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..,"L,ILL 
..~i'd 
FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
Second Regular Session 
) 
9 FER E P::rii 
SENATE 
(In substitution of S. Nos. 182, 1586 and 2072) 
Prepared by the Committee on Urban Planning, Housing and Resettlement with Senators Biazon, Zubiri 
and Santiago as authors 
AN ACT 
PROVIDING FOR A MAGNA CARTA FORHOMEOWNERS, AND FOR OTHER 
PURPOSES 
Be if enacted by fhe Senafe and the House of Represenfafives of the Philippines in Congress 
assembled: 
CHAPTER I 
TITLE AND DECLARATION OF POLICY 
Title. - This Act shall be known as the "Magna Carta for 
SECTION 1. 
Homeowners". 
SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to 
uphold the constitutional right of the people to form unions, associations or societies, as 
well as their right not to join such unions, associations or societies. as embodied under 
Art 111, Sec. 8 of the 1987 Constitution. Towards this end, the State recognizes and 
promotes the rights of homeowners as individuals and as members of the society and 
shall endeavor to make available resources and assistance that will help them fulfill 
their roles in serving the needs and interests of their communities to complement the 
efforts of local government units (LGUs) in providing vital and basic services to the 
citizens, help implement local and national government policies, programs, rules and 
ordinances, and, foster the growth and active participation of homeowners in the 
development of the nation. 
SEC. 3. Definition of Terms. - For purposes of this Act, the following terms 
shall mean: 
(1) "Association" refers to the homeowners' association which is a non-stock, 
non-profit corporation registered with the Housing and Land Use Regulatory Board 
(HLURB), or one previously registered with the Home Insurance Guarantee COrp. (now 
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Home Guaranty Corp.) or the Securities and Exchange Commission (SEC), organized 
by owners or purchasers of a lot in a subdivision/village or other residential real property 
located within the jurisdiction of the association ; or awardees, beneficiaries, legal 
occupants and/or lessees of a housing unit andlor lot in a government socialized or 
economic housing or relocation project and other urban estates; or informal settlers as 
defined under existing laws in the process of being accredited as beneficiaries or 
awardees of ownership rights under the Community Mortgage Program (CMP), Land 
Tenure Assistance (LTA) and other similar programs; wherein said owners, awardees 
or beneficiaries, by virtue of ownership or some right over the property. 
(2) "Association member" refers to a homeowner who is a member of the 
homeowners' association where hislher housing unit or lot is situated. 
(3) "Board" refers to the Board of Directors or Trustees of an association that 
exercises, as a collegial body, all the powers, duties, and responsibilities relating to the 
administration, management, and operation of an association, as defined in this Act 
and other pertinent laws, rules and regulations; 
(4) "Common area" refers to the property owned, or otherwise maintained, 
repaired, administered in whole or in part by an association, including but not limited to 
parks, playgrounds, clubhouses, multi-purpose halls or other facilities. 
(5) "Common expenses" refer to the costs incurred by an association in the 
exercise of its powers as defined in this Act. 
(6) "Economic housing" refers to a type of housing project with lower interest 
rates and longer amortization periods, provided to moderately low-income families, as 
defined under existing laws, rules and regulations. 
(7) "Homeowner" refers to any of the following: 
(a) An owner or purchaser of a lot in a subdivision/village within the purview of 
Presidential Decree (PD) No. 957 and related laws; 
(b) An awardee, beneficiary, occupant, or lessee of a unit, house andlor lot in a 
government socialized or economic housing or relocation project and other urban 
estates; or 
(c) An informal settler in the process of being accredited as beneficiary or 
awardee of ownership rights under the CMP, LTA, and other similar programs. 
(8) "Non-member homeowner" refers to a homeowner who is not a member of 
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the association duly organized in the area where hidher housing unit or lot is situated. 
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(9) "Residential real property" refers to any real property, the use of which is 
limited by law to primary residential or recreational purposes. 
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(Io) "Simple majority" refers to fifty percent (50%) plus one (1) of the total 
number of association members in good standing. 
(1 1) "Socialized housing" refers to housing programs and projects covering 
houses and lots or home lots only 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 other 
benefits in accordance with the provisions of Republic Act No. (RA) 7279, otherwise 
known as the Urban Development and Housing Act of 1992 (UDHA). 
(12) "SubdivisionNillage" refers to a tract or parcel of land partitioned into 
individual lots, with or without improvements thereon, primarily for residential purposes. 
SEC. 4. Registration with HLURB. - An association of homeowners shall 
register with the HLURB in order to acquire juridical personality. 
CHAPTER I I  
HOMEOWNERS 
SEC. 5. Right of A Homeowner Not to Join An Association. - A homeowner 
has the right not to join the association where his/her housing unit or lot is situated. 
However, he/she shall have the right to enjoy such basic services and facilities provided 
by the association, subject to the payment of necessary fees and other pertinent 
charges. 
SEC. 6. Nature of Membership in Association. - Membership in an 
association shall be voluntary, unless: 
(1) 
it is required under the deed of restrictions or as annotation on the title of 
the property; 
(2) 
it is stipulated under the contract for the purchase of a lot in the 
subdivision project; or 
(3) 
it is required for an award under a CMP project or a similar tenurial 
arrangement. 
SEC. 7. Rights of a Non-Member Homeowner. - A non-member homeowner 
shall have the right: 
to avail and enjoy basic community services and facilities provided by the 
association such as, but not limited to the following: security; street and vicinity lights; 
(1) 
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maintenance, repairs and cleaning of streets; garbage collection and disposal; and 
other services that redound to the benefit of all residents in the area, subject to the 
payment of reasonable fees and charges; and 
(2) 
SEC. 8. Qualification of a Member. - A  homeowner as defined under this Act, 
shall be qualified to be a member of an association; Provided, however, That a lessee 
shall have the rights of a homeowner as set forth under this Act upon procurement of a 
written consent or authorization from the owner of the lot or housing unit. 
to enjoy all other rights as provided for in the association By-Laws 
Until such consent or authorization is revoked in writing, the owner of the lot or 
housing unit is deemed to have waived hidher rights enumerated under Sec. 9 of this 
Act, except sub-section (2) of the same section which can be simultaneously enjoyed 
by both the owner and the lessee. 
For purposes of this Act, the lessee authorized in accordance with this section 
shall be deemed a homeowner with all the rights enumerated in this Act, including the 
duties and obligations enumerated under Sections 9, 10, and 11 hereof. 
SEC. 9. Righfs of a Member. -An association member has full rights: 
(1) 
to avail of and enjoy community services and the use of common areas 
and facilities; 
(2) 
to inspect association books and records during office hours and to be 
provided upon request with annual reports, including financial statements; 
(3) to participate, vote and be eligible for any elective or appointive office of 
the association subject to the qualifications as provided for in the By-Laws; 
(4) 
to participate in association meetings, elections and referenda, as long as 
hidher bona fide membership subsists; and 
(5) 
SEC. 10. Duties of a Member. - A  member shall have the following duties: 
(1) to pay membership fees, dues and special assessments; 
(2) to attend meetings of the association; and 
(3) to support and participate in projects and activities of the association. 
SEC. 11. Delinquent Member. - The By-Laws shall provide for guidelines and 
procedures in determining who is a delinquent member, or a member not in good 
standing, and to prescribe the administrative sanctions to such member. The right to 
to enjoy all other rights as may be provided for in the association By-Laws. 
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due process shall be observed in cases where administrative sanctions are imposed on 
a delinquent member. 
CHAPTER 111 
HOMEOWNERS’ ASSOCIATION 
SEC. 12. Rights and Powers of the Association. - In addition to the powers 
and attributes of an association as an artificial being under the General Provisions of 
the Corporation Code, an association has the following rights and may exercise the 
following powers: 
(1) 
Subject to consultation and with the approval of a simple majority of the 
members, adopt and amend the Articles of Incorporation and By-laws, rules and 
regulations, subject to existing laws and regulations; 
(2) 
Subject to consultation and with the approval of a simple majority of the 
members, prepare, adopt and amend budgets for revenues, expenditures and reserves; 
In behalf of its members, institute, defend, or intervene in litigation and/or 
administrative proceedings affecting the welfare of the association and the community 
as a whole; 
(3) 
(4) Regulate the use, maintenance, repair, replacement and modification of 
common areas and cause additional improvements to be made as part of the common 
areas; 
(5) 
Subject to existing laws and regulations, limit access to or passage of 
persons and vehicles through subdivision/village roads, for purposes of preserving 
privacy, tranquility, internal security, safety and traffic order: 
(6) 
Hire, discharge or contract with managing agents and other employees, 
agents and independent contractors to ensure the full functioning and operation of the 
association: 
(7) 
Subject to consultation with and the approval of a simple majority of the 
association members, acquire, hold, encumber and convey in its own name any right, 
title to or interest in real or personal property; 
(8) 
In the absence of a duly franchised local water utility company or 
cooperative, administer and manage the waterworks system of the subdivision, if any, 
which shall be turned over by the developer upon completion of the subdivision; 
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(9) 
Grant leases, concessions and authority to use common areas and 
petition for or consent to the vacation of streets and alleys; Provided, That the said 
grant of leases, concessions and authority shall not be applicable to access roads, 
main interconnecting roads, alleys and sidewalks within the subdivision; 
(10) 
Subject to consultation with and approval of a simple majority of the 
association members, impose and collect any reasonable payment, fees, or charges for 
the use, rental and/or operation of the common areas; 
(1 1) 
Cause compliance with regard to height limitations on buildings, edifices, 
or structures that may be built within the subdivision, in accordance with the National 
Building Code, zoning laws, HLURB rules and regulations, and existing local 
ordinances; 
(12) 
Secure the prior approval of the majority of its members in allowing 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/village in terms of traffic generation, andlor opening the 
area to outsiders which may result in the loss of privacy, security, safety, and tranquility 
to its residents, in accordance with the National Building Code, zoning laws, existing 
local ordinances and HLURB rules and regulations; Provided, That such prior approval 
shall not be necessary for the establishment of sari-sari stores, home industries and 
similar small-scale business enterprises within t-vision/village 
classified as 
socialized housing; 
(13) 
Petition for the creation of a separate barangay, independently or together 
with neighboring subdivisions; Provided, That all the requirements of the Local 
Government Code of 1991 are met; and 
(14) 
Exercise any other power conferred by its By-Laws and HLURB rules and 
regulations which are necessary for the governance and operation of the association. 
SEC. 13. Board of Directors or Trustees. - The By-Laws of the association 
shall provide for the qualifications and number of the directors or trustees that will 
comprise the Board of Directors or Trustees, hereinafter referred to as the Board. 
SEC. 14. Duties and Responsibilities of the Board. - In addition to the duties 
and responsibilities stated in the By-Laws of the association, the Board shall have the 
following duties and responsibilities: 
(1) 
Maintain an accounting system using generally accepted accounting 
principles, and keep books of accounts, which shall be open for inspection to any 
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homeowner and duly authorized representatives of government agencies upon request, 
during reasonable hours on business days; 
(2) 
Collect the fees, dues and assessments that may be provided for in the 
By-Laws and approved by a majority of the homeowners; 
(3) 
Collect reasonable charges for assessments, and after due notice and 
hearing by the Board in accordance with the procedures as provided in the By-Laws, 
and rules and regulations adopted by the Board, charge reasonable fines for late 
payments and for violation of the By-Laws, rules, and regulations of the association, in 
accordance with a previously established schedule adopted by the Board and furnished 
to the homeowners; 
(4) 
Propose measures to raise funds and the utilization of such funds and 
submit the same for consideration by the association; 
(5) 
Exercise such other powers as may be necessary and proper 
in 
accordance with this Act and for the accomplishment of the purposes for which the 
association was organized. 
SEC. 15. Removal of A Director or Trustee. - Through a signed petition of a 
simple majority of the association members in good standing, subject to verification and 
validation of the HLURB, a director/trustee may be removed for causes provided in the 
By-Laws of the association; Provided, That not more than a majority of the members of 
the Board is sought to be removed. In case a majority of the members of the Board is 
removed, it shall be considered a dissolution of the entire Board, in which case, 
Section 16 hereof shall govern. 
Within sixty (60) days after the removal of a director or trustee, an election shall 
be called for the purpose of determining who shall hold office for the unexpired term of 
the removed directodtrustee. 
SEC. 16. Dissolution of the Board. - Through a signed petition of two-thirds 
(2/3) of the association members in good standing, subject to verification and validation 
of the HLURB, the Board of the association may be dissolved for causes provided in 
the By-Laws of the association. 
Within sixty (60) days from the above dissolution, an election for a new Board 
shall be called for the purpose of determining who shall hold office for the unexpired 
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term of the dissolved Board. 
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Until the new Board members shall have been elected and qualified, the HLURB 
may designate an interim Board whose members shall not be eligible to run in the 
election called for the above purpose. 
SEC. 17. Prescriptive Period of Removing a Director or Trustee or 
Dissolving a Board. - Sections 15 and 16 of this Act shall not be applicable if the 
remaining term of office of the director or trustee or the Board, as applicable, is less 
than three (3) months. 
SEC. 18. Association By-Laws. - The By-Laws of the association shall be 
adopted by a majority of the members of the association. It shall provide for: 
(1) 
The qualifications for membership; 
(2) 
(3) 
The rights, duties and obligations of members; 
The circumstances under which membership is acquired, maintained and 
lost; 
(4) 
The time and manner of calling and conducting regular or special 
meetings of the members; 
(5) 
The required quorum in meetings of members and the manner of voting 
therein; 
(6) 
The qualifications, number, duties, elections, term of office, and 
compensation of directors or trustees: Provided, That the term of office of the members 
of the Board shall not exceed two (2) years; 
(7) 
The qualifications, positions, duties, election or appointment, and 
compensation of other officers and employees of the association: Provided, That the 
term of office of the other officers shall not exceed two (2) years; 
(8) 
The time, place and manner of calling and conducting regular or special 
meetings of the directors or trustees; 
(9) 
(IO) 
The required quorum in meetings of the board of directors or trustees; 
The grounds and procedure for removal of director or trustee, and the 
manner of filling up vacancies in the Board; 
(11) 
The grounds and procedure for dissolution of the Board, and the manner 
of reconstituting the Board; 
(12) 
The requirements and manner of voting by proxy; 
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(13) 
The actions for limiting, broadening or denying the right to vote, and the 
extent thereof; 
(14) 
may be exercised; 
The designation of conditions under which and the time when voting rights 
(15) 
The designation of the presiding officer at meetings of directors or 
trustees and members; 
(16) 
The time for holding the regular election of directors or trustees and the 
mode or manner of giving notice thereof; 
(17) 
The creation of election, grievance and audit committees, and such other 
committees which the association may deem necessary; as well as a conciliation or 
mediation mechanism for the amicable settlement of disputes among members, 
directors or trustees, officers and committee members of the association; 
(18) The dues and fees to be imposed on a regular basis and the manner in 
which the same may be imposed and/or increased; 
(19) Special assessments; 
(20) 
(21) 
The method of adopting, amending, repealing and abrogating the By-laws; 
The list of acts constituting an offense/violation by its officers and the 
corresponding penalties therefor; 
(22) 
(23) 
The penalties for violation of the By-Laws; 
Such other matters necessary for the proper or convenient transaction of 
its corporate business and affairs. 
SEC. 19. General Meeting of an Association. - The general meeting of an 
association shall be held once a year on such date fixed in the By-Laws. Written notice 
of the general meeting, including the agenda, shall be sent to all members at least two 
(2) weeks prior to the meeting, unless a different period is required by the By-Laws. 
SEC. 20. Special Meetings of an Association. - The Board may call special 
membership meetings at any time whenever it deems necessary, or as provided in the 
By-Laws. A written notice, including the agenda shall be sent to all members at least 
one (1) week prior to the meeting, unless otherwise provided in the By-Laws. 
SEC. 21. Quorum Requirement - A quorum in general membership meetings 
shall be a simple majority of the members, unless otherwise provided for in the By- 
Laws. 
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SEC. 22. Voting Requirement. -Association members may vote in person or 
by proxy in all meetings of the association. In case of the latter, authorization to such 
proxies shall be in writing duly signed by the member, and filed with the association 
Secretary before the scheduled meeting shall be valid only for the date of the meeting 
for which it is intended. 
SEC. 23. Regular Elections of an Association. - Regular elections shall be 
held on the date fixed by the By-Laws; Provided, however, That there shall be a regular 
election every two (2) years. 
The By-Laws shall contain the date, manner and general procedures for the 
conduct of elections. 
SEC. 24. Referendum, Recall and Other Initiatives. - The association may, 
by a vote of two-thirds (2/3) of all its members in good standing, subject to the 
qualifications set forth in Sec. 6 (2) hereof, call for a referendum, recall or other 
initiatives. The procedure, manner and grounds for the holding of the same shall be 
provided for in the By-Laws. 
SEC. 25. Financial and Other Records of an Association. - The association 
shall observe the following, with regard to its financial and other records: 
(1) 
The association shall keep financial and other records sufficient in detail 
to enable it to fully declare to each member and interested party 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 
or by a duly authorized officer in case there is no 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 upon 
reasonable advanced notice, during normal working hours at the office of the 
association. 
(3) A financial statement of the association shall be prepared annually by an 
auditor, the treasurer and/or an independent certified public accountant within forty five 
(45) days from the end of the accounting period; to be posted in the association office, 
bulletin boards, or other conspicuous places within the subdivision/village, and to be 
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submitted to the HLURB. 
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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. 26. Relationship with LGUs. - Homeowners' associations shall 
complement, support and strengthen LGUs in providing vital services to its members 
and help implement local government policies, programs, ordinances, and rules. 
Associations are encouraged to actively cooperate with LGUs in furtherance of 
their common goals and activities for the benefit of the residents of the 
subdivisions/villages and its environs. 
Where the LGUs lack 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 providing such basic services, 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 and other basic 
services needed by the members. 
LGUs shall hold public consultations with the members of the affected 
associations, or at least their officers, 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 such rules, zoning, 
ordinances, projects or programs. 
Such public consultations shall conform to the manner as specified in Rule XI, 
Art. 54 of the Implementing Rules and Regulations of R.A. 7160 otherwise known as 
the Local Government Code of 1991. 
SEC. 27. 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 help implement the 
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 of the subdivisions and its environs. 
National government agencies shall consult the associations where proposed 
rules, projects and/or programs may affect their welfare. 
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CHAPTER IV 
DUTIES AND RESPONSIBILITIES OF THE HLURB 
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SEC. 28. Duties and Responsibilities of the HLURB. - In addition to the 
powers, authorities and responsibilities vested in it by R.A. No. 8763, P.D. No. 902-A, 
Batas Pambansa Blg. 68 and Executive Order No. 535, Series of 1981, as amended, 
the HLURB shall: 
(1) 
Upon the request of the homeowners' associations, conduct free 
orientation for the officers of the associations; 
(2) 
Register all associations, federations, confederations or umbrella 
organizations of the associations; 
(3) 
Hear and decide intra and/or inter-corporate controversies and/or 
conflicts, without prejudice to filing civil and criminal cases by the parties concerned 
before the regular courts; 
(4) 
Formulate the rules or manner of verification and validation of petitions for 
the removal of director(s) or trustee(s) of the association or dissolution of the Board 
pursuant to Sections 15 and 16 of this Act; 
(5) 
Exercise the same powers over federations, confederations or umbrella 
organizations of the associations: 
(6) 
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 a standard 
Articles of Incorporation and By-Laws for homeowners' association for reference 
purposes; and 
(7) 
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. 
CHAPTER V 
FINAL PROVISIONS 
Sec. 29. Prohibited Acts. - It shall be prohibited for a homeowner, an 
association, its directors or trustees, officers, agents or representatives: 
a.To coerce, compel or induce a non-member homeowner to join the 
homeowners' association, without prejudice to the exceptions as stated in Sec. 6; 


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b. To deprive any homeowner of his right to avail of or enjoy basic community 
services and facilities: 
c. To prevent any homeowner from reasonably exercising his right to inspect 
association books and records or to request for annual reports annual reports; 
d. To prevent any member in good standing from participating in association 
meetings, elections and referenda; 
e. To deny any member due process in the imposition of administrative 
sanctions; 
f. To exercise rights and powers as stated in Sec. 12 without the required 
consultation and approval of the required number of homeowners or members; 
g. Unreasonable failure to provide basic services and facilities and to maintain, 
repair, replace, or modify the such facilities: 
h. Failure to comply with Sec. 25 of this Act; and 
i. Other acts analogous to the foregoing. 
SEC. 30. Penal Provision. -Any person who commits any acts prohibited under 
Sec. 29 hereof shall be punished with a fine of not less than not less than Fifty 
Thousand Pesos (P50,OOO.OO) but not more than Two Hundred Thousand Pesos 
(P200,OOO.OO) and permanent disqualification from being elected or appointed as 
member of the Board, officer or employee in the association, without prejudice to being 
charged before a regular court for violations of the provisions of the Revised Penal 
Code, Civil Code and other pertinent laws. 
If the offense is committed by an association, the members, officers, directors or 
trustees of the association who have actually participated in, authorized, or ratified the 
prohibited act shall be held criminally liable. 
SEC. 31. Separability Clause. - If any provision of this Act is declared invalid or 
unconstitutional, the remainder of the Act shall remain valid and subsisting. 
SEC. 32. 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. 33. lmplemenfing Rules and Regulafions. -The HLURB shall formulate 
and promulgate, in consultation with concerned sectors, rules and regulations 
necessary to implement the provisions of this Act within six (6) months of its effectivity. 
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and territorial integrity of any association. 
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circulation. 
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Approved, 
No rule or regulation shall be issued which tends to undermine the organizational 
SEC. 34. Effectivity. - This Act shall take effect fifteen (15) days following its 
publication in the Official Gazette or in at least two (2) national newspapers of general 
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