HLURB Approval Requirement for HOA Resolutions

HLURB Approval Requirement for HOA Resolutions in the Philippines: A Comprehensive Guide

In the Philippines, homeowners’ associations (HOAs) play a crucial role in maintaining order and fostering community development within residential subdivisions, condominiums, and other housing projects. Their organization, functions, and regulatory oversight are principally governed by Republic Act No. 9904 (the “Magna Carta for Homeowners and Homeowners’ Associations”), its Implementing Rules and Regulations (IRR), and various issuances of the former Housing and Land Use Regulatory Board (HLURB). Although the HLURB has since been reorganized—its adjudicatory functions now under the Human Settlements Adjudication Commission (HSAC) and certain regulatory functions under the Department of Human Settlements and Urban Development (DHSUD)—many of the core rules and procedures established under the HLURB still apply.

Below is a comprehensive discussion on the requirement (both old and current) for HLURB (now DHSUD/HSAC) approval of HOA resolutions, the legal framework, and practical considerations.

1. Legal Framework: RA 9904 and Its IRR

1.1. Republic Act No. 9904: The Magna Carta for Homeowners and Homeowners’ Associations

Enacted in 2009, Republic Act No. 9904 provides the basic legal foundation for:

  • The creation and registration of HOAs;
  • The rights and obligations of both the associations and individual homeowners;
  • The dispute resolution mechanisms for HOA-related controversies.

Among others, RA 9904 emphasizes:

  • The requirement for an HOA to be registered with the appropriate government agency (formerly the HLURB, now DHSUD/HSAC for specific functions).
  • The powers and functions of an HOA’s Board of Directors/Trustees.
  • The significance of general membership approval for major policy decisions.

1.2. IRR of RA 9904 (HLURB Board Resolution No. 877, Series of 2011)

To implement RA 9904, the HLURB issued Board Resolution No. 877, Series of 2011, which lays out the detailed procedures for:

  • HOA formation and registration;
  • The adoption and amendment of Articles of Incorporation and By-Laws;
  • The issuance of rules, regulations, and resolutions within HOAs;
  • Submission requirements and the role of HLURB approval or notation.

These IRR provisions remain largely in force, subject to the reorganized functions now handled by DHSUD or HSAC, as mandated by Republic Act No. 11201 (establishing the Department of Human Settlements and Urban Development).

2. Types of HOA Resolutions and When Approval Is Required

2.1. Ordinary Resolutions vs. Major Resolutions

HOAs typically issue two general categories of resolutions:

  1. Ordinary Resolutions – These include day-to-day management decisions, such as:

    • Setting the dates of meetings;
    • Establishing minor community rules and guidelines (e.g., scheduling amenities, security measures);
    • Approving routine budgets already within thresholds set by the existing by-laws.

    Ordinarily, these do not require registration or direct approval by the HLURB (or DHSUD). They are considered internal matters and become effective once validly adopted by the HOA Board (in compliance with the HOA’s internal by-laws and RA 9904).

  2. Major Resolutions – These are resolutions that significantly affect the HOA’s structure, governance, financial standing, or membership rights. Examples include:

    • Amendments to the HOA’s Articles of Incorporation or By-Laws;
    • Changes in the HOA’s fundamental policies that affect assessments, special levies, or dues beyond thresholds stated in the By-Laws;
    • Dissolution or merger of the HOA;
    • Large-scale borrowing or encumbrance of the HOA’s common properties.

    Under the Magna Carta for Homeowners and the IRR, certain major resolutions must be submitted for HLURB (or DHSUD) approval or notation before they become legally effective, especially if they involve changes in the corporate charter or create legally binding obligations that are outside ordinary administration.

2.2. Amendments to Articles of Incorporation and By-Laws

A primary focus of the HLURB’s supervisory function (carried over to DHSUD) is ensuring that an HOA’s Articles of Incorporation and By-Laws meet legal standards. Thus:

  1. Amendment Procedure

    • Must comply with statutory requirements for notice, quorum, and voting thresholds as prescribed in RA 9904 and the HOA’s existing By-Laws. Typically, a majority of all members in good standing (or a specific higher threshold if the By-Laws require it) must approve amendments.
    • The resolution reflecting the amendment is adopted by the general membership (not merely by the Board alone, except where specifically authorized by the governing documents and applicable law).

  2. Submission to HLURB/DHSUD

    • After the membership approves the amendments, the HOA is required to submit the approved amendments to the HLURB (now the DHSUD) for approval or notation.
    • The regulatory authority reviews the amendments to ensure they are not contrary to law, existing regulations, or public policy.

  3. Effectivity

    • Under Section 17 of the IRR of RA 9904, no amendments to the HOA’s charter or By-Laws become valid and enforceable until registered or noted by the HLURB (now DHSUD).
    • Once approved/noted, the amended Articles/By-Laws are binding upon all members of the HOA.

3. Rationale Behind the Requirement of Regulatory Approval

  1. Consumer Protection
    Many homeowners purchase property under the assumption that the community’s governing rules will remain consistent or fair. External oversight by a government agency helps safeguard homeowners from arbitrary or overly burdensome changes.

  2. Checks and Balances
    By requiring an external regulatory body to review significant amendments, potential abuses by the HOA Board or a small group of homeowners are mitigated.

  3. Uniform Standards
    The HLURB (now DHSUD) has historically aimed to maintain uniform standards for subdivisions and housing projects nationwide, ensuring that HOAs’ governing documents comply with broader planning, development, and housing policies.

  4. Dispute Prevention
    Clear, approved By-Laws reduce confusion or conflict among members and can prevent legal disputes from arising by ensuring that major changes undergo proper due diligence.

4. Procedure for Securing Approval or Notation of Major HOA Resolutions

While specific procedural steps can vary slightly depending on the latest circulars and memoranda, the general process is as follows:

  1. Drafting the Resolution

    • The Board of Directors/Trustees typically initiates the drafting of a major resolution or proposed amendment.
    • It must include the rationale, scope, and intended effect on the HOA’s operations or governance.

  2. Notice to Members

    • The Board must send out notices to all members of the association, typically at least two (2) weeks in advance (or as stated in the By-Laws/IRR), containing the text of the proposed resolution or amendment.
    • The notice must specify the date, time, and place of the assembly or the voting mechanism (whether in-person, proxy, or other means).

  3. Membership Approval

    • During the general assembly or special meeting called for that purpose, the resolution is discussed, and a vote is taken.
    • The required vote threshold for approval is governed by the HOA’s By-Laws and RA 9904 (often a majority of all qualified members, or a higher threshold if the By-Laws so require).

  4. Submission to the Regulator

    • Once approved by the membership, the resolution (together with supporting documents such as attendance records, minutes of meetings, vote tally, etc.) is submitted to the HLURB or its successor agency (DHSUD/HSAC, depending on the nature of the resolution) for evaluation.
    • The submission must be accompanied by the applicable filing fees and documentary requirements.

  5. Regulatory Review

    • The HLURB/DHSUD reviews the resolution or amendments to ensure they comply with RA 9904, the IRR, and other relevant laws and regulations (e.g., local zoning or planning rules).
    • They may request clarifications or additional documents if needed.

  6. Issuance of Certificate or Notation

    • Upon finding the resolution or amendments in order, the regulator issues a certificate or notation of approval.
    • The approval is then recorded in the HOA’s official records.

  7. Implementation

    • The HOA can begin enforcing the newly approved resolution or amended provisions only after the regulator’s approval or notation.
    • The association must disseminate final copies to all members and relevant stakeholders.

5. Regulatory Transition: From HLURB to DHSUD/HSAC

5.1. RA 11201 (Creation of DHSUD)

Effective from 2019 onwards, Republic Act No. 11201 reorganized the country’s housing agencies. Key points relevant to HOAs:

  • The HLURB’s regulatory powers over homeowners’ associations were transferred primarily to the Department of Human Settlements and Urban Development (DHSUD).
  • The HLURB’s adjudicatory functions (resolving disputes) now mostly fall under the Human Settlements Adjudication Commission (HSAC).

Despite the reorganization, most of the substantive requirements and procedures for HOA matters, including the need for approval of major resolutions, remain in effect. The labels or offices may differ (e.g., forms submitted to DHSUD instead of HLURB), but the core processes, such as those found in the IRR of RA 9904, still guide compliance.

6. Common Issues, Pitfalls, and Best Practices

  1. Failure to Follow Due Process

    • Skipping or abbreviating the notice period to members can invalidate the resolution.
    • Not securing the minimum required votes (quorum or majority) is a frequent cause for HLURB/DHSUD disapproval.

  2. Incomplete Documentary Requirements

    • Associations sometimes forget to attach the official minutes of the meeting, proofs of notice, sign-in sheets, or formal vote tallies.
    • Proper documentation is critical for the regulatory review.

  3. Delayed Submission

    • A resolution concerning By-Laws amendments or major policy changes that is implemented before securing regulatory approval can be declared void or unenforceable.

  4. Using Outdated Guidelines

    • HOAs must stay updated on the latest circulars or memoranda from DHSUD/HSAC to ensure compliance with any revised filing procedures and fees.

  5. Engaging Legal Counsel Early

    • Seeking legal assistance during the drafting and approval process can help avoid technical errors, ensuring the resolution meets all statutory and IRR requirements.

7. Frequently Asked Questions (FAQs)

  1. Do all HOA resolutions need HLURB/DHSUD approval?

    • No. Routine or ordinary resolutions—such as day-to-day policies and administrative matters—do not require submission. Only major resolutions that fundamentally alter the HOA’s charter or significantly affect membership rights or financial obligations typically require approval.

  2. What happens if an HOA implements a major resolution without regulatory approval?

    • Such a resolution may be deemed invalid or unenforceable. Members can question its validity before the HSAC or raise complaints directly with DHSUD. It could also expose the Board to administrative or legal liability.

  3. What if the HLURB/DHSUD disapproves the submitted resolution?

    • The HOA may be required to revise and re-submit the resolution, addressing the agency’s concerns. The membership will generally need to ratify the revised version before re-submission.

  4. How long does the regulatory approval process take?

    • Timelines vary depending on the completeness of documents and the current workload of the DHSUD or HSAC. Typically, if all requirements are fulfilled, it may take a few weeks to a few months.

  5. Is online or electronic voting permitted for major resolutions?

    • Generally, the default procedure under RA 9904 and the IRR presumes face-to-face assemblies. However, some HOAs’ By-Laws allow electronic, proxy, or hybrid voting mechanisms. The key is ensuring that the mechanism used is consistent with the By-Laws, due notice is given, and voting integrity is maintained.

8. Conclusion

The requirement for HLURB (now DHSUD/HSAC) approval of certain homeowners’ association resolutions—especially those that amend the Articles of Incorporation or By-Laws or that involve major structural or financial changes—serves as an essential check to protect the interests of homeowners and ensure uniform standards for community governance. While not all HOA resolutions necessitate external approval, those that do must follow precise procedures outlined under Republic Act No. 9904 and its IRR.

Given the continuing evolution of housing and settlement regulations under the DHSUD and the adjudication of disputes by the HSAC, it is prudent for HOAs to remain updated on the latest rules and guidelines. Timely compliance, meticulous documentation, and adherence to the proper voting processes help ensure that major resolutions are valid, enforceable, and beneficial to the homeowners’ community as a whole.

Disclaimer: This article is intended for general informational purposes only and does not constitute legal advice. For specific concerns regarding HOA resolutions and regulatory requirements, it is best to consult a licensed attorney or seek guidance directly from the DHSUD or HSAC.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.

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