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THIRTEENTH CONGRESS OF THE REPUBLIC } 
OF THE PHILIPPINE$ 
I 
Third Regular Session 
I 
S E N A T E  
k : ,  
(in substitution of Senate BillNo. 1294) 
Prepared jointly by the Committees on Urban Planning, Housing and Resettlement 
and on Local Government with Senators Biazon and Lim as authors 
Be it enacted by the Senate and the 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 of Poky, - 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 herein referred to as the Association is a corporation or other legal 
entity, duly registered with the Housing and Land Use Regulatory Board (HLURB) of a residential real 
property located within the Association's jurisdiction, or an Association of awardees or beneficiaries of a 
unit, house andlor lot in government-assisted housing projects, as described in their governing documents, 
and by virtue of membership or ownership of property are obligated to pay real property taxes, insurance 
premiums, maintenance costs, and such other necessary fees. 
(2) Governing Documents are articles of incorporation, by-laws, conditions, rules and regulations 
of the Association, or other written instruments that the Association has the authority to exercise powers on 
as provided for in this Act. 
(3) Board of Directors herein referred to as the Board is the body with primary authority to manage 
the affairs of the Association. 


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(4) Residential Real Property is any real property, the use of which is limited by law, to primarily 
residential or recreational purposes. 
(5) Common Area 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) SubdivisionNillage 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 subdivisionhillage or is an awardee or beneficiary of a 
unit,house andlor lot in government-assisted housing projects, 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. Associafion Membership and Rights Thereof. -The membership of the Association at all 
times shall consist exclusively of the owners of all real property over which the Association has jurisdiction, 
both developed and undeveloped and as prescribed in the Association's articles of incorporation and by- 
laws. An owner or purchaser of real property or beneficiary of a house andlor lot in government-assisted 
housing projects or his duly authorized representative within the jurisdiction of the Association automatically 
becomes a member of the Association, with full rights to enjoy and use community services and facilities 
and to participate and vote and to be eligible to any elective or appointive office of the Association during 
the annual election and to participate in Association meetings, elections and referendums as long as 
hislher bona fide membership subsists. 
SEC. 5. Rights and Powers of the Associafion. -An Association has the following rights and may 
exercise the following powers: 
(1) 
(2) 
(3) 
Adopt and amend by-laws, rules and regulations, subject to existing laws and regulations; 
Adopt and amend budgets for revenues, expenditures and reserves; 
Subject to consultation, impose and collect assessments for common expenses from 
owners; 


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(4) 
In behalf of its members, institute, defend, or intervene in litigation or administrative 
proceedings affecting the welfare of the Association; 
(5) 
Have the right of first refusal to accept donations of the common areas and upon the turn 
over and donation to the Association, repair or rehabilitate, maintain and regulate the use of the same and 
cause additional improvements thereon, or may donate the same to the local government units; 
(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) 
At its option, administer and manage the waterworks system of the subdivision, which shall 
be turned over by the developer upon completion of the subdivision; 
(IO) Grant easements, leases, licenses, and concessions through or over the common areas 
within its jurisdiction: Provided, That the said grant of easements, leases, licenses, and concessions shall 
not be applicable to access roads and main interconnecting roads within the subdivision; 
(11) Impose and collect any reasonable payments, fees, or charges for the use, rental or 
operation of the common areas; 
(12) Impose and collect reasonable charges for assessments and, after notice and an opportunity 
to be heard by the Board and in accordance with the procedures as provided in the by-laws or rules or 
regulations adopted by the said Board, levy reasonable fines for late payments in accordance with a 
previously established schedule adopted by the Board and furnished to the owners for violation of the by- 
laws, 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, not contrary to law, in the 
establishment of certain institutions such as, but not limited to, schools, hospitals, markets, grocery stores 
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and other similar establishments that will necessarily affect the character of the subdivision in terms of 


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traffic to be generated, andlor 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; 
(16) Exercise any other powers conferred by its by-laws; and 
(17) Exercise any other powers necessary for the governance and operation of the Association. 
SEC. 6. Duties and Responsibilities of the Board or Officers of the Associations. - The Board or 
officers of the Associations have the following duties and responsibilities: 
(1) 
Maintain an accounting system using generally accepted accounting principles. Such books 
of accounts shall be opened for inspection to any member and duly authorized representatives of 
government agencies, upon request, during reasonable hours on business days; 
(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) 
(4) 
Discharge the duties and responsibilities provided for in the Association's by-laws; 
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 shall act in all instances on behalf of the Association. In the performance of their duties, 
the officers, and members of the Board shall exercise the degree of care and loyalty required by such 
position. 
SEC. 7. Association By-Laws. -The by-laws of the Association shall provide for: 
(1) 
The qualifications for admission to membership and the payment to be made or interest to be 
acquired as a condition for the exercise of the right of membership; 
(2) 
(3) 
(4) 
The rights, duties and obligations of membership; 
The circumstances under which membership is acquired, maintained and lost; 
The procedure to be followed in case of termination of membership; 


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(5) 
The rules and procedures on the agenda, time, place and manner of calling, convening, 
conducting meetings quorum requirements, voting systems, and other matters relative to the affairs of the 
general assembly, Directors, officers, and committees; 
(6) 
The manner in which Association funds may be raised and the purposes for which it can be 
utilized; 
(7) 
(8) 
The method of adopting, amending, repealing and abrogating the by-laws; 
A conciliation or mediation mechanism for the amicable settlement of disputes among 
members, directors, officers and committee members of the Association, including inter-Association 
disputes; 
(9) 
The list of acts constituting an offense/violation by its officers, and corresponding penalties to 
be meted to erring officers; 
(10) The Association to conduct a review of its by-laws, draft its own rules of procedure to be 
incorporated in the said by-laws and obtain thereof by approval of a simple majority of its members, within 
six (6) months from the effectivity of this Act; and 
(1 1) Other necessary information that is deemed necessary in the furtherance of the interests of 
the association. 
SEC. 8. Financial and Other Records. - The Associations are enjoined to observe the following, 
with regard to its funds, financial and other records: 
(1) 
The Association shall keep financial and other records sufficiently detailed to enable the said 
Association to fully declare to each member the true statement of its financial status. All original copies of 
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 and shall be kept in the 
Association office. 
(2) 
All records of the Association, including the names and addresses of owners and other 
occupants of the lots, shall be available 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 
office of the Association. 
(3) A financial statement of the Association shall be prepared annually by an independent 
certified public accountant. 


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(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 or LGUs. - The Associations shall 
complement, support and strengthen LGUs in providing vital services to its members and helping 
implement local government policies, programs, ordinances, and rules. 
Associations are encouraged to actively cooperate with LGUs it1 furtherance of their common 
goals and activities for the benefit of the residents inside and outside of the subdivisions. 
Where the LGUs lack the resources to provide for basic services, the Associations shall endeavor 
to tap the means to provide for the same. In recognition of the Associations' efforts to assist the LGUs 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 subdivisionslvillages. 
LGUs shall secure the concurrence of Associations where proposed rules, zoning and other 
ordinances, projects andlor programs affecting their jurisdiction and surrounding vicinity are to be 
implemented, prior to the effectivity or implementation of the same. 
SEC. I O .  Relationship with National Government Agencies. - The 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. 
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 Associations where proposed rules, 
projects andlor programs may affect their welfare. 
SEC. 11. Dufies and Responsibilifies of the HLURB. - In addition to the powers, authorities and 
responsibilities vested in it by Republic Act No. 8763, Presidential Decree No. 92-A, Batas Pambansa Blg. 
No. 68 and Executive Order No. 535, Series of 1981, as amended, HLURB shall: 
(1) 
Conduct free orientation for officers of the Associations regularly; 


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(2) Register all Associations, federations, confederations or umbrella organizations of the 
Associations; 
(3) 
Exercise the same powers over federations, confederations or umbrella organizations of the 
Associations; 
(4) 
Formulate, in consultation with the representatives of Associations, federations, 
confederations or umbrella organizations of the Associations, standard nomenclatures to be used for the 
Associations' books of accounts; and 
(5) 
Formulate, in consultation with the representatives of Associations, federations, 
confederations or umbrella organizations of the Associations, the guidelines in regulating the kinds of 
contributions and fees that may be charged andlor collected by Associations, other than those provided in 
the Associations' by-laws. 
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 (F25,000.00), permanent disqualification from being 
elected or appointed as member of the Board, officer or staff in the Association, andlor imprisonment of not 
less than two (2) months but not more than one (1) year, or all of said penalties, 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 shali 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. lmplemenfing Rules and Regulations. - The Department of the Interior and Local 
Government, 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. 
No rule or regulation shall be issued that may tend to undermine the organizational and territorial 
integrity of any Association. 
SEC. 16. Effecfivify. - 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,