• Homeowners’ association member’s right to inspect financial records

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    Persida Acosta

    Dear PAO,
    I wanted to check the financial condition of the homeowners’ association in our village, so I asked to be allowed to see its financial records. My request was not heeded, however. In protest, I refused to pay monthly dues. The association officers retaliated by threatening to declare me as a delinquent. Can you please advise me concerning my predicament?
    Cid

    Dear Cid,
    Republic Act (RA) 9904, or the Magna Carta for Homeowners and Homeowners’ Associations, provides, among others, the rights and obligations of a homeowner. Section 7 grants an association member with a bundle of rights, which includes the right “to inspect association books and records during office hours and to be provided upon request with annual reports, including financial statements.” In support of the right to inspect records of an association member, Section 17(b) of the Magna Carta further declares that “(a)ll 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.”

    In case of violation of his right to inspect records, an association member may resort to several remedies. He may bring up the matter with the conciliation or mediation mechanism of the association that Section 14(n) of the Magna Carta requires to be included in the by-laws for possible amicable settlement of dispute. If he opts for this, he can file a complaint with the Housing Land Use and Regulatory Board (HLURB), which has jurisdiction to “hear and decide intra-association and/or inter-association controversies and/or conflicts” under Section 20(d) of the Magna Carta. A civil action is also possible if the concerned association member incurred damages as a result of the violation of his right to inspection. Finally, he can file a criminal case against the erring officer of the homeowners’ association. Section 22(c) of the Magna Carta expressly declares it unlawful for any person “(t)o prevent any homeowner who has paid the required fees and charges from reasonably exercising his/her right to inspect association books and records.” Please take note that the Magna Carta does not authorize the concerned association member to suspend payment of his membership fees and other dues if his right to inspect records is violated. Such remedy is not provided in the Magna Carta.

    On the other hand, Section 8 of the Magna Carta imposes duties upon an association member, to wit: “(a) to pay membership fees, dues and special assessments; (b) to attend meetings of the association; and (3) to support and participate in projects and activities of the association.” Failure to comply with these obligations may entail administrative sanctions. Section 13, Rule 3 of the Implementing Rules and Regulations of RA 9904 particularly provides that “unless otherwise provided in the by-laws, a member who has failed to pay three (3) cumulative monthly dues or membership fees, or other charges/assessment despite demands by the association, or has repeatedly violated the association’s by-laws and/or declared policies, may be declared delinquent by the Board of Directors” (Section 13, Rule 3, Implementing Rules and Regulations of RA 9904). The declaration of delinquency by the Homeowners’ Association (HOA) board will result in suspension of the rights and privileges of the concerned member, and other sanctions as may be provided by the by-laws of the association. (Sec. 15 & 16, Id.)

    Applying the foregoing to your case, we advise you to pay your outstanding monthly dues to avoid being declared as a delinquent member, which will result in the suspension of your rights and privileges, and other sanctions. If the homeowners’ association continues to violate your right to inspect records, resort to the legal remedies provided by law as detailed above to enforce your right.

    We hope we were able to sufficiently address your concern. Please bear in mind that this opinion is based on the facts you narrated and our appreciation of the same. Our opinion may vary if facts are changed or elaborated.

    Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net.

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