Paranaque City Council approves ordinance regulating fees imposed by homeowner associations

“Wait a minute.”

This is what a new ordinance the Paranaque City Council recently approved seems like telling homeowners associations as they would like authority to control dues and fees imposed by homeowners associations within the city.

Ordinance No. 18-01 Series of 2017 or “An Ordinance regulating the imposition of dues and fees by the homeowners’ association/federation of homeowners’ association within the territorial jurisdiction of the city of Paranaque” calls for homeowners associations to first consult with the local government before they determine fees they would be implementing inside their own villages.

In the ordinance, the city council said they based the new order on Section 16 of Republic Act 7160 or the Local Government Code of 1991 that says “every local government unit shall exercise the power expressly granted, those necessarily implied therefore, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order and preserve the comfort and convenience of their inhabitants” and also took into consideration the Magna Carta for Homeowners and Homeowners’ Associations.

From philippinesearchproperty.com

Deeming it necessary to regulate and monitor such fees “this ordinance hereunto mandates the regulation and monitoring of fees imposed by the homeowners’ association/federation of homeowners’ association within the territorial jurisdiction of the City of Paranaque.”

Some of the fees mentioned were association dues, village stickers and delivery fees, among others.

“The fees imposed y each homeowners association should be approved by the corresponding homeowners and by the HLURB as provided in letter H Section 20 of RA 9904. A copy of the schedule of fees should be provided to the barangay concerned,” as further stated in city Ordinance 18-01.

For the association dues, the computations below follows:

– 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 10 percent as contingency funds to answer for any unforeseen additional expenses.

-Gross Area — the gross area of the subdivision or condominium shall be the total lot and floor area of sale-able lots or units in the subdivision or condominium.

-Rate Base — the rte base shall be obtained by dividing the gross expense by the gross area to arrive at the cost per square meter.

-Chargeable Amounts — The charges per member or beneficial user shall then be computed by multiplying the total lot and floor area by the rate base, and an additional 10% for members or 20% for beneficial users to cover for any shortfall in collections resulting from the failure of some members or beneficial users to pay their dues, fees or contributions.

-Interests and Penalties – interests and penalties may be charged for the non-payment of dues, fees and contributions, provided, that the authority to collect such amounts have been duly provided in the by-laws and provided further that the same shall not exceed 12% per annum.

Perhaps the two provisions that does not coincide with several villages’ security measures are that it also calls for village stickers for non-residents to not exceed more than twice the value of resident stickers and the prohibition of non-resident drivers to surrender their licenses to the gates.

“It shall also be prohibited to require the driver of any vehicle entering the subdivision or condominium to surrender his/her driver’s license. The association is not authorized under the traffic laws to take custody even on a temporary basis the license issued by LTO,” as found in the ordinance.

Penalties were also identified for erring homeowner association officials, namely:

1. Minimum Degree – P3,000
2. Medium Degree – P4,000
3. Maximum Degree – P5,000 plus one year imprisonment

*Permanent disqualification from being an elected or appointed officer

As stated on the approved ordinance, the provisions should have taken effect last January 18, 2018 pending publication of Implementing Rules and Regulations in three major newspapers.

As of this writing, we have heard of several homeowner associations who are planning to file temporary restraining orders to stop this.

How about you? What are your thoughts on this ordinance?