Versus –

CASE NO. NCRHOA-090612-1732


For resolution of this Board is a dispute between homeowners of
Golden Gate Subdivision Homeowners Association, Inc. (GGSHAI). This
complaint is initiated by the complainants as derivative suit against the
incumbent officers of GGSHAI for allegedly violating the provisions of
Republic Act No. 9904, otherwise known as the Magna Carta for Homeowners
and Homeowners Associations, and its Implementing Rules and Regulations
as embodied in HLURB Board Resolution No. 877, series of 2011.
Nothing is more disappointing than neighbors quarreling against each
other. The simple dynamics of a peaceful community is disturbed much like
calm waters agitated with ripples by the throwing of a stone. In this case the
throwing of multiple stones of different sizes and at different locations leaves
the community in turmoil.
It is detrimental to the progress of a community that leaves it ruined if
left unchecked and unresolved. This dispute has been brought to this Board
to be settled. Thus, we now discuss the merits of this case.
This controversy arose allegedly from the continued violation of the
rights of herein complainants by respondents who are the incumbent officers
of the Golden Gate Subdivision Homeowners Association, Inc. Complainants
claim they represent majority of the homeowners thus invoking the right to
file a derivative suit for and in behalf of the homeowners of GGSHAI. In order
to vindicate their rights they come to this Board with this complaint raising
the following acts and omissions purportedly committed by respondents: 1 a.)
Depriving the complainants of their rights as homeowners to avail of or enjoy
basic community services and facilities; b.) Preventing the complainants
from reasonably exercising their right to inspect association books and

Page 2 of complaint.

) Preventing the complainants from exercising their rights and powers in violation of the required consultation and approval of the required number of homeowners or members by: d. g. from (1) collecting fees. and k. e.2. f. (2) preventing the passage of delivery trucks.) Non-submission of and filing erroneous. respondents invoke Sec.) Depriving homeowners of the basic right to avail of and enjoy quality water services and facilities at a reasonable price.A. order the permanent disqualification of respondents.) Preventing the complainants from participating in association elections and referenda. They likewise disputed the allegations contained therein by raising counter allegations against complainants. Complainants prayed for this Board to declare respondents to have failed their functions under R.) Making and implementing election rules and regulations that are not in accordance with the By-Laws of the association.) Failing to conduct a review of the By-Laws of the association. h.records.) Unreasonably failing to provide basic community services and facilities and maintain.) Allowing the establishment and construction of an institution and opening an area inside the subdivision to outsiders without prior consultation and approval by a majority of the homeowners. repair. order respondents to pay the maximum fine. Respondents deny the allegations in the complaint and answered by raising procedural infirmities in the validity of the derivative suit and the legal standing of complainants. respondents claim that complainants did not exert all efforts to settle their grievance as a condition precedent before coming to this Board. In support of their claim. to have violated the rights of complainants. On the issue of procedural infirmities. by laws. 9904 as directors and officers of GGSHAI. They pray for the dismissal of the instant complaint for lack of merit and the denial of the application for cease and desist order. to wit: Sec. par. The complaint has been submitted together with an application for a cease and desist order to restrain respondents and all persons. and to issue a cease and desist order enjoining the respondents and all persons acting in their behalf. 10.1. their agents and representatives. d. and (3) destroying and removing the improvements erected by the previous administration of GGSHAI. and assessments without prior consultation and approval by a majority of the homeowners. j. i. and incomplete financial statements. c. (3) preventing lessees from leaving the subdivision. 10. inaccurate. replace or modify such facilities. According to them. the complaint itself does not contain any allegations of such fact.) Collecting illegal fees. acting for and in behalf and under the authority of the respondents. d. draft rules and procedures and conduct plebiscite. charges. Derivative Suit – A member of a homeowners’ association in good standing may bring an action on behalf of the association provided that: xxx xxx xxx . (b) of the 2011 Revised Rules of Procedure of the HLURB that the complaint must alleges with particularity that reasonable efforts were exhausted to exhaust all remedies available under GGSHAI’s articles of incorporation.) Failing to adopt and maintain an accounting system using Generally Accepted Accounting Principles (GAAP). laws or rules.) Destroying projects and improvements done by previous administrations.

No. Respondents. Rule 3 of the Implementing Rules and Regulations of the Rep. complainants have been delinquent in the payment of their association dues. the number of complainants definitely affects the substance of the complaint. Section 4 (p). claim that not all of the complainant homeowners in the complaint and impleaded as such did not consent to its filing with this Board. a member who has failed to pay three (3) cumulative monthly dues or membership fees or other charges/assessment despite demands by the association. even if there is only a single complainant in the complaint as long as the requirements are met then such complaint is valid and should be given due course.A. This however failed miserably as the parties could not agree on a common ground. may be declared delinquent by the Board of Directors in accordance with the procedure in the succeeding section. Nonetheless. members of the board of GGSHAI and employees any effort exerted against them would be to no avail.” On the other hand. Anent the issue on legal standing. 9904. where it provides. Since they are the incumbent officers. by laws.) The complainant alleges with particularity that reasonable efforts were exerted to exhaust all remedies available under the association’s articles of incorporation. the complainants are filing the instant complaint as a derivative suit. Thus. For this issue and for the purpose of allowing this complaint to proceed we find for complainants. A complaint does not derive its validity based on the number of complainants that are impleaded in it. they are without personality to file a derivative suit. laws or rules for the purpose of obtaining the relief prayed for. They allege that complainants are not members in good standing because according to their claim. or has repeatedly violated the association’s by laws and/or declared policies. Thus. It is clear that the complaint is against the incumbent officers of GGSHAI for their continued denial and refusal to recognize the rights of complainants as homeowners. Implementing Rules and Regulations of R. Act. They claim that in order for them to be considered delinquent they must first be declared delinquent in accordance with the procedures under the by-laws of the association2. and xxxx xxx On this. complainants claim that they have paid their association dues and are therefore members in good standing. . this Board provided a mandatory conference for the parties to settle their dispute amicably and give them a chance to raise their grievances face to face. Although the numbers of complainant do not have any effect on the procedural validity of the complaint. Respondents invoke Sec. On this and for this issue we find for complainant. however.Delinquent Member – Unless otherwise provided in the by-laws. Hence. Another issue raised by respondents is the legal personality of complainants as homeowners to file the derivative suit. The issue as to whether or not a member is in “good standing” may be invoked only in two instances: (1) 2 Rule 1. the only recourse for complainants was to submit their grievance to the only available forum having jurisdiction over the dispute which is the Housing and Land Use Regulatory Board. we resolve the issue in favor of the complainants. 13. 9004. to wit: “Section 13 . There is no such requirement under the rules.b.

may be declared delinquent by the Board of Directors in accordance with the procedure in the succeeding section. complainants contend that they were refused inspection of the association books and records by the incumbent officers of GGSHAI. respondents however. We now go to the meat core of the dispute. 2011 and November 18. . The IRR of R. a member who has failed to pay three (3) cumulative monthly dues or membership fees or other charges/assessment despite demands by the association. Complainants argue that there must be strict compliance of this procedure before a delinquent member is considered a member not in good standing. Respondents also do not deny refusing complainant Edward P. concerning the same association dues covering the same period. 2011 bears a mark of receipt by respondents which respondents do not deny. 2010 letters.A. 2010 and December 10. On this issue and for this purpose. and removal of directors. Act No.” (emphasis supplied) 3 Rule 3. the sender of the January 7. Respondents deny having received the December 1. December 10. 2010. Of these letters only the January 7. 2011 and November 18. 2011 demand letter. 9904. A delinquent “member” or a “member not in good standing” refers to a member of the association who has been declared as such for the grounds and in accordance with the procedures under the by laws of the association. to reiterate provides that: “Section 13 . Hence. or has repeatedly violated the association’s by laws and/or declared policies. In support of their claim. We find the claim of respondents persuasive on this issue. This is merely discretionary. Respondents refused inspection because according to the records of GGSHAI Mr.Delinquent Member – Unless otherwise provided in the by-laws. Furthermore. Mr. in inspecting the association books and records. did not follow the procedure under the IRR of R. 9904 under Section 13. 2011. the causes of actions raised by complainants: On the first cause of action regarding the deprivation of the rights of complainants to inspect association books and records. Section 14. 2010.election of directors. January 7. Although complainants insist that complainant Colobong and the other senders of the demand letter are all members in good standing. Colobong and the other senders of the demand letters are considered members not in good standing. Colobong and the other complainant sender of the demand letters are members not in good standing as they have not paid their association dues. Colobong and company.A. we resolve that there is no need for the Board of Directors to declare a member delinquent. complainants have legal standing on this note. the demands of complainants for inspection was held in abeyance considering that some of the complainants were still facing criminal action before the Regional Trial Court of Las Piñas City Branch 202. they presented demand letters dated December 1. They even argued that assuming they are not members in good standing. Implementing Rules and Regulations of Rep. 9904 3 before a homeowner becomes a delinquent member that he must first be declared delinquent by the board. 2011 and November 18.

A. They admit collecting fees and charges but the same according to them are enforced not to homeowners but to ambulant vendors. respondents are correct that it would be more prudent to answer the allegations before the criminal court on the basis of sub judice. respondents vehemently denied that they were collecting illegal fees and charges. An examination of the law. The law clearly has no express provisions regarding retroactive application. Respondents claim that R. On this issue we must find for respondents. 9904. complainants allege that respondents have been collecting fees. Mere failure to pay three (3) cumulative monthly dues is already sufficient to make a member delinquent. which provides: 4 Ibid.A.A. Hence. Respondents are correct in their argument. respondents posit that Rep.A. They allege that law is not applicable because it did not provide for retroactivity. the construction of the above provision would be that the procedure as indicated in the succeeding section4 “may or may not” be followed. Morever. complainants never denied the operation of the school prior to the enactment of R. Simply stated. 2010 while the construction of the school building began in 2009 with zoning clearances and permits issued before the effectivity of the law.The by-laws shall provide for guidelines and procedures in determining who is a delinquent member. On the third cause of action. and to prescribe the administrative sanctions to be imposed on such member. Act No.The word “may” is merely discretionary.A. 9904 which provides. 9904 took effect on March 30. the law did not expressly provide for retroactive application. They invoke Sec. 49. charges and assessments without prior consultation and approval of the board. Mark’s Institute and the opening of the perimeter fence. the application of the law could not be retroactively applied to a right already vested prior to its enactment. Hence. . Also. the law itself provides for the procedure to determine who is a delinquent member. The right to due process shall be observed in cases where administrative sanctions are imposed on a delinquent member Clearly the procedure that should be followed to determine a delinquent are those procedures as indicated in the by-laws of the association. R. However. to wit: Section 9. Absent any procedures indicated in the by-laws those with authority may adopt those outlined in the IRR of R. Interestingly. and deliveries and the same are within their powers and duties. 9904. or a member not in good standing. 9904 cited by the complainants and the Implementing Rules and Regulations has no legal application on the construction of the Annex school building of St. . Delinquent Member. On the second cause of action. 9004 or issuance of the zonal clearance of Las Piñas City they merely questioned the beginning of the construction of the school Annex building. Rule 9 of the Implementing Rules and Regulations of R.

We therefore cannot side for complainants in this issue. tranquility. that [1] xxxx [2] existing laws and regulations are met. complainants submit that respondents failed to adopt and maintain an accounting system using General Accepted Accounting Principles (GAAP). the complaint on this issue must necessarily fail. On the sixth cause of action. According to them.” Complainants to support their claim that respondents are illegally charging fees against homeowners. their agents and their representatives from being elected or appointed as members of the board. respondent raised the fact that Ms. In fact. the removal of these structures even if already without use or benefit should have been properly consulted to the board. [3] the authority of the concerned government agencies or units are obtained. some of these complainants were duped to sign a document that they were told was a petition with the Maynilad. Respondents’ on the other hand submit that the reports. Even nuisance must be properly abated lest liability be incurred.Sec. Complainants did not refute this allegation thus. according to respondents the illegal practice of not submitting reports where in fact conducted by complainant Colobong during their term which the records at the HLURB will show. Rights and Powers of the Association. respondents never contradicted the same and merely raised that the structures no longer serve its use or give any benefit to the community. the Board can no longer hear the issue as the action has already prescribed. officer. balance sheet and statement of receipts and disbursements are in accord with GAAP. In disputing complainants claim. On the fourth cause of action. Their numbers give credence to their protest. bolstering the claim of respondents. internal security. Regulate access to or passage through the subdivision/village roads for purposes of preserving privacy. Solano was not a homeowner within the purview of the law but merely a possessor of a residential house and that the she was actually delivering construction materials. On this trivial issue we find for complainants. For one. Certainly. or employee of GGSHAI. On the fifth cause of action regarding the destruction and removal of the structure and improvements introduced by complainants during their term of office. we are not persuaded. An Association shall have the following rights and powers: Xxx xxx d. Second. Respondents support their claim by submitting affidavits of some of these complainants. safety and traffic order: Provided. Given this uncontroverted fact. The thirty eight complainants in this case prays that unto this Board to permanently disqualify respondents. this Board cannot help but think that this issue is in the guise of an electoral protest. The removal or destruction of the structures and improvement introduced by complainants should have been properly consulted to the board. 851 Series of 2009 “Adopting the 2009 Revised Rules of Procedures of . respondents raise a claim that not all of the complainants consented to the filing of the complaint. presented the affidavit of complainant Joycelyn A. and [4] the appropriate and necessary memoranda xxx xxx among the concerned parties. Under the HLURB Board of Commissioner’s Resolution No. Solano who according to her was charged with the disputed toll fee for entering the subdivision. 49. However.

if the by-laws of the association do not provide for a procedure for resolution of the controversy. Against this issue. . 5 Rule VII of HLURB Commissioners’ Resolution No. the manner and validity of elections. of this Rules. Series of 2009. With regard to the prayer of complainants to permanently disqualify respondents and their representatives. trustees or other officers directly elected by the members of a homeowner’s association where the articles of incorporation or by-laws so provides. What is clearly revealing is an examination of the by-laws of GGSHAI which proves respondents point that it is consistent with the law. or within ten (10) days from receipt of the resolution of the controversy by the association as provided in its by-laws: Applying the above rule. Section 3. – In addition to the requirements in Sections 1 and 2. including the proclamation of winners and assumption to the office of directors. 851. This is a trivial issue that does need this Board’s utmost attention. we therefore must dismiss this issue raised by complainants. The result of the review by the committee found that the provisions of the by-laws of GGSHAI are consistent with the requirements of R. 5 It provides. – “The provision of this Rule shall apply to election contests involving homeowners associations. Definition – An election contest refers to any controversy or dispute involving title or claim to any elective office in a homeowners association. the Board has no power to issue this as the same involves a determination of guilt based on proof beyond reasonable doubt and not merely substantial evidence before the supreme penalty of permanent disqualification can be handed to respondents. the complaint in an election contest must state that the case was filed within ten (10) days from the date of election. the positive declaration of respondents that the present by-laws of GGSHAI are consistent with R. Filing of election contest. the validation of proxies. 9904. 9904 must outweigh the negative assertion of complainants. Section 2. Respondents have shown that it has formed a committee to review the entire provisions of the by-laws of GGSHAI. to wit: “Election Contest Section 1. Cases covered. On the seventh cause of action.the Housing and Land Use Regulatory Board” it provides for the specific cases being raised here and the remedy provided thereto.A. Rule IV. the by-laws are already consistent with the law. and the qualification of candidates. For the Board to issue such an order would be an exercise of grave abuse of discretion. As pointed out by respondents. complainants claim that respondents have not yet conducted a review of the by-laws of the GGSHAI.A.

We resolve that the determination of whether Golden Gate Subdivision should be declared as an “Open Community” cannot be left to a few homeowners alone. 2012.Lastly. They interpose that the assessment of Php 24.00 covers the Capital Expenditures such as underground water pipes to be installed along the numerous streets of Golden Gate Subdivision. a call for a special general membership meeting on July 1. the demand of complainants against the board of GGSHAI is premature.00 due to their subdivision status as an “Open Community”. This list has been repeatedly used and abused by complainants by attaching the same to the complaint. (Maynilad) the amount of Php 24. Complainants claim that they were denied this call and immediately demanded the board of GGSHAI to issue a resolution declaring Golden Gate Subdivision as an “Open Community”. 9904 and it’s implementing rules and regulations. complainants discovered the neighboring subdivisions in Las Piñas City were charged a one-time installation fee of only 2.000. However. Hence. It is apparent that not all of the supposed complainants in the list consented to the filing of the instant complaint. we now resolve the eight cause of action of complainants and probably the most crucial issue deciding whether respondents violated the provisions R. In support of their claim they submitted affidavits of some of these complainants. complainants submitted a list purportedly a petition by majority of the homeowners expressing their consent to the demand of complainants. In 2011.A.800.00 as installation fee for water meter payable in monthly installments. Complainants allege that these qualifications have been met by Golden Gate Subdivision. In order to bolster their demand to declare the subdivision an “Open Community”. complainants have not been candid with this Board. According to complainants the homeowners of Golden Gate Subdivision were assessed by Maynilad Water Services. Inc. Regrettably. hence. Complainants should have immediately called the attention of the HLURB regarding this matter to determine first whether Golden Gate Subdivision has met the qualifications to be considered an “Open Community”. These qualifications are subject to determination. as the list is merely a list of homeowners who signed because they wanted to avail of the water services of Maynilad. Complainants. . in order to make available this discounted installation to the homeowners demanded to the officers of the present GGSHAI.000. respondent quickly refuted this. The situation therefore of neighboring subdivisions as complainants claim is inapplicable in this case. respondents herein. to pass a board resolution declaring Golden Gate Subdivision as an “Open Community”. All in all the complaint filed by the aggrieved homeowners of Golden Gate Subdivision failed to establish the quantum of evidence required of this case to justify the penalties they prayed to this Board against respondents. position paper and other pleading submitted before us. Before a declaration that a private subdivision is an “Open Community” certain qualifications must first be met. There are no existing water pipelines inside the subdivision before Maynilad came inside the subdivision. Respondents dispute the allegations of complainants.

569. S. 568. Ct. 88. Jurado. 6 Ombudsman v. 420. ed. 24 S. The obvious purpose of this and similar provisions is to free administrative boards from the compulsion of technical rules so that the mere admission of matter which would be deemed incompetent in judicial proceedings would not invalidate the administrative order. 93.. Abilene & Southern Ry. Interstate Commerce Commission v. 860. 48 Law. 565. 154. or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. ed. WHEREFORE PREMISES CONSIDERED. 50 S. judgment is hereby rendered dismissing the instant complaint for lack of merit and consequently the application for a cease and desist order is DENIED.6 Basic is the rule that. 225. 68 Law.. The statute provides that ‘the rules of evidence prevailing in courts of law and equity shall not be controlling. G. this complaint must necessarily fail. With merely allegations bereft of any substantial evidence to support the claims of complainant. Ct. 33 S. Co. ed. 280 U. 44. Ct. a fact may be deemed established if it is supported by substantial evidence. 25. 561 SCRA 135. – In cases filed before administrative or quasi-judicial bodies. S. in administrative cases. 57 Law. but such kind of relevant evidence as a reasonable mind might accept as adequate to support a conclusion or evidence commonly accepted by reasonably prudent men in the conduct of their affairs. Rule 133 of the Rules of Court is explicit. Section 5. 1016. S. ed.R. the quantum of evidence necessary to find an individual administratively liable is substantial evidence. 187. Baird. Substantial evidence. 288. Tagg Bros. Louisville & Nashville R. Ct. 227 U. 5. Co. 563. 274. S. Mere uncorroborated hearsay or rumor does not constitute substantial evidence. SO ORDERED.Substantial evidence does not necessarily mean preponderant proof as required in ordinary civil cases. 185. 431. 44 S. 154155. & Moorhead v.7 But this assurance of a desirable flexibility in administrative procedure does not go so far as to justify orders without a basis in evidence having rational probative force. 2008. United States. 265 U. 7 . August 6. 220. 442. 624. to wit: Sec. 74 Law. 194 U. Interstate Commerce Commission v. United States v.