The Supreme Court (SC) ruled that homeowners’ associations may sanction on members who fail to pay association dues but cannot restrict their use of subdivision roads and other common areas, clarifying the limits of associations’ disciplinary powers under the Magna Carta for Homeowners and Homeowners’ Associations. 

In a decision penned by Associate Justice Alfredo Benjamin S. Caguioa, the SC Third Division held that while delinquent members may be deprived of certain basic community services and facilities, they retain the full right to use common areas such as roads. 

“[D]elinquent, nonpaying members retain the full right to use common areas such as the roads,” the Court said. 

FACTS AND ISSUE

The case stemmed from a dispute between spouses Linley and Juvy Retirado, homeowners in La Costa Brava Subdivision, and the directors and officers of the La Costa Brava Homeowners’ Association Inc. (LCBHAI). The spouses failed to pay their monthly association dues from 2016 to 2021 and were declared delinquent members. 

The association subsequently imposed sanctions that included barring deliveries of food, gas and other items to their residence; preventing empty taxis, tricycles and Grab vehicles from entering the subdivision to fetch them; restricting the entry of their guests; and imposing fees on vehicles delivering supplies and construction materials. 

The spouses filed a complaint before the Human Settlements Adjudication Commission (HSAC), which found the association’s board resolutions contrary to law for restricting the use of and passage through subdivision roads and permanently disqualified the association officers from holding office in LCBHAI. The ruling was affirmed by the HSAC Second Division and later by the HSAC En Banc. 

The officers appealed to the Court of Appeals (CA), which dismissed their petition on procedural grounds, including defective service, and subsequently denied reconsideration. They then brought the case to the SC, raising the issue of whether the CA gravely abused its discretion in dismissing their appeal. 

RULING

The SC dismissed the petition and affirmed the CA resolutions, finding the petition procedurally defective and without merit.  

The Court held that the officers availed themselves of the wrong remedy by filing a petition for certiorari under Rule 65 instead of a petition for review on certiorari under Rule 45. Even if treated as a Rule 45 petition, it was filed beyond the prescribed 15-day period. The SC also found no grave abuse of discretion in the CA’s dismissal of the appeal for defective service.  

Nevertheless, the Court addressed the merits and clarified the limits of a homeowners’ association’s authority to sanction delinquent members under Republic Act No. 9904.

In laying down the framework governing the rights of homeowners’ associations and delinquent members under RA 9904, the Court said association members have two separate rights: the right to avail themselves of and enjoy basic community services and facilities, and the right to use common areas, including roads. 

While homeowners’ associations may sanction members declared delinquent in accordance with their bylaws, the SC held that this authority is not absolute. Associations may restrict delinquent members’ access to or enjoyment of basic community services and facilities but cannot deprive them of the right to use common areas. 

Delinquent homeowners therefore retain the full right to use subdivision roads, which the Court said includes their free use for transportation and the delivery of basic goods. 

Applying this rule, the Court found unlawful the restrictions on food and gas deliveries, guests, and taxis, tricycles and Grab vehicles because they interfered with the spouses’ use of subdivision roads. By contrast, restrictions on grass-cutting or maintenance and reduced garbage collection were permissible because they involved basic community services rather than access to common areas. 

The Court also upheld the officers’ permanent disqualification from holding office in the association, finding their violation serious and grave because restricting the use of roads hampered basic functions such as transportation and the delivery of basic goods. 

“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 Court said. “Here, petitioners failed to do so.” 

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