Homeowner Associations: Republic Act 9904 and Its Importance

Imagine you're in the market for a home. To your surprise, you see a neighborhood that is well maintained with manicured shrubs and freshly cut grass. It seems to be a slice of suburban paradise.

These well-maintained neighborhood are made possible because it is part of what they call Homeowners Associations or HOA.

What is a Homeowner Association (HOA)?

An HOA is an association of homeowners. If you're familiar with the term "planned development," you know what it refers to a posh subdivision with perks like a communal swimming pool and landscaping services that are made up of individuals who own houses in the same complex as you.

Generally speaking, it means that residents pay a monthly fee to the Home Owners Association (HOA) to cover the cost of the HOA's services and benefits.

Republic Act 9904 or the Magna Carta for Homeowners and Homeowners Associations

The Magna Carta for Homeowners and Homeowners’ associations by the Housing and Land Use Regulatory Board (HLURB) or RA 9904 defines a homeowners' association as a "nonstock, nonprofit corporation registered with the HLURB, or with the Home Insurance Guarantee Corporation, now called Home Guaranty Corporation, or the Securities and Exchange Commission." This group is organized by:

a. Owners or buyers of a Lot in a subdivision/village or other residential real estate under the association's jurisdiction.

b. Legal residents or lessees who are legally entitled to live in a dwelling unit or land owned by a government socialized housing or relocation project.

c. Citizens who are considered to be underprivileged and homeless In the process of receiving ownership rights under the Community Mortgage Program (CMP), Land Tenure Assistance Program (LTAP), and other similar programs related to housing projects implemented by the national government or local government unit as defined by law.

Why property owner associations are needed in a community?

The primary objective of a HOA is to raise the overall property values of the neighborhood's real estate. To that end, the HOA establishes and enforces standards for the appearance of neighborhood properties and limits on what residents may and cannot do.

Aside from contributing to the over security and safety of the whole community, your property can also be sold faster if the neighborhood is well-kept and appealing to prospective buyers, who will be more willing to pay a premium for a home in that area.

How do homeowners association work?

When a new neighborhood is created, HOAs are often established.

The developer sets up the homeowners association, then gives it over to the individuals who purchase homes in the neighborhood. Those persons are instantly added to the HOA as well. Those people automatically become members of the HOA.

The HOA's board of directors is elected by the members of the neighborhood. Community features and services are selected by the board, and the board collects monthly fees to pay for them. The board also defines and enforces the community regulations.

HOA Membership

Section 9 of the Implementing Rules and Regulations (IRR) of RA 9904 specifies that participation in the organization is voluntary unless explicitly indicated in the Contract to Sell, Deed of Sale, or other documents of conveyance or noted in the title of the property.

Even if you're a lessee of a member, you may join as long as you have a one-year lease and the owner of the property you're renting has given you formal permission to do so.

Participation in the organization is a condition of membership. Members are expected to pay dues, membership fees, special levies (such as a construction bond and parking stickers), attend regular meetings of the board of directors, and engage in various events.

HOA Board Members

A board of directors/trustees of an association is a group of five to fifteen individuals chosen by the organization's members. It is up to the board members to decide whether or not additional posts such as treasurer or secretary should be formed; if they don't, the bylaws govern the association's operations.

As befits their position, the members of the Board of Directors are expected to carry out their duties with the utmost possible care and commitment.

Benefits of joining the property owners association

Members of the community association can enjoy the following benefits as long as they follow HOA's rules and pay the designated HOA Fees on time:

a. Enjoy all fundamental community services and amenities, as well as shared places and spaces.

b. Check the books and records of the association and deliver yearly reports comprising financial statements on demand, during normal work hours.

c. Vote and be eligible for any elective or appointive position in the organization if the necessary criteria are met.

d. Require and receive the association's mandatory deposits.

e. Be an active member of the community by attending meetings, voting, and taking part in referendums.

f. Make use of any and all additional privileges granted by the rules of the organization.

Perks of having community associations in your neighborhood

With an increasing number of HOAs popping up when home hunting, it's important to understand the benefits of living in a neighborhood with a HOA before making a final decision for your home investment.

Here are some of the advantages of having a HOA in your community:

1. Possible boost in the value of your property.

In the minds of many proponents of HOAs, they can boost the value of your home by a few percentage points. However, this is of course still dependent on the location, accessibility of the area, and convenience of the property you would like to buy. To maximize the growth of your property value, make sure to choose a subdivision that is located near the commercial center and has the potential for various infrastructure development.

2. Appealing aspect.

A well-kept neighborhood is made possible thanks to the work of homeowners' associations (HOAs), which are charged with the responsibility of maintaining common areas. Everyone can't deny the fact that there's an undeniable sense of satisfaction in returning to a lovely neighborhood every day.

3. Amenities.

From swimming pools and gyms to security and safety, HOAs provide a wide range of services to residents. The convenience of having so much upkeep taken care of for you, as well as the availability of exciting amenities near to your home, may make the HOA fees well worth paying.

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