HOMEOWNERS’ ASSOCIATION MANAGEMENT IN THE PHILIPPINES

HOMEOWNERS’ ASSOCIATION MANAGEMENT IN THE PHILIPPINES

It all started when a land developer company purchase a piece of land somewhere within or near the urban areas and develop it by constructing concrete fence and roads, install streetlights, build water system, provision for utilities like electricity, internet, and cable television.
The developer subdivides the land to lot sizes affordable to average-income employees and build row or single-detached houses. 


Parallel to this, a group of ever-active self-declared “real-estate brokers” begin selling these properties before the groundbreaking is made.
Few months later, new homeowners start migrating to their dreamed-houses and meet for the first time their totally-stranger but lifetime-to-be neighbors. A typical modern Filipino community is born.
As the community gradually grows, the land developer starts to turn over the management to the homeowners by urging them to create an association and elect board of directors or BOD, formulate by-laws and articles of incorporation, rules and regulations and have it registered to SEC. A functional Filipino homeowner association or HOA is created.

The following are the most common practices of a typical Filipino HOA:
  •         The election BOD will be held every 3 to 5 years.
  •         The association usually collect from the homeowner the following dues and fees:
    1. MEMBERSHIP FEE. This is a one-time non-refundable membership fee for every new owner of the property. This will go to the association reserve fund. The amount usually ranges between P3000 to P5000 per property.
    2. MONTHLY DUES. This is intended for insuring security and order of the community including maintenance of streetlights, CCTV, roads, gutters, sidewalks, drainage, wastewater treatment lagoon, trees trimming, common swimming pool, covered court, function rooms, and other expenses that includes office supplies, computer software and equipment to keep track and maintain all the billings, expenses and financial records of the association. The amount usually ranges between P500 to P3000 depending on size and number of facilities of the common areas.
    3. WATER RATE, WATER MINIMUM FEE, WATER CONNECTION FEE. These fees and rate are needed if the association has their own water system like deep well and water tank. The amount will be similar or at least near to the rate of water utility in the area.
    4. ELECTRICITY RATE, ELECTRICITY MINIMUM FEE, ELECTRICITY CONNECTION FEE. These fees and rate are needed if the association has their own standby power backup generator. The amount will be similar or at least near to the rate of power utility in the area.
    5. NEW TENANT FEE. This fee is collected from a homeowner whose property is generating an income through tenant rentals. This one-time fee is collected for every new tenant. The amount usually ranges between 20 to 40 percent of the monthly tenant rental amount.
    6. MONTHLY PARKING FEE. There are subdivisions that utilizes some parts of the road as fee parking areas for homeowner whose own parking area can no longer accommodate his vehicles. The monthly rate usually ranges between P100 to P200 per vehicle.
  •     The BOD will be the implementing body of all the agreed rules and regulations and collection of necessary dues and fees. BOD includes five central officer positions—president, vice president, treasurer, secretary and auditor. The BOD will have an ethical and moral obligation to make decisions for the benefit of everyone in the community, not just for a single home. And for the services rendered by the BOD, the association sometimes agreed to give an incentive in a form of discount to their monthly dues. The monthly discount amount ranges between P500 to P1000.
  •         To keep track the financial records, monthly bills and collection efficiently, the association will employ a clerk to do this job.
  •         Homeowners will be notified regularly about news updates and activities of the association including periodic financial reports.
  •         A financial budget plan for an association which estimates income and expenses for a specific period will be agreed by the association.
  •         A minimum number of homeowners is required to hold a meeting for the association which is called “a quorum”. Having a proper quorum is critical anytime the BOD wants to conduct official business, change rules, or vote on new board officers.
  •         When an HOA rule or regulation is violated, a fine can be issued. HOA fine amounts will depend on what is agreed by the community's governing rules and guidelines.
  •     An aid of a database-type computer  software will be a good idea to facilitate the generation of monthly bills and record every transaction specially if the number of properties involve is about a hundred or more.












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