7279, as amended by Republic Act No. 10884.

11.1    Any developer, who shall participate in any socialized housing project approved by the HLURB or rehabilitation of calamity-stricken communities, under the BALAI programs of the HUDCC, by way of constructing or contracting through a third party for the construction or installation of any of the enumerated, shall be considered as compliance:

(a)   Provision of adequate and potable water supply and distribution; (b)   Provision of adequate power/electrical  distribution system;
(c)   Implementation  of land development plans which shall include the construction of roads, drainage and open space facilities; and
(d)   Construction  of  non-salable  and  non-recoverable   housing  projects  on  land owned  by  the  government   or  donated  land  such  as  housing  for  military personnel,  public  housing,  housing  for  street  children,  indigent  elderly  and people with disability.

11.2    Considering   that  the  cost  incurred   by  the  developer   in  this  section   is  non- recoverable, the computation of the value of the above enumerated construction or installation  vis-à-vis  its  actual  cost,  for  purposes  of  compliance,  shall  be  in  the amount equivalent to at least twenty (20%) percent of the total project cost of the socialized  housing  project  in  order  to  be  credited  the  entire  socialized  housing project or program.

11.3    The developer participating  under this provision shall enter into a Memorandum  of Agreement  with  the HLURB,  HUDCC  and  any  Shelter  Agency  or Local Government   Unit  as  proof  of  participation.   The  accredited   socialized   housing developer shall submit to HLURB a proposed socialized housing project or program for HLURB evaluation and approval.

11.4    Upon remittance  by the developer  of its participation  in escrow  with the Pag-Ibig Fund as enumerated in the Memorandum  of Agreement, a Provisional Certificate of Compliance  to the socialized  housing  requirement  shall be issued  in its favor.  A final  Certificate  of  Compliance  shall  be  issued  in  favor  of  the  developer  upon completion  of the construction  or installation  intended for the remitted participation in escrow with the Pag-ibig Fund, indicating the specific construction  or installation with the corresponding  geotagging of the location of the project/installation  for easy verification;

Section 12. Strict and Faithful Compliance.  – The HLURB shall ensure strict and faithful compliance by the developers with the balanced housing development through:

12.1    Proper and sufficient documentary submission;

12.2    Publication  of the notices of filing of registration  statement and posting of billboard notices at the sites of both the main and compliance projects;

12.3    Detailed  annotation  on the certificate  of registration  or license  to sell of both the main  and  compliance   projects   of  the  name  and  location   of  the  projects   by specifying its geographical coordinates verifiable by google maps, their respective project  area  and  cost,  including  the  specific  blocks  and  lots,  or  units  of  the compliance project, and the remaining blocks and lots, or units still available for compliance, in order to avoid insufficient, duplication or re-utilization of compliance;

12.4    Conduct of ocular inspection and regular monitoring of the compliance projects in accordance with its rules and regulations; and

12.5    Imposition of fines and sanctions in case of any violation or noncompliance  with the balanced housing development.

Section  13.  Authority  to  Issue  Guidelines   and  Circulars.   –  Subject  to  prior authority  or  approval  by  the  Executive  Committee,  the  Chief  Executive  Officer  of  the HLURB is hereby authorized to issue guidelines and memorandum  circulars implementing or   interpreting   this   Rules,   provided   that   the   provisions   of   such   guidelines   and memorandum  circulars  shall not be inconsistent  with or go beyond the provisions  of this Rules.

Section 14. Penalty Clause. – Any violation of the provisions of these Rules shall be penalized in accordance with the provisions of Executive Order No. 648, RA 7279 and RA 10884, which shall be the imposition of the penalty of fine of not less than five hundred thousand pesos (P500,000),  for the first offense; suspension of license to do business for a period of three (3) to six (6) months and a fine of not less than five hundred thousand pesos (P500,000),  for the second offense; and cancellation  of license to do business for the third offense: Provided, That, if the offender is a corporation,  partnership,  association or other juridical entity, the penalty shall be imposed on the officer or officers of said corporation, partnership, association or juridical entity who caused the violation.

Furthermore,  the license to sell of the main project may be suspended,  cancelled, or revoked,  if  the  required  compliance  project  has  not  been  developed  or  has  not  been completely  developed  in  accordance  with  the  approved  work  program  and  within  the period approved by HLURB.

If any of the compliance projects of the developer, under Sections 3 and 4.2.3, to any of its main projects  has not been completed  within the period allowed  by HLURB  at the time  any  application  for  a  new  main  project  is  filed,  such  an  application  shall  not  be accepted until and unless such compliance project/s is completed.

Section  15. Criminal  Prosecution.  – The HLURB,  through  a Board  Resolution,  is hereby authorized to institute a criminal complaint with prosecutor's office for any violation hereof. Provided that due process and hearing shall first be conducted by the Board in accordance with existing rules and regulation.

Section  16.  Repealing   Clause.  –  All  board  resolutions,   rules  and  regulations,
memoranda,   circulars,   guidelines   and  similar   official   issuances   mandating   rules   or implementing,  explaining  and  interpreting  Section  18  of RA  7279,  as  amended  by  RA
10884  that  are  inconsistent  herewith  are  hereby  repealed.  Board  Resolution  No.  946, Series of 2017 is hereby repealed.

This   Resolution   supersedes   all   resolutions,   rules,   regulations,   and   guidelines pertaining to the manners or modes of compliance to Section 18 of RA 7279.

Section 17. Separability Clause. – The provisions of this Rules are hereby declared separable, and in the event that any provision herein is declared null and void, the validity of all other provisions shall not be affected thereby.

Section 18. Effectivity  Clause. – This Rules shall take effect fifteen (15) days after its publication in the Official Gazette or in any national newspaper of general circulation.

Approved, this 7th day of December, 2017, at Quezon City, Philippines.