OFFICE ORDER NO.

______
Series of 2021

SUBJECT : GUIDELINES OF EMPLOYEES ON THE EXPULSION OF MEMBER-

BENEFICIARY OF COMMUNITY ASSOCIATION
____________________________________________________
In the interest of service, the following guidelines shall govern the expulsion of member-beneficiaries
(MBs) of the Community Mortgage Program (CMP) and High-Density Housing (HD) Program of the
Social Housing Finance Corporation (SHFC). These guidelines are hereby promulgated to improve and
facilitate the expulsion process to ensure that the housing programs of the corporation reach the intended
beneficiaries in accordance with the applicable laws, rules and regulations. 1

I. Definition of Terms

For purposes of this Order, the following terms shall mean:

a. By-laws - refer to rules of action adopted by the association for its internal government
and for the government of its members and those having the direction, management and
control of its affairs in their relation to the association and as among themselves.
b. Expulsion – refers to the action of permanently depriving a MB of his/her membership in
an association on the grounds and process laid down by the by-laws and as determined by
the Board of Directors of the CA;
c. Member in Good Standing – refers to a MB who has faithfully complied with his/her
duties and obligations as provided by the law, rules and regulations, and the by-laws. 2
d. Professional Squatters – refer to individuals or groups who occupy lands without the
express consent of the landowner and who have sufficient income for legitimate housing.
The term shall also apply to persons who have previously been awarded home lots or
housing units by the Government but who sold, leased or transferred the same and settled
illegally in the same place or in another urban area, and non-bonafide occupants and
intruders of lands reserved for socialized housing. The term shall not apply to individuals
or groups, who simply rent land and housing from professional squatters or squatting
syndicates.
e. Squatting syndicates – refer to groups of persons engaged in the illegal business of'
squatter housing for profit or gain.3

II. Coverage

This Order shall serve as guide to all employees applicable to all CAs that seek to expel or
terminate the membership of a MB based on the grounds and process pursuant to the by-laws
of the Community Association and determined by their respective Board of Directors
1
This guideline was an offshoot from the meeting conducted last March 31, 2021 among Atty. Leo Deocampo, OIC SVP - LPPE Group; Mr.
Joeen Buensalido, Manager of Remedial Division; Remedial Division Personnel; and Atty. Ma. Lorina Rigor, Chairperson, DHSUD-ENCRFO-
BAC, where Atty. Rigor recommended that substitution shall carry with it the process of expulsion whilst observing due process when asked if
SFHC may initiate substitution in the event that the CA failed to obtain the simple majority requirement.
2
HLURB Board Resolution No. 960 Series of 2017
3
Section 27, RA 7279 Urban Development and Housing act of 1992
III. Grounds for Expulsion

Pursuant to Article 3, Section 10 of the by-laws of the association, an MB may be expelled on

the following grounds:

a. Default in the payment of association dues specified in Article IV hereof, for a period
of thirty (30) days from written demand;
b. Ceasing to be a member in good standing, as determined by the board of directors
and trustees, after due notice and hearing;
c. Repeated violation of any of the provisions of the articles of incorporation, by-laws
or existing rules and regulations of the association and exhibiting conduct inimical to
the interest of the association as determined by the board of directors or trustees, after
due notice and hearing.4

IV. Process for Expulsion with Active Board of Officers

The procedure of expelling member has been outlined in the following manner in accordance
with the by-laws of the association:
a. The Board or committee assigned by the board shall determine whether a member
committed any of the above-mentioned grounds for expulsion;
b. The President or the designated officer of the association shall forthwith notify the
said member in writing of the ground for expulsion committed and require him to
explain in writing within fifteen (15) days from the receipt of the notice, why he
should not be expelled;
c. After the lapse of fifteen (15) days, with or without explanation, the President or the
designated officer shall submit the matter to the Board or committee for hearing and
deliberation;
d. Thereafter, the member maybe expelled by the majority vote of all members of the
Board;
e. A Board Resolution adopting and declaring the expulsion of a member shall be made
and issued by the Board of Directors;5
f. The Board Resolution adopting and declaring the expulsion of the member shall be
submitted to the Department of Human Settlement and Urban Development
(DHSUD) within thirty (30) days from its adoption pursuant to Section 47 of the
Implementing Rules and Regulations of RA No. 99046; and
g. Upon approval of the Board Resolution adopting and declaring the expulsion of a
member, the President or the designated officer of the association shall forthwith
notify the SHFC.

4
Article 3, Section 10 By-Laws
5
Section 14, Implementing Rules and Regulations of RA No. 9904
Article 6, Section 10 By-Laws
Arroyo v. Rosal Homeowners Association, Inc. (G.R. No. 175155; October 22, 2012)
6
Section 47, Implementing Rules and Regulations of RA No. 9904
V. Process of Expulsion of MB with Inactive Board of Officers

A. Rationale

In the interest of due process requirement embodied in the Philippine Constitution, the
procedure of expelling an MB belonging to a community association with inactive set of
officers shall be guided by the methods found in the Deed of Assignment, Collection
Agreement and CMP Corporate Circular No. 17-048.

B. Process

1. The SHFC shall send demand letter to the member in writing requiring him to pay
and update his account;
2. After the lapse of fifteen (15) days, upon failure of the MB to update his account, the
SHFC shall notify said MB of his status as a member not in good standing;
3. After the lapse of fifteen (15) days from the receipt of notice, SHFC shall cause the
publication of the status of the MB;
4. SHFC shall notify Department of Human Settlement and Urban Development
(DHSUD) within thirty (30) days from its adoption pursuant to Section 47 of the
Implementing Rules and Regulations of RA No. 9904. Otherwise, the declaration of
members as not in good standing shall not be enforceable;
5. The CA can conduct election enabling them to have legal personality and
representation to any legal transactions;
6. After the conduct of election, the CA shall submit DHSUD Certification or
Acknowledgement Receipt on submission of general information sheet (GIS) on the
present set of officers or directors.

VI. SHFC’s Extent of Participation on National Drive Against Squatters and Squatting
Syndicate (NDAPSSS)

A. Non-member
CA shall initiate the expulsion of non-member through the assistance of Local
Government Units.

B. Member
Upon declaration as expelled MB, the member shall be considered as professional squatter.
Should the declared evictee refused to vacate the premises upon demand and after notifying
the LGU concerned, the latter, in cooperation with the PNP, PCUP, and PCUP- accredited
urban poor organizations in the area, shall adopt measures to identify and effectively curtail
the nefarious and illegal activities of professional squatters and squatting syndicates in
accordance with National Drive Against Squatters and Squatting Syndicate (NDAPSSS).
 Any person or group identified as such shall be summarily evicted and their dwellings or
structures demolished, and shall be disqualified from availing the benefits of the program. 7

VII. Documentary Requirements

In accordance with RA No. 9904 and other pertinent rules and regulations, the following
documents shall be submitted by the CA to SHFC as proof that the process of expulsion has
been initiated for substitution:

a. Demand letter sent to the member sought to be expelled;

b. Report of the treasurer or the association’s financial records reflecting the member’s
failure to pay association dues specified in Article IV of the by-laws of the
association;
c. Documents and other records in support of the fact of ceasing of a member to be in
good standing, as determined by the board of directors and trustees;
d. Notice of Reported Alleged Violation of any existing provisions of the articles of
incorporation, by-laws or existing rules and regulations of the association, stating the
finding of facts, the nature of the violations, and the corresponding penalty, attaching
therewith any documents/s or things in support thereof;
e. Written explanation of the member sought to be expelled, if any; and
f. Board Resolution adopting and declaring the expulsion of a member and the proof
that it has been submitted to DHSUD. Otherwise, the delisting or expulsion of
members shall not be enforceable.8

VIII. Effects of Expulsion

Upon enforceability through the report to DHSUD of the expulsion, the rights and privileges
of the MB shall be terminated giving the CA the power to evict said MB.

IX. Substitution of Expelled Member

Upon enforceability through the report of CA to DHSUD of the expulsion, the SHFC may
initiate and apply for the substitution of the said MB pursuant with its inherent powers under
the contract with the CA.
When the Substitution Committee of SHFC approved the substitution process, the latter shall
forthwith notify the DHSUD in accordance with RA No. 9904.

7
Section 27, RA 7279 Urban Development and Housing act of 1992; Primer on National Drive Against Squatters and
Squatting Syndicate
8
Section 47 of the IRR of RA 9904.
X. Responsible for Implementation

The responsible units shall enforce the proper implementation of this Order.

XI. Effectivity

This Order takes effect immediately. All office policies, office orders and memoranda or
parts thereof inconsistent with any provisions of this order are deemed modified or repealed
accordingly.

ATTY. ARNOLFO RICARDO B. CABLING

President

Date approved:____________________.