SC: Homeowners' Associations Cannot Restrict Delinquent Members From Using Common Areas Over Unpaid Dues

 SUPREME COURT: HOMEOWNERS' ASSOCIATIONS CANNOT RESTRICT DELINQUENT MEMBERS FROM USING COMMON AREAS OVER UNPAID DUES

The Supreme Court (SC) ruled that a homeowners association cannot deprive the delinquent association members of their right to avail of or enjoy the use of common areas, such as roads, noting that its power to impose sanctions is not absolute.

In a 14-page decision penned by Associate Justice Alfredo Benjamin Caguioa, the SC's Third Division has affirmed the ruling of the Court of Appeals (CA), which found that the sanctions imposed by the directors and officers of La Costa Brava Homeowners' Association, Inc. (LCBHAI) against homeowners spouses Linley and Juvy Retirado are not allowed under Republic Act No. 9904 or the Magna Carta of Homeowners and Homeowners' Associations.

Private respondents Spouses Retirado are homeowners in La Costa Brava Subdivision. From 2016 to 2021, they did not pay the monthly association dues being collected by LCBHAI, which is the homeowners' association of La Costa Brava Subdivision. 

As a result, directors of LCBHAI declared the Spouses Retirado delinquent members and imposed various sanctions. These included the prohibition of grass-cutting and maintenance activities within five meters of their property unless requested in writing by adjacent lot owners and the reduction of garbage collection services to once every two weeks.

The association also banned the delivery of food, packages, construction materials, appliances, gas, and similar items to the residences of delinquent members. In addition, empty taxis, tricycles, and Grab vehicles were prohibited from entering the subdivision to pick up delinquent members from their homes.

Their guests were likewise barred from entering the subdivision, while delivery trucks and vehicles transporting supplies and construction materials to construction sites were subjected to delivery fees.

This prompted the spouses Retirado to file a complaint before the Human Settlements Adjudication Commission (HSAC) against the House Owners' Association officers for violation of Republic Act No. 9904, or the Magna Carta of Homeowners and Homeowners' Association. The HSAC ruled in favor of spouses Retirado, noting that restricting the use and passage through the roads is contrary to law.

The Court of Appeals (CA) subsequently affirmed the ruling of the HSAC. This paved the way for LCBHAI directors and officers to elevate the case before the Supreme Court.

In upholding the appellate court's ruling, the high court said that the homeowners' association's right to impose sanctions is not absolute, as Section 22(b) with Section 7(a) of Republic Act No. 9904 reveals a limitation to this right to impose sanctions. 

While a homeowners' association may deprive the delinquent association members of their right to avail of or enjoy basic community services and facilities, it may not deprive the members of their right to use common areas, such as the roads.

It cited Section 7(a) of Republic Act No. 9904, which provides that association members have two separate "full rights": (1) the right to avail of and enjoy basic community services and facilities; and (2) the right to use common areas.

The highest bench explained that the separation of these rights is apparent, which separately defines "basic community services and facilities" and "common areas." 

It emphasized that "basic community services and facilities" refer to those that "redound to the benefit of all homeowners." This includes the "security, maintenance, repairs, and cleaning of streets, and garbage collection or disposal." 

Meanwhile, common areas refer to property owned or otherwise maintained, repaired, or administered in whole or in part by the association, including, but not limited to, roads.

It noted that Section 22(b) prohibits the deprivation of any homeowner of his/her right to avail of or enjoy basic community services and facilities when such homeowner has paid the necessary dues. 

The SC underscored that a homeowner member, once declared delinquent for nonpayment of dues, still retains the "full right" to use common areas such as the roads. 

The Court held that the other sanctions imposed on the spouses Retirado, such as the prohibition on grass-cutting or maintenance within five meters of their property, the reduction of garbage collection services to once every two weeks, and restrictions on the use and enjoyment of certain basic services and facilities, are permitted under Republic Act No. 9904. 

But the sanctions being questioned in this case clearly restrict their right to use subdivision roads, which form part of the common areas, and are therefore not allowed.

"While a homeowners' association is well within its right to sanction its members' delinquency due to nonpayment of dues, the exercise of such right must fall within the framework crafted under Republic Act No. 9904," the Supreme Court said.

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Source: BatasPH