THIRTEENTH CONGRESS OF THE REPUBLIC 
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OF THE PHILIPPINES 
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First Regular Session 
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S. B. SENAT!i294 
No. 
Introduced by Senator Rodolfo G. Biazon 
EXPLANATORY NOTE 
Homeowners’ associations are people’s organizations that aim to improve, in their own 
little ways, the quality of life of Filipino citizens, albeit such may be limited to their respective 
memberships. Though often perceived to be passive, homeowners’ associations are actually a 
potent force in defining and shaping our culture. 
The importance to constitutional democracy of people’s organizations, such as 
homeowners’ associations, is recognized in at least three provisions in the 1987 Constitution to 
wit: 
“Article II, Sec. 23. The State shall encourage non-governmental, 
community-based organizations thatpromote the welfare of the nation; 
Article XIII, Sec. 1.5. The State shall respect the role of independent 
people ij organizations to enable the people to pursue and protect, within the 
democratic framework, their legitimate and collective interests and aspirations 
through peace@ and lawjiil means; and 
Article XIIi Sec. 16. The right of people and their organizations to 
effective and reasonable participation at all levels of social, political and 
economic decision-making shall not be abridged ” xm 
The Local Government Code gives substance to these enunciations in Chapter 4 thereof: 
“Sec. 34. Role of People’s and Nongovernmental Organizations, - Local 
government units shall promote the establishment and operation of people’s and 
nongovernmental organizations to become active partners in the pursuit of local 
autonomy. 
Sec. 35. Linkages with People’s and Nongovernmental Organizations. I 
Local government units may enter into joint ventures and such other cooperative 
arrangements with people’s and nongovernmental organizations to engage in the 
delivery of certain basic services, capability building and livelihood projects, and 
to develop local enterprises designed to improve productivity and income, 
diversify agriculture, spur rural industrialization, promote ecological balance, and 
enhance the economic and social well-being of the people. 
Sec. 36. Assistance to People S and Nongovernmental Organizations. - A 
local government unit may through its local chief executive and with the 
concurrence of the sanggunian concerned, provide assistance, financial or 
otherwise, to such people’s and nongovernmental organizations for economic, 
socially-oriented, or cultural projects to be implemented within its territorial 
jurisdiction.” 


The law clearly empowers people’s organizations so that the people may be able to help 
themselves. In situations where the local government lacks the resources to provide for basic 
services, it is incumbent upon the residents to find the means to provide for themselves. In this 
rare scenario, local government units must be responsive by providing the support necessary to 
facilitate their attainment. If financial assistance cannot be extended, LGUs are encouraged to 
exercise their authority to grant tax exemption privileges as stated in Sec. 192 of the Code: 
“Local government units may, through ordinances duly approved, grant tax exemptions, 
incentives or reliefs under such terms and conditions as they may deem necessary.” It is 
envisioned that fund-raising initiatives of homeowners’ associations that will be spent for various 
community services which should have otherwise been shouldered by the government, shall be 
exempted from payment of tax. 
This bill aims to recognize, support and enhance the important roles of homeowners’ 
associations in society and the nation and the economy, and vis-a-vis the State. Specifically, this 
bill will try to remove ambiguities concerning the role, rights and powers of homeowners’ 
associations by defining and delimiting the same. It will also define the relationship between 
members and officers of homeowners’ associations, and the relationship between homeowners’ 
associations and local government units, as well as between homeowners’ associations and 
concerned national agencies. 
It is hoped that this bill will answer the clamor of many residents’ associations for a 
measure that will bring peace of mind and better quality of life, not only for its members but for 
the public in general. 
Senator 


THIRTEENTH CONGRESS OF THE REPUBLIC 
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OF THE PHILIPPINES 
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First Regular Session 
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1293 
S E N A T E  
S. B. No. 
Introduced by Senator Rodolfo G. Biazon 
AN ACT 
GRANTING THE MAGNA CARTA FOR HOMEOWNERS’ ASSOCIATIONS AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Title. - This Act shall be known as the “Magna Carta for Homeowners’ 
Associations. ’’ 
Sec. 2. Declaration ofPolicy. - It is hereby declared the policy of the State to recognize 
and promote the roles of homeowners’ associations, in serving the needs and interests of its 
members and the communities surrounding them, in complementing the efforts of local 
government units in providing vital and basic services to our citizens, and in helping implement 
local and national government policies, programs, rules and ordinances; and to foster the growth 
and active participation of homeowners’ associations in the development of the nation. 
Sec. 3. Definition of Terms. -For purposes of this Act, the following terms shall mean: 
(1) Homeowners ’ Association or Residents ’ Association is a corporation, unincorporated 
association, or other legal entity, duly registered with the Housing and Land Use Regulatory 
Board (HLURB) where the members are owners of a residential real property located within the 
association’s jurisdiction, as described in the governing documents, and by virtue of membership 
or ownership of property is obligated to pay real property taxes, insurance premiums, 
maintenance costs, etc. 
(2) Governing Documents are articles of incorporation, by-laws, conditions, rules and 
regulations o f  the association, or other written instiuinents that the association has the authority 
to exercise powers on as provided for in this Act. 
(3) Board of Directors or Board is the body with primary authority to manage the affairs 
of the association. 
(4) Residential Real Property - any real property, the use of which is limited by law, to 
primarily residential or recreational purposes. 
( 5 )  Common Areas is a property owned, or otherwise maintained, repaired or 
administered in whole or in part by the association, including but shall not be limited to roads, 
parks, playgrounds, or other facilities. 
(6) Common Expenses are costs incurred by the association in the exercise of its powers 
as provided for in this Act. 


(7) SubdivisiodVillage is a tract or a parcel of land partitioned into individual lots with or 
without improvements thereon, primarily for residential purposes. 
(8) Homeowner is an owner of a lot within a subdivisiodvillage who shall have the right 
to enjoy and use community services and facilities and to participate and vote and be elected in 
association meetings, elections and referenda. 
Sec. 4. Association Membership. - The membership of the association at all times shall 
consist exclusively of the owners of all real property over which the association has jurisdiction. 
Sec. 5. Rights and Powers of the Association. - An association has the following rights 
and may exercise the following powers: 
(1) Adopt and amend its by-laws, rules and regulations; 
(2) Adopt and amend budgets for revenues, expenditures and reserves; 
(3) Impose and collect assessments for common expenses from owners; 
(4) In behalf of its members, institute, defend, or intervene in litigation or administrative 
proceedings affecting the welfare of the homeowners’ association; 
(5) Regulate the use, maintenance, repair, replacement and modification of common areas 
and cause additional improvements to be made as part of the common areas; 
(6) Regulate access to or passage through the subdivision of persons and vehicles for 
purposes of preserving privacy, internal security, safety and traffic order; 
(7) Hire, discharge or contract with managing agents and other employees, agents and 
independent contractors; 
(8) Acquire, hold, encumber and convey in its own name any right, title or interest to real 
or personal property, and utilities; 
(9) Administer and manage the waterworks system of the subdivision, which shall be 
turned over by the developer upon completion of the subdivision; 
(10) Grant easements, leases, licenses, and concessions through or over the common 
areas and petition for or consent to the vacation of streets and alleys; 
(1 1) Impose and collect any payments, fees, or charges for the use, rental or operation of 
the common areas; 
(12) Impose and collect charges for the late payments of assessments and, after notice 
and an opportunity to be heard by the board of directors and in accordance with the procedures 
as provided in the bylaws or rules or regulations adopted by the board of directors, levy 
reasonable fines in accordance with a previously established schedule adopted by the board of 
directors and furnished to the owners for violation of the bylaws, rules, and regulations of the 
association, 
(13) Impose height limitations on buildings, edifices, or structures that may be built 
within the subdivision; 
(14) Require the prior approval of the majority of its residents, in 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 in terms 


of traffic to be generated, and/or opening the area to outsiders which may result in loss of privacy 
to its residents; 
(15) Petition for the creation of a separate barangay, independently or together with 
neighboring subdivisions, provided, that all the requirements of the Local Government Code are 
met; 
(1 6) Exercise any other powers conferred by the bylaws; and 
(17) Exercise any other powers necessary for the governance and operation of the 
association. 
See. 6. Duties and Responsibilities of the Board of Directors/Offficers of Homeowners’ 
- The Board of Directors or officers of homeowners’ associations have the 
Associations. 
following duties and responsibilities: 
(1) Maintain an accounting system using uniform books of accounts with nomenclatures 
conforming to standards formulated and prescribed by the HLURB and other 
pertinent laws. Such books of accounts should be submitted to the HLURB at a 
prescribed date every year; 
(2) Undergo a free orientation by the HLURB on how to conduct meetings, preparation 
of minutes, handling of accounts, laws and pertinent rules and regulations, within 
thirty (30) days after election or appointment; 
(3) Discharge the duties and responsibilities provided for in the association’s by-laws; 
(4) To exercise such other powers as may be necessary and proper for the effective 
enforcement of this Act and to accomplish the purposes for which the association 
was organized; and 
(5) To do and perform any and all acts and deeds as are necessary and incidental to the 
attainment of the purposes of the Association. 
The board of directors shall act in all instances on behalf of the association. In the 
performance o f  their duties, the officers and members of the board of directors shall exercise the 
degree of care and loyalty required by such position. 
See. 7. Association By-Laws. - The by-laws of the association shall provide for: 
(1) The number, qualifications, powers and duties, terms of office, and manner of 
electing and removing the board of directors and officers and filling vacancies; 
(2) Election by the board of directors or officers of the association as the bylaws specify; 
(3) Which, if any, of its powers the board of directors or officers may delegate to other 
persons or a managing agent; 
(4) The method of amending the by-laws; 
(5) The list of acts constituting an offensehiolation by its officers, and corresponding 
penalties to be meted to erring officers; 
(6) A list of contributions and fees that may be charged or collected by the association; 
and 


(7) Other necessary information that is deemed necessary in the furtherance o f  the 
interests of the association. 
Sec. 8.’ Financial and Other Records. - The homeowners’ associations are enjoined to 
observe the following, with regard to its funds, financial and other records: 
(1) 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 they are kept, are the properties of the 
association. Each association managing agent shall turn over all original books and records to 
the association immediately upon termination of the managenlent relationship with the 
association, or upon such other demand as is made by the board of director, An association 
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. 
(2) All records of the association, including the names and addresses of owners and other 
occupants of the lots, shall be availabk for examination by all owners, holders of mortgages on 
the lots, and their respective authorized agents on reasonable advance notice during normal 
working hours at the offices of the association or its managing agent. The association shall not 
release the unlisted telephone number of any owner. 
(3) A financial statement of the association shall be prepared annually by an independent 
certified public accountant and submitted to the HLURB. 
(4) The funds of the association shall be kept in accounts in the name of the association 
and shall not be joined with the funds of any other association, or any person responsible for the 
custody of such funds. 
Sec. 9. Relationship with Local Government Units. - The homeowners’ associations 
shall complement, support and strengthen local government units in providing vital services to its 
members and helping implement local government policies, programs, ordinances, and rules. 
Homeowners’ associations are encouraged to actively cooperate with local government 
units in furtherance of their common goals and activities for the benefit of the residents inside 
and outside of the subdivisions. 
Where the local government units lack the resources to provide for basic services, 
homeowners’ associations shall endeavor to tap the means to provide for the same. 
In 
recognition of the associations’ efforts to assist the local governments in its duties, their 
association dues and income derived from the rentals of their facilities shall be tax-exempt, 
Provided, that such income and dues will be used for the maintenance of the cleanliness, safety 
and security of their respective subdivisions/villages. 
Local government units shall secure the concurrence of homeowners’ associations 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 the 
same. 
Sec. 10. Relationship with National Government Agencies. 
~ 
The homeowners’ 
associations shall complement, support and strengthen the efforts of the national government 
agencies in providing vital services to its members and helping implement national government 
policies and programs. 


Homeowners’ associations are encouraged to actively cooperate with national 
government agencies in the furtherance of their common goals and activities for the benefit of 
the residents inside and outside of the subdivisions. 
National government agencies shall secure the concurrence of homeowners’ associations 
where proposed rules, projects and/or programs may affect their welfare. 
Sec. 11. Duties and Responsibilities of the Housing and Land Use Regulatory Board 
(HLURB). - In addition to the powers, authorities and responsibilities vested in it by Republic 
Act No. 8763, the HLURB shall: 
(1) Conduct free orientation for officers of homeowners’ associations regularly; 
(2) Prepare a standard copy of articles and bylaws for homeowners’ associations; 
(3) 
Register all homeowners’ associations, federations, confederations or umbrella 
organizations of homeowners’ associations; 
(4) Exercise the same powers over federations, confederations or umbrella organizations 
of homeowners’ associations; 
(5) Formulate, together with at least two (2) representatives of homeowners’ associations, 
the standard nomenclatures to be used for the homeowners’ associations’ books of accounts; 
(6) Formulate, together with at least two (2) representatives of homeowners’ associations, 
a list of contributions and fees that may be charged or collected by homeowners’ associations 
that will be included in the association’s bylaws; and 
(7) Formulate, together with at least two (2) representatives of homeowners’ associations, 
the guidelines in regulating the kinds of contributions and fees that may be charged and/or 
collected by homeowners’ associations, other than those provided in the associations’ bylaws. 
Sec. 12. Penal Provision. - Any person who violates the provisions of this Act shall be 
punished with a fine of not less than Five Thousand Pesos (P5,OOO.OO) and/or imprisonment of 
not less than two (2) months but not more than one (1) year, or both at the discretion of the court. 
Sec. 13. Separability Clause. - If any provision of this Act is declared invalid’or 
unconstitutional, the remainder of the Act shall remain valid and subsisting. 
Sec. 14. Repealing Clause. - All other issuances, laws, decrees, orders, rules and 
regulations, or parts thereof inconsistent with this Act are hereby repealed or modified 
accordingly. 
Sec. 15. Implementing Rules and Regulations. - The Department of Interior and Local 
Government (DILG), and the HLURB shall formulate and promulgate the rules and regulations 
necessary to implement the provisions of this Act within six (6) months of its effectivity. 
Sec. 16. 
Effectivity. - This Act shall take effect fifteen (15) days following its 
publication in the Official Gazette or in at least two (2) newspapers of general circulation. 
Approved,