Is HLURB Approval Needed for Homeowners Association Resolutions?

Is HLURB Approval Needed for Homeowners Association Resolutions?
A Comprehensive Overview in the Philippine Context

1. Introduction

In the Philippines, homeowners associations (HOAs) are primarily governed by Republic Act No. 9904, also known as the Magna Carta for Homeowners and Homeowners Associations, along with its Implementing Rules and Regulations (IRR). Oversight for HOAs was traditionally provided by the Housing and Land Use Regulatory Board (HLURB). With the passage of Republic Act No. 11201, however, housing-related agencies have been reorganized under the new Department of Human Settlements and Urban Development (DHSUD). Despite this structural shift, many still refer to “HLURB approval,” especially when discussing older regulations, registration forms, and guidelines.

A common question that arises among HOA board members and residents is whether or not HLURB (now effectively DHSUD) approval is necessary for all—or certain—resolutions, rules, or policies that the HOA wishes to implement. This article aims to comprehensively detail the legal and practical considerations relevant to that question.

2. Legal Framework Governing HOAs

  1. Republic Act No. 9904 (Magna Carta for Homeowners and Homeowners Associations)

    • Enacted to establish the rights and obligations of homeowners, as well as the standards and guidelines for the creation and governance of HOAs.
    • Empowers government agencies (initially HLURB, now DHSUD) to register and supervise HOAs.

  2. Implementing Rules and Regulations (IRR) of RA 9904

    • Provides the administrative procedures HOAs must follow, including registration requirements, reporting obligations, and mechanisms for dispute resolution.
    • Lists the powers and responsibilities of an HOA’s Board of Directors or Trustees and the rules on adopting resolutions.

  3. Administrative Orders, Rules, and Circulars

    • The HLURB (and successor bodies under DHSUD) from time to time issues guidelines or memoranda clarifying the scope of their regulatory function over HOAs.
    • These guidelines often cover registration requirements, issuance of a certificate of incorporation and by-laws, and requirements for amending HOA governing documents.

3. Registration vs. Approval: Key Distinctions

It is crucial to distinguish between two concepts:

  1. Registration
    HOAs must be registered with the HLURB (now DHSUD) to be recognized as a juridical entity (akin to a non-stock, non-profit corporation). This registration includes the submission of Articles of Incorporation, By-laws, list of members, and other foundational documents.

  2. Approval
    Beyond registration, some specific corporate acts—particularly amendments to the Articles of Incorporation or By-laws, or resolutions that substantially affect membership rights or obligations—may require approval from the regulatory authority. However, not all internal rules or resolutions demand such approval.

4. Types of HOA Resolutions and When Approval Is Required

  1. Routine Internal Resolutions

    • Examples: Setting dates for meetings, appointing committees, imposing minor guidelines (e.g., new parking rules, clubhouse use policies).
    • These do not usually require direct approval from HLURB/DHSUD.
    • Provided these resolutions are consistent with the HOA’s existing By-laws and do not materially alter the rights or obligations of the members, they can be adopted by the HOA Board and/or membership in accordance with their internal procedures.

  2. Resolutions Involving Amendments to By-laws or Articles of Incorporation

    • Substantial changes to the foundational documents (e.g., expansions of board power, changes in voting structure, membership requirements, or alterations to dues and assessments that require changes to the By-laws).
    • Likely require HLURB/DHSUD review and approval.
    • Under RA 9904 and the relevant IRR, amendments to By-laws must be filed with the regulatory agency for validation and issuance of a certificate of approval of amended By-laws (similar to corporate practice under the Securities and Exchange Commission for non-stock corporations).

  3. Resolutions Affecting Dues, Assessments, and Collection Policies

    • The power to levy dues and assessments on members is inherent to an HOA but is governed by the By-laws, the Magna Carta for Homeowners, and existing HLURB/DHSUD guidelines.
    • If the resolution is in line with existing By-laws and already-registered policies (i.e., the amount or method of assessment is within the scope previously approved in the By-laws), no additional regulatory approval is generally needed.
    • If the resolution effectively amends the By-laws or imposes entirely new obligations not previously set out, HLURB/DHSUD approval may be required.

  4. Resolutions on Major Financial Transactions or Asset Disposal

    • Large-scale financial commitments (e.g., obtaining bank loans under the HOA’s name, disposing of major HOA assets) sometimes trigger the requirement of membership approval per the By-laws.
    • If the By-laws or Articles require external approval for certain transactions, the HOA must comply with both internal requirements and HLURB/DHSUD rules.
    • In some cases, the regulatory agency may need to be notified or asked for confirmation, especially if the transaction involves encumbering communal property or property owned in common.

  5. Resolutions on Governance Disputes or Membership Sanctions

    • Sanctions against members for violations of the HOA rules are typically governed by internal processes and do not require prior HLURB/DHSUD approval.
    • However, if a sanction or dispute escalates and is appealed to the regulatory agency (which exercises quasi-judicial powers), the HOA may need to justify its resolution before HLURB/DHSUD.

5. Procedures for Obtaining HLURB (Now DHSUD) Approval

  1. Filing of Petition or Application

    • If a proposed resolution involves amending the HOA By-laws or Articles of Incorporation, the HOA must file an application or petition with the concerned regional office of DHSUD.
    • Required documents typically include the proposed amendment, a copy of the relevant board resolution, and proof of compliance with membership voting requirements (e.g., minutes of the general assembly meeting, attendance records, and voting results).

  2. Documentary Requirements

    • Notarized Board Resolution proposing the amendment.
    • Certification of the Secretary attesting that the required membership vote was obtained (if so mandated by the By-laws).
    • Evidence of Notice sent to members regarding the meeting and the agenda.
    • Any relevant attachments, such as the current By-laws and the mark-up or redlined version of the changes.

  3. Evaluation by the Regulatory Agency

    • DHSUD will review the documents to ensure that the proposed amendments are consistent with RA 9904, the IRR, and any other applicable housing regulations.
    • The agency may require clarifications, additional documentation, or compliance with certain conditions before approving.

  4. Issuance of Approval/Certificate

    • Once satisfied with the petition, DHSUD issues a certificate approving the amended By-laws or a similar document signifying that the resolution is recognized.
    • The HOA then updates its internal records accordingly and disseminates the approved amendment to all members.

6. Common Pitfalls and Practical Tips

  1. Assuming Automatic Approval

    • Some HOA boards mistakenly believe that internal approval by a majority of members is enough to enforce changes to the By-laws or Articles. In fact, government approval is still required for such amendments to take legal effect.

  2. Failing to Update Registered Documents

    • Even if the HOA obtains the membership votes, the resolution amending the By-laws is not final until the regulatory agency formally recognizes it. HOAs must be diligent in updating the official copies on file with DHSUD.

  3. Overstepping Board Authority

    • Not all major policy changes can be unilaterally imposed by the Board of Directors/Trustees. The By-laws often stipulate when membership-wide approval is necessary. If a board passes a resolution that exceeds its authority, the resolution can be challenged—and possibly overturned—by members or by the regulatory agency.

  4. Lack of Proper Notice and Documentation

    • RA 9904 and its IRR emphasize due process and transparency. Proper notice to members (written notices, posting on bulletin boards, etc.) is crucial to ensure the legitimacy of any resolution that is later submitted for regulatory approval.

  5. Use of the Correct Government Office or Portal

    • With the transition from HLURB to DHSUD, HOAs must ensure they are filing paperwork with the correct office and are updated on the latest forms, fees, and contact information.

7. Enforcement and Dispute Resolution

  1. Administrative Complaints

    • If an HOA implements a resolution without required regulatory approval (e.g., drastically changing membership fees contrary to existing By-laws), affected members may file an administrative complaint with the DHSUD.

  2. Mediation and Conciliation

    • RA 9904 and related DHSUD/HLURB regulations encourage alternative dispute resolution methods. DHSUD often facilitates mediation or conciliation sessions before resorting to formal adjudication.

  3. Court Action

    • In cases involving complex or high-stakes disputes—especially regarding property rights—parties may elevate the matter to the regular courts after exhausting administrative remedies.

8. Conclusion

Not all resolutions issued by a homeowners association require direct approval or confirmation from the HLURB (now DHSUD). Routine internal governance measures—such as setting meeting dates, forming committees, or adjusting certain community guidelines—can typically be enacted by the HOA board and membership according to the association’s By-laws without additional regulatory steps.

However, key resolutions that amend the Articles of Incorporation or By-laws, impose new or significantly altered dues and assessments, or involve major transactions affecting communal property or member rights do typically require regulatory approval. HOAs should carefully check their By-laws, RA 9904, and the latest DHSUD guidelines to confirm whether external sign-off is needed.

Ultimately, the primary purpose of requiring HLURB/DHSUD approval is to protect homeowners’ rights, ensure the legality of HOA governance actions, and maintain transparency and accountability within community associations. By being informed about these requirements and adhering to proper procedures, HOAs can avoid administrative pitfalls, uphold their members’ interests, and promote harmonious community living.

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. For specific issues or legal concerns regarding homeowners associations, it is advisable to consult a qualified attorney or contact the DHSUD regional office for updated guidelines and requirements.

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

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