ASG Law

Tag: Homeowners Association Disputes

  • Understanding Jurisdiction in Homeowners Association Disputes: The Role of HLURB and RTC

    Key Takeaway: The Exclusive Jurisdiction of HLURB in Resolving Intra-Association Disputes

    Atty. Pablo B. Francisco v. Melanio Del Castillo, Sandra Bernales, and the Republic of the Philippines, G.R. No. 236726, September 14, 2021

    Imagine living in a vibrant homeowners association where transparency and accountability are the cornerstones of community governance. Now, picture a scenario where you, as a homeowner, request to inspect the association’s financial records, only to be met with resistance. This real-world situation underscores the importance of understanding the legal avenues available to enforce your rights as a member of a homeowners association. In the case of Atty. Pablo B. Francisco v. Melanio Del Castillo, Sandra Bernales, and the Republic of the Philippines, the Supreme Court of the Philippines clarified the jurisdiction over such disputes, emphasizing the role of the Housing and Land Use Regulatory Board (HLURB) in resolving intra-association conflicts.

    The case centered on Atty. Francisco’s attempt to inspect the financial records of the Brookside Residents Association, Inc. (BRAI), which was met with refusal by fellow board members Melanio Del Castillo and Sandra Bernales. Atty. Francisco then filed a criminal case against them for violating his rights under Republic Act No. 9904, the Magna Carta for Homeowners and Homeowners Associations. The central legal question was whether the Regional Trial Court (RTC) or the HLURB had jurisdiction over this dispute.

    Legal Context: Understanding Jurisdiction and the Magna Carta for Homeowners

    The legal landscape surrounding homeowners associations in the Philippines is governed by Republic Act No. 9904, which aims to protect the rights of homeowners and ensure the proper functioning of homeowners associations. Under this law, homeowners have the right to inspect association books and records during office hours, as stipulated in Section 7(b):

    Section 7. Rights of a Member. – An association member has full rights: … (b) to inspect association books and records during office hours and to be provided upon request with annual reports, including financial statements;

    This right is complemented by Section 22(c), which prohibits preventing homeowners from exercising their right to inspect association books:

    Section 22. Prohibited Acts. – It shall be prohibited for any person: … (c) To prevent any homeowner who has paid the required fees and charges from reasonably exercising his/her right to inspect association books and records;

    The HLURB, now reconstituted as the Human Settlements Adjudication Commission (HSAC), is tasked with hearing and deciding intra-association disputes, as outlined in Section 20(d) of RA 9904:

    Section 20. Duties and Responsibilities of the HLURB. – In addition to the powers, authorities and responsibilities vested in it by Republic Act No. 8763, Presidential Decree No. 902 – A, Batas Pambansa Blg. 68 and Executive Order No. 535, Series of 1981, as amended, the HLURB shall: … (d) Hear and decide intra-association and/or inter-association controversies and/or conflicts, without prejudice to filing civil and criminal cases by the parties concerned before the regular courts: Provided, that all decisions of the HLURB are appealable directly to the Court of Appeals;

    The term ‘intra-association dispute’ refers to conflicts arising from the relations between and among members of the association or between them and the association itself. This jurisdiction has evolved over time, with the HLURB assuming the role previously held by the Securities and Exchange Commission (SEC) and the Home Financing Commission (HFC).

    Case Breakdown: From Request to Supreme Court Ruling

    Atty. Francisco’s journey began when he visited the BRAI office on September 3, 2014, to inspect and request copies of the financial books and records for the years 2008 to 2013. His request was denied, leading him to file a criminal case against Del Castillo and Bernales for violating Section 7(b) of RA 9904. The case was filed in the RTC of Antipolo City, which issued a warrant of arrest, but the respondents were granted provisional liberty upon posting bail.

    Del Castillo and Bernales filed an Omnibus Motion to Quash the Information, arguing that the HLURB, not the RTC, had jurisdiction over the dispute. The RTC denied their motion, prompting them to appeal to the Court of Appeals (CA). The CA granted the petition, reversing the RTC’s decision and quashing the Information on the grounds that the dispute was an intra-association matter within the HLURB’s jurisdiction.

    Atty. Francisco then appealed to the Supreme Court, arguing that the case was a criminal matter cognizable by the RTC. However, the Supreme Court upheld the CA’s decision, emphasizing the HLURB’s exclusive jurisdiction over intra-association disputes. The Court’s reasoning included the following key points:

    “The exclusive jurisdiction of the HLURB to resolve intra-association disputes is therefore made clear by the foregoing legislative enactments.”

    “The phrase ‘without prejudice’ under Secs. 20 and 23 of R.A. No. 9904 simply means that a complaint may be filed with the regular courts, provided that there is a violation of the Revised Penal Code, Civil Code and other pertinent laws that accompanied the violation of any of the provisions of R.A. No. 9904.”

    The Court also clarified that the HLURB’s authority to impose administrative fines does not equate to criminal penalties, which are within the purview of regular courts:

    “The imposition of fine by the HLURB against the erring parties must be understood to be in the concept of an administrative sanction, not a fine in the nature of criminal penalty as contemplated in the Revised Penal Code.”

    Practical Implications: Navigating Homeowners Association Disputes

    This ruling has significant implications for homeowners and homeowners associations. It underscores the importance of understanding the appropriate legal venue for resolving disputes. Homeowners seeking to enforce their rights under RA 9904 should first approach the HLURB, now HSAC, rather than filing criminal cases in the RTC.

    For businesses and property developers, this decision highlights the need to comply with the provisions of RA 9904 and ensure that homeowners associations are properly registered with the HLURB. It also emphasizes the importance of maintaining transparent and accessible records to avoid potential disputes.

    Key Lessons:

    • Understand the jurisdiction of the HLURB in resolving intra-association disputes.
    • Ensure compliance with RA 9904 to protect the rights of homeowners.
    • Seek legal advice before pursuing legal action to ensure you are approaching the correct venue.

    Frequently Asked Questions

    What is an intra-association dispute?

    An intra-association dispute is a conflict arising from the relations between and among members of a homeowners association or between them and the association itself.

    Which body has jurisdiction over intra-association disputes?

    The Housing and Land Use Regulatory Board (HLURB), now known as the Human Settlements Adjudication Commission (HSAC), has exclusive jurisdiction over intra-association disputes under RA 9904.

    Can I file a criminal case against a homeowners association for denying my right to inspect records?

    No, the HLURB has jurisdiction over disputes related to the violation of rights under RA 9904. Criminal cases can only be filed if there is a concurrent violation of the Revised Penal Code or other pertinent laws.

    What are the rights of a homeowner under RA 9904?

    Homeowners have the right to inspect association books and records, participate in association meetings, and enjoy other rights as provided in the association’s bylaws.

    How can I ensure my homeowners association complies with RA 9904?

    Ensure that your association is registered with the HLURB and maintains transparent and accessible records. Regularly review the association’s bylaws and seek legal advice if necessary.

    ASG Law specializes in homeowners association law and dispute resolution. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Navigating Homeowner Disputes: Understanding the Limits of HIGC Jurisdiction in the Philippines

    When Can the HIGC Intervene in Homeowners’ Association Disputes? Understanding Jurisdictional Limits

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    TLDR: This case clarifies that the Home Insurance and Guaranty Corporation (HIGC) has limited jurisdiction over homeowners’ association disputes. The Supreme Court ruled that the HIGC cannot expand its jurisdiction through its own rules and regulations beyond what is explicitly granted by law. Disputes outside the specific ‘intra-corporate relations’ framework are beyond the HIGC’s authority.

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    G.R. No. 124873, July 14, 1999: UNITED BF HOMEOWNER’S ASSOCIATION, AND HOME INSURANCE AND GUARANTY CORPORATION, PETITIONERS, VS. BF HOMES, INC., RESPONDENTS.

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    INTRODUCTION

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    Imagine homeowners locked in a bitter dispute with their subdivision developer over security, amenities, or association management. Where do they turn for resolution? Many might assume government agencies tasked with overseeing housing and homeowner associations have broad powers to intervene. However, Philippine law carefully delineates the jurisdiction of these bodies, as illustrated in the landmark case of United BF Homeowner’s Association vs. BF Homes, Inc. This case highlights the crucial principle that administrative agencies like the Home Insurance and Guaranty Corporation (HIGC) cannot overstep the boundaries of their legally granted authority, particularly when it comes to resolving disputes within homeowners’ associations.

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    The United BF Homeowners’ Association (UBFHAI), representing residents of the vast BF Homes Parañaque subdivision, sought the intervention of the HIGC against BF Homes, Inc. (BFHI), the subdivision developer. UBFHAI alleged that BFHI, under new receivership, was improperly revoking agreements concerning security and administration of common areas. The central legal question became: Did the HIGC have the jurisdiction to hear and decide this dispute between the homeowners’ association and the subdivision developer?

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    LEGAL CONTEXT: DELINEATING JURISDICTION OVER HOMEOWNERS’ ASSOCIATIONS

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    The legal framework governing homeowners’ associations in the Philippines has evolved, with administrative oversight shifting over time. Initially, the Securities and Exchange Commission (SEC) held this responsibility. Executive Order No. 535, issued in 1979, transferred this function to the Home Insurance and Guaranty Corporation (HIGC), now known as the Home Guaranty Corporation. This delegation aimed to streamline the regulation of housing and homeowner associations under a specialized agency.

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    Executive Order No. 535, Section 2 clearly outlines the HIGC’s expanded powers:

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    “2. In addition to the powers and functions vested under the Home Financing Act, the Corporation, shall have among others, the following additional powers;
    (a) To require submission of and register articles of incorporation of homeowners associations and issue certificates of incorporation/registration, upon compliance by the registering associations with the duly promulgated rules and regulations thereon; maintain a registry thereof; and exercise all the powers, authorities and responsibilities that are vested on the Securities and Exchange Commission with respect to homeowners association, the provision of Act 1459, as amended by P. D. 902-A, to the contrary notwithstanding;”

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    This order effectively empowered the HIGC to act as the primary regulatory body for homeowners’ associations, inheriting the SEC’s previous authority. Presidential Decree No. 902-A, Section 5(b), which defined the SEC’s jurisdiction, became relevant to understanding the scope of the HIGC’s powers. This decree outlined jurisdiction over:

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    “(b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity.”

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    The HIGC, in 1989, issued its