Homeowners-Association Authority over Common Areas under Philippine Law
(A structured, practice-oriented digest)
1. Legal Architecture
| Layer |
Key Instrument |
Salient Provisions on Common Areas |
| Statute |
Republic Act 9904 (“Magna Carta for Homeowners and Homeowners Associations,” 2010) |
§10(c)–(h) vests the association with power to regulate the use, maintenance, repair and modification of common areas; gate or control subdivision roads; grant easements or leases; and impose reasonable user fees. |
|
RA 4726 (“Condominium Act,” 1966) |
§2(d) defines common areas as “the entire project excepting the individual units,” while §10 and the Master Deed tie every unit to an indivisible share in those areas, exercised through the condominium corporation. (Republic Act No. 4726 - LawPhil) |
|
P.D. 957 & P.D. 1216 (Subdivision & Condominium Buyer’s Protective Decree, 1976; amendment, 1977) |
§31 (as amended) requires developers to reserve 30 % of the gross area as open space and, upon completion, “donate” roads, alleys, sidewalks and open spaces to the LGU or homeowners association. (P.D. No. 1216 - LawPhil) |
|
RA 11201 (2019) |
Creates the Department of Human Settlements & Urban Development (DHSUD) and the Human Settlements Adjudication Commission (HSAC), which now regulate HOAs and decide disputes involving common areas. (Republic Act No. 11201 - LawPhil, History - HUMAN SETTLEMENTS ADJUDICATION COMMISSION) |
| Implementing Rules |
IRR of RA 9904 (2012) |
Rule 9 mirrors §10 and elaborates on consultation, voting thresholds and limits (e.g., 10 % cap on un-approved personal-property deals). ([Implementing Rules and Regulations of Republic Act No. 9904 |
| Administrative Issuances |
Recent DHSUD department and circular orders (e.g., 2024-018) refine turn-over protocols, audit requirements, and sanctions for neglected common areas. ([PDF] Department Circular No. 2024-018 - DHSUD) |
|
| Local/Other |
DILG & LGU ordinances on road-clearing, traffic, “passthrough” or access fees; BIR rulings on tax-exempt dues under §18 of RA 9904. (Whether the collection of pass-through fees inside a subdivision by ...) |
|
| Jurisprudence |
White Plains (1991, 1998), Republic v. Spouses Llamas (2017), Casa Milan HOA v. RCAM (2018), Medical Plaza v. Cullen (2013), among others |
Clarify ownership, donation, and regulatory power over roads & open spaces, HSAC/HLURB jurisdiction, and limits on compulsory cession. (Supreme Court E-Library Information At Your Fingertips, G.R. No. 220042 - CASA MILAN HOMEOWNERS ASSOCIATION, INC., PETITIONER, VS. THE ROMAN CATHOLIC ARCHBISHOP OF MANILA AND REGISTER OF DEEDS OF QUEZON CITY, RESPONDENTS.D E C I S I O N - Supreme Court E-Library, G.R. No. 181416 - MEDICAL PLAZA MAKATI CONDOMINIUM ...) |
2. What Counts as “Common Areas”
- Subdivision context – Roads, parks, playgrounds, landscaped strips and similar open spaces set in the approved subdivision plan; facilities built with association or developer funds (clubhouse, guard-house, perimeter fence, water system). P.D. 1216 classifies them as for “public use” yet still subject to developer disposition until donated. (P.D. No. 1216 - LawPhil)
- Condominium context – Everything “except the separate units”: the land, structural parts, plumbing, lobbies, elevators, parking, gardens, roof deck, etc. (Republic Act No. 4726 - LawPhil)
- Evolving assets – Modern HOAs increasingly manage CCTV networks, solar-panel arrays, wastewater plants and private fiber networks; by law these too become part of common areas once acquired for community benefit and booked in the association’s assets.
3. Core Powers of the Association
- Maintenance & Repair – Day-to-day upkeep; power to raise and spend funds; obligation to follow Philippine Financial Reporting Standards, keep stamped books, and post an externally-audited annual statement (§12 & §17 RA 9904; Rule 9 IRR). (Implementing Rules and Regulations of Republic Act No. 9904 | PDF | Board Of Directors | By Law)
- Improvement & Alteration – Board may act on routine works, but any “additional improvement” or change that affects the subdivision plan requires prior consultation and a simple-majority vote of all members (§10(c), RA 9904).
- Access Control & Traffic Management – HOA may gate or regulate roads to preserve privacy and security, provided:
- Grant of Easements, Leases, Concessions – Allowed after consultation, but cannot cover access roads, main inter-connecting roads, alleys and sidewalks (Rule 9 h, IRR). (Implementing Rules and Regulations of Republic Act No. 9904 | PDF | Board Of Directors | By Law)
- Imposition of Dues & User Fees – Must be “reasonable,” linked to an approved budget, and supported by a board resolution; association income and dues remain tax-exempt if ploughed back into basic services (§18, RA 9904).
- Enforcement & Sanctions – Board may fine, suspend privileges, or cut services of delinquent members, but must observe due process and its published schedule of penalties (§12-13, §9 RA 9904).
4. Limits and Compliance Guard-rails
- By-law & Voting Requirements – Anything outside routine maintenance (e.g., sale of land, large loans) triggers the specific voting thresholds in the by-laws or in §10 RA 9904; major capital projects usually need simple-majority of all members, not merely of attendees.
- Statutory “Ceilings” – Board may not (i) transact personal-property deals worth >10 % of cash holdings without member approval; (ii) encumber common areas if that endangers the residential character; or (iii) block emergency vehicles.
- Role of the LGU & National Agencies – LGUs retain zoning power; the HOA complements but cannot supplant the LGU in delivering basic services (street lighting, waste pickup). Any road closure affecting traffic circulation may be invalidated by DILG if it impedes mobility. (Right to regulate passage in subdivisions - Inquirer Opinion)
- Donations of Open Space – White Plains (1998) & Republic v. Llamas (2017) struck down the notion that donation to government is automatic; a positive act of donation is indispensable, else ownership remains with the developer. Until then, HOA authority is regulatory, not proprietary. (Supreme Court E-Library Information At Your Fingertips)
- Data-Privacy Overlay – CCTV and guest-log systems constitute personal-data processing; HOA must register its Data-Protection Officer with the National Privacy Commission and craft a privacy manual. (NPC Advisory 2017-01; best practice).
5. Turn-over & Ownership Models
| Stage |
Subdivision HOA |
Condominium Corporation |
| Pre-turn-over |
Developer owns the common areas; HOA regulates only by contract & RA 9904. |
Developer, then condo corporation (once majority of units sold) holds title in trust. |
| Turn-over trigger |
Certificate of Completion (HLURB/DHSUD) + notarised Deed of Donation, accepted by HOA or LGU. |
Transfer of common areas & facilities via Turn-over Deed; corporation elects owner-controlled board. |
| Post-turn-over duties |
HOA now bears full civil-law liability for maintenance, accidents, environmental compliance. |
Same; plus condominium corporation must insure the building (§15 RA 4726). |
6. Dispute-Resolution Pathways
- Internal mechanisms – Conciliation/mediation committee required in every by-law (Rule 4, IRR).
- HSAC (formerly HLURB) – Original and exclusive jurisdiction over:
- intra-association disputes (board elections, dues, access, use of common areas);
- developer-HOA cases on turn-over and common-area defects;
- enforcement of P.D. 957 and RA 9904.
Decisions are appealable to the Court of Appeals under Rule 43; SC cases such as Medical Plaza v. Cullen confirm that ordinary courts will dismiss suits falling under HSAC jurisdiction. (G.R. No. 181416 - MEDICAL PLAZA MAKATI CONDOMINIUM ...)
- Regular Courts – Actions involving torts, real-property ownership, or criminal offenses (e.g., estafa by officers) proceed in the RTC/MeTC.
- LGU/Barangay Lupon – Katarungang Pambarangay covers small civil disputes among residents, but HSAC matters are expressly exempt.
7. Fiscal & Accounting Rules
- Audit Window – Books must be open to any member during office hours (§17 RA 9904). Failure can lead to HSAC fines or criminal complaints for violation of Corporate Code-like duties.
- Collections & “Pass-through” Fees – DILG opined that HOAs may impose vehicle pass-through or sticker fees inside private subdivisions so long as the charge is reasonable and tied to actual service costs. (Whether the collection of pass-through fees inside a subdivision by ...)
- Tax Treatment – Association dues, interest income and rentals are VAT- and income-tax-exempt if the money is spent for cleanliness, safety and basic services (BIR RMC 65-2012). Non-compliance revives full tax liability.
8. Enforcement Toolbox
| Tool |
Legal Basis |
Notes |
| Monetary fine / suspension of privileges |
§12(c), §15(o) RA 9904 |
Pre-published schedule, written notice & hearing required. |
| Lien & annotation on title |
By-law + §19, §20 RA 9904 |
Better drafted as contractual lien recorded on title to survive transfers. |
| Injunction vs. violators |
HSAC / RTC |
Typical for building code breaches, illegal structures on common areas. |
9. Emerging & Contested Issues (2024-2025 snapshot)
- Electric-Vehicle charging bays – Are they common areas or concession space? DHSUD Circular 2024-018 treats charging stations as additional improvement needing member approval. ([PDF] Department Circular No. 2024-018 - DHSUD)
- Short-term rentals & digital platforms – Increasing pressure on HOAs to balance owner rights with security; some by-laws now designate exclusive-use areas (e.g., drop-off lobby) and impose host fees.
- Climate-resilience retrofits – Solar carports and rainwater-harvesting tanks being funded through special assessments that must follow §15(o) by-law process.
- Road-sharing for traffic decongestion – DILG and MMDA continue to negotiate year-long MOAs with gated subdivisions to open certain time-windows—highlighting the tension between §10(d) privacy rights and metropolitan mobility. (Right to regulate passage in subdivisions - Inquirer Opinion)
10. Checklist for Boards & Counsel
- Inventory & title-check every common-area parcel/facility.
- Keep an updated reserve-fund study; match dues to a 5-year maintenance plan.
- Ensure by-laws mirror §10 powers; amend if silent on easements, liens, or digital assets.
- Adopt a data-privacy manual and designate a DPO.
- File annual GIS, audited FS, and proof of tax-exempt expenditures with DHSUD/HSAC.
- Maintain a dispute-prevention workflow (mediation first, HSAC second).
- For any gate-closure, secure LGU concurrence and a public-hearing record.
- Annotate contractual liens on individual titles to protect receivables.
- Obtain property & liability insurance that expressly covers common areas and volunteer directors.
- Keep abreast of DHSUD circulars; subscribe to HSAC e-bulletins for jurisdictional updates.
11. Key Case-Law Nuggets (quick citation table)
12. Conclusion
Philippine HOAs enjoy expansive but clearly delimited powers over common areas. The statutory matrix (RA 9904, RA 4726, PD 957/1216), fleshed out by DHSUD/HSAC regulations and tempered by Supreme Court doctrine, requires every board to master (i) process—member consultation, voting, due process, proper filings—and (ii) purpose—that all actions redound to communal welfare. When those twin imperatives are met, an HOA can lawfully gate roads, lease the clubhouse, install EV chargers, or sue erring residents with confidence that its authority stands on solid legal ground.