REPUBLIC OF THE PHILIPPINES HUMAN SETTLEMENTS

ADJUDICATION COMMISSION REGIONAL ADJUDICATION BRANCH

REGION IV-A

CYNTHIA HEUSSAFF,
EMELY TORDA,
ERLINDA DESCALSOTA,
HENRY S. LAXAMANA and EDUARDO M. PANGAN,
Complainants,

Case No. HSAC-RIVA

- versus - HOA-200803-00039
(For: Declaration of Nullity of Dues
Increase with Prayer for Refund)

THE MEMBERS OF THE BOARD OF DIRECTORS

OF MANILA SOUTHWOODS RESIDENTIAL ESTATES HOMEOWNERS ASSOCIATION,

INC., namely: JOSE S. PALMA, JR., FERNANDO RIMANDO, LUZ SOCORRO
PASTOLERO, VERONICA MITA, ARTURO ZULUAGA, JR. and MANILA SOUTHWOODS
RESIDENTIAL
Ashows ASSOCIATION, INC.,
Respondents.

POSITION PAPER

Complainants Cynthia Heussaff, Emely Torda, Henry S. Laxamana, and

Eduardo M. Pangan, by counsel, respectfully state:

NATURE OF THE COMPLAINT

1. This is a complaint for the declaration of nullity of the increase in association dues
from P1.80 to P5.50 per square meter and implementation thereof by the Respondent Board
of Directors of Manila
Southwoods Residential Estates Homeowners, Inc. ("MSREHAI") effective 1
January 2020, for being contrary to law, as follows:

1.1. the increase in association dues does not comply with the formula for
determining the amount of dues as prescribed in Section 8, Guidelines
on HOA Dues, Fees and Contributions, HLURB Exec. Comm. Res. No.
001-17, as ratified in HLURB Memorandum Circular 09-17; and

1.2. the Respondent Board imposed a higher association dues rate of P5.50
per square meter on regular members as compared to P3.30 per square
meter on certain Joint Venture Partners who own saleable lots in Manila
Southwoods subdivision, in violation of Section 8, Guidelines on HOA
Dues, Fees and Contributions;

1.3. the Respondent Board failed to obtain the approval of the majority of the
members of the Manila Southwoods Residential Estates Homeowners
Association, Inc., as required by Section 12 sub-paragraphs (b) and (d),
Republic Act 9904, otherwise known as the Magna Carta for
Homeowners and Homeowners Associations (“RA 9904"), and
reiterated in Section 6.2(c), Guidelines on HOA Dues, Fees and
Contributions.

PARTIE
S

2
.
The following are the
parties:

2.1. The Complainants, Cynthia Heussaff, Emely Torda, Henry S. Laxamana and
Eduardo M. Pangan are members of the Manila Southwoods Residential
Estates Homeowners Association, Inc., and may be served with summons,
pleadings and other processes of this Honorable Court through the
undersigned law firm.
 2.2. Respondents Jose S. Palma, Jr., Fernando Rimando, Luz Socorro Pastolero,
Veronica Mita and Arturo Zuluaga, Jr. are incumbent Directors of the
Manila Southwoods Residential Estates Homeowners Association, Inc.,
all Filipino and of legal age, and may be served with summons,
pleadings, motions and other processes of this Honorable Court at:
MSREHAI Administrative Office, G/F, Manila Southwoods
Sportsclub, Bgy. Cabilang Baybay, Carmona, Cavite.

2.3. Respondent MSREHAI is a homeowners' association duly organized and

existing under the laws of the Republic of the Philippines, and is composed
of owners of
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XXXXTTACY.

subdivision lots in Manila Southwoods Residential Estates ("Manila Southwoods" or "Subdivision"),

a residential subdivision comprised of four phases, parts of which are located in Carmona, Cavite;
GMA, Cavite; and Biñan, Laguna, all within the jurisdiction of this Honorable Office.

STATEMENT OF FACTS

3.
The following are the facts of the case:

3.1. On 15 November 2019, Respondent Board announced the Dues Increase in The Southwoods
Guardian (Issue No. 20; 15 November 2019), the official newsletter of MSREHAI, but the
amount of the dues increase was not yet
definite.

3.2. The announcement stated that MSREHAL must "increase its dues from P1.80 per square meter
to a minimum of P5.50 per square meter for members in Good Standing and from P1.00 to
P3.30 for Joint Venture Partners who own lots within our Village."

(Emphasis supplied.)

Copies of pages 1 and 2 of the Southwoods Guardian Newsletter (Issue No. 20; 15 November
2019) are attached hereto and made integral parts hereof as Annexes "A" and "A
1". The above-quoted statement is sub-marked as "A-1-A".
3.3. On the upper part of the said newsletter appeared the "Financial Updates", which
showed:

Cash in Bank: P55.615 M Payables : P16.154 M

Bonds:
P13.104 M Opex:
P3.050 M

AVAILABLE: P34.297 M
CASH IN BANK As of 31 October 2019: 66% of the Lot owners are already in good standing 9% of
which are Joint Venture (JV) Partners while 57% are private owners.

(Annex "A-1-B")
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3.4. On 7 December 2019, the 2019 Board of Directors (which included Respondents Palma,
Rimando and Zuluaga) convened the MSREHAL Annual General Members Meeting,
however, they did not include the Dues Increase in the Agenda of the said Annual General
Members Meeting, which is reproduced below:

AGENDA/ PROGRAMME (General Assembly and Elections of the Board of Directors of

MSREHAl for the year 2020)

1. REGISTRATION

II. INVOCATION
CALL TO ORDER DETERMINATION OF QUORUM

III. ELECTION PROPER

INTRODUCTORY SPEECH BY THE NOMELEC CHAIR INTRODUCTION AND SHORT
SPEECHES OF NOMINEES CASTING OF VOTES

IV. HOMEOWNERS' GENERAL ASSEMBLY

REPORT OF THE PRESIDENT PRESENTATION OF FINANCIAL STATEMENTS OTHER
MATTERS

V. PROCLAMATION AND OATH TAKING OF NEW

BOARD
A photocopy of the Notice of Annual General Members Meeting of 7 December 2019 and
corresponding Agenda are attached hereto and made integral parts hereof as ANNEXES "B" and
"B-1".

3.5. The Dues Increase was the elephant in the room at the 2019 Annual General
Members Meeting. It was briefly mentioned, but the members were not asked their views. Nor was
the matter submitted to members' vote. No motion was made for the members' ratification of the
Board Resolution on the Dues Increase. (Affidavit of Atty. Liza Nofuente, ANNEX "C")

3.6. Right after the Respondent Board was sworn in, a MSREHAL member, Atty. Liza Nofuente, asked
the Village Manager, Ms. Joann Aday, if the 2019 Board could take questions regarding the Dues
Increase. Respondent Jose Palma, Jr. took the microphone and recognized Atty. Nofuente
(Paragraph 8, Annex "C" of Complaint))
3.6.1. Atty. Nofuente questioned the basis for the different rates of increase for
members and the Joint Venture Partners. Respondent Palma
replied that the Joint Venture Partners are considered beneficial
users. Atty. Nofuente pointed out that the cost of maintaining
vacant lots of beneficial users is higher, to which Respondent
Palma declared that her comment was noted. (Paragraph
9, Annex "C" of Complaint)

3.7. In late December 2019, the Complainants received statements of account

relating to their MSREHAI dues for Year 2020 at the increased rate of
P5.50 per square meter - a Two Hundred Five Percent (205%)
increase from the previous years rate of P1.80 per square meter. An early
payment discount of 10% was offered if full payment was tendered on or
before 15 March 2020.

3.8. Complainant Eduardo Pangan informed Respondent Luz Socorro Pastolero

about the impending signature-gathering and requested her to
convince her fellow Respondent Directors to pre-empt the petition
by calling for a members' meeting to allow the members to discuss the
dues increase with Respondent Board, in order to avert a situation that
had a potential for escalation

3.9. Thereafter, sometime in the last week of January 2020, a number of

MSREHAL members circulated a Petition addressed to the Respondent
Board requesting a thorough discussion with the members, and "the
 suspension of the implementation of the proposed Dues increase to allow
full discussion and obtain members' approval". The petition was signed
initially by 93 members and was submitted to the MSREHAI office,
where it was received by Carlitos Quinatadcan, the Association staff at the
Association office on 6 February 2020 whose signature appears on the
receiving stamp on the transmittal letter accompanying the Petition. Mr.
Quinatadcan counted the signatories and number of signature pages in full
view of Village Manager Joann Aday, and the MSREHAI administrative staff,
Gina Tividad and Melan Delos Santos.

The transmittal letter is attached hereto and made an integral part hereof as ANNEX
"D".

The MSREHAI receiving stamp with the signature of Mr. Quinatadcan are
sub-marked as "D-1", the number of signature pages is sub-marked as
"D-2", and the number of signatories is sub-marked as "D-3",
3.9.1. Subsequently, another 13 members submitted copies of identically-worded Petitions
bearing their signatures to the MSREHAL Administrative Office. The copies of the signed
Petition are presently in the MSREHAL Office which is under the control of the Respondent
Board.

3.10 On 26 February 2020, the Respondent Board scheduled a members' meeting on 28 March
2020. However, the special meeting was not held as the government imposed the Enhanced
Community Quarantine on 12 March 2020.

3.11. In the meantime, unaware that the collection of the dues increase was not in accordance
with law, the Complainants (except Complainant Pangan, who paid the old rate of P1.80) paid
the new association dues rate for the whole year of 2020, as follows:

Name of Member
Assessed Amount
Amount
Paid

Cynthia Heussaff
28,512.00
25,660.80
Emely Torda
30,162.00
27,145.80
Rate per
square meter (PHP) 5.50 with 10% discount 5.50 with 10% discount 5.50 with 10% discount 1.80
with 10% discount
35,376.00
31,838.40
Henry S. Laxamana Eduardo Pangan
45,012.00
13,258.08

Photocopies of the receipts relating to the foregoing payments are attached hereto and made
integral parts hereof as ANNEXES “E", "E-1" and "E-2"

3.11.1. Complainant Pangan received a statement of account for P45,012.00 but paid the
previous rate of P1.80 per square meter in the total amount of P13,258.08, which is net of the
10% discount for early payment.
A photocopy of the MSREHAL official receipt is attached hereto and made an
integral part hereof as ANNEX "F".

3.12. Complainants (except Complainant Pangan) paid the P5.50

rate, and consequently, overpaid MSREHAI. Their respective overpayment
are as follows:

Name of Member
Lot Area
P5.50 per
sq.m.
with 10%
discount
P1.80 per
sq.m. with 10% discount
Amount
of Over
payment

Cynthia Heussaf
 432
25,660.
80
8,398.0
8
17,262.7
2

Emely
Torda
457
27,145.
80
8,884.
08
18,261.
72

Henry Laxamana
53
6
31,838.4
0
10,419.8
4
21,418.5
6

3.13. MSREHAI member Bernadette Wong, who does not reside in Manila Southwoods,
belatedly learned that MŞREHAI accepted payments at the rate of P1.80 per
square meter with 10% discount from other members, and that the
2020 dues increase was not approved by the MSREHAl members.
Upon learning of this fact, Ms. Wong wrote Respondent
MSREHAI to request a refund in a letter dated 22 June 2020, which
MSREHAI received on 30 June 2020.
A photocopy of the letter of Bernadette Wong is attached hereto and made an
integral part hereof as ANNEX "G”.

3.14. Complainants Heussaf, Torda and Pangan, through the law firm of Mendoza
& Pangan, requested reconsideration of the dues increase and to submit
the matter to the members for approval, in a letter dated 20 July 2020,
which was sent by e mail to admin@southwoodsresidential.com, which
was duly
acknowledged received on the same date.

Photocopies of the letter of Mendoza & Pangan and the printout of the e-mail are
attached hereto and made integral parts hereof as ANNEXES "H" and "H-
1".

3.15. Another MSREHAL member, Erlinda Descalsota, expressed her objection

to the increase and the absence of members' approval, and asserted
that her payment of the increased rate is not to be deemed an implied
approval of the increase
A photocopy of the letter of Erlinda Descalsota is attached hereto and made an
integral part hereof as ANNEX "H-2".

3.16. Complainant Henry S. Laxamana expressed his objection to the

increase and the absence of members' approval, and requested the
Respondent Board to reconsider its position and return his excess
payment. He also made clear that his payment of the increased rate is
not to be deemed an implied approval of the increase.

A photocopy of the letter of Complainant Laxamana is attached hereto and made

an integral part hereof as ANNEX "H
3".

3.17. In the meantime, on 23 March 2020, the Respondent Board, in response to

members' request to forward the members' grievance on the 206%
association dues increase to the Grievance Committee, wrote:

"the present By-Laws of MSREHAI does not provide for the creation or
constitution of a grievance committee; hence, the
creation of one becomes merely discretionary on the part of the
Board of Directors, the only condition being, "when
deemed necessary”.
 XX
X

To be clear, a member of an association can always go to the Housing and

Land Use Regulatory Board (HLURB) which has
primary jurisdiction over disputes ..."

A photocopy of the letter of Respondent Board dated 23 March 2020 is

attached hereto and made an integral part hereof as ANNEX "I".

3.18. Thereafter, on 18 November 2020, the Respondent Board announced that

"the dues for 2021 will be discounted to P3.00 per square meter for
those who will fully settle their dues by Dec. 31, 2020."

On the same page of the said newsletter, appeared the following

statement:
"After granting this discount, the Association will still have a reserve
fund of Php25 million which
the Board has earmarked for future contingencies and urgent capital
expenditure."

A photocopy of the Southwoods Guardian Newsletter (Issue No. 24; 18

November 2020) are attached hereto and made integral parts hereof as
Annex "J". The above-quoted statement is sub-marked as "J-1".

4. At a meeting between Respondent Board Members (except Arturo

Zuluaga) and Complainant Eduardo Pangan and three other members on 28 June
2020, the latter asked for the basis of the amount of P5.50 per square meter.

Respondent Fernando Rimando, in the presence of the other three Board Members,
explained that approximately one-third (1/3) of the total saleable lots in the
subdivision are consistently in arrears. Thus, in arriving at the new rates, the gross
operating expense was divided by the area of the lots in good standing.

5. Complainant Pangan explained the legal basis of the petitioning members'

clamor for submitting the dues increase to members' approval. Respondent Palma
replied that the dues increase is the sole prerogative of the Board, and insisted on his
interpretation of Republic Act No. 9904. As the parties could not agree on the
interpretation, complainant Pangan suggested to the Respondent Board that they
obtain a written legal opinion on the matter considering the seriousness of the
 impact of a wrong interpretation.

Complainant Pangan's Affidavit attesting the truth of the foregoing statements and
identifying the Annexes attached hereto is made an integral part hereof as Annex
"K".

IV
.

STATEMENT OF
THE CASE
6. The following is the Statement of the
Case:

6.1. With no other recourse available to them, complainants filed the instant
Complaint for Declaration of Nullity of Dues Increase with Prayer for
Refund on 3 August 2020.

6.2. Thereafter, Respondent Board filed their Verified Answer (With Motion to
Dismiss Raised in the Special and Affirmative Defenses).
bearing on the
interno
6.3. On 3 November 2020, this Honorable Office held a hearing on the
complainant's prayer for issuance of a Cease and Desist Order.

6.4. On 3 December 2020, the Complainants filed a Manifestation with

Omnibus Motion to inform this Honorable Office that on 18 November
2020, the Respondent Board announced the association dues of R3.00
per square meter for 2021 with an early payment discount of 10%, with
the following statement:

“After granting this discount, the Association will still have a

reserve fund of Php 25 million which the Board has
earmarked for future contingencies and urgent capital
expenditures." (Emphasis supplied.)

6.4.1. The complainants also manifested that the Respondent Board did not seek
 members' ratification of the P3.00 per square meter rate,
which is greater than the 2019 rate of P1.80 per square meter.

6.4.2. The Complainants prayed for the issuance of a Cease and Desist Order.

6.5. In an Order dated 16 February 2021, this Honorable Office issued a Cease
and Desist Order against the Respondent Board.

6.6. Under date 11 March 2021, the Respondent Board filed a Petition for Review
with Motion to Declare the Cease and Desist Order Moot and Academic.

6.7. On 17 March 2021, this Honorable Office held a mediation

conference which was terminated on the same day due to the failure of
the parties to reach an amicable settlement.

6.8. Under date 5 April 2021, the Respondent Board filed a Manifestation with
Omnibus Motion praying that this Honorable Office issue an order
directing Atty. Eduardo M. Pangan to secure the respective written
authority of the complainants to establish his authority to continue
representing Erlinda Descalsota and the other complainants, and moving that
failure of Atty. Eduardo M. Pangan to submit his written authority of the
.

other complainants shall be considered as desistance and/or withdrawal of the complainants

from the instant case.

6.9. Under date 28 April 2021, the Complainants filed an Omnibus Manifestation with
Motion of One Party to Withdraw as Party Complainant informing this Honorable Court of
the admission of the Respondent Board in their letter dated 23 March 2021 that "the By-
Laws of MSREHAI does not provide for the creation of a grievance committee, and that the
Board did not constitute a grievance committee, hence the creation of one becomes
merely discretionary on the part of the Board of Directors..." It also moved for the withdrawal of
Erlinda Descalsota as party complainant.

6.10. Thereafter, the Honorable Office directed the parties to submit their respective Position
Paper.
ISSUES

A.
WHETHER OR NOT THE COMPLAINT SHOULD BE DISMISSED FOR
FAILURE OF THE COMPLAINANTS TO SUBMIT THE ISSUE ON THE INCREASE
OF DUES TO THE GRIEVANCE PROCEDURE?

B.
WHETHER OR NOT THE COMPUTATION OF THE 2020 DUES RATE IS INVALID
FOR FAILURE TO COMPLY WITH SECTION 8 OF HLURB EXEC. RES. NO. 001-17
(GUIDELINES ON HOA DUES, FEES AND CONTRIBUTIONS)?

WHETHER OR NOT THE IMPOSITION OF A HIGHER RATE OF P5.50 PER SQUARE

METER ON MEMBERS, AS COMPARED TO P3.30 PER SQUARE METER FOR JOINT
VENTURE PARTNERS, IS INVALID FOR FAILURE TO COMPLY WITH SECTION 8
OF HLURB EXEC. RES. NO. 001 17 (GUIDELINES ON HOA DUESFEES AND
CONTRIBUTIONS)?

D.
WHETHER OR NOT THE OPINION OF THE HLURB LEGAL SERVICES DIRECTOR IS
VALID AND BINDING ON THIS HONORABLE OFFICE?
AND TESTE DIAGRA BRECAS
E.
WHETHER OR NOT THE INCREASE OF ASSOCIATION DUES FROM P1.80 TO 5.50 PER
SQUARE METER, AS APPROVED BY THE RESPONDENT BOARD, REQUIRES
PRIOR MEMBERS' APPROVAL FOR ITS VALIDITY AND IMPLEMENTATION?

F.
WHETHER OR NOT THE BUSINESS JUDGMENT RULE EXEMPTS
RESPONDENT BOARD FROM COMPLYING WITH RA 9904 AND THE
GUIDELINES ON HOA DUES, FEES AND CONTRIBUTIONS?

VI. DISCUSSION

A.
The present complaint is not dismissible for failure to undergo grievance procedure.
7. Respondent Board claims that the filing of the present complaint is premature due to the
failure of the complainants to submit it to grievance procedure. Respondent Board is mistaken.
As pointed out by the Complainants, "the MSREHAI By-Laws does not provide a grievance
procedure. Neither is there a constituted Grievance Committee." (Paragraph 39, Complaint).

7.1. In fact, the Respondent Board itself admitted, in a letter dated 23 March 2020, that “the
present By-Laws of MSREHAl does not provide for the creation or constitution of a grievance
committee; hence, the creation of one becomes merely discretionary on the part of the Board
of Directors, the only condition being, "when deemed necessary

7.2. There being no grievance committee, this case falls under the exception provided in
Section 16(g) of the 2019 Revised Rules of Procedure of the Housing and Land Use
Regulatory Board (adopted by the Human Settlements Adjudication
Commission), which is reproduced below:

Section 16. The following shall be attached to the complaint upon filing:

* Annex "B" of Annex "GG" of Complaint with Application for Cease and Desist Order or Writ of Preliminary
Injunction, Freddie N. Webb, et al vs. Jose S. Palma, Jr., et al. (HSAC-RIVA-HOA 200914-00045) which
is attached as Annex A of Omnibus Manifestation of with Motion to Withdraw of One Party
Complainant dated 28 April 2020.
(1)
XXX

(3) In homeowners association cases, a certification issued by the

chair of the Election Committee in cases involving
elections, or by the chair of the Grievance Committee or
any other committee constituted to resolve any
matter in controversy at the association level, as the
case may be, stating under oath that the parties have been
invited to participate in the proceedings to
settle the dispute but that no amicable settlement was reached

In the absence of an Election Committee and Grievance Committee

or refusal to issue the certification, an affidavit attesting to this
fact shall be made and further stating that complainant has
exhausted administrative remedies. [Emphasis supplied]

7.3. Paragraphs 39 and 40 of the Complaint complied with the

 foregoing requirement.

8. Jurisprudence recognizes exceptions to the doctrine of exhaustion of

administrative remedies. In Republic vs. Lacap, G.R. No. 158253, 2 March 2007, the
Supreme Court held:

"Nonetheless, the doctrine of exhaustion of administrative remedies and the

corollary doctrine of primary jurisdiction, which are based on
sound public policy and practical considerations, are not
inflexible rules. There are many accepted exceptions, such
as: (a) where there is estoppel on the part of the party invoking
the doctrine; xxx (e) where the question involved is purely legal
and will ultimately have to be decided by the courts of
justice; xxx (h) where the controverted acts violate due process;
XXX (k) when strong public interest is involved; xxx”
(Emphasis supplied.)

8.1. Exceptions (a) (e) (h) and (k) as enumerated in Republic vs. Lacap
are applicable to the present case.

Respondent Board is estopped from invoking the grievance procedure. In

response to members' request to forward the members'
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grievance on the 206% association dues increase to the Grievance Committee, the Respondent
Board answered in a letter dated 23 March 2020, that:

"the present By-Laws of MSREHAI does not provide for the creation or constitution of a
grievance committee; hence, the creation of one becomes merely discretionary on the part
of the Board of Directors, the only condition being, "when deemed necessary".

XXX

To be clear, a member of an association can always go to the Housing and Land Use
Regulatory Board (HLURB) which has primary jurisdiction over disputes ..."
A photocopy of the letter of Respondent Board dated 23 March 2020 is attached hereto and
made an integral part hereof as ANNEX "T".

9.1. In addition, the Board did not take any steps to form a Grievance Committee even while the
dues increase was already generating controversy among the MSREHAL members.
Respondent Board are now barred from requiring the complainants to comply with a
condition which cannot be satisfied due to the Respondent Board's own inaction.

10. The present complaint falls under the exception to the non-exhaustion of administrative
remedies because the issues in the present complaint involve pure questions of law, which
only this Honorable Office can resolve. These issues are:

a. Whether or not a higher dues rate can be validly imposed

on members, as compared to certain beneficial users?

Whether or not the total lots in good standing as the divisor in computing the association dues
rate per square meter?

c. Whether or not the dues increase requires members

approval, in addition to the Board's approval?

11. The Respondent Board's act of implementing the 2020 dues increase without members'
approval is in violation of the members' right to due process, to have the fair opportunity to
examine the bases for the dues increase, and to object to aspects of the dues that are not in
accordance with law - such as a higher rate for members as compared to certain beneficial
users.

12. Finally, the present complaint is imbued with a strong public interest,
involving as it does the exaction of association dues from residential
subdivision lot owners - an activity which the legislature does not leave to
free enterprise. Rather, the legislators deemed it fit to regulate exactions
for a community benefit from subdivision lot owners.

12.1 This public concern was evident forty-five years ago, when Presidential
Decree No. 957 was promulgated. Among other things, the said
law required the consent of a majority of the lot buyers for the
collection of association dues, in this wise:
 "[flees to finance services for common comfort, security and
sanitation may be collected only by a properly
organized homeowners association and only with the
consent of a majority of the lot or unit buyers actually
residing in the subdivision or condominium project."
(Section 27, PD 957)

12.2 Section 12 of Republic Act No. 9904, enacted in 2009, took a

step further and set the parameters on the exercise of the HOA
Board's power to raise funds and collect dues or fees, as follows:

"Section 12. Duties and Responsibilities of the Board. In addition to the duties
and responsibilities stated in the bylaws of the
association, the board shall have the following duties and
responsibilities:

XX
X

(b) Collect the fees, dues and assessments that may be provided for in the
bylaws and approved by a majority of the members;

(c) Collect reasonable charges for assessments, and after due notice
and hearing by the board in accordance with the
procedures as provided in the bylaws, and rules and
regulations adopted by the board, charge reasonable fines
for late payments and for violation of the bylaws, rules,
and regulations of the association, in accordance with
a previously established schedule adopted by the board
and furnished to the homeowners;
MANGSAAN
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(d) Propose measures to raise funds and the utilization of such funds and submit the same for
consideration of the members of the association;

Xxx"
12.3 In 2017, the HLURB issued the Guidelines on HOA Dues, Fees and Contributions,
pursuant to RA 9904, and set standards in the "formulation of dues, fees and
contributions" with the objective of "eliminating unauthorized, excessive and
arbitrary fees and assessments", as provided in the Section 2.2 thereof, as follows:

"2.2. Objectives. Guidelines are:

The objectives of this

(a) To provide standards in the formulation of dues, fees and contributions which may
be charged by associations with the end in view of eliminating unauthorized; excessive
and arbitrary fees and assessments;

(b) To provide associations with the funds necessary to defray their administrative and other
operating expenses in the performance of their duties and functions for the promotion of
the welfare of all persons within their territorial jurisdiction and not for profit;"

(Emphasis supplied.)

12.4 Being imbued with a strong public interest, the present complaint falls under the exception
to the doctrine of exhaustion of administrative remedies.

Respondent Board violated Section 8 of the Guidelines for HOA Dues, Fees and Contributions
when they failed to comply with the prescribed formula therein in setting the 2020 MSREHAI
association dues.
-----------

13. The Guidelines on HOA Dues, Fees and Contributions regulates the
amount of association dues which a Homeowners Association may collect.
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13.1 Section 8 of the Guidelines on HOA Dues, Fees and Contributions provides the specific
parameters and formula for determining the amount of dues to be charged per member and per
beneficial user, as follows:

"Section 8. Computation of Dues, Fees and Contributions. - The procedure in the

determination of the amount to be charged per member and beneficial user shall be as
follows:

8.1. Gross Expense. The association shall determine the amount chargeable by
obtaining the average monthly expenses or, if not feasible, the highest monthly expense,
and an additional ten percent (10%) as contingency funds to answer for any unforeseen
additional expenses

8.2. Gross Area. The gross area of the subdivision or condominium shall be the total lot and
floor area of saleable lots or units in the subdivision or condominium, respectively;

8.3. Rate Base. The rate base shall be obtained by dividing the gross expense by the
gross area to arrive at the cost per square meter."

(Emphasis supplied.)

13.2. Stated otherwise, the formula for deriving the monthly dues per square meter is:

(Average Monthly Expense x 1.1)

Rate Base =
Gross Area of Saleable Lots

14. The formula is plain and clear. The Gross Expense shall be divided by the total lot
area of saleable lots (Section 8.2). The said provision does not authorize the Respondent
Board to change the divisor - from total area of saleable lots to total area of lots in good
standing.

14.1. The reduction of the divisor resulting from the exclusion of the area of lots in arrears
resulted to a higher Ra Base for the non-delinquent lot owners.
PADOVU
..
.
 15. Compliance with the prescribed formula is mandatory. The policy underlying the Guidelines on
HOA Dues, Fees and Contributions are stated in Section 2.2 thereof, as follows:

"2.2. Objectives. The objectives of this Guidelines

are;

(a) To provide standards in the formulation of dues, fees and contributions which may be
charged by associations with the end in view of eliminating unauthorized, excessive and arbitrary
fees and assessments;

(b) To provide associations with the funds necessary to defray their administrative and other
operating expenses in the performance of their duties and functions for the promotion of the welfare of all
persons within their territorial jurisdiction and not for profit;"

XXX XXX XXX

(Emphasis supplied.)
15.1. Respondent Board argued that MSREHAL would only generate P30 Million if they were to follow
the prescribed formula, which would fall short of the estimated expenses, given the high
delinquency rate. (par. 54, Verified Answer). However, they conveniently ignore Section 8.4
of the Guidelines on HOA Dues, Fees and Contributions which permit the HOA to collect an
additional Ten Percent (10%) and Twenty Percent (20%) from the members and beneficial
users, respectively.

15.2. Being contrary to law, the 2020 dues rate is void. Consequently, the new rate cannot be
validly collected.

C. The imposition of higher dues rate

on members, as compared to beneficial users, is contrary to law.

16. Starting 1 January 2020, the Respondent Board implemented a two-tier

association dues rate - a higher rate of P5.50 per square meter for Members in Good Standing, and a
lower rate of P3.30 per square meter for Joint Venture Partners who own lots within the Manila
Southwoods subdvision.
16.1. Said Joint Venture Partners refer to landowners who entered into a joint venture
agreement with the developer whereby they contributed their tracts of land to the subdivision
project in exchange for saleable lots in Manila Southwoods Residential Estates.
 16.2. In this regard, “Joint Venture Partners" are classified as "beneficial users" under Section 3.3 of
the Guidelines on HOA Dues, Fees and Contributions:

"3.3. Beneficial user refers to the homeowner who is not a member of the association or the
developer or owner who cannot be a homeowner as he/she/it holds the property or properties in
the subdivision or condominium not for the purpose of residing therein but as part of the
inventory of properties for sale to the general public. In a general sense, it refers to all
property owners within the subdivision who are not members."

17. Section 8 of the Guidelines on HOA Dues, Fees and Contributions generally imposes the
same rate on members and beneficial users, as follows:

"Section 8. Computation of Dues, Fees and Contributions. - The procedure in the

determination of the amount to be charged per member and beneficial user shall be as follows:

XXX XXX XXX

(Emphasis supplied.)

18. It is common knowledge, and as pointed out by a MSREHAI member, Atty. Liza
Nofuenta, at the MSREHAI Annual General Meeting on 7 December 2019 (Paragraph 9,
Affidavit of Atty. Liza Nofuente, Annex "C" of Complaint), that the maintenance of vacant lots
entails a higher cost than built-up/ occupied lots. Maintenance and security services are the two major
expenses of MSREHAI. In contrast, built-up lots are maintained by their occupants, who pay a
separate garbage collection fee for the collection of domestic waste. Inspite of these facts,
the Respondent Board imposed a higher association dues rate for members.
18.1. Section 8.4 of the Guidelines on HOA Dues, Fees and Contributions
authorizes the HOA Board to charge the beneficial users a higher
amount "to cover shortfall in collections due to non-payment of other
members or beneficial user. Thus, under the said regulation, the
MSREHAI Board of Directors can impose an additional ten percent
(10%) for members and twenty percent (20%) for beneficial users to cover
the collection shortfall.

18.2. To reiterate, the beneficial user may be charged a higher rate, but not the other
way around.
 19. In summary, the imposition of a higher base rate for regular
members, in comparison to beneficial users, is contrary to the Guidelines
for HOA Dues, Fees and Contributions, and is void.

D. The collection of the increased rate

without prior members' approval is
contrary to law.

20. Respondents exploit the inexact language of Section 6.2(c) of the Guidelines on
HOA Dues, Fees and Contributions in order to construe it as vesting the
Board of Directors with the sole power to determine the amount of
association dues. The subject of the contrary interpretations, Section 6.2
(c) reads:

"Section 6. The powers and duties of associations and the Board of

Directors are as follows:

XXX XXX
XXX

(c) Collect the fees, dues and assessments that may be provided
for in the By-Laws, and such rules as may be approved by the
Board and, upon publication in at least three (3) conspicuous
places within the subdivision/ village, ratified by a
majority of the members;"

(Emphasis supplied.)

21. The Respondent Board insists that the phrase "ratified by a

majority of the members" in Section 6.2(c) of the Guidelines refers to the approval by
the members of the board of directors,
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21.1. Such an interpretation is absurd! It would render nugatory the unequivocal requirement
in Section 6.2 (f) of the Guidelines on HOA Dues, Fees and Contributions that "measures to
raise funds" must be submitted for the approval of the "members of the association".

21.2. “A statute must be so construed as to harmonize and give effect to all its provisions
whenever possible. The meaning of the law, it must be borne in mind, is not to be
extracted from any single part, portion or section or from isolated words and phrases, clauses or
sentences but from a general consideration or view of the act as a whole. Every part of the
statute must be interpreted with reference to the context." (Aisporna vs. Court of Appeals, G.R.
No. L-39419 April 12, 1982.)

21.3. Accordingly, Section 6.2 (c) must be read in conjunction with Section 6.2
(f), which provides:

"Section 6. Powers and Duties. - The powers and duties of associations and the Board of
Directors are as follows:

XXX

6.2. Board of Directors.

(f) Propose measures to raise funds and the utilization of such funds and submit the same for the
consideration of the members of the association;"

(Emphasis supplied.)

21.4. Section 6.2 (f) is an express restraint on the power of the Board to raise funds and utilize
the same, regardless of any avowed noble purpose for such fund-raising. It categorically
requires HOA members' approval of the Board's proposed measure to raise funds before the
Board can implement it and utilize such funds.

21.5. The clear intent in Section 6.2(f) will be negated if the Respondent Board's interpretation of
Section 6.2(c) were to be followed. Going by their logic, a HOA Board that is unable to obtain
the member's approval of its proposed measure to raise funds under Section 6.2(f), could
then invoke Section 6.2 (c)
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and proceed to collect fees and dues that they approved, notwithstanding the absence of
approval of a majority of the HOA members.

21.5.1. Nothing is better settled then that courts are not to give words a meaning which would
lead to absurd or unreasonable consequence.

21.6. A careful reading of Section 6.2 (c) of the Guidelines on HOA Dues, Fees and
Contributions will show that it distinguishes between two types of fees, dues and
assessments, that the board may collect, namely:

21.6.1.those fees, dues and assessments provided for in the By-Laws (Section 6.2(c), first
phrase);
and

21.6.2. those provided in rules approved by the Board and, upon publication in at least
three (3) conspicuous places within the subdivision/ village, ratified by a majority of
the members (Section 6.2 (c), second phrase).

21.7. The first type of dues can be collected without need of members' approval because
these are already provided in the by-laws.

21.8 The second type of dues, i.e. those not provided in the by-laws, can only be
collected by the HOA Board if two conditions are satisfied: (i) the rules setting the
increase of dues is approved by the HOA Board; AND (ii) the new Board rules is
ratified by the members of the association, and such ratification takes place only after the
Board-approved rules are published in at least three conspicuous places within the
subdivision.

21.9. The conjunction "and" after the phrase "rules approved by the Board" denotes
that the ratification of a majority of the members is a step subsequent to the Board
approval of the rules, and is an additional condition or requirement for the valid
collection of new dues.

2 Microsoft vs. Manansala, G.R. NO. 166391, October 15, 2019.

3 Section 6.2 (C): "Collect the fees, dues and assessments that may be provided for in the By-
Laws, and such rules as may be approved by the Board and, upon publication in at least three (3)
conspicuous places within the subdivision/ village, ratified by a majority of the members;"
21.10. "Ratification” is defined as "[t]he adoption of, and assent to be bound
 by, the act of another.” (Philippine Law Dictionary, citing Hongkong
Shanghai Banking Corporation v. Aldecoa & Co., 30 Phil 283) “The
substance of ratification is the confirmation after the act, amounting to
a substitute for a prior authority
(Prieto vs. Hon. Court of
Appeals, G.R. No. 158597, June 18, 2012.) Since ratification
is the act of another party, ratification can only be done by a party
other than the Board. Thus, the members mentioned in Section 6.2 (c)
are the members of the HOA.

22. In summary:

22.1. the collection of dues that are provided in the By Laws may be done without
the approval of the HOA members;

22.2. the collection of dues that are not provided in the By-Laws but are contained
in rules approved by the Board may be collected only if ratified by a
majority of the HOA members (after publication of the proposed rules);

22.3 new measures to raise funds require the approval of the HOA members.

23. Finally, it cannot be overemphasized that the Magna Carta for Homeowners and
Homeowners Associations expresses a strong public policy for participatory
democracy and the promotion of HOA members' rights, to wit:
public paling his
per a

Section 2. Declaration of Policy. - In fulfillment of the constitutional

principles directing the State to encourage, promote and
respect nongovernmental, community - based and people's
organizations in serving their legitimate collective interests in
our participatory democracy, it is hereby declared the policy
of the State to uphold the rights of the people to form unions,
associations, or societies, and to recognize and promote the
rights and the roles of homeowners as individuals and as
members of the society and of homeowners' associations.

(Emphasis supplied.)
 23.1. Submitting an increase of dues that is not provided in the by-laws to
members' approval is more consistent with the principle of participatory
democracy, and enhances the
roles of homeowners as members, instead of passive spectators
and dues payers. Unfortunately, the Respondent Board prefers to
interpret the law in favor of concentrating powers unto itself. This is
anathema to the Declaration of Policy of Republic Act No. 9904.

23.2. The dangers of giving the Respondent Board unbridled power to set
the dues rate is showcased by the subsequent decision of the
Respondent Board to set the dues rate in 2021 at a "discounted” rate
of P3.00 per square meter (from P5.50 per square meter) for 2021
"for those who will fully settle their dues by Dec. 31, 2020."

This discount of P2.50 per square meter (45%) is arbitrary and without
any rational basis.

If it is in the nature of a penalty for the members who paid the old rate in 2020 instead
of the contested rated of P5.50 per square meter, Section 12 (c) of
Republic Act No. 9904 empowers the HOA Board to "charge
reasonable fines for late payments ... in accordance with a previously
established schedule adopted by the board and furnished to the
homeowners".

24. In Ursua vş. Court of Appeals (G.R. No. 112170 April 10, 1996), the Supreme
Court held:

Time and again we have decreed that statutes are to be construed in

the light of the purposes to be achieved and the evils sought
to be remedied. Thus, in construing a statute the reason for its
enactment should be kept in mind and the statute should be
construed with reference to the intended scope and purpose. The
court may consider the spirit and reason of the statute, where a
literal meaning would lead to absurdity, contradiction, injustice,
or would defeat the clear purpose of the lawmakers.

25. In light of the express requirement of members' approval of dues increase in the
Guidelines on HOA Dues, Fees and Contributions, the Respondent Board cannot
 claim that herein Complainants who paid the 2020 rate of P5.50 per square meter
impliedly waived their right to approve -- or not to approve.
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26. Rights may be waived, unless it is contrary to law or public policy. In the case at bar, the
alleged waiver is contrary to the Guidelines and the public policy expressed therein.

26.1. Neither can the respondents invoke estoppel against the members and herein four
Complainants who paid the increased rate. It is well settled that “[e]stoppel ... will not apply for
it cannot be predicated on an illegal act. It is generally considered that as between the
parties to a contract, validity cannot be given to it by estoppel if it is prohibited by law
or is against public policy. Indeed, estoppel cannot be predicated on acts which are prohibited by
law or are against public policy.

26.2. In fact, the filing of the present Complaint is a clear manifestation that complainants are
asserting, not waiving, their rights as HOA members.

E.
The Opinion of the HLURB Legal Officer has no binding effect on MSREHAI and this Honorable
Office.

27. Respondents attached the Opinion of HLURB Legal Service Director, Atty. Cesar A. Manuel
in (illegible) 2017 as Annex "F" of their Verified Answer. The Opinion is to the effect that
MSREHAI cannot collect dues from the Grandview Properties and Ventures, La Paz Housing and
Development Corporation, Greenfield Development Corporation, Southcoast Real Estate and
Development Corporation, and Lima Property Holdings, Inc., which hold saleable subdivision
lots in Manila Southwoods under a joint venture agreement with the developer. In part, the Opinion
reads:

“... Not being members of MSREHAI, it also follows that they cannot be obliged to
pay corresponding association dues as mandated by the By-Laws.
... the amendment of the By-Laws and approval of HLURB are needed before MSREHAI may be
legally authorized to impose and collect any kind of dues on the members of the Group.
4 Article 6, New Civil Code of the Philippines. 5 Heirs of Hermosilla vs. Spouses
Remoquillo, G.R. No. 167320, January 30, 2007.
* Benguet Cons. Mining Co. v. Pineda, 52 Off. Gaz. 1961, L-7231, March 28, 1956;
Eugenio v. Perdido, L-7083, May 19, 1955.
... the imposition of beneficial user dues and other assessments under
HLURB Executive Committee Resolution No. 001, s. 2017
is of prospective application."

Everybody is entitled to his own opinion. However, the foregoing Opinion has
no binding effect on MSREHAI and this Honorable Court for the following
reasons:

27.1. First, the HLURB Director for Legal Services should have declined
from rendering an opinion on a specific matter involving an actual
controversy between lot owners and the homeowners association, a
controversy which was within the exclusive jurisdiction of the HLURB.

The Opinion of the HLURB Director for Legal Services exceeded his powers.
Thus, the issuance of the Opinion is ultra vires, and is void.
27.2. Second, the HLURB Officer did not give MSREHAI the opportunity to
present its position on a matter affecting its right to collect association dues
from owners of saleable lots in Manila Southwoods subdivision. Thus,
MSREHAI was deprived of its right to due process. On this point alone,
it cannot have any binding effect on MSREHAI.

27.3. Third, the opinion of the HLURB Director for Legal Services unjustly
enriches the Joint Venture Partners to the detriment of MSREHAI, by
enabling a subdivision lot owner to avail of maintenance and security
services for their lots without contributing to maintenance and security
expenses as provided by law.

28. It is not amiss to point out that the 2019 Board (three of whom are
Respondents herein) owed a fiduciary duty to MSREHAI. They should have
vindicated MSREHAl's right as HOA to collect dues from the Joint Venture
Partners.

28.1. Instead, they cite the HLURB Opinion as if it were gospel truth, not unlike
the so-called Nine-Dash Line. As reflected by the following statement
in Paragraph 57 of the Verified Answer:

It has been the position of the joint venture partners that they are
 exempted from paying any dues. To support their
position, they have obtained a legal opinion from
HLURB dated 10 July 2017 xxx essentially affirming
that they are exempted from paying dues."
28.2. As things stand, it appears that the so-called "Opinion' was
used as leverage to squeeze generous concessions from the 2019 Board. They
should have engaged a legal counsel to defend the rights and interest of
MSREHAI with the same vigor they have displayed towards this case.

Business Judgment Rule does not exempt the

Respondent Board from complying
with legal requirements from RA 9904
and the Guidelines on HOA Dues, Fees and
Contributions.

29. Respondents admitted the allegations in Paragraphs 5 and 15 of the

Complaint as regards the higher rate for members (as compared to beneficial
users) of MSREHAI and the computation of dues rate based on the area of lots
in good standing only. The Respondents have not presented any argument that
these acts are NOT contrary to Section 8 of the Guidelines on HOA Dues,
Fees and Contributions.

30. Instead, Respondent Board invoked the Business Judgment Rule to justify their
computation of the base rate, as well as the P5.50 rate on members' lots, as compared to the
P3.30 rate for Joint Venture Partners' lots. Respondent Board is grossly mistaken.

30.1. Acts executed against the provisions of mandatory or prohibitory laws

shall be void, except when the law itself authorizes their validity.
(Article 5, New Civil Code of the Philippines)

31. Section 30 of the Revised Corporation Code, being a statutory

provision, takes precedence over the Business Judgment Rule. It penalizes
directors for willfully and knowingly voting for or assenting to patently
unlawful acts of the corporation, as follows:

SEC. 30. Liability of Directors, Trustees or Officers. – Directors or

trustees who willfully and knowingly vote for or assent to
 patently unlawful acts of the corporation or who are guilty of
gross negligence or bad faith in directing the affairs of the
corporation or acquire any personal or pecuniary interest in
conflict with their duty as such directors or trustees shall be
liable jointly and severally for all damages resulting
therefrom suffered by the corporation, its stockholders or
members and other persons.
32. The Business Judgment Rule does not exempt the Respondent Board from
complying with the mandatory legal requirements. The unlawful acts of the
Respondent Board rose to the level of "patently unlawful acts" when they persisted
in implementing the Dues Increase despite being informed of its legal infirmity.

33. Respondent's citation of Balinghasay vs. Castillo (G.R.

185664, 8 April 2015) actually supports the complainant's position.

33.1. In Balinghasay, the Supreme Court held that the petitioner-directors

violated the provisions of the Corporation Code when they failed to
inhibit themselves from voting with respect to the questioned contract in
which they had personal financial interest. In other words, the
Supreme Court applied the mandatory provisions of the Corporation
Code requiring recusal in
conflict of interest situations, despite the protestations of the petitioner-directors that the
questioned contract was beneficial to the corporation. (The petitioner-
directors were ordered to return all profits they earned arising from the
questioned contract and pay attorney's fees to the opposing party.)

33.2. By analogy, the Respondent Board is required to observe the

mandatory rules on computing association dues, as provided in Republic
Act 9904 and the Guidelines on HOA Dues, Fees and Contributions.

34. Respondent Board cite their noble motive of restoring MSREHAI to financial
health. They want to impress upon this Honorable Office that their action was borne
out of desperate urgency. Such assertion is contrary to the financial figures
shown in the November issue of the Southwoods Guardian, which showed
ample free cash that was available to meet the future needs of
MSREHAI.
34.1. As pointed out in Paragraph 3.3 above, the Southwoods Guardian
Newsletter reported that MSREHAI had P50 Million cash in bank, of
 which P34 Million was available for its use, as of 31 October 2019.
(ANNEX "A", Complaint.)

34.2. The Respondents themselves pointed out that the dues increase was
announced "as early as June 29, 2019" (Paragraph 5, Verified Answer).
They only have themselves to blame for failing to submit the dues
increase to a vote at the Annual General Meeting on 7 December 2019.

34.3. Even after the said members' meeting, the Respondent Board, by
A
exercising proper Business Judgment,
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could called for a meeting in January 2020 to obtain the members' approval before implementing
the 2020 dues increase. The Respondents' invocation of urgency and necessity is belied by the
MSREHAl's sufficient free cash. Based on the financial figures they presented as of 31 October
2019, a delay of one or two months in the collection of the 2020 dues would not have caused any
significant impact on MSREHAI's cash flow. On the contrary, a members' vote would have
provided the legal foundation for the collection of the increased rate.

34.4. Instead, the Respondent Board decided to ignore the warnings of a legal infirmity in
the collection of the 2020 dues rate, and chose to take a risk that the collection of the new
rate could be invalidated, in which case the excess collection would have to be returned.

34.5. The Annual General Members meeting, which is set on the second Sunday of December of
every year under the By Laws of MSREHAI, was held on 7 December 2019. At that meeting, the
2019 Board omitted the Dues Increase from the agenda as shown in the Agenda/Programme of
the 2019 AGM (Annex "C" of Respondents' Verified Answer).

35. The Respondent Board, who were elected and sworn in on 7 December 2019, continued the
policy of the 2019 Board. With the 1 January 2020 effectivity date of the Dues Increase looming,
the Respondent Board did not take any step to obtain members' approval. Neither did they suspend
the implementation of the Dues Increase in January 2020 until a members' vote could be
taken. Sadly, they circled the wagon and chose to dig in.
36. The Respondent Board then repeated the wrong in 2021 by granting a
"discounted” P3.00 rate (which is actually still higher than the previous P1.80 rate)
without members' approval.

37. MSREHAI will have to return the excess collection in the event the Dues Increase is declared
void. If Respondent Board truly wants to put MSREHAI on a stable financial footing, they
should submit the Dues Increase to a members' vote - without which, the Dues Increase will
always be vulnerable to a legal challenge. Indeed, the action for the declaration of nullity of
a void act does not prescribe

38. The Complainants (except Complainant Pangan) are entitled to a refund of their excess
payment for the Year 2020. The base rate of P1.80 per square meter should be applied to their
respective lot
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..

area, with the corresponding 10% early payment discount as they paid before the
payment deadline.

PRAYE
R

WHEREFORE, the Complainants respectfully pray that this Honorable

Office:

1. Declare the dues increase, from P1.80 per square meter to P5.50 per
square meter, void; and

2. Order the Respondents MSREHAI Board of Directors and MSREHAL to

immediately refund the excess payment of the Complainants Cynthia Heussaf,
Emely Torda, and Henry S. Laxamana.
 Complainants pray for other reliefs just and equitable under the premises.

Makati City for Calamba, Laguna, 30

April 2021.

MENDOZA & PANGAN

Counsel for the Complainants
Unit 11-1, V. Madrigal Building 6793
Ayala Avenue, 1226 Makati City
Metro Manila Philippines
Telephone No.: +63 2 8403 0006

B
y:

EDUARDO M. PANGAN PTR No.

8533797; 01.04.21; Makati City IBP Life Roll
No. 02875; 8.23.03; Cebu
Attorney's Roll No. 38070 MCLE Compliance
No. VI - 0019256; 3.15.19

Copy
furnished:

Jose S. Palma, Jr., Fernando Rimando, Luz

Socorro Pastolero, Veronica Mita and
Arturo Zuluaga, Jr.
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and Manila Southwoods Residential Estates Homeowners Association, Inc. MSREHAI

Administrative Office
G/F, Manila Southwoods Sportsclub Brgy. Cabilang Baybay Carmona, Cavite
EXPLANATION
Due to distance and current Modified Enhanced Community Quarantine, copies of this
position Paper are filed with the Honorable Office by registered mail and private courier
and served on the other parties by registered mail.

EDUARDO M. PANGAN
VERIFICATION

We, EDUARDO M. PANGAN and CYNTHIA HEUSSAFF, both of legal age, Filipinos, and
with mailing address at Unit 11-1, V. Madrigal
Bldg., 6793 Ayala Avenue, Makati City and 17 Tamarind Road, South : Forbes Park,
Makati City, respectively, after being sworn in accordance
with law, hereby depose and state that:

1. We are the complainants in this case entitled "Cynthia Heussaf, et al. v. The Members of
the Board of Directors of Manila Southwoods Residential Estates Homeowners Association, Inc.
namely Jose S. Palma, Jr., et al., HSAC Case No. RIVA-HOA-200803-00039".

2.
We caused the preparation and filing of this position Paper.

3. We have read the contents of this position Paper and I attest, based on my personal knowledge
and on authentic records in my possession or available to me, that all the allegations of fact
therein are true and correct.

IN WITNESS WHEREOF, we have hereunto set our hands this 30 April 2021 at Makati
City, Philippines.

Eduardo Eduardo M. Pangan

Cynthia Heussaff

SUBSCRIBED AND SWORN to before me this 30 April 2021 at Makati City,

affiant exhibiting to me their:
Name
Government Issued ID

Eduardo M. Pangan
Driver's License No. L02-80-049084 expiring on 1 March 2021

Cynthia Heussaff
OSCA Makati No. 793358 issued on 27 February 2014

BUENAVENTURLU MENDOZA
Doc. No. 88; Page No. 19; Book No. 24: Series of 2021
NOTARY PUBLIC
Until December 31, 2021 PTR No. 8530373 Makati Cty 01/04/21 TOP NO. 131129 10-23-2020 Roll No. 31206
MCLE Comallance No. M-0021653 500 A Madrigal side Ayala Ave., Malaad ality Extended und June 30, 2021 per 8.M No. 3795

VERIFICATION

I, EMELY TORDA, of legal age, Filipino, and with mailing address at 46 Olympic
Drive, Manila Southwoods Residential Estates, Carmona, Cavite, after being sworn
in accordance with law, hereby depose and state that:

1. I am a complainant in this case entitled "Cynthia Heussaf, et al. V. The Members

of the Board of Directors of Manila Southwoods Residential Estates Homeowners
Association, Inc. namely Jose S. Palma,
Jr., et al., HSAC Case No. RIVA-HOA-200803-00039".

2.
I caused the preparation and filing of this position Paper.

3. I have read the contents of this position Paper and I attest, based on my personal
knowledge and on authentic records in my possession or available to me, that all the
allegations of fact therein are true and correct.

IN WITNESS WHEREOF, I have hereunto set my hand this 30 April 2021 at

Makati City, Philippines.
fony R. Tordes Emely Torda

APR 30 2021 SUBSCRIBED AND SWORN to before me this 29 April 2021 at

Makati City, affiant exhibiting to me her:
Name
Government Issued ID

Emely Torda
UMID #0003-4916260-9
n
.

Doc. No. Page No. 19 Book No. 24 : Series of 2021

BUENAVENTURA U. MENDOZA
NOTARY PUBLIC
Until December 31, 2021 PTR NO. 65.20373 Makati City 01/04/21 IBP No. 1129 10-23-2020 Koli Na. 31206
MOLE Compllance No. 14-0021653 500-A Madrigal lor. Ayia Are., Mataat alty Extended unne 10, 2021 per LN No. 3795

VERIFICATION

I, HENRY S. LAXAMANA, of legal age, Filipino, and with mailing address at Block 9, Lot 17,
Bayhill Drive, Manila Southwoods Residential Estates, Carmona, Cavite, after being sworn
in accordance with law, hereby depose and state that:

1. Tam a complainant in this case entitled "Cynthia Heussaf, et al. V. The Members of the Board
of Directors of Manila Southwoods Residential Estates Homeowners Association, Inc. namely
Jose S. Palma, Jr., et al., HSAC Case No. RIVA-HOA-200803-00039".

2.
I caused the preparation and filing of this position Paper.

3. I have read the contents of this position Paper and I attest, based on my personal knowledge
and on authentic records in my possession or available to me, that all the allegations of
fact therein are true and correct.

IN WITNESS WHEREOF, I have hereunto set my hand this 29 April 2021 at Makati City,
Philippines.
Henry S. Laxamana

SUBSCRIBED AND SWORN to before me this 29 April

2021 at Makati City, affiant exhibiting to me her: Name
Government Issued ID Henry S. Laxamana
Driver's license No. Doy-94-075806 expiring in 9 September 2127.

Doc. No. 86; Page No. 19 Book No. 24: Series of 2021
BUENAVENTURA U. MENDOZA
NOTARY PUBUS
UMBI Detember 31, 2021 PTR No, R530373 Makatayo/04/23 IBP No: 3129 10-23-2020 Roll No. 31205
MALE Chronice Na. I-0021653 500-A Ni moral de Ayala Ave., Maliad City Bertandid nine p2l par BM No. 3795

Customer's Copy
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WY
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REPUBLIC OF THE PHILIPPINES) MAKATI CITY
) S. S.

AFFIDAVIT OF SERVICE

I, Ricardo B. Javier, Jr., a paralegal of MENDOZA & PANGAN, with office

address at Unit 11-1, V. Madrigal Building, 6793 Ayala Avenue, Makati City 1226, after
being duly sworn, depose and say:

That on 3 May 2021, 1 served a copy of the following pleading/paper.

NATURE OF PLEADINGS/PAPERS

POSITION PAPER
AND DRAFT DECISION

In Human Settlement Adjudication Commission, Cynthia Heussaff, et al. vs. The

Members of the Board of Directors of Manila Southwoods Residential Estates
Homeowners Association, Inc. and Manila Southwoods Residential Estates Home Owners
Association, Inc., Case No. HSAC-RIVA-HOA-200803-00039, to wit:

BY REGISTERED MAIL TO:

Human Settlements Adjudication Commission Regional Adjudication Branch Region IV-A

Dencris Bus. Center, National Hwy Halang, Calamba City, Laguna
By depositing a copy on 3 May 2021 in the post office at Makati City Central Post Office as
evidenced by Registry Receipt Nos.
Jose S. Palma, Jr., Fernando Rimando, Luz Socorro Pastolero, Veronica Mita and Arturo
Zuluaga, Jr. and Manila Southwoods Residential Estates Homeowners Association, Inc. MSREHAI
Administrative Office
G/F, Manila Southwoods Sportsclub Brgy. Cabilang Baybay Carmona, Cavite
and Hereto attached and indicated after the name of the addressee, with the instructions to the postmaster to
return the mail to the sender after ten (10) days if undelivered.

BY PRIVATE COURIER TO:

By private courier on 3 May 2021 under LBC airwaybill no,
Human Settlements Adjudication Commission Regional Adjudication Branch Region IV-A
Dencris Bus. Center, National Hwy Halang, Calamba City, Laguna

3 May2021, Makati City, Philippines.

C D Ricardo B, Javier, Jr.

SUBSCRIBED AND SWORN to before me this 3 May 2021

at Makati City, affiant exhibiting to me his Professional Driver's
License No. C11-02-157626 expiring on 29 April 2022.

Doc. No. 235 Page No. 48; Book No. 24 Series of 2021.
BUENAVENTURA U. MENDOZA
NOTARY PUBLIC
Until December 31, 2021 PTR No. 8530373 Malati aty 01/04/21 IBP No. 131129 10-23-2020 Roll No. 31206
MOE Compliance No. 110021653 500-A Madal Big Ayala Ave., Mabad City Extended und June 30, 2021 per L.M No.3795