After reading On Dissolution of Homeowners’ Association read also Registration of Homeowners’ Association
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A homeowners’ association may be dissolved voluntarily or involuntarily
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A homeowners’ association may be dissolved by shortening the corporate term
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The association may be dissolved upon the filing of a verified complaint
A homeowners’ association may be dissolved voluntarily or involuntarily.
What is the process of dissolving a homeowners’ association when there are no affected creditors?
The law says:
If the dissolution of an association does not prejudice the rights of any creditor having a claim against it, the dissolution of a homeowners’ association shall be effected as follows:
What if there are two (2) or more associations applying for registration within the same subdivision?
a. The issuance of a Board Resolution authorizing the dissolution of the association:
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Notice sent to all members of the Board, in accordance with the notice requirements of the by-laws, setting a date for a Meeting for the purpose of the dissolution of the association;
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In the meeting called for the purpose, a majority of all the members of the Board shall be necessary for the approval of the Board Resolution dissolving the association;
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The Board Resolution shall likewise state the date of the General Assembly which shall consider the dissolution of the association;
b. A majority vote of all the members, duly notified beforehand, shall be required to dissolve the association. The Notice shall be –
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Personally served or sent by registered mail to the members at least thirty (30) days before the scheduled meeting;
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Published once a week for two (2) consecutive weeks in a newspaper of local circulation where the principal office address of the association is located, or, if there is none, in a newspaper of general circulation once a week for two (2) consecutive weeks;
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Posted at the bulletin board of the association and in other strategic and conspicuous places within its territorial boundaries.
c. The Regional Office of the Housing and Land User Regulatory Board (HLURB) shall be furnished copies of the Resolutions of the board of directors/trustees and the general assembly of members dissolving the association, both of which shall be signed and certified as correct by a majority of the members of the Board of Directors/Trustees and countersigned by the Secretary.
d. The Regional Office shall issue the certificate of dissolution upon determination that the application has complied with all the foregoing requirements and that it is not contrary to law.
Wht is the process of dissolving a homeowners’ association when there are affected creditors?
The law says:
Where the dissolution of an association may prejudice the rights of any creditor, the following procedure shall be followed:
a. The association shall conduct the meetings and all solemnities required for the notice;
b. A petition for dissolution shall be filed with the Regional Office of the HLURB which shall have the following requirements:
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The petition shall be signed by a majority of its board of directors or trustees or other officers of the association having the management of its affairs;
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The petition shall be verified by its president or secretary or one of its directors or trustees, and shall set forth all claims and demands against it, and that its dissolution was resolved upon by the affirmative majority vote of its members at a meeting called for that purpose;
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he resolutions of the board and the general membership attesting to the consent of the majority of both the members of the Board and the general membership shall be attached to the petition, including proof of publication of the notice, its personal service or service by registered mail to all members and posting;
c. If the petition is sufficient in form and substance, the Regional Office of the HLURB shall, by an order reciting the purpose of the petition, fix a date on or before which objections thereto may be filed by any person, which date shall not be less than thirty (30) days nor more than sixty (60) days after the entry of the order. Before such date, a copy of the order shall be published at least once a week for three (3) consecutive weeks in a newspaper of local circulation in the municipality or city where the principal office of the association is situated, or if there is no such newspaper, then in a newspaper of general circulation in the Philippines, and a similar copy shall be posted for three (3) consecutive weeks in three (3) public places in such municipality or city and in the bulletin board of the association.
d. . Upon five (5) days’ notice, given after the date on which the right to file objections as fixed in the order has expired, the Regional Office shall proceed to hear the petition and try any issue made by the objections filed; and if no such objection is sufficient, and the material allegations of the petition are true, it shall render judgment dissolving the association and ordering such disposition of its assets as justice requires, and may appoint a management committee to collect such assets and pay the debts of the association.
Please take note that a homeowners’ association may also be dissolved by shortening its corporate term. In such a case, a voluntary dissolution may be made by amending the articles of association to shorten the term of the existence of the association. A copy of the amended articles of association shall be submitted to the Regional Office of the HLURB. Upon approval by the Regional Office of the amended articles of association or expiration of the shortened term, as the case may be, and upon such terms as may protect the rights of creditors whose claims against the association may be affected, the association shall be deemed dissolved without any further proceedings.
Also, the association may be dissolved by the Regional Office of the HLURB upon the filing of a verified complaint and after proper notice and hearing on the grounds provided by existing laws, rules and regulations.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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