Atty. Patricia M. De Guzman

March 11, 2002 SEC OPINION Atty. Patricia M. De Guzman Suite 501 State Condominium 1, Salcedo St., Salcedo Village, Legaspi Village, Makati City Dear Atty. De Guzman, This refers to your letter dated January 11, 2002 requesting opinion on the following queries: 1. Is Projects and Lands Inc.,a corporation which owns several condominium units in a building known as One Lafayette Square entitled to vote during the annual meeting and election of directors on its proportionate interest represented by the condominium units, the dues of which have been fully paid? 2. In the absence of a specific provision in the by-laws of the condominium association, is the person designated by a member to represent him/her as a member of the corporation qualified to be elected as a member of the board of directors of the condominium association? As alleged in your letter, your client, Projects and Lands Inc.,is a member of One Lafayette Square condominium Corporation, being the registered corporate owner of several condominium units in the building known as One Lafayette Square. Each unit is covered by a separate condominium certificate of title. However, considering that each unit is being used by different individuals, the association dues and other assessments on some units have been paid to One Lafayette Square Condominium Association, Inc.,while some remain outstanding. As to the first query, Section 89 of the Corporation Code applies. The same provides thus: "Sec. 89. Right to vote. The right of members of any class or classes to vote may be limited, broadened or denied to the extent specified in the articles of incorporation or the by-laws. Unless so limited, broadened or denied, each member, regardless of class, shall be entitled to one vote. xxx xxx xxx." Pursuant thereto, the right to vote of the members is determined by the articles and by-laws of a corporation. "The by-laws may declare who shall be entitled to vote and how they shall be entitled to vote, or impose other restrictions such as limiting the right to vote of each member . . ." (De leon, Corporation C od e, p. 590). Unless otherwise provided therein, every member is entitled to vote proportionate to his interest in the condominium. Section 3 of Article 11 of the by-laws of the association states that "...each member of the corporation shall be entitled to such number of votes corresponding to his/her/its membership interest or participation in the corporation as determined under Part 1 of the Master Deed and Declaration of Restrictions of said condominium project. However, members who are delinquent in their dues and assessments fixed by the Board of Directors pursuant to the powers granted them, shall not be qualified to cast their votes in any meetings of the corporation ... " In the case of your client, since it is delinquent as to some units it owns, then pursuant to the abovequoted by-law provision, it may be entitled to such number of votes corresponding to those units of which the dues and assessments have been fully paid. As to the units of which the dues are still outstanding, then your client may not be entitled to vote thereon. In reply to your second query, please be informed that the by-laws provision of One Lafayette Square Condominium Association Inc.,explicitly provides and we quote: "Section 2. A member may designate another person to represent him/her/it as a member of the corporation by filing a written designation with the Secretary of the corporation. In case a unit is owned in common by two or more persons, they shall designate only one of them to represent them in the corporation and the representative so designated shall be considered as member representing the condominium unit for all purposes in all matters related to the corporation. Provided, however that in case of conflict, the board of directors shall have the right to decide whom to recognize as their authorized representative. In case a member is a legal entity, authorized officers shall designate who should represent it in the corporation. " The aforequoted by-law provision (Section 2, Article 11, by-laws) categorically allows a juridical entity to designate its representative in the condominium association subject to the following conditions: (1) that there be a Board Resolution of the corporate owner or member as its representative for the express purpose of qualifying him as director, and (2) the appointment of the representative must be recorded in the corporate books. This is in accordance with the SEC Opinion dated July 1, 1996 addressed to Puruganan, Chato & Geronimo. Moreover, although Section 23 of the Corporation Code, which requires that the board of directors or trustees be elected from among the holders of stocks, or where there is no stock, from among the members of the corporation, can be strictly applied to individual members/stockholders, the rule is different in the case of a corporate member. Hence, a distinction has to be made between an individual member and a corporate member. As to the former, his/her representative may not be eligible to be elected as director. Only the member himself/herself is qualified to be a director. As to the latter however, for practical considerations, considering that a juridical person acts only thru its agents/officers, the designated representative may be eligible to be voted as director of the association subject to the abovementioned conditions. EHaCTA Please be guided accordingly. Very truly yours, (SGD.) FE ELOISA C. GLORIA Commissioner