“The greatest threat to the not-for-profit sector is the betrayal of public trust, the disappointment of public confidence…”

Joel Fleishman, Author, Professor of Law and Public Policy, Duke University

 


 

By Realttorney

 


 

Do you have a similar situation like this in your HOA?

RT was a past president and a former member of the Board of Directors of a HOA in Pampanga. The current HOA Board decided to give an “allowance” of P1,000 per month to a member of the board for being the chairman on security and traffic within the subdivision.

RT questioned this action the Board and pointed out that it is a violation as provided under the HOA Bylaws – where, officers are allowed only per diem the amount of which is to be determined by the board. In reply, the Board said that it is not a violation since what was given is compensation to a board member for discharging duties that is not part of his duties and responsibility as board.

RT asks if being a Chairman of the Committee on Security and Traffic of the HOA not part of the function of a member of the board.

HOA BoardThe last paragraph of Rule 9, Section 54 of the IRR of RA 9904 states: “The board shall act in all instances on behalf of the association, except to amend the articles of association, to dissolve the association, to elect members of the board or to determine the qualifications, powers and duties, or terms of office of the board, and other instances that require the vote or approval of the members themselves. In the performance of their duties, the officers and members of the board shall exercise the degree of care and loyalty required by such position.”

Like a corporation, the Board of Directors or Trustees shall implement the policies, objectives and guidelines on how the Homeowners’ Association should be governed. Moreover, the Board provides the HOA direction and advice.

It is their responsibility to ensure that the HOA fulfils its mission statement, if there is one. That is why the members of the Board should have experienced and knowledgeable people.

Furthermore, the Board is typically held responsible for the management of the financial resources of the HOA as well. Therefore, fiscal prudence should always be a major goal that Board Members constantly have in mind.

Having said this, being a Chairman of a standing or an ad hoc Committee of the HOA is not a regular duty or function of a member of the Board. The regular duties and responsibilities of the Board (acting as a collegial body) are indicated in Section 12, RA 9904 as well as Rule 9, Section 54 of the IRR of RA 9904.

To determine if the action of the HOA Board is legal, there must be a determination if the appointment as Chairman of an ad hoc Committee of the Board Member and the “allowance” provided by the HOA Board is in accordance with the By-Laws of the Association.

If the action of the Board is in accordance with the By-Laws of the HOA and the appointment and “allowance” is contained in a Board Resolution duly passed and adopted by the Board then everything is legal.

If the By-Laws do not provide for such a provision then the action of the Board can be questioned before the Grievance Committee of the HOA, if there is one established. If none, then the dispute can be settled by the HLURB in an action properly filed before it.

The By-Laws of the Homeowners’ Association is the constitution of the community whereby all the policies, guidelines and rules on how to manage and operate the HOA can be found.                                                                                         

If there is a questionable act done by your Board or any of the officers then the first step is to review the HOA By-Laws to determine if such action is within the duties and responsibilities listed there.

Providing a monthly allowance of P1,000 to a Member of the Board directly affects the financial resources of the Association. It is up to the general membership to decide whether this particular action is sound and redounds to the best interest of the Association and its members.

The interests of the Member-Homeowners are the primordial concern of the Board Members and the Officers of the HOA. This is the standard whereby all Members of the Board and the Officers should be measured.

We laud the efforts of RT in being involved in the affairs of the HOA. We only wish that the same be amicably settled.

We’d like to hear from you and your experience with your HOA’s officers and Board Members. Tell us if “pasaway sila.”