Interpretation of Salient Provisions of RA 9904 (Magna Carta for Homeowners and Homeowners' Association)

DOJ OPINION NO. 020 , s. 2011 May 3, 2011 Hon. Fe B. Barin Chairperson Securities and Exchange Commission Mandaluyong City Dear Chairperson Barin : This refers to your request for opinion on the interpretation of salient provisions of Republic Act No. 9904 (RA 9904), otherwise known as the "Magna Carta for Homeowners and Homeowners' Association". EASCDH You stated that Section 3 of RA 9904 specifically provides for the definition of an "association", to wit: "(b) 'Association' refers to the homeowners' association which is a nonstock, nonprofit corporation registered with the Housing and Land Use Regulatory Board (HLURB), or one previously registered with the Home Insurance Guarantee Corporation, now Home Guaranty Corporation, (HIGC/HGC) or the Securities and Exchange Commission (SEC), organized by owners or purchasers of a lot in a subdivision/village or other residential real property located within the jurisdiction of the association; or awardees, usufructuaries, legal occupants and/or lessees of a housing unit and/or lot in a government socialized or economic housing or relocation project and other urban estates; or underprivileged and homeless citizens as defined under existing laws in the process of being accredited as usufructuaries or awardees of ownership rights under the Community Mortgage Program (CMP), Land Tenure Assistance Program (LTAP) and other similar programs in relation to a socialized housing project actually being implemented by the national government or the LGU." Also, Sec. 4 of the same Act provides for the registration of these associations: "Sec. 4. Registration with the HLURB. Every association of homeowners shall be required to register with the HLURB. This registration shall serve to grant juridical personality to all such associations that have not previously acquired the same by operation of the General Corporation Law or by any other general law. The law further states in Section 20, subsection (c) that the HLURB shall "(r)egister all associations, federations, confederations or umbrella organizations of the associations." However, you noted that the law is silent on "neighborhood associations" or non-stock, non-profit organizations registered with the SEC that consist of residents of housing communities whose purposes are similar to those of homeowners' associations. The members of neighborhood associations are either members of existing homeowners' associations in their communities, or people who reside in the same community but are not, or do not want to be members of the existing homeowners' association. Further, you stated that these neighborhood associations register with the SEC for the purpose of securing accreditation as usufructuaries or awardees of ownership rights in relation to Sec. 3 (b) of RA 9904. Thus, there are instances where a housing community would have a homeowners' association registered with the HLURB and, at the same time, a neighborhood association registered with the SEC, both of which have separate and distinct juridical personalities. HSEIAT Notwithstanding the foregoing, it is your view that the omission of neighborhood associations in RA 9904 and considering the objective of the law to consolidate the supervision of the activities of homeowners' associations under the HLURB, the same law should be interpreted to include the registration of neighborhood associations as part of the responsibilities of the HLURB. We agree. The term "association" necessarily includes "neighborhood associations". Although differently named, as you stated, still they have the "same objectives, membership pool and territorial coverage". This term should be understood and applied in its generic sense since RA 9904 does not make any distinction. Thus where the law does not distinguish, we must not distinguish (Ruben Agpalo, Statutory Construction, 3rd Edition, p. 152). The term "association" deserves a liberal construction in order to accomplish its intended purpose and carry out is intent. Liberal construction is that construction which expands the meaning of a statute to meet cases which are clearly within the spirit or reason thereof or within the evil which the statute was designed to remedy, or which gives a statute its generally accepted meaning to the end that the most comprehensive application thereof may be accorded, without being inconsistent with its language or doing violence to any of its terms. ( Cresent City vs. Griffin , 87 P2d 414; Maryland Casualty Co. vs. Smith , 40 S.W. 2nd 913). One of the duties and responsibilities of the HLURB is to "(h)ear and decided intra-association and/or inter-association controversies and/or conflicts" (Sec. 20 (d), RA 9904). The consolidation of jurisdiction over all homeowners associations including neighborhood associations under a single government agency was envisioned to facilitate conflict resolution and coordination between and among these associations. Thus, Section 4 of RA 9904 requires the registration of every association of homeowners with the HLURB, after the law became effective, even those previously registered with the Securities and Exchange Commission and the defunct Home Insurance Guarantee Corporation so that the HLURB can acquire and exercise jurisdiction over all of them. To interpret the term "association" strictly, that would exclude "neighborhood associations from its meaning, would defeat the intent of Section 20 (d) of the law where the legislature invested such adjudicatory powers on HLURB. Please be guided accordingly. SHECcT Very truly yours, (SGD.) LEILA M. DE LIMA Secretary