Hlurb Position Paper [sample]

Republic of the Philippines Office of the President HOUSING AND LAND USE REGULATORY BOARD Expanded NCR Field Office Kalayaan Avenue, Quezon City ROLANDO DOMINGO et al., Complainants, - versus -

HLURB Case No: NCRHOA 102114-2135

RAUL EVANGELISTA et al., Respondents, x-------------------------x

POSITION PAPER COMPLAINANTS, by themselves, to this Honorable Commission, most respectfully submits this Position Paper and in support hereof states: THE PARTIES 1. The complainants ROLDANDO DOMINGO, BAYANI JIMENEZ, RODOLFO MANIACUP, ANDRES ESCUETA, ZOE ABIOG, LEOPOLDO DIEGO, JAIME CHONGCO, and MYRNALINA OCHINANG, are all of legal age, Filipinos, and are members in good standing of Broadway Pines Homeowners’ Association, Inc. (BPHAI). They may be served with notices and processes of this Honorable Commission at Block 22 Lot 3, Roosevelt Drive, Broadway Pines Executive Village, Barangay Mayamot, Antipolo City; 2. The authority of the above-named complainants to represent other bonafide members of BPHAI is evidenced by a Special Power of Attorney 1 (SPA); and 3. The respondents RAUL EVANGELISTA (President), RICKY CINCO (Vice-President), JERRY SUAPENGCO (Secretary), LUISITA LIMBAGO (Treasurer), EDUARDO ABAD (Water Committee Chairman), ROLAND GARCIA (COMELEC-BPHAI Chairman), MONET ESPIRITULOPEZ, LEONCIA GREGORIO, RENATO CALDERON, SUSAN FLORES, DENNIS VALERIO, CELESTINO PANGANIBAN, MENARD MANIPOL, LARRY MENDOZA, NARCISO PANGILINAN, AND ROBERTO BOLANOS (Directors), are all of legal age and Filipinos, with office address at 1

Annex A

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the BPHAI Office located at Broadway Pines Executive Village, Barangay Mayamot, Antipolo City, where they may be served with summons and other processes of this Honorable Commission. STATEMENT OF FACTS 4. The complainants filed the Complaint against herein respondents for the latter’s patent violations of Republic Act 9904 (RA 9904), otherwise known as the Magna Carta for Homeowners and Homeowners’ Association and the BPHAI By-Laws. ISSUES 5.

Whether the respondents violated RA 9904;

6.

Whether the respondents violated the BPHAI By-Lawss; and

7. Whether the respondents committed gross negligence in the management of the BPHAI. DISCUSSION THE RESPONDENTS VIOLATED RA 9904 NON-FILING OF THE FINANCIAL REPORTS WITH THE HLURB 8. Section 17, RA 9904 enumerates the duties of the Treasurer and President or Chairman of the Board of Directors 2 of the Association in relation to financial reports and other records, to wit: “Section 17. Financial and Other Records. - The homeowners’ association is enjoined to observe the following, with regard to its funds, financial and other records: (a) The association or its managing agent shall keep financial and other records sufficiently detailed to enable the association to fully declare to each member the true statement of its financial status. All financial and other records of the association including, but not limited to, checks, bank records and invoices, in whatever form these are kept, are the property of the association. Each association’s managing agent shall turn over all original books and records to the association immediately upon termination of the management relationship with the association, or upon such other demand as is made by the board. An association’s managing agent is entitled to keep association records. All records which the managing agent has turned over to the association shall be 2

Reportorial Requirements., hlurb.gov.ph/homeowners-association/., accessed last 22 December 2014.

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made reasonably available for the examination and copying by the managing agent; (b) All records involving the affairs of the association shall be available for examination by all owners, holders of mortgages on the lots, and their respective authorized agents upon reasonable advanced notice, during normal working hours at the office of the association: Provided, That holders of mortgages on lots may have access to the information about the property held in mortgage with the written consent of the registered owner; (c) A financial statement of the association shall be prepared annually by an auditor, the treasurer and/or an independent certified public accountant within ninety (90) days from the end of the accounting period to be posted in the association office, bulletin boards, or other conspicuous places within the subdivision/village, and to be submitted to the HLURB; and (d) The funds of the association shall be kept in accounts in the name of the association and shall not be joined with the funds of any other association, or any person responsible for the custody of such funds”

9. In relation to the above-cited provision of RA 9904, Section 2, Article IX of the BPHAI By-Laws provides for the fiscal period for the preparation of the financial report. The cited provision reads: “The fiscal year of the Association shall begin on the first day of July and shall end on the 30th day of June of the following year xxx.”

10. Upon inquiry from the HLURB on October 2014, only the cash flow for 2011 was filed. No financial statement was filed by the Treasurer and President or the Chairman of the Board from fiscal year 2011 until the present year in blatant disregard of their duties as officers of the Association. Belated compliance by the respondents with the obligation to file the financial statements with the HLURB will not cure their prior violation. 11. This is a wanton violation by the respondents of their sworn duty and obligation to fully declare to each member the true statement of its financial status. Copies of the BPHAI By-Laws3 and the cash flow for the year 20114 are hereto made an integral part of this Position Paper. HIRING THE SERVICE OF A PRIVATE INDEPENDENT CONTRACTOR FOR THE LAYOUT AND CONSTRUCTION OF PIPING LINES FOR MANILA WATER SERVICES WITHOUT THE NECESSARY CONSULTATION OR APPROVAL OF THE MEMBERSHIP 12. Section 22 (f) in relation to Section 10 (e) of RA 9904 authorizes the Association to hire, discharge or contract managing agents and other employees, agents and independent contractors to ensure the full functioning 3 4

Annex B Annex C

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and operation of the association provided that the majority of the members agree thereto. The said provisions state: “Sec 22 (f) [Prohibited Acts] - To exercise rights and powers as stated in Section 10 in violation of the required consultation and approval of the required number of homeowners or members.” “Sec 10 (e) [Rights and Powers of the Association] – Hire, discharge or contract managing agents and other employees, agents and independent contractors to ensure the full functioning and operation of the association.”

13. The President, the Directors, and the Water Committee Chairman, in connivance with each other, in a purported “contract” denominated as Quotation for the Proposed Pipe laying and Home Service Connection5, acquired the services Engineer Jose A Rementina for the laying of the pipelines within the subdivision. 14. There was neither consultation nor approval from the majority of the members before the alleged “contract” was entered into in violation of Sec 22 (f) of RA 9904 constituting grave abuse of authority of the President, the Directors, and the Water Committee Chairman. 15. The justification proffered by the President, the Directors, and the Water Committee Chairman that the services of Engineer Jose A Rementina is the least expensive of all the prospective service contractors is unavailing. Even if it is true that the services of Engineer Jose A Rementina is the least expensive, consultation and approval of the membership is required and cannot be ignored. 16. It cannot be overemphasized that even if the Respondents no longer enjoy the pleasure of the majority of the membership, the respondents still pursued the “contract” without the requisite consultation and approval of the membership. THE RESPONDENTS VIOLATED THE BPHAI BY-LAWSS COLLECTION OF ASSESSMENT FEES WITHOUT THE APPROVAL OF THE MAJORITY OF THE MEMBERS OF THE ASSOCIATION 17. [may]:

Pursuant to Section 12 (b) of RA 9904, the Board of Directors

“Section 12. xxx collect the fees, dues and assessments that may be provided for in the By[-]laws and approved by a majority of the members.” 5

Annex D

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18. The President and Directors, in conspiracy with each another, made special assessments and collected from the members of the Association for the operation of Closed-Circuit Televisions (CCTVs), Road User’s fees, and other fees for the alleged beautification of the subdivision entrance gate. The collection is evidenced by herein attached copies of receipts of payment6. 19. Upon inquiry with the HLURB on October 2014, there were no documentations, minutes of meeting, or resolutions showing that the majority of the members approved the collection of aforesaid fees in complete disregard of the provisions of the By-Laws. 20. Considering that the President and most of the Directors have been officers of BPHAI for more than one term, it is incumbent for them to know the provisions of the BPHAI By-Laws. Their failure to obey the provisions of the By-Laws is reprehensible and constitutes gross ignorance of the BPHAI ByLaws. SIGNING OF THE PRESIDENT OF THE QUOTATION WITHOUT THE REQUISITE BOARD RESOLUTION AUTHORIZING THE PRESIDENT TO ENTER INTO SUCH CONTRACT 21. The act of the President in signing the aforementioned Quotation for the Proposed Pipe laying and Home Service Connection is an act beyond the scope of his authority. The Directors should have first executed a resolution in order to authorize the President to sign or enter into agreements which will bind the Association. Without the necessary Board resolution, the President cannot bind the Association and any obligation resulting from any deed, mortgage, bond, contract, or any instrument shall be the personal obligation of the President. Section 3, Article IV of the BPHAI By-laws provides in part: “Section 3: President. xxx The [P]resident shall also sign and execute in the name of the association all authorized deeds, mortgages, bonds, contracts and other instruments to be entered into by the Board in the name of the association xxx.”

22. Considering that the act of the President in signing the Quotation for the Proposed Pipe laying and Home Service Connection is ultra vires, the “contract” is an unenforceable contract. Under Article 1403 (1) of the New Civil Code, [contracts] entered into in the name of another person by one who has been given no authority or legal representation, or who as acted beyond his powers, are unenforceable. 23. The President, Directors, and the Water Committee Chairman should have been more circumspect in their actions considering that the value involved in the supposed “contract” is Php 10 Million. AMENDMENT OF THE BPHAI BY-LAWSS WITHOUT PRIOR CONSULTATION AND APPROVAL OF THE MEMBERSHIP 6

Annex E to E-19

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23. Sometime in 2011, the Respondent-Directors and the COMELEC Chairman amended the BPHAI By-laws by providing that only 30% of the entire membership entitled to vote is required in order to pass further amendments to the By-laws. Said amendment was without the prior consultation and approval of the BPHAI members. No special meeting was called for the amendment of the By-laws therefore constituting grave abuse of authority of the respondents. The amendment came into surface only in the general membership meeting conducted last 28 September 2014. 24. Be that as it may, the amendment made by the RespondentDirectors and the COMELEC Chairman has not attained finality as a timely Opposition7 therefor has been filed before the HLURB. The issuance of the Certificate of Amendment was suspended through a letter 8 sent by HLURB to both parties. THE RESPONDENTS ARE GUILTY OF GROSS NEGLIGENCE IN THE MANAGEMENT OF THE BPHAI FAILURE TO MAINTAIN ESSENTIAL SERVICES IN THE SUBDIVISION AT A REASONABLE PRICE 25. It is the duty of the officers of the association to provide essential services in the subdivision at a reasonable price. The BPHAI By-laws provide: “Section 13 (e): [Duties and Responsibilities] – The Board shall be responsible for maintaining all facilities [sic] provide sanitation, security, and other essential services for the subdivision.”

26.

RA 9904 states a similar duty of the officers, to wit:

“Section 10 (g): [Rights and Powers of the Association] - ensure the availability of quality water services at a reasonable price xxx.”

27. Sometime in 2013, the President, Directors, and the Water Committee Chairman contracted the services of Manila Water. In order to connect to the services of Manila Water, the President, Directors, and the Water Committee Chairman hired the services of a private independent contractor for the laying of pipelines within the subdivision. The initial fee for each household was Php 33,000.00 which was increased to P 43,000.00 and further increased to Php 50,000.00 for an alleged “business scheme”. However, the said “business scheme” is not reflected in any resolution or any documentation of the Respondents. 7 8

Annex F Annex G

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28. After the payment of the initial fee, several “connection fees” ranging from P 1, 500.00 to P 3, 000.00 are still collected before actual connection to the water service. This business scheme is not in consonance with the right of the Association members to quality water services at a reasonable price. 29. Copies of some of the receipts9 issued by the Respondents for the aforementioned exorbitant charges are hereto attached and made an integral part of this Position Paper. COMPULSION IN AVAILING OF THE SERVICES OF MANILA WATER 30. The water fiasco in the subdivision is further compounded by the issuances of National Water Regulatory Board (NWRB) of two void orders. The first order10 directed the sealing and closure of individual deep wells. 31. A Motion for Reconsideration was filed, which however was denied by NWRB in a second order11 while ordering anew the closure and sealing of the deep wells. 32. The respondents tried to execute the second order of the NWRB by sending letters12 throughout the Association underscoring the date when the deep wells shall be removed by the elements of the NWRB thus leaving the members no other choice but to avail the services of Manila Water at an exorbitant price. 33. Further, through the initiative of the President himself, the water pump (poso) which is situated along Roosevelt Drive was sealed and closed thereby effectively depriving the homeowners who do not have deep wells of water supply. Photos13 of the sealed and closed water pump is likewise attached herewith and made an integral part of this Position Paper. 34. It is depressing to note that as of this time, there are still many homeowners who cannot avail the water services of Manila Water considering the exorbitant fees asked by the officers of the Association. The act of the President, the Directors, and the Water Committee Chairman in inviting the NWRB and discontinuing the operation of the water pump in order to forcibly take away the only water source of the Association members is inconsistent with the right of the Association to quality water services. 35. The validity of said NWRB orders, however, had been assailed in a Petition for Review with Application for Temporary Restraining Order pending 9

Annex H Annex I 11 Annex J 12 Annex K 13 Annex L to L-2 10

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before the Special Ninth Division of the Court of Appeals and is docketed as CA-GR SP No 13562014. NONCOMPLIANCE WITH THE COMPROMISE AGREEMENT/AMICABLE SETTLEMENT AGREED IN THE HLURB CONCILIATION 36. A conciliation proceeding between herein parties was conducted in the HLURB last 15 July 2014. A copy of the minutes 15 of the conciliation conference is attached herewith and made an integral part of this Position Paper. 37. At the said conciliation, it was agreed that the respondents shall discontinue the utility of a mother meter for the water connection and instead use individual meters for each of the households in the subdivision. However, after the said conciliation and persisting until now, there is yet an action from the respondents to pursue the agreement reached during the conciliation. Their stubborn refusal to comply shows their clear disrespect not only to the agreement but also to the institution of the HLURB. CONDUCT OF AN INVALID REFERENDUM 38. The President, the Directors, and the COMELEC Chairman in an attempt to continue their tyrannical ways, made further amendments in the BPHAI By-Laws through their so-called “referendum”. In the said “referendum”, the Respondents declared that a certain number of the BPHAI membership voted that instead of voting the President at large at the time of elections, only directors shall be voted upon and the directors thus elected shall choose among themselves the President. Also in the said referendum, it was allegedly approved that a fidelity bond should be given by the President before being chosen by the elected directors. 39. Their so-called “referendum” was illegally conducted. First, it is elementary that in a referendum, only a single subject for amendment should be presented to the membership for approval or rejection 16. In other words, there should only be one referendum for a single amendment. The respondents presented two issues for the consideration of membership in a single referendum17. The purpose of the single-subject rule is to allow the membership to focus on a single subject when deliberating whether or not to vote for the amendments18. 40. Second, coming from the Respondent-President himself during the September 28th General Membership Meeting, the counting of the votes cast for the referendum was held five days after the termination of the voting. After the voting, the chairman of BPHAI-COMELEC took home the ballot box and hid it 14

Annex M Annex N 16 Atty Raul L Lambino vs COMELEC (2006)., GR No 174153 17 Annex O 18 Francisco S Tatad v. Secretary of Department of Energy (1997)., GR 124360 15

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until five days thereafter. This unlikely procedure violated the sanctity of the referendum and casted a reasonable doubt on the results of the referendum. 41. Finally, to aggravate the numerous violations of the respondents against the BPHAI By-Laws, the Respondent-President declared in the same General Membership Meeting held on the 28th of September, that the result of the referendum was not physically and actually disseminated by the respondents as enjoined by the By-Laws. The result was posted online through a Facebook account, making a mockery out of the proceedings of the Association. Nowhere in the By-Laws allows the posting of voting results through a social media account such as Facebook. 42. The afore-mentioned deplorable acts of the Respondents, taken singly or as a whole, manifested their gross negligence and/or illegal acts in the performance of their sworn duties in violation of the rights of the members of the Association and violation of the law, for which they should be accordingly meted with applicable penalties and sanctions. PRAYER WHEREFORE, premises considered, it is respectfully prayed that sanctions be meted to each of the respondents for their illegal acts, willful disregard, gross negligence in the management of BPHAI, and violations of RA 9904 and BPHAI By-laws pursuant to Section 23 of RA 9904, which provides in part: “Section 23. Penalties and Sanctions – Any person who, intentionally or by gross negligence, violates any provision of this Act, fails to perform his/her functions under this Act and/or violates the rights of the members, shall be punished with a fine of not less than Five Thousand pesos (Php 5, 000.00) but not more than Fifty thousand pesos (Php 50, 000.00) and permanent disqualification from being elected or appointed as member of the Board, officer or employee of the Association, without prejudice to being charged before a regular court for violations of the provisions of the Revised Penal Code, Civil Code, and other pertinent laws. xxx”.

It is likewise prayed that the questioned amendments of the By-laws be declared null and void for having been made in contravention with the provisions of the same By-Laws. It is further prayed that reasonable damages be awarded in favor of the Association for the deplorable acts of the Respondents. Other reliefs just and equitable under the circumstances are likewise prayed for. 9 | Page

Antipolo City for Quezon City, 22 December 2014. By themselves and as representatives of the members of the Broadway Pines Homeowners Association:

Rolando Domingo Complainant

Bayani Jimenez Complainant

Rodolfo Maniacup Complainant

Andres Escueta Complainant

Leopoldo Diego Complainant

Jaime Chongco Complainant

Zoe Abiog Complainant

Myrnalina Ochinang Complainant

Copy Furnished: BPHAI Office Broadway Pines Executive Village, Sumulong Highway, Brgy Mayamot, Antipolo City

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