Compilation of Laws on Real Estate Subdivision Projects/Developments; Department of

Human Settlements and Urban Development (DHSUD); HLURB and its successor
office/agency under the newly created DHSUD

REPUBLIC ACT No. 11201

An Act Creating the Department of Human Settlements and Urban Development, Defining its
Mandate, Powers and Functions, and Appropriating Funds Therefor

Be it enacted by the Senate and House of Representatives of the Philippine Congress Assembled:

CHAPTER I
TITLE AND DECLARATION OF POLICY

Section 1. Short Title. - This Act shall be known as the "Department of Human Settlements and Urban
Development Act".

Section 2. Declaration of Policy. - The State shall, pursuant to Section 9, Article XIII of the
Constitution, ensure that underprivileged and homeless citizens have access to an adequate, safe,
secure, habitable, sustainable, resilient and affordable home.The State shall, by law and for the
common good, undertake, in cooperation with the private sector, a continuing program of housing and
urban development which shall make available at affordable cost, decent housing and basic services
to underprivileged and homeless citizens in urban centers and resettlement areas. It shall also promote
adequate employment opportunities to such citizens. In the implementation of the program, the State
shall respect the rights of small property owners.

The State shall pursue the realization of a modern, humane, economically-viable, and
environmentally-sustainable society where the urbanization process is manifest in towns and cities
being centers of productive economic activity and is led by market forces; where urban areas have
affordable housing, sustainable physical and social infrastructure and services facilitated under a
democratic and decentralized system of governance; and where urban areas provide the opportunities
for an improved quality of life and the eradication of poverty.

The State shall ensure that poor dwellers in urban and rural areas shall not be evicted nor their dwelling
demolished, except in accordance with law.

In addition, the State shall encourage on-site development in the implementation of housing programs
and shall promote the creation of new settlements and development of sustainable urban renewal
programs while guaranteeing the preservation of agricultural lands necessary for food security.

CHAPTER II
DEFINITION OF TERMS

Section 3. Definition of Terms. - As used in this Act, the following terms are defined as follows:

(a) Abandoned subdivision or condominium refers to a project whose development has not
been completed in accordance with the approved development plan despite the lapse of at
least ten (10) years from the target date of completion and it appears that said project owner
 or developer has no intention to complete the project development or, despite diligent effort
for at least the last five (5) years, the project owner or developer cannot be located;

(b) Comprehensive Land Use Plan (CLUP) refers to the document, formulated by the local
government in consultation with its stakeholders, that defines or provides guidelines on the
allocation, utilization, development and management of all lands within a given territory or
jurisdiction according to the inherent qualities of the land itself and supportive economic,
demographic, socio-cultural and environmental objectives;

(c) Housing refers to a multi-dimensional concept relating to the process of residing and the
objects of dwelling whose main attributes are location relative to access to livelihood, tenure
arrangements, cost and physical structure, as well as their environment. Housing is likewise a
physical structure as well as a social structure, functioning at different spatial scales from
homes, neighborhoods, communities, municipalities, cities, provinces, and regions. It is also a
sector of the economy, an important category of land use in both urban and rural areas,
especially in cities, and is an important factor in the overall dynamics of the urban system;

(d) Human Settlements comprise of (a) physical components of shelter and infrastructure; and
(b) services to which the physical elements provide support, such as community services
which include education, health, culture, welfare, recreation and nutrition;

(e) Informal Settler Families (ISFs) refer to households living in a lot, whether private or public,
without the consent of the property owner; or those without legal claim over the property they
are occupying; or those living in danger areas such as esteros, railroad tracks, garbage dumps,
riverbanks, shorelines, and waterways;

(f) People’s plan refers to the plan formulated by the beneficiary-association, which shall
contain a site development plan that conforms to the CLUP of the local government unit under
whose jurisdiction the project site is proposed to be located, including community health,
sanitation, and security plans, as well as non-physical development components such as self-
help housing cooperative, livelihood, self-help development, capability building, and a system
of allocation of socialized housing units that promote and protect the welfare of the elderly,
persons with disability, and children;

(g) Public housing is housing that is owned and/or managed by the government for the purpose
of providing housing to underserved families;

(h) Urban Development refers to the process of occupation and use of land or space for
activities such as residential, industrial, commercial and the like or their combinations,
necessary to carry out the functions of urban living. It entails the building or rebuilding of more
or less permanent structures over land that is often withdrawn or converted from its original
use, resulting in the creation of a built environment; and

(i) Urban Development Planning refers to the process that involves the planning of diverse
elements that comprise an urbanizing and urbanized area, including its physical infrastructure,
environment, housing, transportation and management of land use and urban growth.

CHAPTER III
DEPARTMENT OF HUMAN SETTLEMENTS AND URBAN DEVELOPMENT

Section 4. Creation and Mandate of the Department of Human Settlements and Urban Development. -
There is hereby created the Department of Human Settlements and Urban Development, hereinafter
referred to as the Department, through the consolidation of the Housing and Urban Development
Coordinating Council (HUDCC) and the Housing and Land Use Regulatory Board (HLURB). The
Department shall act as the primary national government entity responsible for the management of
housing, human settlement and urban development. It shall be the sole and main planning and policy-
making, regulatory, program coordination, and performance monitoring entity for all housing, human
settlement and urban development concerns, primarily focusing on the access to and the affordability
of basic human needs. It shall develop and adopt a national strategy to immediately address the
provision of adequate and affordable housing to all Filipinos, and shall ensure the alignment of the
policies, programs, and projects of all its attached agencies to facilitate the achievement of this
objective.

Section 5. Powers and Functions. - The Department shall exercise the following powers and
functions:

I. Policy Development, Coordination, Monitoring and Evaluation

(a) Formulate a national housing and urban development policies, strategies and standards
that are consistent with the Philippine Development Plan to promote social and economic
welfare, in coordination and in consultation with national and local stakeholders, local
government units (LGUs), and other government agencies;

(b) Formulate housing finance and production policies, recommend and facilitate the
development of mechanisms that promote the establishment of a self-sustaining housing
finance and housing delivery systems in coordination with the relevant agencies;

(c) Formulate housing policies and programs, such as public housing, in coordination with the
attached agencies, for the homeless and underprivileged families;

(d) Conduct continuing and comprehensive studies and research necessary for housing and
urban development;

(e) Formulate a framework for resilient housing and human settlements as a basis for the
mechanisms for post-disaster housing and resiliency planning, research and development,
extension, monitoring and evaluation of programs, projects and activities to protect vulnerable
communities from the adverse effects of climate change and disasters; and

(f) In the exercise of its oversight functions, develop and establish a sector performance
monitoring and assessment mechanism to accurately and independently report on the
performance of national government agencies and LGUs involved in the housing and urban
development.

II. Environmental, Land Use and Urban Planning and Development

(a) Develop and maintain a shelter and urban development management, standards and
monitoring information system which shall include, but not be limited to, the following data sets:
inventory of idle lands, CLUPs, inventory of housing stocks, and list of
beneficiaries: Provided, That notwithstanding this provision, all existing CLUPs duly approved
and being implemented by the LGUs shall remain in full force and effect for the duration of the
period as stated therein: Provided, further, That upon enactment of this Act, LGUs may
improve, amend and enhance their existing CLUPs in accordance with the standards set by
the Department;
 (b) Provide technical assistance to provinces, cities and municipalities in building their
capability to undertake housing and urban development and management, such as, but not
limited to: creating a Local Housing Board (LHB) or similar entity; formulating CLUPs and local
shelter plans (LSPs); and strengthening local government compliance with housing and urban
development laws, standards and guidelines;

(c) Assist the LGUs in the utilization of the socialized housing tax, as provided in Section 43 of
Republic Act No. 7279, and other sources of funds for housing which shall be exclusively used
for new settlement projects, and other housing, urban development and renewal projects;

(d) Own and administer government-owned lands, whether owned by the national government
or any of its subdivisions, instrumentalities, or agencies, including government-owned or -
controlled corporations (GOCCs) and their subsidiaries, which have not been used for the
purpose for which they have been originally reserved or set aside for at least ten (10) years
and identified by the Department as suitable for urban development, particularly for housing
purposes: Provided, That the lands held in trust by the GOCCs for and on behalf of their
members shall be excluded from the coverage hereof;

(e) Formulate and prescribe land use planning and zoning standards and regulations for the
guidance of cities and municipalities in the formulation of their respective CLUPs; and >

(f) Develop and implement a comprehensive plan for the establishment of government centers
in the country.

III. Housing and Real Estate Development Regulation

(a) Develop mechanisms and implement programs, in coordination with attached agencies
and concerned agencies, that will initiate and promote the establishment of estate and new
towns, new settlements, urban renewal programs, and prototypes of housing and urban
development interventions, including the people’s plan approach, while encouraging the
participation therein of local government partnerships with civil society organizations,
nongovernment organizations, private groups and communities;

(b) Manage and oversee the development of proclaimed socialized and economic housing
sites, including the use of these land assets as resource mobilization strategy to raise
alternative resources in developing new housing projects and efficient financing programs,
either by itself or through its attached agencies;

(c) Implement a single regulatory system that shall govern all activities relative to the planning,
production, marketing, and management of housing and urban development projects; and

(d) Take over unfinished, incomplete or abandoned licensed real estate development projects
under Presidential Decree No. 957, in coordination with the appropriate government agencies
and instrumentalities, under such guidelines as may be formulated. Further, the Department
shall be in charge of regulating the use of road and street systems of projects taken over under
this provisions.

IV. Homeowners Association and Community-Development

(a) Register, regulate and supervise the homeowners associations (HOAs) in subdivision
projects and government housing projects;
 (b) Provide technical assistance to encourage housing cooperatives and civil society
organizations to serve as the implementing agencies of their housing and urban development
programs;

(c) Promote and encourage partnerships between the government and private sectors for the
provision of decent housing, suitable living environment, and expanded economic
opportunities specially for the homeless and underprivileged citizens; and

(d) Effect and oversee a single regulatory system that shall govern all activities relative to the
planning, development, production, marketing, and management of housing and urban
development projects, without encroaching on the jurisdiction of other agencies.

V. General Powers

(a) Enter into contracts, joint venture agreements or understanding, public-private

partnerships, and memoranda of agreement or understanding, either domestic or foreign,
under such terms and conditions as the Department may deem proper and reasonable subject
to existing laws;

(b) Receive, take and hold by bequest, device, gift, purchase or lease, either absolutely or in
trust for any of its purposes from foreign and domestic sources, any asset, grant or property,
real or personal, subject to such limitations provided under existing laws and regulations;

(c) Discharge all responsibilities of government that may arise from treaties, agreements and
other commitments on human settlement and urban development to be extended through
bilateral or multilateral loans and/or assistance programs;

(d) Determine, fix and collect reasonable amounts to be charged as fees and charges
necessary for the effective implementation of all laws, rules and regulations enforced by the
Department and impose reasonable fines and penalties for violation thereof: Provided,
however, That all income generated from fees, fines, charges, and other collections shall be
deposited with the National Treasury as income of the general fund;

(e) Recommend new legislation and amendments to existing laws as may be necessary for
the attainment of government’s objectives in housing;

(f) Promote, accredit and regulate the use of indigenous materials and technologies in the
housing construction;

(g) Implement prototype projects in housing and urban development undertakings, with the
right to exercise the power of eminent domain, when necessary;

(h) Open roads of subdivisions to the public when the general welfare requires it upon
consultation with stakeholders; and

(i) Perform such other related functions as may be mandated by law.

Section 6. Composition. - The Department shall be composed of the Office of the Secretary, and the
various bureaus, services and regional offices. The Office of the Secretary shall house the Office of
the Department Secretary, the Offices of the Undersecretaries, the Offices of the Assistant
Secretaries, and their immediate support staff.
Section 7. The Secretary. - The Secretary shall have the following functions:

(a) Advise the President of the Philippines on matters related to housing, human settlements,
and rural and urban development;

(b) Establish policies and standards for the efficient and effective operations of the Department
in accordance with programs of the government;

(c) Promulgate rules, regulations and other issuances necessary in carrying out the
Department’s mandate, objectives, policies, plans, programs and projects;

(d) Exercise control and supervision, including disciplinary powers over officers and
employees of the Department in accordance with law, including their investigation and the
designation of a committee or officer to conduct such investigation;

(e) Exercise control and supervision, including disciplinary powers over officers and
employees of the attached agencies in accordance with law, including their investigation and
the designation of a committee or officer to conduct such investigation;

(f) Designate and appoint officers and employees of the Department, excluding the
Undersecretaries, Assistant Secretaries, and Regional and Assistant Regional Directors, in
accordance with the civil service laws, rules and regulations;

(g) Coordinate with other agencies and instrumentalities of the government to ensure the
effective and efficient implementation of housing and urban development programs;

(h) Formulate such rules and regulations and exercise such other powers as may be required
to implement the objectives of this Act; and

(i) Perform such other functions as may be provided by law or assigned by the President.

The Secretary shall also serve as a voting member of the National Economic and Development
Authority (NEDA) Boarth the governing Boards of the Climate Change Commission (CCC), the
National Disaster Risk Reduction and Management Council (NDRRMC), and the National Land Use
Committee (NLUC).

Section 8. The Undersecretaries and Assistant Secretaries. - The Secretary shall be assisted by three
(3) Undersecretaries and three (3) Assistant Secretaries, who shall be appointed by the President,
upon the recommendation of the Secretary: Provided, That at least one (1) Undersecretary and one
(1) Assistant Secretary shall be career officers. They shall have the powers and functions as provided
for in Chapter 2, Book IV of the Administrative Code of 1987. The Secretary is further authorized to
delineate and assign other functional areas or responsibilities of the Undersecretaries and Assistant
Secretaries.

Section 9. Qualifications and Appointment. - No person shall be appointed Secretary, Undersecretary

and Assistant Secretary of the Department unless he or she is a citizen and resident of the Philippines,
of good moral character, of proven integrity, competence and expertise in housing, urban planning
and development.

Section 10. Department Bureaus and Regional Offices. - The Department shall establish, operate,
and maintain Bureaus under it such as. but not limited to:
 (a) Environmental, Land Use and Urban Planning and Development;

(b) Housing and Real Estate Development Regulation; and

(c) Homeowners Associations and Community Development.

As may be necessary, a regional office may be established in the administrative regions of the country.

Section 11. Structure and Staffing Pattern. - Subject to the approval of the Department of Budget and
Management (DBM), the Secretary shall determine the organizational structure and create new
divisions or units as may be necessary, and appoint officers and employees of the Department and
the Commission hereinafter created under Section 12 in accordance with the civil service laws, rules
and regulations. The remuneration structure of the position in the staffing pattern shall strictly conform
to Republic Act No. 6758, otherwise known as the Salary Standardization Law, as amended.

CHAPTER IV
HUMAN SETTLEMENTS ADJUDICATION COMMISSION

Section 12. Reconstitution of the HLURB as the Human Settlements Adjudication Commission
(HSAC). - The HLURB is hereby reconstituted and shall henceforth be known as the Human
Settlements Adjudication Commission, hereinafter referred to as the "Commission".

The adjudicatory function of the HLURB is hereby transferred to the Commission and shall be attached
to the Department for policy, planning and program coordination only.

Section 13. Composition, Staffing Pattern and Compensation. -

(a) The Commission shall be composed of the following:

(1) Commission en banc – Five (5) Commissioners appointed by the President shall
comprise the Commission.

The Executive Commissioner, chosen by the President from among the five (5)
Commissioners, shall be responsible for the administration and operations of the
Commission, including the supervision of personnel, and shall be assisted by the
Executive Clerk of the Commission.

(2) Regional Adjudication Branch – There shall be as many Regional Adjudication

Branches as there are Regional Offices of the Department. The President shall appoint
as many Regional Adjudicators as may be necessary upon the recommendation of the
Secretary.

(b) Subject to the approval of the DBM, the Commission shall determine its organizational
structure and create new divisions or units as it may deem necessary, and shall appoint
officers and employees of the Commission in accordance with the civil service laws, rules and
regulations. The remuneration structure of the positions in the staffing pattern shall, strictly
conform to Republic Act No. 6758 or the Salary Standardization Law, as amended.

Section 14. Qualifications and Terms of Office. - The qualifications and terms of office are as follows:
 (a) Commissioner – Each Commissioner must be a natural born citizen of the Philippines, of
good moral character and has been engaged in the practice of law and a member of the
Philippine Bar of good standing for a period of at least ten (10) years prior to the
appointment: Provided, That all nominees shall have experience in urban development
planning, sustainable development, climate change adaptation, disaster risk reduction and/or
real estate development.

Each Commissioner shall hold office for six (6) years. In case of death, permanent disability,
removal from office, resignation and incapacity to discharge the duties of office, the person
appointed as Commissioner shall only serve the unexpired term: Provided, That the term of
office of the incumbent Commissioners shall be respected.

(b) Regional Adjudicator – Each Regional Adjudicator must be a citizen of the Philippines, of
good pioral character, has been in the practice of law and member of the Philippine Bar of
good standing for at least seven (7) years, with at least three (3) years’ experience in realty
and/or land use and development cases, prior to the appointment: Provided, That the existing
HLURB Arbiters are deemed qualified.

Each Regional Adjudicator shall hold office on good behavior until otherwise incapacitated or
has reached the retirement age in accordance with law, rules and regulations promulgated by
duly constituted authorities, whichever comes earlier.

Section 15. Jurisdiction of the Commission. - The Commission shall have the exclusive appellate
jurisdiction over:

(a) All cases decided by the Regional Adjudicators; and

(b) Appeals from decisions of local and regional planning and zoning bodies.

The decision of the Commission shall be final and executory after fifteen (15) calendar days from
receipt thereof by the parties.

Section 16. Jurisdiction of Regional Adjudicators. - The Regional Adjudicators shall exercise original
and exclusive jurisdiction to hear and decide cases involving the following:

(a) Cases involving subdivisions, condominiums, memorial parks and similar real estate
developments:

(1) Actions concerning unsound real estate business practices filed by buyers or
homeowners against the project owner or developer, which cause prejudice to the
buyers or committed with bad faith and disregard of the buyers’ rights;

(2) Claims for refund, and other claims filed by subdivision lot or condominium unit
buyer against the project owner, developer, dealer, broker or
salesman: Provided, That when the cause of action arises from the buyer’s rights
under Section 23 of Presidential Decree No. 957 and the purchase price of the property
is paid through a housing loan from a bank or other financing institutions, the latter
shall be impleaded as necessary party;
 (3) Cases involving specific performance or contractual and statutory obligations
arising from the sale of the lot or unit and development of the subdivision or
condominium project;

(4) Disputes involving the open spaces or common areas and their use filed by the
project owner or developer or the duly registered HOA, including the eviction of
informal settlers therein, in accordance with the requirements of law, and the rules and
regulations promulgated by duly constituted authorities;

(5) Suits to declare subdivision, condominium or other real estate developments within
the regulatory jurisdiction of the Department as abandoned, as defined under Section
3 of this Act for the purpose of Section 35 of Presidential Decree No. 957;

(6) Disputes involving easements within or among subdivision projects; and

(7) Actions to annul mortgages executed in violation of Section 18 of Presidential

Decree No. 957 filed by a subdivision lot or condominium unit buyer against the project
owner and/or developer and the mortgagee.

(b) Cases involving Homeowners Associations:

(1) Controversies involving the registration and regulation of HOAs;

(2) Intra-association disputes or controversies arising out of the relations between and
among members of HOAs; between any or all of them and the HOA of which they are
members;

(3) Inter-association disputes or controversies arising out of the relations between and
among two (2) or more HOAs between and among federations and other umbrella
organizations, on matters pertaining to the exercise of their rights, duties and functions;
and

(4) Disputes between such HOA and the State, insofar as it concerns their individual
franchise or right to exist and those which are intrinsically connected with the regulation
of HOAs or dealing with the internal affairs of such entity.

(c) Disputes involving the implementation of Section 18 of Republic Act No. 7279, as amended,
and its Implementing Rules and Regulations.

(d) Disputes or controversies involving laws and regulations being implemented by the
Department except those cases falling within the jurisdiction of other judicial or quasi-judicial
body.

Section 17. Powers and Authorities of the Commission. - The Commission shall have the power and
authority:

(a) To promulgate rules and regulations governing the hearing and disposition of cases before
it and its Adjudicators, as well as those necessary to carry out its functions;

(b) To administer oaths, summon the parties to a controversy, issue subpoenas requiring the
attendance and testimony of witnesses or the production of such books, papers, contracts,
records, statements of accounts, agreements, and others as may be material to a just
determination of the case;

(c) To hold any person in contempt directly or indirectly and impose appropriate penalties
therefore in accordance with law.

Any person committing any act of misbehavior in the presence of or so near any member of
the Commission or any Adjudicator as to obstruct or interrupt the proceedings before the same,
including disrespect toward said officials, offensive acts toward others, or refusal to be sworn,
or to answer as a witness or to subscribe an affidavit or deposition when lawfully required to
do so, may be summarily adjudged guilty of direct contempt by said officials and shall be
punished by a fine not exceeding Five thousand pesos (₱5,000.00) or imprisonment not
exceeding five (5) days, or both if it be committed against the Commission or any member
thereof; and, if the offense is committed against an Adjudicator, it shall be punishable by a fine
not exceeding One thousand pesos (₱1,000.00) or imprisonment not exceeding one (1) day,
or both.

The person adjudged in direct contempt by the Adjudicator may appeal to the Commission
and the execution of the judgment shall be suspended pending the resolution of the appeal
upon the filing by such person of a bond on condition that he/she will abide by and perform the
judgment of the Commission should the appeal be decided against him/her. Judgment of the
Commission on direct contempt is immediately executory and unappealable. Indirect contempt
shall be dealt with by the Commission or Adjudicator in the manner prescribed under Rule 71
of the Revised Rules of Court (ROC).

(d) To enjoin or restrain, after due notice and hearing, any actual or threatened commission of
any or all prohibited or unlawful acts or to require the performance of a particular act in any
dispute within its jurisdiction which, if not restrained or performed forthwith, may cause grave
or irreparable damage to any party or render ineffectual any decision in favor of such party. In
no case shall a temporary or permanent injunction be issued except after a finding of fact by
the Commission, to the effect that:

(1) Prohibited or unlawful acts have been threatened and will be committed and will be
continued unless restrained, but no injunction or temporary restraining order shall be
issued on account of any threat, prohibited or unlawful act, except against the person
or persons, association or organization making the threat or committing the prohibited
or unlawful act or actually authorizing or ratifying the same after actual knowledge
thereof;

(2) Substantial and irreparable injury to complainant’s property will follow;

(3) As to each item of relief to be granted, greater injury will be inflicted upon
complainant by the denial of relief than will be inflicted upon defendants by the granting
of relief;

(4) Complainant has no adequate remedy at law; and

(5) Public officers charged with the duty to protect complainant’s property are unable
or unwilling to furnish adequate protection.1avvphi1

(e) To exercise such other powers as are implied, necessary, or incidental to carry out the
express powers granted to the Commission.
Section 18. Appeals. - Decisions, awards or orders of the Regional Adjudicators shall be final and
executory unless appealed to the Commission within fifteen (15) calendar days from receipt of such
decisions, awards or orders.

The decision of the Commission upon any disputed matter may be brought upon to the Court of
Appeals in accordance with Rule 43 of the Rules of Court.

Section 19. Execution of Decisions, Orders or Awards. - The Commission or any Regional Adjudicator
may, motu proprio or on motion of any interested party and under such rules as may be duly
promulgated, issue a writ of execution on an order, award or judgment within five (5) years from the
date it becomes final and executory, and by independent action for the enforcement of the order,
award or decision filed with the Regional Adjudication Branch which issued the order, award or
decision.

The Commission shall appoint a Sheriff or such number of Sheriffs, in accordance with the provisions
of the civil service laws, rules and regulatipns, who shall be responsible for the service and execution
of all writs, summonses, and orders and other processes of the Commission.

The Commission may designate special sheriffs and take any measure under existing laws to ensure
compliance with their decisions, orders or awards.

Section 20. Criminal Prosecution. - The criminal prosecution for violation of housing laws and
regulations shall be instituted before criminal courts having appropriate jurisdiction.

CHAPTER V
NATIONAL HUMAN SETTLEMENTS BOARD

Section 21. Creation of a National Human Settlements Board. - The powers and functions of the
attached agencies with respect to policy and program development shall be exercised by a single
Board of Trustees, known as the National Human Settlements Board, hereinafter referred to as the
Board, with the Secretary of the Department as Chairperson and the following as members:

(a) The Director General of NEDA or his/her designated Deputy Secretary General;

(b) The Secretary of Finance or his/her duly designated Undersecretary;

(c) The Secretary of Budget and Management or his/her duly designated Undersecretary;

(d) The Secretary of Department of Public Works and Highways or his/her duly designated
Undersecretary;

(e) The Secretary of the Interior and Local Government or his/her duly designated
Undersecretary; and

(f) The Head of each attached agency of the Department.

Provided, That the Home Development Mutual Fund’s corporate powers and functions shall continue
to be exercised by its own Board of Trustees, as provided for under Republic Act No. 9679.

CHAPTER VI
ATTACHED CORPORATIONS
Section 22. Attached Corporations. - The Department shall exercise administrative supervision over
the following housing agencies, which shall remain to be attached for purposes of policy and program
coordination, monitoring and evaluation:

(a) National Housing Authority (NHA);

(b) National Home Mortgage Finance Corporation (NHMFC);

(c) Home Development Mutual Fund (HDMF); and

(d) Social Housing Finance Corporation (SHFC).

The attached corporations shall continue to function according to existing laws and their respective
Charters, subject to the policy directions of the Board.

The appointment of the Board of Directors or Trustees of the attached GOCCs shall be in accordance
with Republic Act No. 10149, otherwise known as the "GOCC Governance Act of 2011". However,
each of the heads of the attached corporations shall enter into a performance contract annually with
the Secretary in accordance with their respective mandates, which shall be consistent with the national
targets on human settlements and urban development, and the overall administration of the
corporation.

Furthermore, within two (2) years from the effectivity of this Act, the Secretary, in coordination with the
Governance Commission for GOCCs (GCG), shall recommend to the President, the restructuring of
the foregoing corporations guided by the objectives found hereunder:

(a) To eliminate overlaps, if any, in programs, within and among the attached corporations,
that serve the same beneficiaries or clientele;

(b) To identify functions and programs of corporations that properly belong to regular
government agencies such as policymaking, regulation, standard setting, and service
provision from functions that are imbued with commercial motives which require a corporate
structure. Thereafter, line functions shall be transferred to the Department while commercial
functions shall be retained with the corporations;

(c) To clarify the role of each corporation along the housing value chain, including housing
production, primary financing, secondary market development, and housing insurance and
guarantee to promote the development of a comprehensive and synergetic housing industry;
and

(d) To strengthen integration of functions, programs, and services among the corporations and
the Department to leverage limited public resources and maximize the value of housing
products and services offered by the public sector.

Any reorganization, merger, streamlining, abolition or privatization of any attached corporation shall
be formulated and implemented in coordination with the GCG and in consultation with the GOCC
concerned and the relevant provisions of Republic Act No. 10149.

CHAPTER VII
OTHER PROVISIONS
Section 23. Housing One-Stop Processing Centers (HOPCs). - The Department shall establish
HOPCs in the regions, which shall centralize the processing and issuance of all required housing-
related permits, clearances, and licenses in accordance with Executive Order No. 45, series of 2001,
entitled "Prescribing Time Periods for Issuance of Housing Related Certifications, Clearances and
Permits, and Imposing Sanctions for Failure’to Observe the Same": Provided, That for the foregoing
purpose, the respective ceilings for socialized, low cost/economic and middle-income housing shall
be jointly determined by the Department and NEDA: Provided, further, That at any time, but not more
than once every two (2) years, such ceilings may be reviewed or revised to conform to prevailing
economic conditions. 1âwphi1

All agencies involved in the issuance of said permits, clearances and licenses shall be represented in
the HOPC and shall assign to HOPC regional centers personnel who shall be sufficiently authorized
to process and issue the same.

Section 24. Identification and Designation of Lands for Housing and Urban and Rural Development. -
For the purpose of designating lands for housing and urban and rural development, the Department
of Human Settlements and Urban Development (DHSUD), the Department of Environment and
Natural Resources (DENR), the Department of Agrarian Reform (DAR), the Department of Agriculture
(DA), the Department of the Interior and Local Government (DILG), and the Land Registration
Authority (LRA) shall, within one hundred eighty (180) days from the effectivity of this Act, jointly
identify government lands suitable for housing and rural development: Provided, That all government
lands which have been idle for more than ten (10) years, except lands owned by the GOCCs and
government financial institutions engaged in shelter financing as part of its fiduciary obligation to its
members and/or are taken possession of in their ordinary conduct of business, are hereby prioritized
for housing and urban development purposes: Provided, further, That lands exempted from
conversion under existing laws shall be excluded from the coverage of this section: Provided,
finally, That the national lands identified under this section shall be transferred to or administered by
the Department, subject to the approval of the President.

CHAPTER VIII
TRANSITORY PROVISIONS

Section 25. Transfer of Functions and Assets. - The HUDCC and the HLURB are hereby consolidated
and reconstituted as the Department and HSAC, respectively.

The following functions of the HLURB are hereby transferred as stipulated hereunder:

(a) The land use planning and monitoring function, including the imposition of penalties for
noncompliance to ensure that LGUs will follow the planning guidelines and implement their
CLUPs and zoning ordinances shall be transferred to the Department;

(b) The regulatory function, including the formulation, promulgation, and enforcement of rules,
standards and guidelines over subdivisions, condominiums and similar real estate
developments, are hereby transferred to the Department;

(c) The registration, regulation and supervision of HOAs are hereby transferred to the
Department; and

(d) The adjudicatory mandate is hereby transferred to the Commission.

The Department shall, by virtue of this Act, be subrogated to all rights and assume all the liabilities of
the HUDCC and HLURB, except those that may hereafter be transferred to or absorbed by the
Commission.

Section 26. Transition Period. - All transfer of functions, assets, funds, personnel, equipment,
properties, transactions, and personnel in the affected national government agencies and the
formulation and implementation of the internal organic structures, staffing patterns, operations
systems, and revised budgets of the Department and the Commission, shall be completed within six
(6) months from the effectivity of this Act, during which existing personnel shall continue to assume
their posts in holdover capacities until new appointments are issued. Accordingly, all applications for
permits and licenses, and cases pending with HLURB upon the effectivity of this Act and filed during
the transition period shall continue to be acted upon by the incumbents until the rules and regulations
as provided under this Act shall have been in force.

Section 27. Transfer of Assets and Obligations. - The following dispositive actions shall be
implemented within six (6) months from the effectivity of this Act:

(a) The assets, equipment, funds, records, and pertinent transactions of HUDCC and HLURB
shall be transferred to the Department and the Commission; and

(b) The Department and the Commission shall cause the creation of additional positions and
augment their budget appropriations, as may be necessary. 1âw phi 1

Section 28. Absorption or Separation from Service of Employees of the Consolidated Agencies. - The
existing employees of HUDCC and HLURB shall enjoy security of tenure and shall be absorbed by
the Department or the HSAC, in accordance with their staffing patterns and the selection process as
prescribed under Republic Act No. 6656, otherwise known as the "Government Reorganization Law".

Employees opting to be separated from the service as a consequence of the consolidation and
reconstitution under the provisions of this Act shall, within one (1) month from their separation or phase
out from the service, receive separation benefits in accordance with existing laws. In addition, those
who are qualified to retire shall be allowed to" retire and be entitled to all benefits provided, under any
of the existing retirement laws.

Section 29. Implementing Rules and Regulations. - The HUDCC, HLURB, DBM and Civil Service
Commission, in coordination with NHA, SHFC, NHMFC, HDMF and other concerned agencies, shall
prepare and issue the Implementing Rules and Regulations (IRR) of the Department within ninety (90)
days upon the effectivity of this Act.

Section 30. Implementing Authority. - The HUDCC Chairperson is hereby authorized to undertake the
implementation of the provisions of this Act and implement the necessary organizational changes
within the specified six (6)-month transition period or until a Department Secretary has been appointed
and has assumed office.

Section 31. Appropriations. - The amount necessary for the initial implementation of the provisions of
this Act shall be charged against the current year’s appropriations of the HUDCC and HLURB.
Thereafter, such sums as may be necessary for the continued implementation of this Act shall be
included in the annual General Appropriations Act. The Department shall include in its proposed
budget the necessary amount to enable it to achieve its mandate of providing adequate and affordable
housing to all Filipinos.
CHAPTER IX
MISCELLANEOUS PROVISIONS

Section 32. Mandatory Review of the Implementation of this Act. - The Department shall conduct a
review of the implementation of this Act at the end of the third (3rd) year from the date of its effectivity
and submit a report to Congress.

Section 33. Separability Clause. - If, for any reason, any portion or provision of this Act shall be held
unconstitutional or invalid, the remaining provisions not affected thereby shall continue to be in full
force and effect.

Section 34. Repealing Clause. - Executive Order No. 90, s. 1986 and Executive Order No. 648, s.
1981, are hereby repealed. 1âw phi1

All other laws, executive orders, proclamations, rules, regulations, and other issuances or parts thereof
which are inconsistent with the provisions of this Act are hereby amended or modified accordingly.

Section 35. Effectivity - This Act shall take effect fifteen (15) days after its publication in the Official
Gazette or in any newspaper of general circulation.

BATAS PAMBANSA Blg. 220

An Act Authorizing the Ministry of Human Settlements to Establish and Promulgate Different
Levels of Standards and Technical Requirements for Economic and Socialized Housing
Projects in Urban and Rural Areas from Those Provided Under Presidential Decrees Numbered
Nine Hundred Fifty-Seven, Twelve Hundred Sixteen, Ten Hundred Ninety-Six and Eleven
Hundred Eighty-Five

Section 1. It is hereby declared a policy of the Government to promote and encourage the
development of economic and socialized housing projects, primarily by the private sector, in order to
make available adequate economic and socialized housing units for average and low-income earners
in urban and rural areas.

Section 2. As used in this Act, economic and socialized housing refers to housing units which are
within the affordability level of the average and low-income earners which is thirty percent (30%) of
the gross family income as determined by the National Economic and Development Authority from
time to time. It shall also refer to the government-initiated sites and services development and
construction of economic and socialized housing projects in depressed areas.

Section 3. To carry out the foregoing policy, the Ministry of Human Settlements is authorized to
establish and promulgate different levels of standards and technical requirements for the development
of economic and socialized housing projects and economic and socialized housing units in urban and
rural areas from those provided in Presidential Decree Numbered Nine hundred fifty-seven, otherwise
known as the "Subdivision and Condominium Buyers’ Protective Decree," Presidential Decree
Numbered Twelve hundred and sixteen, "Defining Open Space in Residential Subdivision";
Presidential Decree Numbered Ten Hundred and ninety-six, otherwise known as the "National Building
Code of the Philippines"; and Presidential Decree Numbered Eleven hundred and eighty-five,
otherwise known as the "Fire Code of the Philippines" and the rules and regulations promulgated
thereunder, in consultation with the Ministry of Public Works and Highways, the Integrated National
Police, and other appropriate government units and instrumentalities and private associations.

Section 4. The standards and technical requirements to be established under Section three hereof
shall provide for environmental ecology, hygiene and cleanliness, physical, cultural and spiritual
development and public safety and may vary in each region, province or city depending on the
availability of indigenous materials for building construction and other relevant factors.

Section 5. The different levels of standards and technical requirements that shall be established and
promulgated by the Ministry of Human Settlements only after public hearing and shall be published in
two newspapers of general circulation in the Philippines for at least once a week for two consecutive
weeks and shall take effect thirty days after the last publication.

Section 6. This Act shall take effect upon its approval.

Annex A

Rules and Standards for Economic and Socialized Housing Projects to Implement Batas Pambansa

Pursuant to Section 3 of Batas Pambansa Blg. 220 and by virtue of Section 4 (f) of Presidential Decree
1396, the following rules and levels of standards are hereby promulgated.

RULE I
GENERAL PROVISIONS

Section 1. Scope of Application. These rules and standards shall apply to the development of
economic and socialized housing projects in urban and rural areas as defined in Section 2 of BP Blg.
220. They shall apply to the development of either a house and lot or a house or lot only.

These rules and standards shall also apply in the case of individual lot owner who belong to the
category of average of low income earners as defined in BP Blg. 220 and who shall cause the
construction of their houses after the effectivity of these Rules. Section 2. Declaration of Policies. It is
a policy of the government to promote and encourage the development of economic and socialized
housing projects, primarily by the private sector in order to make available adequate economic and
socialized housing units for averaged and low-income earners in urban and rural areas.

RULE II
DEFINITION OF TERMS

Section 3. As used in this rules, the following words and phrases are defined and understood to have
the meaning correspondingly indicated therein.

ALLEY : A public way intended to serve both pedestrian and emergency vehicles, and also access to
lots, both end always connecting to streets.

BLOCK : A parcel of land bounded on the sides by streets or alleys or pathways or other natural or
manmade features, and occupied by or intended for buildings.

CLUSTER HOUSING : A single-family attached dwelling containing three or more separate living units
grouped closely together to form relatively compact structures.
COMMISSION : Shall mean the Human Settlements Regulatory Commission.

COMMUNITY FACILITIES: Facilities or structures intended to serve common needs and for the benefit
of the community, such as: neighborhood/ multi-purpose center, health center, drugstore, school,
livelihood center, etc.

DWELLING : A building designed or used as residence for one or more families.

Single-Family Detached a dwelling for one family which is completely surrounded by permanent open
spaces, with independent access, services, and use of land.

Single-Family Attached a dwelling containing two or more separate living units each of which is
separated from another by party or lot lines walls and provided with independent access, services,
and use of land. Such dwellings shall include duplexes, row houses or terraces, and cluster housing.

Multi-Family Dwelling a dwelling on one lot containing separate living units for 3 or more families,
usually provided with common access, services, and use of land.

ECONOMIC AND SOCIALIZED HOUSING: A type of housing project provided to moderately low
income families with lower interest rates and longer amortization periods.

FIREBLOCK : Any wall which separate two abutting living units so as to resist the spread of fire. Such
wall shall be of masonry construction e.g., cement hollow blocks, bricks, reinforced concrete, etc. at
least "4" thick, and shall extend throughout the whole length of the living units and from the lowest
portion of the wall adjoining the living units up to the point just below the roof covering of purlins.

FIRE-RESISTIVE TIME PERIOD RATING: Fire resistive time period is the length of time a material
can withstand being burned which may be one-hour, 2-hours, 3-hours, 4-hours, etc.

FIRE WALL : A fireblock with extends vertically from the lowest portion of the wall which adjoins the 2
living units up to a minimum height of 0.30 meter above the highest portion of the roof attached to it;
the fire wall shall also extend horizontally up to a minimum distance of 0.30 meter beyond the
outermost edge of the abutting living units.

FRONTAGE : That part or end of a lot which abuts a street.

LIVING UNIT : A dwelling, or portion thereof, providing complete living facilities for one family, including
provisions for living, sleeping, cooking, eating, bathing and toilet facilities and laundry facilities, the
same as a single family-dwelling.

LOT/PLOT : A portion of a subdivision or any parcel of land intended as a unit for transfer of ownership
or for building development.

LOT LINE WALL : A wall used only by the party upon whose lot the wall is located, erected at a line
separating two parcels of land each of which is a separate real estate entity.

OCCUPANCY : The purpose for which a building is used or intended to be used. The term shall also
include the building or room housing such use. Change of occupancy is not intended to include change
of tenants or proprietors.

OPEN SPACE : Shall refer to areas allocated for the following purposes:
Circulation

Community facilities

Park/Playground

Easements

Courts

PARTY WALL : A wall used jointly by two parties under easement agreement, erected upon a line
separating two parcels of land each of which is a separate real estate.

PARK/PLAYGROUND : That portion of the subdivision which is generally not built on and intended for
passive or active recreation.

PATHWALK/FOOTPATH : A public way intended for pedestrian and which cuts across a block to
provide access to adjacent streets or property with maximum length of 100 meters if connecting to
roads and 50 meters if terminating in a dead end.

ROW HOUSE : A single-family attached dwelling containing three or more separate living units
designed in such a way that they abut each other at the sides, as in a row, and are separated from
each other by party walls: provided with independent access, services, and use of land.

TECHNICAL REQUIREMENTS: Shall refer to the set of documents required by the Commission for
the processing and approval of economic and socialized housing projects including systems and
procedures for the implementation and enforcement of BP 220.

RULE III
MINIMUM DESIGN STANDARDS AND REQUIREMENTS FOR ECONOMIC AND SOCIALIZED
HOUSING

Section 4. Compliance with standards required. Development of economic and socialized housing
project shall be in accordance with the minimum design standards herein set forth.

Section 5. Basis and objectives of the minimum design standards. The minimum design standards
set forth herein are intended to provide minimum requirements within the generally accepted levels of
safety, health and ecological considerations. Variations, however are also possible, as may be based
on some specific regional, cultural and economic setting, e.g., building materials, space requirements
and usage. The parameters used in formulating these Design Standards are:

A. Protection and safety of life, limb, property and general public welfare.

B. Basic needs of human settlements, enumerated in descending order as follows:

1) Water

2) Movement and Circulation

3) Storm drainage
 4) Solid and Liquid Waste Disposal

5) Power

6) Park/Playground

The provision of these basic needs shall be based on the actual setting within which
the project site is located.

C. Affordability levels of target market

D. Location

The Actual setting of project site shall determine the type and degree of development to be required
in a subdivision/housing project regardless of political boundaries. With respect to this, the degree on
level of development shall be defined as follows:

1) Underdeveloped Area characterized by the predominant absence of utility systems or

networks, especially water supply, roads and power.

2) Developed Area characterized by the predominant presence of utility systems or network,

especially water supply, roads and power.

Section 6. Technical Guidelines. In determining whether an economic and socialized housing shall
be allowed, the following guidelines shall be considered.

A. Suitability of Site

1. Physical Suitability

A potential site must have characteristics assuring healthful, safe and environmentally
sound community life. It shall be stable enough to accommodate foundation load
without excessive site works. Critical areas (e.g., areas subject to flooding, lands slides
and street) must be avoided.

2. Slope

Flat to rolling terrain (0 to 5%) are preferable but housing development may take place
up to 15% slopes, with flat lands (below 5%) for high density development and sloping
area (5-15%) for low to medium density development. The latter slopes, however,
should be capable of being developed for habitation at reasonable cost with assurance
of stability for vertical construction.

3. Availability of basic needs

The prioritized basic needs cited earlier shall preferably be available within reasonable
distance from the project site, but where these are not available, the same shall be
provided for by the developer.

4. Conformity with the Zoning Ordinance or Land Use Plan of the City/Municipality
 Generally, housing projects should conform with the Zoning Ordinance of the
city/municipality where they are located. However, where there is no Zoning Ordinance
or Land Use Plan, the dominant land use principle and site suitability factors cited
herein shall be used in determining suitability of a project to a site.

Furthermore, if the project is undoubtedly supportive of other land uses and activities,
(e.g., housing for industrial workers) said project shall be allowed.

B. Allowance for future development

Project design should consider not only the reduction of cost of development to a minimum
but also provision for possible future improvement or expansion, as in the prescription of lot
sizes, rights-of-way of roads, open space, allocation of areas for common uses and facilities.

C. Land Allocation

1. Saleable and non-saleable are

There shall be no fixed ratio between saleable portion and non-saleable portion of a
subdivision project.

2. Area allocated for Circulation System

The area allocated for the circulation system shall not be fixed, as long as the
prescribed dimension and requirements for access (to both the project site and to
dwelling units) specified in these Design Standards are complied with.

3. Area allocated for community facilities

Sites for community facilities shall be reserved or allocated by the developer, where
such facilities may be constructed/put up the Homeowners Association as the need
arises. Said sites shall be used exclusively for these facilities as defined in Rule II, and
the area shall be exclusive of that area intended for park/playground.

The area allocated for community facilities shall vary with the density of the
subdivision, i.e., number of lots and/or living units whichever is applicable, as shown
in Table I.

Table 1
Required Area for Community Facilities According to Density

No. of lots and/or living units Areas for Community Facilities % of gross area of
per ha. subdivision
150 and below 1%
151 to 225 1.5%
above 225 2.0%
 Community facilities shall be centrally located where they can serve maximum member
of population, preferably near or side by side the park/playground.

4. Area allocated for Park/Playground

Provision for park/playground is required in all cases.

Allocation of areas for parks and playgrounds shall be exclusive of those allocated for
community facilities and shall vary according to the density of lots and/or living units in
the subdivision, whichever is applicable, as shown in Table 2.

Table 2
Required Area for Park/Playground According to Density

Area for Park/Density Playground

No. of lots and/or living area of units per hectare % of gross subdivision
150 and below 3.5
151 to 225 7.0
above 225 9.0

Location of parks shall be based on hierarchy, accessibility and shall be free from
hazard, risks, barriers, etc.

Landscaping (sodding and tree-planting) shall be done by the subdivision

developer/owner.

Minimum size for a pocket park is 100 square meters.

D. Integration of project site with adjacent property and to the total development
context of the city/municipality.

Land allocation and alignment of the various utilities (roads, drainage, power and
water) of the subdivision should align and be integrated with those of existing networks
as well as projects outside the boundaries of the project site, e.g., access roads (road
connecting project site to the nearest public road) should follow the standard
specification of the MPWH.

Hierarchy of roads (with respect to function and dimensions) shall be observed when
planning the road network within the project site such that no major or minor road align
with an alley or footpath.

Section 7. Design Standards and Planning Considerations. The following design standards and
planning considerations shall be observed by all projects covered by these Rules.

A. Water Supply

1. Underdeveloped Area
 Minimum requirement shall be provision of communal wells.

Water supply must be potable and adequate at least 43 liters per capita per day.
Supply source shall be identified and developed by the project developer/owner.

Whenever a body of water shall be utilized for community waters supply, permits from
the National Water Resource Council (NMRC) shall be obtained. Standards set by the
Regional Water Resource Council (RWRC) on water source development shall be
complied with. Each well shall be allocated approximately four (4) square meters area
which shall form part of the area for community facilities (as defined in Rule II) and
shall not encroach on any saleably lot or right of way.

2. Developed Area

Whenever a public water supply system exists, connection to it by the subdivision is

mandatory. Each lot and/or living unit shall be served with water connection
(regardless of the type of distribution system). Water supply provided by the local water
district shall be complemented/supplemented by other sources, when necessary, such
as communal well which may be located strategically for ease and convenience in
fetching water by residents and at the same time not closer than 300 meters from each
other.

If public water supply system is not available, the developer shall provide for an
independent water supply system within the subdivision project. Minimum quantity
requirement shall be 75 liters per capita per day.

Likewise, required permits from the NWRC shall be obtained and standards of the
Local Water Utilities Administration shall be complied with.

If ground reservoir is to be put up, and area shall be allocated for this purpose (part of
allocation for community facilities). The size shall depend on volume of water intended
to be stored. Provide for protection from pollution namely, buffer of at least 25 meters
from sources of pollution/contamination.

For elevated reservoir, structural design shall comply with accepted structural
standards.

B. Circulation System

1. Circulation system shall be the same in both Underdeveloped Area and a Developed
Area projects except for type of pavement which is adopted on regional or locational
peculiarities of the project site.

Table 3
Heirarchy of Roads

Type of Right-of Road Way Maximum Carriageway Length

Major 8.00 6.00
Minor 6.50 5.00
120 m. (dead end), provide for turn around space. If 50 m. or less, turn around space not
required.
Alley 3.00 3.00
150 m. (both ends connecting to a Minor road), 75 m. (dead end)
Footpath 2.00 2.00
100 m. (both ends connecting to an alley), 50 m. (dead end)

Table 4
Maximum Sizes of Projects Per Heirarchy of Road

Project Range Road Network

Size
above 0 2.50 has Minor road, alley footpath
above 2.50 has Major road, minor road alley, footpath
15.00
above 15.00 has Model B’s major road, then major road to footpath as cited in Table
30.00 3. (Model B of PD 957)
above 30.00 Model A’s collector road, service road, then major road to footpath as
cited in Table 3. Model A of PD 957)

Table 5
Paving Material Specification Per Type of Road

Type of Road Underdeveloped Developed

Footpath aggregates (stones, aggregates rocks, pebble, gravel)
Alley aggregates aggregates
Minor road aggregates macadam
Major road Macadam asphalt

Note: Paving material for roads adopted from Models A and B (PD 957) shall have the
same paving materials as cited herein, i.e., asphalt.

2. Planning Considerations or Circulation Layout

a) Observance of the hierarchy of roads within the subdivision.

b) Conformance to natural topography.

c) Consideration for access and safety e.g. adequate radius, minimum number
of roads at intersections, moderate slope/grade, adequate sight distance, no
blind corners, etc.
 d) Optimization as to number of lots to lessen area for roads, at the same time
enhance community interaction.

e) There shall be no duplications of street names and such names shall not
bear any similarity to existing street names in adjacent subdivision, except
when they are in continuation of existing ones. Street names shall be
recognizable and readable.

The developer shall bear the cost of purchase and installation of street
names/signs coincident with the construction of streets and utilities.

f) Sidewalks shall not be required when drainage system is through open

canals; when drainage canals are covered or underground, the space above
the canals shall be utilized as sidewalk.

C. Drainage System

Drainage system shall be required in all projects.

An open canal on each side of the circulation network shall be provided. Said canal shall have
appropriate slope to effect good drainage. Moreover, the sides of the open canal shall be lined
with grass or stones to prevent erosion. See illustration below.In case of non-existence of
drainage system in the locality, catchment area for drainage discharges shall be provided for
and developed by the developer/owner in consultation with local authorities or private entities
concerned, to prevent flooding of adjacent property. Moreover, said catchment are shall be
made safe and maintained and shall form part of the park/playground requirement.

D. Sewage Disposal System

The minimum requirement for sewage disposal shall be the use of septic tank.

For single detached units and multi-unit buildings, communal septic tanks maybe allowed.

Drainfield area of affluent shall be 25.00 meters minimum distance from any sources of water
(well, spring, etc.).

E. Electrical Power Supply

1. Underdeveloped Area

Electrical power supply is optional. However, the developer shall allocate sufficient
land area for easements for power supply facilities based on existing laws and
regulations.

2. Developed Area

When power is available within the locality of the project site, its connection to the
subdivision is required. Actual connection, however, may depend on the minimum
number of users as required by the power supplier. Installation particles, materials and
fixtures used, shall be in accordance with the provisions of the existing rules and
regulations of the Electrical Code of the local power utility company.
F. Lot sizes

1. Minimum lot area requirement shall be as follows:

a) Detached dwelling unit 72.00 sq. meters

b) Semi-detached dwelling unit

a. corner lot 54.00 sq. meters

b. row house d.u. 36.00 sq. meters

2. Lot Planning consideration (applicable to both Underdeveloped Area and Developed

Area Projects).

a) A lot shall either be served by a road, motor court, an alley or a pathway.

b) Deep lots and irregularly shaped lots shall be avoided.

c) Lot elevation may be at grade, lower or higher than the elevation of the street
but should not be so excessive as to effect good utility connection/run.

d) Lot lines shall be perpendicular or radial to street lines in appropriate cases.

e) Lot shall be protected against non- conforming uses and/or other risk
through provision of adequate buffer strip, protective walls, and roads or other
similar devices. On the other hand, lot shall be laid out that they front desirable
views, such as parks, lagoon, etc.

f) Lot shall be so laid out that water courses/drainage ways do not bisect the
lots.

g) Minimum lot frontages:

Single detached 8.00 meters

Single attached 6.00 meters

Row house/irregular lot 3.50 meters

G. Block Length

Maximum block length is 250 meters. Block length exceeding 250 meters, but not beyond 400
meters, shall be provided by an alley at midlength.

H. Easements

Provisions for easements in both Under-developed Area and Developed Area projects shall
be integrated with utility network/part of right of way.
 I. Other Facilities

1. Garbage Disposal System

Garbage disposal shall be undertaken by the local government or in the absence

thereof by individual lot owners, but shall always observe sanitary practices and
methods.

2. Firefighting

The Homeowners Association shall form fire brigade in collaboration with the barangay
fire brigade. Water for fire fighting shall be part of the water supply requirement and
shall comply with the requirements of the local/district fire unit of the Integrated
National Police.

Section 8. Building Design Standards and Guidelines. Projects incorporation housing components
shall comply with the following design standards and guidelines.

A. Single Family Dwelling

1. Height Limitation Maximum number of stories is two (2).

2. Unit Planning

a. Access to the Property. Direct access to the single-family dwelling shall be

provided by means of an abutting public street, alley or pathway.

b. Access to the dwelling unit. An independent means of access to the dwelling

unit shall be provided without trespassing adjoining properties. Acceptable
means of access to the rear yard of the dwelling unit shall be provided without
passing through any other dwelling unit or any other yard.

c. Open space requirements. Open spaces shall be located totally or

distributed anywhere within the lot in such a manner as to provide maximum
light and ventilation into the building.

Table 6
Private Open Space Requirement

Type of Lot Percent of Open Space

Residential All Others

a. Interior lot (located in the interior of a block made accessible or alley by

means of a private access road) 50% 25%

b. Inside lot (non-corner or single frontage lot) 20% 15%

c. Corner and/or through lot 10% 15%

 d. Lots bounded on three (3) or more sides by public open spaces such as
streets, easement of seashores, rivers, esteros, etc. 5% 5%

d. Sizes and Dimensions of Courts and Yards. The minimum horizontal

dimension of courts and yards shall be not less than 2.0 meters. All inner courts
shall be connected to a street of yard, either by a passageway with a minimum
width of 1.20 meters or by a door through a room or rooms.

Every court shall have a width of not less than 2.0 meters for one and two-
storey buildings. However, this may be reduced to not less than 1.50 meters
in cluster living units such as quadruplexes, row-houses and the like one or
two stories in height with adjacent courts with an area of not less than 3.00
square meters. Provided, further, that the separation walls or fences, if any,
shall be not higher than 2.00 meters. Irregularly shaped lots such as triangular
lots and the like whose courts may be also triangular in shape may be
exempted from having a minimum width of 2.0 meters, provided that no side
thereof shall be less than 3.0 meters.

e. Abutments. Abutments may be permitted on all sides provided that:

a. A fire wall starting from the ground level and extending at least 0.30
meters from the roof line is constructed.

b. There shall be no opening on the party fire wall.

c. The fire wall shall have a minimum of one-hour fire resistive rating.

3. Building Design Standards

a. Space Standards. Spaces within the dwelling structure shall be distributed

in an economical, efficient and practical manner so as to afford the maximum
living comfort and convenience and to insure health and safety among the
occupants. It shall provide complete living facilities for one family including
provisions for living, sleeping, laundry, cooking, eating, bathing and toilet
facilities.

b. Floor Area Requirement. The minimum floor area requirement for single-
family dwelling shall be 20.00 square meters.

c. Ceiling Heights

1. Minimum ceiling height for habitable measured from the finished

floor line to the ceiling line. Where ceilings are not provided, a minimum
headroom clearance of 2.00 meters shall be provided.

2. Mezzanine floors shall have a clear ceiling height of not less than
1.80 meters above and below it, provided that it shall not cover 50% of
the floor area below it.

d. Openings
 1. Doors

a. A minimum of one entrance/exit shall be provided where the

number of occupants is not more than 10; two (2)
entrance/exits where the number of occupants is greater than
10.

b. Doors shall have a minimum clear height of 2.00 meters.

Except for bathroom doors and doors in the mezzanine which
shall have a minimum clear height of 1.80 meters.

c. Minimum clear widths shall be the following:

Main Door 0.80 meters

Service Door/

Bedroom Door 0.70 meters

Bathroom Door 0.60 meters

2. Windows

A. Rooms for habitable use shall be provided with windows

with a total free area of openings equal to at least 10% of the
floor area of the room.

B. Bathrooms shall be provided with window/s with an area not

less than 1/20 of its floor area.

C. Required windows may open into a roofed porch where the

porch:

a) Abuts a court, yard, public street or alley, or open

water course and other public open spaces;

b) Has a ceiling height of not less than 2.00 m.

e. Interior Stairs. The stairs shall ensure structural safety for ascent and
descent, even in extreme cases of emergency. It shall afford adequate
headroom and space for the passage of furniture.

1. Width. Stairways shall have a minimum clear width of 0.60 meters.

2. Rise and Run. Stairs shall have a maximum riser height of 0.25
meters and a minimum tread width of 0.20 meters. Stairs treads shall
be exclusive of nosings and/or other projections.

3. Headroom Clearance. Stairs shall have a minimum headroom

clearance of 2.00 meters. Such clearance shall be established by
 measuring vertically from a place parallel and tangent to the stairway
tread moving to the soffit above all points.

4. Landings. Every landing shall have a dimension measured in the

direction of travel equal to the width of the stairway. Maximum height
between landing shall be 2.60 meters.

5. Handrails. Stairways shall have at least one handrail on one side

provided there is a guard or wall on the other side. However, stairways
have less than four (4) risers need not have handrails, and stairs with
either a guard or wall on one end need not be provided with a handrail
on that end.

6. Guard and Handrail details. The design of guards and handrails and
hardware for attaching handrails to guards, balusters or masonry walls
shall be such that these are made safe and convenient.

a. Handrails on stairs shall not be less than 0.80 meters nor

more than 1.20 meters above the upper surface of the tread,
measured vertically to the top of the rail from the lending edge
of the tread.

b. Handrails shall be so designed as to permit continuous

sliding of hands on them and shall be provided with a minimum
clearance of 38 mm. from the wall to which they are fastened.

c. The height of guards shall be measured vertically to the top

guard from the leading edge of the tread or from the floor of
landings. It shall not be less than 0.80 meters and no more than
1.20 meters. Masonry walls may be used for any portion of the
guard.

7. Winding and circular stairways. Winders and circular stairways may

be used if the required width of run is provided at a point not more than
300 millimeters from the side of the stairway where the treads are
narrower but in no case shall any width of run be less than 150 mm. at
any point. The maximum variation in the height of risers and the width
of treads in any one flight shall be 5 mm.

8. Ladders. The use of ladders be allowed provided that the maximum

distance between landings shall be meters.

f. Roofing. Roofing material that is impervious to water shall be provided.

g. Electrical Requirements. There shall be provided at least one light outlet and
one convenience outlet per activity area.

h. Fireblocks. When any two (2) living units abut each other, a fireblock shall
be required in which case the fireblock shall be the masonry construction (e.g.,
cement hollow blocks, bricks, reinforced concrete, etc.), at least 4" thick, and
 shall extend from the lowest portion of the wall adjoining the 2 living units up
to the point just below the road covering or purlins.

i. Abutments. Whenever a dwelling abuts on a property line a fire wall shall be

required. The fire wall shall be of masonry construction, at least 4" thick, and
extend vertically from the lowest portion of the wall adjoining the living units up
to a minimum height of 0.30 meters above the highest point of the roof attached
to it the fire wall shall also extend horizontally up to a minimum distance of 0.30
m. beyond the outermost edge of the abutting living units.

No openings whatsoever shall be allowed except when the two abutting

spaces of two (2) adjacent living units are unenclosed or partially open, e.g.,
carports, terraces, patios, etc.; instead a separation wall shall be required.

B. Multi-Family Dwellings

1. Plot Planning

a. Access to the property. Direct vehicular access to the property shall be

provided by means of an abutting improved public street or alley.

b. Access to the dwelling. An independent means of access shall be provided

to each dwelling, or group of dwellings in a single plot, without trespassing
adjoining properties. Each dwelling must be capable of maintenance without
trespassing adjoining properties. Utilities and service facilities must be
independent for each dwelling unit.

Each dwelling unit shall be provided with a sanitary means for the removal of
garbage and trash.

c. Access to living units. An independent means of access to each living units

shall be provided without passing through any yard of a living unit or any other
yard.

d. Non-residential use. Portions of the property may be designed or used for

non-residential use provided the type of non- residential use is harmonious or
compatible with the residential character of the property. Some examples of
allowable non-residential uses are garages, carports, cooperative store, and
structures for the homeowners’ association.

Any non-residential use of any portion of the property shall be subordinate to

the residential use and character of the property. The floor area authorized for
non-residential use, whether in the principal dwelling structure or in any
accessory building, shall not exceed 25% of the total residential area.

The computation of the non-residential area shall include hallways, corridors

or similar spaces which serve both residential and non-residential areas.

e. Open Space Requirements. Portions of the property shall be devoted to

open space to provide for adequate light, ventilation and fire safety.
1. Setbacks from the property line shall be maintained, the minimum of
which shall be the following:

Kinds of Total

Lot Open MINIMUM SETBACK REQUIREMENT PER

STOREY

Space

Required 1 & 2 3 4 5 6 7 8 9 10 11 12

Interior 50%

Inside 20%

Corner/

Through 10%

2.0 2.3 2.6 2.9 3.2 3.5 3.8 4.1 4.4 4.7 5.0

Lot abutting

3 or more

streets, alleys,

rivers, esteros. 5%

2. Distance between building shall also be adequately maintained to

ensure light and ventilation.

In general, the minimum distance between 2 buildings in which the

taller buildings has not more than two (2) storeys shall be 4.00 meter.
And the minimum horizontal clearance between the two roof eaves
shall be 1.50 meters.

The minimum distance between two buildings wherein the taller

building has three (3) or four (4) storeys, shall be 6.00 meters. And the
minimum horizontal clearance between the two roof eaves shall be
2.00 meters.

The minimum distance between buildings with more than four (4)
storeys shall be 10 meters. The minimum horizontal clearance shall be
6 meters.

Except, however, in cases when the two sides of the buildings facing
each other are blank walls, i.e., either there are no openings or only
minimal openings for comfort rooms, the minimum distance between
 the buildings shall be 2.00 meters. And the horizontal clearance
between the roof eaves shall be 1.00 meter.

In the measurement of distances between two buildings, measurement

shall be made where the distance between the two buildings is
shortest.

f. Parking Requirements. For multi-family dwellings, a minimum of one (1)

parking space for every twenty (20) living units shall be provided.

2. Building Design Stamps

a. Living Units. In general, all building design standards for the single-family
dwelling shall apply for all living units of multi-family dwellings, except that, the
minimum floor are of living unit in multi-family dwellings shall be 36.00 square
meters.

b. Exits. Exit requirements of a building or portion thereof shall be determined

by the occupant load which gives the largest number of persons. No
obstruction shall be placed in the required width of an exit except projections
permitted by these implementing rules and regulations.

The occupant load in any building or portion thereof shall be determined by

multiplying the no. of living units by six (6).

1. No of Exits. Every multi-family dwelling or usable portion thereof,

shall have at least one exist. Floors above the first storey shall have at
least two exists, which shall be remote from each other, irrespective of
the occupant load in the same storey.

The number of exits required from any storey of a building shall be

determined by using the occupant loads of floors which exit through
the level under consideration as follows: 50% of the first adjacent
storey above (and the first adjacent storey below, when a storey below
exits through the level under considerations) and 25% of the occupant
load in the storey immediately beyond the first adjacent storey. The
maximum number of exits required for any storey shall be maintained
until egress is provided from the structures. For purposes of this
Section basement or cellars and occupied roofs shall be provided with
exits as required for storeys.

2. Width. Exits serving living units with occupant load of 50 or less shall
have a minimum width of 0.80 meters. For every additional occupant
load of 25 or fractions thereof, and additional width of 0.15 meters shall
be provided. The total exit width required from any storey of a building
may be divided approximately equally among the separate exits,
provided the minimum width of 0.80 meters is maintained.

The total exit width required from any storey of a building shall be
determined by using the occupant load of that storey plus the
percentage of the occupant loads of floors which exit through the level
under consideration as follows: fifty (50) of the occupant load in the first
 adjacent storey above and the first adjacent below when a storey
below exits through the level under consideration and twenty-five (25)
percent of occupant load in the storey immediately beyond the first
adjacent storey. The maximum exit width from any storey of a building
shall be maintained.

3. Arrangement of Exits. Distance between any two exits shall be such

that they shall be remote from each other and as arranged and
constructed to minimize any possibility that both may be blocked by
any one fire or other emergency condition, provided that it shall not be
less than one fifth the perimeter of the area served, measured in a
straight line between the exits.

4. Distance to Exits. No point in a building shall be more than 45.00

meters from an exterior exit door, a horizontal exit, exit passageway,
or an enclosed stairway, measured along the line of travel. In a building
equipped with the complete, automotive fire extinguishing system the
distance from exits may be increased to 60.00 meters.

5. Automatic Smoke Detection Alarm Initiating Device. Automatic

smoke detection alarm initiating devices shall be installed in every
family dwelling unit located and adjusted to operate reliably in case of
abnormal accumulation of smoke in any part of the protected area.
Installation of smoke detection alarm initiating device shall be
approved for the particular application, location and spacing.

c. Corridors and Exterior Exit Balconies. The provisions herein shall apply to
every corridor and exterior exit balcony serving as a required exit for an
occupant load of more than fifty (50).

1. Width. Every corridor or exit balcony shall not be less than 1.20
meters in width.

2. Projections. The required width of corridors and exit balconies shall

be unobstructed. Doors in any position shall not reduce the required
width of the corridor by more than one-half.

3. Access to Exits. When more than one exit is required, they shall be
so arranged to allow going to either direction from any dead end point.

4. Dead Ends. Corridors and exterior exit balconies with dead ends are
permitted when the dead end not exceed 12.00 meters in length.

5. Construction. Walls of corridors above the first storey shall be of

masonry (e.g. CHB, bricks, titles, etc.). Ceilings shall likewise be fire-
resistive Provided, however, that this requirement shall not apply to
corridors formed by temporary partitions.

Exterior exit balconies shall not project into an area where protected
openings are required.
 6. Openings. Where corridor walls are required to be fire-resistive,
every interior door opening shall be protected as set forth in generally
recognized and accepted requirements for dual purpose fire exit doors.
The total are of all openings other than doors, in any portion of an
interior corridor wall shall not exceed twenty-five (25) per cent of the
area of the corridor wall of the room being separated from the corridor.

7. Ramps. Changes in floor elevation of less than 300 meters along

any exit serving a tributary occupant load of 10 or more shall be by
means of ramps. The maximum allowable slope for ramps is fifteen
(15) percent.

d. Common Stairways. Except for stairs or ladders used only to serve as

access to equipment, every stairway inside a multi-family dwelling serving two
or more living units shall conform to the following design requirements:

1. Width. Stairways serving two or more living units with an occupant

load of 50 or less shall have a minimum clear width of 0.90 meters.
Stairways serving living units with an occupant load more than 50 shall
not be less than 1.00 meter in width.

2. Rise and Run. Stairs shall have a maximum riser height of 0.20 m.
and minimum tread width of 0.25 m. Stairs shall be exclusive of nosing
and/or other projections. The maximum variation in the height of risers
and the width of treads in any one flight shall be 5 m.

3. Landings. Every landing shall have a dimension measured in the

direction of travel equal to the width of the stairway, however, such
dimension need not exceed 1.20 meters when the stair has a straight
run. Landings shall not be reduced in width by more than 100
millimeters by a door when fully opened.

4. Basement Stairways. When a basement stairway to an upper storey

terminate in the same exit enclosure, an approved barrier shall be
provided to prevent persons from continuing on to the basement.
Directional exit signs shall be provided.

5. Distance between Landings. There shall not be more than 3.60

meters vertical distance between landings.

6. Handrails. Stairways less than 3.00 m. in width shall have at least

one handrail on one side, provided there is a guard or wall on the other
side. Stairways measuring 3.00 m. to 3.50 m. in width shall have two
handrails. Stairways more than 3.50 m. wide shall have at least one
intermediate handrail for every 3.00 m. of required width. Intermediate
handrails shall be spaced approximately equal within the entire width
of the stairway. Except that stairways having less than four (4) risers
need not have handrails and stairs with either a guard or wall on one
end need not be provided with a handrail on that end.
 7. Handrail Details. Handrails shall be placed not less than 0.80 m. nor
more than 1.00 m. above the nosing or treads. Ends of handrails shall
terminate in newel pests or safety terminals.

8. Distance to Stairs. Per floors above the first storey, the maximum
travel distance from the exit door of a living unit to the stairway shall
be 24.00 meters.

9. Stairway to Roof. In every building four or more storeys in height,

one stairway shall extend to the roof unless the roof has a slope greater
than 1 in 3.

10. Headroom. Every common stairway shall have a headroom

clearance of not less than 2.00 meters. Such clearance shall be
established by measuring vertically from a plane parallel and tangent
to the stairway tread nosing to the soffit above all points.

e. Utilities and Services. To ensure healthful and livable conditions in the

project, basic utilities and services shall be provided, the minimum
requirements of which shall be:

1. Water Supply. Water supply shall be adequate in amount and

reasonably free from chemical and physical impurities; a main service
connection and a piping system with communal faucets to serve the
common areas like the garden, driveways, etc. shall be provided. Pipes
branching out from the main water line shall service the individual units
which shall be provided with individual water meters.

2. Power Supply/Electrical Service. If available in the vicinity, a main

power service shall be provided with a main circuit to service common
lighting as well as common power needs of the dwelling. Like the water
system, however, branch circuits with separate meters shall service
the individual living units.

3. Drainage System. Surface run-offs shall be channeled to

appropriate repositories.

4. Sewage Disposal System. Sewage disposal may be accomplished

by any of the following means:

a. Discharge to an existing public sewerage system.

b. Treatment in a community disposal, plant, or communal

septic tank.

c. Treatment in individual septic tanks with disposal by

absorption field or leaching pit.

5. Garbage Disposal System. There shall be provided adequate

services for the regular collection and disposal of garbage and rubbish.
 C. General Construction Requirements

1. Structural Requirements

All construction shall conform with the provisions of the latest edition of the Philippine
Structural Code.

2. Electrical Requirements

All electrical systems, equipment and installation shall conform with the provisions of
the latest edition of the Philippine Electrical Code and the requirements of the electric
utility that serves the locality.

3. Sanitary Requirements

All sanitary systems, equipment and installation shall conform with the provisions of
the latest edition of the National Plumbing Code.

4. Construction Materials

The use of indigenous materials for site development and construction of dwellings
shall be encouraged, as long as these are in conformity with the requirements of these
Rules and ensures a building life span of at least 25 years, or in a correspondence to
loan terms of payment.

Section 9. Variances/Exemptions. Variances from these standards and requirements may be granted
when strict observance hereof will cause unnecessary hardship to the owner/developer or prejudice
intended beneficiaries such as in the case of regional considerations/characteristics, peculiarities of
the location and other relevant factors.

RULE IV
APPLICATION AND APPROVAL OF PLANS AND BUILDING DESIGNS

Section 10. Approval Required. No development of economic and socialized housing projects shall
be allowed without having complied with the standards and approval procedures set forth in these
Rules.

Section 11. Approval of Proposed Residential Houses of Average and Low-Income Earners.
Individual lot owners who are average and low-income earners as defined by BP 220 may construct
their individual residential houses in the manner provided by these rules, provided that:

1. They secure project approval from the Ministry of Human Settlements prior to their
construction; and

2. They utilize MHS approved stock plans or they submit their proposed building plans to the
Ministry for approval.

Whenever applicable, the procedures and documents required under this Rule in the case of
other housing projects shall also be observed in case of individual residential projects.
Section 12. Establishment of an Integrated Approval System. There is hereby established and
INTEGRATED APPROVAL SYSTEM which shall be applicable exclusively to the evaluation and
approval of all proposed economic and socialized housing projects whether the development is for a
house and lot or for a house or lot only.

Upon the effectivity of these Rules, all proposed economic and socialized housing projects shall be
required to secure only the INTEGRATED APPROVAL set forth herein which shall take the place of
permits and clearances required under Presidential Decree Numbers 957, 1216, 1096 and 1185 and
their implementing rules and regulations.

Section 13. Where Application for Integrated Approval Made. Applications for integrated approval
shall be made with the Ministry of Human Settlements through its regulatory arm, the Human
Settlements Regulatory Commission which is hereby authorized to prescribe application requirements
and impose the necessary conditions on approvals and applications.

Section 14. How Application Made. Application for Integrated Approval shall be made by
accomplishing in duplicate copies an application form duly prescribed by the Commission.

The application form shall be accompanied by the following documents:

a) Development cost estimate and payment scheme for amortization;

b) Statement of potential and funding sources, preferably attested to by an accountant;

c) Program of development, indicating phasing and schedule;

d) Locational Clearance issued by the Commission;

e) Certified xerox copy of owners certificate of title or other sufficient evidence of ownership; if
applicant is not the owner, authority to develop and sell;

f) At least two (2) sets of sketch plan and site development plan, showing general pattern and
layout of development, including location of streets and proposed access roads, power and
other utility lines, residential areas and open spaces for parks, playgrounds and community
facilities;

g) Location and vicinity map, drawn to a required scale, indicating location, intensity and nature
of surrounding land uses within one (1) kilometers radius;

h) Written options to avail of the MHS Stock Plans, indicating specific model(s) desired, or in
the absence thereof, at least two (2) sets each of the following:

1. Architectural drawing

2. Detailed structural plans and specification including cost estimates

3. Detailed engineering drawing

i) Certification from the Ministry of Agrarian Reform that the Land is not tenanted and/or is not
covered by operation land transfer;
 j) Sworn statement as to nature, number and income level of beneficiaries.

Section 15. Evaluation of Land Development and Structural Design Components of Project. Should
the project be found locationally viable, the Commission shall proceed to determine whether the land
development scheme and building design is in accordance with the standards set forth in these Rules.

Where the developer or applicant has opted to avail of the pre-approved plans of the Commission,
there shall be no necessity for evaluating building design except with respect to the suitability thereof
to project site and its harmony/compatibility with the land development scheme. Should the design be
found unsuitable/incompatible, the developer may be asked to alter/revise his choice. The
Commission may extend technical assistance in the choice of the appropriate model.

Where the developer does not avail of said plans and presents his own design and specifications, the
Commission shall evaluate the building component of the project as to structural, fire safety and
functionality. The review of such building plans and specifications shall be in accordance with the
standards set forth in these Rules.

Section 16. Pre-Approval of Building Plans. The Commission shall formulate model building plans
and design or may approve plans submitted by duly qualified professionals which plans shall be
considered pre-approved and maybe utilized by the developer/proponent.

Section 17. Validity of Development Approval. Development permits shall be valid for a period of one
(1) year and should activity be not commenced within said period, the grantee of the permit may apply
for its revalidation within the next succeeding year.

Thereafter, no development shall be allowed unless a new application for approval is filed.

Section 18. Survey and Approval of Subdivision Plan. Upon the issuance of Integrated Approval to
an economic and socialized housing project, the developer shall refer the final subdivision plan
together with the parcellary map to the Bureau of Lands for the conduct of verification survey and
approval of the subdivision scheme. Upon accomplishment thereof, the Bureau shall submit its finding
to the Commission.

RULE V
REGISTRATION AND LICENSING OF ECONOMIC
AND SOCIALIZED HOUSING PROJECTS

Section 19. Registration of Project. No subdivision or condominium intended for economic and
socialized housing shall be sold unless it has been registered and issued a license to sell in
accordance with these Rules.

Upon receipt of the Survey Returns and Approval of Subdivision Plan from the Bureau of Lands, the
Commission shall notify the developer of economic and socialized housing project, which have been
granted Integrated Approval to submit the following documents to have his project registered under
these Rules.

1. Certificate of Title or other sufficient evidence of ownership;

2. Affidavit attesting that the data submitted in the Original Application Forms and attachments
thereto have remained the same, or if there have been any changes, incorporating therein the
nature and surrounding circumstances thereof;
 3. Articles of incorporation or partnership or association, with all amendments thereto, and
existing by-laws, if developer is a corporation, partnership or association;

4. If property is mortgaged, mortgage contract and status of loan certified by mortgagee; in

addition an undertaking by mortgagee to release the mortgage on any subdivision lots or
condominium units as soon as full purchase price is paid;

5. Submit certification of availability of water supply, if proponent/developer intends to utilize

existing water system; or permit from the National Water Resources Council, if he intends to
put up a centralized deep well distribution system; or certificate of water potability, if he intends
to leave the establishment of individual wells to lot/unit owners from the appropriate
government agency.

Section 20. Notice of Publication. Upon evaluation of the completeness and veracity of the documents
submitted, this Office shall cause the publication at the expense of the applicant a Notice of Pending
Application for Registration and License to Sell in one newspaper of general circulation in English or
in Pilipino reciting therein that an application for registration and License to Sell for the sale of
subdivision lots and condominium units has been filed with the Commission and that the aforesaid
application papers as well as the documents attached thereto are open to inspection during business
hours by interested parties. In addition, a 3 x 6 billboard notice of the project shall be posted on the
project site until the issuance of the License to Sell.

Upon completion of the publication, the proponent shall submit Proof of Publication executed by the
Publisher and an affidavit attesting to the posting of the Billboard Notice on the site.

Section 21. Registration of Project. Ten days from the completion of the publication and submission
of the proof of publication, the Commission shall, in the absence of an opposition to the Registration
of the Project, issue a Certificate of Registration. No opposition shall be entertained after the above
period.

Section 22. Opposition to Registration. Complaints and opposition to the registration shall be filed
with the Commission within ten (10) days from the date of publication. Proceedings for registration and
license to sell shall be, in the meantime, suspended upon an initial finding that the same is meritorious.

Section 23. License to Sell. No owner or developer shall sell any disposable subdivision lot or
condominium unit in a registered property without a license to sell issued by the Commission.

Upon submission of a Performance Bond in the forms of a Surety Bond to the amount of Ten Percent
(10%) of the total estimated development cost of the project issued by a duly accredited bonding
company and acceptable to the Commission, or a certificate of guarantee from any bank or financing
institution of good standing addressed to the Commission for the total development cost, the
Commission shall cause the issuance of a License to Sell for the project.

Whenever it shall appear that the Performance Bond is, or for any cause has become worthless,
inadequate or insufficient after the License to Sell has been issued, the owner/developer shall, after
due notice, be required to give an additional performance bond or replace the worthless bond within
ten days from receipt of such notice. Meanwhile, the License to Sell shall be deemed suspend or
revoked.

Section 24. Monitoring of Project. The Commission shall have the power to monitor projects granted
Integrated Approval and License to Sell under these Rules to ensure faithful compliance with the
terms, standards and conditions thereof. It may exercise visitatorial powers and in case of violation or
non-compliance of the terms, standards and conditions set forth in the approval and the license issued,
it may institute revocation proceedings and impose appropriate fines and penalties.

RULE VI
COMPLAINTS, HEARINGS AND PENALTIES

Section 25. Authority to Issue Rules and Procedures. The Commission is hereby authorized to issue
Rules of Procedure to govern the conduct of Hearings before it on complaints or proceedings against
owners, developers, dealers, brokers and salesmen arising under these Rules. Until the issuance of
such Rules, the present Rules of Procedure to govern the conduct of Hearings before the Human
Settlements Regulatory Commission shall apply.

Section 26. Mediation/Conciliation of Complaints. It shall be mandatory on the part of the Commission
to conduct mediation or conciliation on complaints or opposition filed with it before the same could be
subjected to a formal hearing.

Section 27. Suspension of License to Sell/Cease and Desist Order. The Commission may, in its
1aw p++i1

discretion or upon notice and hearing immediately suspend the owner’s license to sell and issue a
Cease and Desist Order pending investigation and hearing of the case for the following reasons:

a. Upon verified complaint filed by a buyer of a subdivision statement lot/house or any

interested party;

b. In its opinion, any information in the registration statement filed by the owner/dealer is or
has become misleading, incorrect, inadequate or incomplete or the sale or offering for sale of
the project may work or tend to work a fraud upon prospective buyers;

c. When it appears to the Commission that the owner/dealer is engaged in any act or practice
which constitute or shall constitute a violation of the provisions of these Rules.

The suspension order/cease and desist order may be lifted if, after notice and hearing, the Commission
is convinced that any deficiency in the sworn registration statement has been corrected or
supplemented, or that the sale to the public of the subdivision project shall neither be fraudulent nor
result in fraud. It shall also be lifted upon dismissal of the complaint.

Until the final entry of an order of suspension, the suspension of the right to sell the project, through
binding upon all persons notified thereof, shall be deemed confidential unless it shall appear that the
order of suspension has in the meantime been violated.

Section 28. Revocation of the Registration Certificate and License to Sell. The Commission may,
motu propio, or upon verified complaint filed by a buyer revoke the registration and license to sell of
any subdivision project or subdivision lot/house in said project or condominium unit if upon examination
of the affairs of the owner or dealer, during a hearing conducted it shall appear there is prima facie
evidence that the said owner or dealer:

a. Is insolvent; or

b. Has violated any of the provisions of the law and its rules and regulations or any undertaking
of his/its performance bond; or

c. Has been or engaged in fraudulent transaction.

Section 29. Administrative Fines and Penalties. Violation of any of the provision of these Rules and
Standards shall be subject to the Fines and Penalties as provided for under PDs 957, 1216, 1096 and
1185.

RULE VII
MISCELLANEOUS PROVISIONS

Section 30. Conformance to the Requirements of other pertinent laws, rules and regulations. Unless
otherwise amended or expressly provided, the provisions of Presidential Decree 957 and its
Implementing Rules on the following Sections are hereby adopted in these Rules:

a. Submission of Semestral Reports on Operations

b. Advertisement

c. Time of Completion 1âwphi1

d. Extension of Time for Completion

e. Alteration of Plans

f. Non-Forfeiture of Payments

g. Registration of Conveyances

h. Mortgages

i. Take-over development

j. Phases of Subdivision

k. Realty Tax and Other Charges

Section 31. Non-Development. Failure on the part of the owner or developer to develop the project in
accordance with the approved project plans and within the time herein specified shall subject the
owner/developer to administrative sanctions and penalties.

Section 32. Organization and Registration of Homeowners. The owner or developer of a socialized
and economic housing project shall initiate the organization of a homeowners association among the
buyers and residents of the project for the purpose of promoting and protecting their mutual interest.
Said homeowners association shall register with the Commission and the latter is hereby authorized
to accredit and determine the legitimate homeowners association of the housing project for purposes
of applying the pertinent provisions of these Rules.

Section 33. Donations of Roads, Open Spaces and Water Supply. The owner or project developer
shall donate the roads and open spaces found in the project to the local government of the area after
their completion had been certified to by the Commission and it shall be mandatory for the said local
government to accept such donations. Parks and playgrounds maybe donated to the duly accredited
Homeowners Association of the project with the consent of the city or municipality concerned under
PD 1216.
The water supply system of the project may likewise be donated to the duly accredited homeowners
association after certification by the Commission of its completion and of its being operational. Should
the homeowners not accept the donation, the owner or developer of the project shall collect reasonable
rates to be determined by the Commission in consultation with the National Water Resources Council
or the Local Utilities Administration. The proceeds thereof shall be used exclusively for the
maintenance and operation of the water system by the developer.

Section 34. Fees. Until such time that the Commission shall have adopted new schedule of fees for
economic and social housing projects, it shall apply and collect the fees provided for under the
implementing Rules of PD’s 957, 1096 and 1185.

Section 35. Authority to Issue Supplemental Rules, Directives and Interpretative Memorandum and
Circular. In the implementation of Batas Pambansa Blg. 220 and these Rules and Standards, the
Commission, through its Chief Executive Officer, is hereby authorized to issue supplemental rules,
directives and interpretative memorandum and circulars.

Section 36. Separability Clause. The provision of these Rules are hereby declared separable, and in
the event any of such provisions are declared null and void, the validity of all other provisions shall not
be affected thereby.

Section 37. Effectivity. These Rules shall take effect thirty days after its last publication in two
newspapers of general circulation in the Philippines for at least once a week for two consecutive
weeks.

Promulgated, 11 June 1982, Makati, Metro Manila.

PRESIDENTIAL DECREE No. 957 July 12, 1976

REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS, PROVIDING

PENALTIES FOR VIOLATIONS THEREOF

WHEREAS, it is the policy of the State to afford its inhabitants the requirements of decent human
settlement and to provide them with ample opportunities for improving their quality of life;

WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators,
and/or sellers have reneged on their representations and obligations to provide and maintain properly
subdivision roads, drainage, sewerage, water systems, lighting systems, and other similar basic
requirements, thus endangering the health and safety of home and lot buyers;

WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent manipulations
perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to
deliver titles to the buyers or titles free from liens and encumbrances, and to pay real estate taxes,
and fraudulent sales of the same subdivision lots to different innocent purchasers for value;

WHEREAS, these acts not only undermine the land and housing program of the government but also
defeat the objectives of the New Society, particularly the promotion of peace and order and the
enhancement of the economic, social and moral condition of the Filipino people;

WHEREAS, this state of affairs has rendered it imperative that the real estate subdivision and
condominium businesses be closely supervised and regulated, and that penalties be imposed on
fraudulent practices and manipulations committed in connection therewith.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the
powers vested in me by the Constitution, do hereby decree and order:

Title I
TITLE AND DEFINITIONS

Section 1. Title. This Decree shall be known as THE SUBDIVISION AND CONDOMINIUM BUYERS'
PROTECTIVE DECREE.

Section 2. Definition of Terms When used in this Decree, the following terms shall, unless the context
otherwise indicates, have the following respective meanings:

(a) Person. "Person" shall mean a natural or a juridical person. A juridical person refers to a
business firm whether a corporation, partnership, cooperative or associations or a single
proprietorship.

(b) Sale or sell. "Sale" or "sell" shall include every disposition, or attempt to dispose, for a
valuable consideration, of a subdivision lot, including the building and other improvements
thereof, if any, in a subdivision project or a condominium unit in a condominium project. "Sale"
and "sell" shall also include a contract to sell, a contract of purchase and sale, an exchange,
an attempt to sell, an option of sale or purchase, a solicitation of a sale, or an offer to sell,
directly or by an agent, or by a circular, letter, advertisement or otherwise.

A privilege given to a member of a cooperative, corporation, partnership, or any association

and/or the issuance of a certificate or receipt evidencing or giving the right of participation in,
or right to, any land in consideration of payment of the membership fee or dues, shall be
deemed a sale within the meaning of this definition.

(c) Buy and purchase. The "buy" and "purchase" shall include any contract to buy, purchase,
or otherwise acquire for a valuable consideration a subdivision lot, including the building and
other improvements, if any, in a subdivision project or a condominium unit in a condominium
project.

(d) Subdivision project. "Subdivision project" shall mean a tract or a parcel of land registered
under Act No. 496 which is partitioned primarily for residential purposes into individual lots with
or without improvements thereon, and offered to the public for sale, in cash or in installment
terms. It shall include all residential, commercial, industrial and recreational areas as well as
open spaces and other community and public areas in the project.

(e) Subdivision lot. "Subdivision lot" shall mean any of the lots, whether residential,
commercial, industrial, or recreational, in a subdivision project.

(f) Complex subdivision plan. "Complex subdivision plan" shall mean a subdivision plan of a
registered land wherein a street, passageway or open space is delineated on the plan.

(g) Condominium project. "Condominium project" shall mean the entire parcel of real property
divided or to be divided primarily for residential purposes into condominium units, including all
structures thereon.

(h) Condominium unit. "Condominium unit" shall mean a part of the condominium project
intended for any type of independent use or ownership, including one or more rooms or spaces
 located in one or more floors (or part of parts of floors) in a building or buildings and such
accessories as may be appended thereto.

(i) Owner. "Owner" shall refer to the registered owner of the land subject of a subdivision or a
condominium project.

(j) Developer. "Developer" shall mean the person who develops or improves the subdivision
project or condominium project for and in behalf of the owner thereof.

(k) Dealer. "Dealer" shall mean any person directly engaged as principal in the business of
buying, selling or exchanging real estate whether on a full-time or part-time basis.

(l) Broker. "Broker" shall mean any person who, for commission or other compensation,
undertakes to sell or negotiate the sale of a real estate belonging to another.

(m) Salesman. "Salesman" shall refer to the person regularly employed by a broker to perform,
for and in his behalf, any or all functions of a real estate broker.

(n) Authority. "Authority" shall mean the National Housing Authority.

Title II
REGISTRATION AND LICENSE TO SELL

Section 3. National Housing Authority The National Housing Authority shall have exclusive jurisdiction
to regulate the real estate trade and business in accordance with the provisions of this Decree.

Section 4. Registration of Projects The registered owner of a parcel of land who wishes to convert the
same into a subdivision project shall submit his subdivision plan to the Authority which shall act upon
and approve the same, upon a finding that the plan complies with the Subdivision Standards' and
Regulations enforceable at the time the plan is submitted. The same procedure shall be followed in
the case of a plan for a condominium project except that, in addition, said Authority shall act upon and
approve the plan with respect to the building or buildings included in the condominium project in
accordance with the National Building Code (R.A. No. 6541).

The subdivision plan, as so approved, shall then be submitted to the Director of Lands for approval in
accordance with the procedure prescribed in Section 44 of the Land Registration Act (Act No. 496, as
amended by R.A. No. 440): Provided, that it case of complex subdivision plans, court approval shall
no longer be required. The condominium plan as likewise so approved, shall be submitted to the
Register of Deeds of the province or city in which the property lies and the same shall be acted upon
subject to the conditions and in accordance with the procedure prescribed in Section 4 of the
Condominium Act (R.A. No. 4726).

The owner or the real estate dealer interested in the sale of lots or units, respectively, in such
subdivision project or condominium project shall register the project with the Authority by filing
therewith a sworn registration statement containing the following information:

(a) Name of the owner;

(b) The location of the owner's principal business office, and if the owner is a non-resident
Filipino, the name and address of his agent or representative in the Philippines is authorized
to receive notice;
 (c) The names and addresses of all the directors and officers of the business firm, if the owner
be a corporation, association, trust, or other entity, and of all the partners, if it be a partnership;

(d) The general character of the business actually transacted or to be transacted by the owner;
and

(e) A statement of the capitalization of the owner, including the authorized and outstanding
amounts of its capital stock and the proportion thereof which is paid-up.

The following documents shall be attached to the registration statement:

(a) A copy of the subdivision plan or condominium plan as approved in accordance with the
first and second paragraphs of this section.

(b) A copy of any circular, prospectus, brochure, advertisement, letter, or communication to be

used for the public offering of the subdivision lots or condominium units;

(c) In case of a business firm, a balance sheet showing the amount and general character of
its assets and liabilities and a copy of its articles of incorporation or articles of partnership or
association, as the case may be, with all the amendments thereof and existing by-laws or
instruments corresponding thereto.

(d) A title to the property which is free from all liens and encumbrances: Provided, however,
that in case any subdivision lot or condominium unit is mortgaged, it is sufficient if the
instrument of mortgage contains a stipulation that the mortgagee shall release the mortgage
on any subdivision lot or condominium unit as soon as the full purchase price for the same is
paid by the buyer.

The person filing the registration statement shall pay the registration fees prescribed therefor by the
Authority.

Thereupon, the Authority shall immediately cause to be published a notice of the filing of the
registration statement at the expense of the applicant-owner or dealer, in two newspapers general
circulation, one published in English and another in Pilipino, once a week for two consecutive weeks,
reciting that a registration statement for the sale of subdivision lots or condominium units has been
filed in the National Housing Authority; that the aforesaid registration statement, as well as the papers
attached thereto, are open to inspection during business hours by interested parties, under such
regulations as the Authority may impose; and that copies thereof shall be furnished to any party upon
payment of the proper fees.

The subdivision project of the condominium project shall be deemed registered upon completion of
the above publication requirement. The fact of such registration shall be evidenced by a registration
certificate to be issued to the applicant-owner or dealer.

Section 5. License to sell. Such owner or dealer to whom has been issued a registration certificate
shall not, however, be authorized to sell any subdivision lot or condominium unit in the registered
project unless he shall have first obtained a license to sell the project within two weeks from the
registration of such project.

The Authority, upon proper application therefor, shall issue to such owner or dealer of a registered
project a license to sell the project if, after an examination of the registration statement filed by said
owner or dealer and all the pertinent documents attached thereto, he is convinced that the owner or
dealer is of good repute, that his business is financially stable, and that the proposed sale of the
subdivision lots or condominium units to the public would not be fraudulent.

Section 6. Performance Bond. No license to sell subdivision lots or condominium units shall be issued
by the Authority under Section 5 of this Decree unless the owner or dealer shall have filed an adequate
performance bond approved by said Authority to guarantee the construction and maintenance of the
roads, gutters, drainage, sewerage, water system, lighting systems, and full development of the
subdivision project or the condominium project and the compliance by the owner or dealer with the
applicable laws and rules and regulations.

The performance bond shall be executed in favor of the Republic of the Philippines and shall authorize
the Authority to use the proceeds thereof for the purposes of its undertaking in case of forfeiture as
provided in this Decree.

Section 7. Exempt transactions. A license to sell and performance bond shall not be required in any
of the following transactions:

(a) Sale of a subdivision lot resulting from the partition of land among co-owners and co-heirs.

(b) Sale or transfer of a subdivision lot by the original purchaser thereof and any subsequent
sale of the same lot.

(c) Sale of a subdivision lot or a condominium unit by or for the account of a mortgagee in the
ordinary course of business when necessary to liquidate a bona fide debt.

Section 8. Suspension of license to sell. Upon verified complaint by a buyer of a subdivision lot or a
condominium unit in any interested party, the Authority may, in its discretion, immediately suspend the
owner's or dealer's license to sell pending investigation and hearing of the case as provided in Section
13 hereof.

The Authority may motu proprio suspend the license to sell if, in its opinion, any information in the
registration statement filed by the owner or dealer is or has become misleading, incorrect, inadequate
or incomplete or the sale or offering for a sale of the subdivision or condominium project may work or
tend to work a fraud upon prospective buyers.

The suspension order may be lifted if, after notice and hearing, the Authority is convinced that the
registration statement is accurate or that any deficiency therein has been corrected or supplemented
or that the sale to the public of the subdivision or condominium project will neither be fraudulent not
result in fraud. It shall also be lifted upon dismissal of the complaint for lack of legal basis.

Until the final entry of an order of suspension, the suspension of the right to sell the project, though
binding upon all persons notified thereof, shall be deemed confidential unless it shall appear that the
order of suspension has in the meantime been violated.

Section 9. Revocation of registration certificate and license to sell. The Authority may, motu proprio
or upon verified complaint filed by a buyer of a subdivision lot or condominium unit, revoke the
registration of any subdivision project or condominium project and the license to sell any subdivision
lot or condominium unit in said project by issuing an order to this effect, with his findings in respect
thereto, if upon examination into the affairs of the owner or dealer during a hearing as provided for in
Section 14 hereof, if shall appear there is satisfactory evidence that the said owner or dealer:
 (a) Is insolvent; or

(b) has violated any of the provisions of this Decree or any applicable rule or regulation of the
Authority, or any undertaking of his/its performance bond; or

(c) Has been or is engaged or is about to engage in fraudulent transactions; or

(d) Has made any misrepresentation in any prospectus, brochure, circular or other literature
about the subdivision project or condominium project that has been distributed to prospective
buyers; or

(e) Is of bad business repute; or

(f) Does not conduct his business in accordance with law or sound business principles.

Where the owner or dealer is a partnership or corporation or an unincorporated association, it shall be

sufficient cause for cancellation of its registration certificate and its license to sell, if any member of
such partnership or any officer or director of such corporation or association has been guilty of any act
or omission which would be cause for refusing or revoking the registration of an individual dealer,
broker or salesman as provided in Section 11 hereof.

Section 10. Registers of subdivision lots and condominium units. A record of subdivision lots and
condominium units shall be kept in the Authority wherein shall be entered all orders of the Authority
affecting the condition or status thereof. The registers of subdivision lots and condominium units shall
be open to public inspection subject to such reasonable rules as the Authority may prescribe.

Title III
DEALERS, BROKERS AND SALESMEN

Section 11. Registration of dealers, brokers and salesmen. No real estate dealer, broker or salesman
shall engage in the business of selling subdivision lots or condominium units unless he has registered
himself with the Authority in accordance with the provisions of this section.

If the Authority shall find that the applicant is of good repute and has complied with the applicable rules
of the Authority, including the payment of the prescribed fee, he shall register such applicant as a
dealer, broker or salesman upon filing a bond, or other security in lieu thereof, in such sum as may be
fixed by the Authority conditioned upon his faithful compliance with the provisions of this Decree:
Provided, that the registration of a salesman shall cease upon the termination of his employment with
a dealer or broker.

Every registration under this section shall expire on the thirty-first day of December of each year.
Renewal of registration for the succeeding year shall be granted upon written application therefor
made not less than thirty nor more than sixty days before the first day of the ensuing year and upon
payment of the prescribed fee, without the necessity of filing further statements or information, unless
specifically required by the Authority. All applications filed beyond said period shall be treated as
original applications.

The names and addresses of all persons registered as dealers, brokers, or salesmen shall be recorded
in a Register of Brokers, Dealers and Salesmen kept in the Authority which shall be open to public
inspection.
Section 12. Revocation of registration as dealers, brokers or salesmen. Registration under the
preceding section may be refused or any registration granted thereunder, revoked by the Authority if,
after reasonable notice and hearing, it shall determine that such applicant or registrant:

1. Has violated any provision of this Decree or any rule or regulation made hereunder; or

2. Has made a material false statement in his application for registration; or

3. Has been guilty of a fraudulent act in connection with any sale of a subdivision lot or
condominium unit; or

4. Has demonstrated his unworthiness to transact the business of dealer, broker, or salesman,
as the case may be.

In case of charges against a salesman, notice thereof shall also be given the broker or dealer
employing such salesman.

Pending hearing of the case, the Authority shall have the power to order the suspension of the dealer's,
broker's, of salesman's registration; provided, that such order shall state the cause for the suspension.

The suspension or revocation of the registration of a dealer or broker shall carry with it all the
suspension or revocation of the registrations of all his salesmen.

Title IV
PROCEDURE FOR REVOCATION OF REGISTRATION CERTIFICATE

Section 13. Hearing. In the hearing for determining the existence of any ground or grounds for the
suspension and/or revocation of registration certificate and license to sell as provided in Section 8 and
9 hereof, the following shall be complied with:

(a) Notice. No such hearing shall proceed unless the respondent is furnished with a copy of
the complaint against him or is notified in writing of the purpose of such hearing.

(b) Venue. The hearing may be held before the officer or officers designated by the Authority
on the date and place specified in the notice.

(c) Nature of proceeding. The proceedings shall be non-litigious and summary in nature
without regard to legal technicalities obtaining in courts of law. The Rules of court shall not
apply in said hearing except by analogy or in a suppletory character and whenever practicable
and convenient.

(d) Power incidental to the hearing. For the purpose of the hearing or other proceeding under
this Decree, the officer or officers designated to hear the complaint shall have the power to
administer oaths, subpoena witnesses, conduct ocular inspections, take depositions, and
require the production of any book, paper, correspondence, memorandum, or other record
which are deemed relevant or material to the inquiry.

Section 14. Contempt.

(a) Direct contempt. The officer or officers designated by the Authority to hear the complaint
may summarily adjudge in direct contempt any person guilty of misbehavior in the presence
 of or so near the said hearing officials as to obstruct or interrupt the proceedings before the
same or of refusal to be sworn or to answer as a witness or to subscribe an affidavit or
deposition when lawfully required to do so. The person found guilty of direct contempt under
this section shall be punished by a fine not exceeding Fifty (P50.00) Pesos or imprisonment
not exceeding five (5) days, or both.

(b) Indirect contempt. The officer or officers designated to hear the complaint may also adjudge
any person in indirect contempt on grounds and in the manner prescribed in Rule 71 of the
Revised Rules of Court.

Section 15. Decision. The case shall be decided within thirty (30) days from the time the same is
submitted for decision. The Decision may order the revocation of the registration of the subdivision or
condominium project, the suspension, cancellation, or revocation of the license to sell and/or forfeiture,
in whole or in part, of the performance bond mentioned in Section 6 hereof. In case forfeiture of the
bond is ordered, the Decision may direct the provincial or city engineer to undertake or cause the
construction of roads and of other requirements for the subdivision or condominium as stipulated in
the bond, chargeable to the amount forfeited. Such decision shall be immediately executory and shall
become final after the lapse of 15 days from the date of receipt of the Decision.

Section 16. Cease and Desist Order. Whenever it shall appear to the Authority that any person is
engaged or about to engage in any act or practice which constitutes or will constitute a violation of the
provisions of this Decree, or of any rule or regulation thereunder, it may, upon due notice and hearing
as provided in Section 13 hereof, issue a cease and desist order to enjoin such act or practices.

Section 17. Registration. All contracts to sell, deeds of sale and other similar instruments relative to
the sale or conveyance of the subdivision lots and condominium units, whether or not the purchase
price is paid in full, shall be registered by the seller in the Office of the Register of Deeds of the province
or city where the property is situated.

Whenever a subdivision plan duly approved in accordance with Section 4 hereof, together with the
corresponding owner's duplicate certificate of title, is presented to the Register of Deeds for
registration, the Register of Deeds shall register the same in accordance with the provisions of the
Land Registration Act, as amended: Provided, however, that it there is a street, passageway or
required open space delineated on a complex subdivision plan hereafter approved and as defined in
this Decree, the Register of Deeds shall annotate on the new certificate of title covering the street,
passageway or open space, a memorandum to the effect that except by way of donation in favor of a
city or municipality, no portion of any street, passageway, or open space so delineated on the plan
shall be closed or otherwise disposed of by the registered owner without the requisite approval as
provided under Section 22 of this Decree.

Section 18. Mortgages. No mortgage on any unit or lot shall be made by the owner or developer
without prior written approval of the Authority. Such approval shall not be granted unless it is shown
that the proceeds of the mortgage loan shall be used for the development of the condominium or
subdivision project and effective measures have been provided to ensure such utilization. The loan
value of each lot or unit covered by the mortgage shall be determined and the buyer thereof, if any,
shall be notified before the release of the loan. The buyer may, at his option, pay his installment for
the lot or unit directly to the mortgagee who shall apply the payments to the corresponding mortgage
indebtedness secured by the particular lot or unit being paid for, with a view to enabling said buyer to
obtain title over the lot or unit promptly after full payment thereto;

Section 19. Advertisements. Advertisements that may be made by the owner or developer through
newspaper, radio, television, leaflets, circulars or any other form about the subdivision or the
condominium or its operations or activities must reflect the real facts and must be presented in such
manner that will not tend to mislead or deceive the public.

The owner or developer shall answerable and liable for the facilities, improvements, infrastructures or
other forms of development represented or promised in brochures, advertisements and other sales
propaganda disseminated by the owner or developer or his agents and the same shall form part of the
sales warranties enforceable against said owner or developer, jointly and severally. Failure to comply
with these warranties shall also be punishable in accordance with the penalties provided for in this
Decree.

Section 20. Time of Completion. Every owner or developer shall construct and provide the facilities,
improvements, infrastructures and other forms of development, including water supply and lighting
facilities, which are offered and indicated in the approved subdivision or condominium plans,
brochures, prospectus, printed matters, letters or in any form of advertisement, within one year from
the date of the issuance of the license for the subdivision or condominium project or such other period
of time as may be fixed by the Authority.

Section 21. Sales Prior to Decree. In cases of subdivision lots or condominium units sold or disposed
of prior to the effectivity of this Decree, it shall be incumbent upon the owner or developer of the
subdivision or condominium project to complete compliance with his or its obligations as provided in
the preceding section within two years from the date of this Decree unless otherwise extended by the
Authority or unless an adequate performance bond is filed in accordance with Section 6 hereof.

Failure of the owner or developer to comply with the obligations under this and the preceding
provisions shall constitute a violation punishable under Sections 38 and 39 of this Decree.

Section 22. Alteration of Plans. No owner or developer shall change or alter the roads, open spaces,
infrastructures, facilities for public use and/or other form of subdivision development as contained in
the approved subdivision plan and/or represented in its advertisements, without the permission of the
Authority and the written conformity or consent of the duly organized homeowners association, or in
the absence of the latter, by the majority of the lot buyers in the subdivision.

Section 23. Non-Forfeiture of Payments. No installment payment made by a buyer in a subdivision or

condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or
developer when the buyer, after due notice to the owner or developer, desists from further payment
due to the failure of the owner or developer to develop the subdivision or condominium project
according to the approved plans and within the time limit for complying with the same. Such buyer
may, at his option, be reimbursed the total amount paid including amortization interests but excluding
delinquency interests, with interest thereon at the legal rate.

Section 24. Failure to pay installments. The rights of the buyer in the event of this failure to pay the
installments due for reasons other than the failure of the owner or developer to develop the project
shall be governed by Republic Act No. 6552.

Where the transaction or contract was entered into prior to the effectivity of Republic Act No. 6552 on
August 26, 1972, the defaulting buyer shall be entitled to the corresponding refund based on the
installments paid after the effectivity of the law in the absence of any provision in the contract to the
contrary.

Section 25. Issuance of Title. The owner or developer shall deliver the title of the lot or unit to the
buyer upon full payment of the lot or unit. No fee, except those required for the registration of the deed
of sale in the Registry of Deeds, shall be collected for the issuance of such title. In the event a mortgage
over the lot or unit is outstanding at the time of the issuance of the title to the buyer, the owner or
developer shall redeem the mortgage or the corresponding portion thereof within six months from such
issuance in order that the title over any fully paid lot or unit may be secured and delivered to the buyer
in accordance herewith.

Section 26. Realty Tax. Real estate tax and assessment on a lot or unit shall de paid by the owner or
developer without recourse to the buyer for as long as the title has not passed the buyer; Provided,
however, that if the buyer has actually taken possession of and occupied the lot or unit, he shall be
liable to the owner or developer for such tax and assessment effective the year following such taking
of possession and occupancy.

Section 27. Other Charges. No owner or developer shall levy upon any lot or buyer a fee for an alleged
community benefit. Fees to finance services for common comfort, security and sanitation may be
collected only by a properly organized homeowners association and only with the consent of a majority
of the lot or unit buyers actually residing in the subdivision or condominium project.

Section 28. Access to Public Offices in the Subdivisions. No owner or developer shall deny any
person free access to any government office or public establishment located within the subdivision or
which may be reached only by passing through the subdivision.

Section 29. Right of Way to Public Road. The owner or developer of a subdivision without access to
any existing public road or street must secure a right of way to a public road or street and such right
of way must be developed and maintained according to the requirement of the government and
authorities concerned.

Section 30. Organization of Homeowners Association. The owner or developer of a subdivision

project or condominium project shall initiate the organization of a homeowners association among the
buyers and residents of the projects for the purpose of promoting and protecting their mutual interest
and assist in their community development.

Section 31. Donations of roads and open spaces to local government. The registered owner or
developer of the subdivision or condominium project, upon completion of the development of said
project may, at his option, convey by way of donation the roads and open spaces found within the
project to the city or municipality wherein the project is located. Upon acceptance of the donation by
the city or municipality concerned, no portion of the area donated shall thereafter be converted to any
other purpose or purposes unless after hearing, the proposed conversion is approved by the Authority.

Section 32. Phases of Subdivision. For purposes of complying with the provisions of this Decree, the
owner or developer may divide the development and sale of the subdivision into phases, each phase
to cover not less than ten hectares. The requirement imposed by this Decree on the subdivision as a
whole shall be deemed imposed on each phase.

Section 33. Nullity of waivers. Any condition, stipulation, or provision in contract of sale whereby any
person waives compliance with any provision of this Decree or of any rule or regulation issued
thereunder shall be void.

Section 34. Visitorial powers. This Authority, through its duly authorized representative may, at any
time, make an examination into the business affairs, administration, and condition of any person,
corporation, partnership, cooperative, or association engaged in the business of selling subdivision
lots and condominium units. For this purpose, the official authorized so to do shall have the authority
to examine under oath the directors, officers, stockholders or members of any corporation, partnership,
association, cooperative or other persons associated or connected with the business and to issue
subpoena or subpoena duces tecum in relation to any investigation that may arise therefrom.

The Authority may also authorize the Provincial, City or Municipal Engineer, as the case may be, to
conduct an ocular inspection of the project to determine whether the development of said project
conforms to the standards and specifications prescribed by the government.

The books, papers, letters, and other documents belonging to the person or entities herein mentioned
shall be open to inspection by the Authority or its duly authorized representative.

Section 35. Take-over Development. The Authority, may take over or cause the development and
completion of the subdivision or condominium project at the expenses of the owner or developer,
jointly and severally, in cases where the owner or developer has refused or failed to develop or
complete the development of the project as provided for in this Decree.

The Authority may, after such take-over, demand, collect and receive from the buyers the installment
payments due on the lots, which shall be utilized for the development of the subdivision.

Section 36. Rules and Regulations. The Authority shall issue the necessary standards, rules and
regulations for the effective implementation of the provisions of this Decree. Such standards, rules and
regulations shall take effect immediately after their publication three times a week for two consecutive
weeks in any newspaper of general circulation.

Section 37. Deputization of law enforcement agencies. The Authority may deputize the Philippine
Constabulary or any law enforcement agency in the execution of its final orders, rulings or decisions.

Section 38. Administrative Fines. The Authority may prescribe and impose fines not exceeding ten
thousand pesos for violations of the provisions of this Decree or of any rule or regulation thereunder.
Fines shall be payable to the Authority and enforceable through writs of execution in accordance with
the provisions of the Rules of Court.

Section 39. Penalties. Any person who shall violate any of the provisions of this Decree and/or any
rule or regulation that may be issued pursuant to this Decree shall, upon conviction, be punished by a
fine of not more than twenty thousand (P20,000.00) pesos and/or imprisonment of not more than ten
years: Provided, That in the case of corporations, partnership, cooperatives, or associations, the
President, Manager or Administrator or the person who has charge of the administration of the
business shall be criminally responsible for any violation of this Decree and/or the rules and regulations
promulgated pursuant thereto.

Section 40. Liability of controlling persons. Every person who directly or indirectly controls any person
liable under any provision of this Decree or of any rule or regulation issued thereunder shall be liable
jointly and severally with and to the same extent as such controlled person unless the controlling
person acted in good faith and did not directly or indirectly induce the act or acts constituting the
violation or cause of action.

Section 41. Other remedies. The rights and remedies provided in this Decree shall be in addition to
any and all other rights and remedies that may be available under existing laws.

Section 42. Repealing clause. All laws, executive orders, rules and regulations or part thereof
inconsistent with the provisions of this Decree are hereby repealed or modified accordingly.
Section 43. Effectivity. This Decree shall take effect upon its approval.

REPUBLIC ACT NO. 7279

AN ACT TO PROVIDE FOR A COMPREHENSIVE AND CONTINUING URBAN DEVELOPMENT

AND HOUSING PROGRAM, ESTABLISH THE MECHANISM FOR ITS IMPLEMENTATION,
AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled:

ARTICLE I

TITLE, POLICY, PROGRAM AND DEFINITION OF

TERMS

SECTION 1. Title. – This Act shall be known as the “Urban Development and Housing Act of
1992.”

SEC. 2. Declaration of State Policy and Program Objectives. – It shall be the policy of the State
to undertake, in cooperation with the private sector, a comprehensive and continuing Urban
Development and Housing Program, hereinafter referred to as the Program, which shall:

(a) Uplift the conditions of the underprivileged and homeless citizens in urban areas and in
resettlement areas by making available to them decent housing at affordable cost, basic services,
and employment opportunities;

(b) Provide for the rational use and development of urban land in order to bring about the following:

(1) Equitable utilization of residential lands in urban and urbanizable areas with particular attention
to the needs and requirements of the underprivileged and homeless citizens and not merely on
the basis of market forces;

(2) Optimization of the use and productivity of land and urban resources;

(3) Development of urban areas conducive to commercial and industrial activities which can
generate more economic opportunities for the people;

(4) Reduction in urban dysfunctions, particularly those that adversely affect public health, safety
and ecology; and

(5) Access to land and housing by the underprivileged and homeless citizens;

(c) Adopt workable policies to regulate and direct urban growth and expansion towards a
dispersed urban net and more balanced urban-rural interdependence;

(d) Provide for an equitable land tenure system that shall guarantee security of tenure to Program
beneficiaries but shall respect the rights of small property owners and ensure the payment of just
compensation;
(e) Encourage more effective people’s participation in the urban development process; and

(f) Improve the capability of local government units in undertaking urban development and
housing programs and projects.

SEC. 3. Definition of Terms. – For purposes of this Act:

(a) “Affordable cost” refers to the most reasonable price of land and shelter based on the needs
and financial capability of Program beneficiaries and appropriate financing schemes;

(b) “Areas for priority development” refers to those areas declared as such under existing statutes
and pertinent executive issuances;

(c) “Blighted lands” refers to the areas where the structures are dilapidated, obsolete and
unsanitary, tending to depreciate the value of the land and prevent normal development and use
of the area.

(d) “Consultation” refers to the constitutionally mandated process whereby the public, on their
own or through people’s organizations, is provided an opportunity to be heard and to participate
in the decision-making process on matters involving the protection and promotion of its legitimate
collective interests, which shall include appropriate documentation and feedback mechanisms;

(e) “Idle lands” refers to nonagricultural lands urban and urbanized areas on which no
improvements, as herein defined, have been made by the owner, as certified by the city, municipal
or provincial assessor;

(f) “Improvements” refers to all types of buildings and residential units, walls, fences, structures
or constructions of all kinds of a fixed character or which are adhered to the soil but shall not
include trees, plants and growing fruits, and other fixtures that are mere superimpositions on the
land, and the value of improvements shall not be less than fifty percent (50%) of the assessed
value of the property;

(g) “Joint venture” refers to the commitment or agreement by two (2) or more persons to carry out
a specific or single business enterprise for their mutual benefit, for which purpose they combine
their funds, land resources, facilities and services;

(h) “Land assembly or consolidation” refers to the acquisition of lots of varying ownership through
purchase or expropriation for the purpose of planned and rational development and socialized
housing programs without individual property boundary restrictions;

(i) “Land banking” refers to the acquisition of land at values based on existing use in advance of
actual need to promote planned development and socialized housing programs;

(j) “Land swapping” refers to the process of land acquisition by exchanging land for another piece
of land of equal value, or for shares of stock in a government or quasi-government corporation
whose book value is of equal value to the land being exchanged, for the purpose of planned and
rational development and provision for socialized housing where land values are determined
based on land classification, market value and assessed value taken from existing tax
declarations: Provided, That more valuable lands owned by private persons may be exchanged
with less valuable lands to carry out the objectives of this Act;

(k) “Land use plan” refers to the rational approach of allocating available land resources as
equitably as possible among competing user groups and for different functions consistent with
the development plan of the area and the Program under this Act;

(l) “On-site development” refers to the process of upgrading and rehabilitation of blighted and
slum urban areas with a view of minimizing displacement of dwellers in said areas, and with
provisions for basic services as provided for in Section 21 hereof;

(m) “Professional squatters” refers 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 homelots or housing units by the
government but who sold, leased or transferred the same to settle illegally in the same place or
in another urban area, and nonbona fide 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;

(n) “Resettlement areas” refers to areas identified by the appropriate national agency or by the
local government unit with respect to areas within its jurisdiction, which shall be used for the
relocation of the underprivileged and homeless citizens;

(o) “Security of tenure” refers to the degree of protection afforded to qualified Program
beneficiaries against infringement or unjust, reasonable and arbitrary eviction or disposition, by
virtue of the right of ownership, lease agreement, usufruct and other contractual arrangements;

(p) “Slum Improvement and Resettlement Program or SIR” refers to the program of the National
Housing Authority of upgrading and improving blighted squatter areas outside of Metro Manila
pursuant to existing statutes and pertinent executive issuances;

(q) “Small property owners” refers to those whose only real property consists of residential lands
not exceeding three hundred square meters (300 sq. m.) in highly urbanized cities and eight
hundred square meters (800 sq. m.) in other urban areas;

(r) “Socialized housing” refers to housing programs and projects covering houses and lots or
homelots only undertaken by the government or the private sector for the underprivileged and
homeless citizens which shall include sites and services development, long-term financing,
liberalized terms on interest payments, and such other benefits in accordance with the provisions
of this Act;

(s) “Squatting syndicates” refers to groups of persons engaged in the business of squatter housing
for profit or gain;

(t) “Underprivileged and homeless citizens” refers to the beneficiaries of this Act and to individuals
or families residing in urban and urbanizable areas whose income or combined household income
falls within the poverty threshold as defined by the National Economic and Development Authority
and who do not own housing facilities. This shall include those who live in makeshift dwelling units
and do not enjoy security of tenure;
(u) “Unregistered or abandoned lands” refers to lands in urban and urbanizable areas which are
not registered with the Register of Deeds, or with the city or municipal assessor’s office
concerned, or which are uninhabited by the owner and have not been developed or devoted for
any useful purpose, or appears unutilized for a period of three (3) consecutive years immediately
prior to the issuance and receipt or publication of notice of acquisition by the government as
provided under this Act. It does not include land which has been abandoned by reason of force
majeure or any other fortuitous event: Provided, That prior to such event, such land was
previously used for some useful or economic purpose;

(v) “Urban areas” refers to all cities regardless of their population density and to municipalities
with a population density of at least five hundred (500) persons per square kilometer;

(w) “Urbanizable areas” refers to sites and lands which, considering present characteristics and
prevailing conditions, display marked and great potential of becoming urban areas within the
period of five (5) years; and

(x) “Zonal Improvement Program or ZIP” refers to the program of the National Housing Authority
of upgrading and improving blighted squatters areas within the cities and municipalities of Metro
Manila pursuant to existing statutes and pertinent executive issuances.

ARTICLE II

COVERAGE AND EXEMPTIONS

SEC. 4. Coverage. – The Program shall cover all lands in urban and urbanizable areas, including
existing areas for priority development, zonal improvement sites, slum improvement and
resettlement sites, and in other areas that may be identified by the local government units as
suitable for socialized housing.

SEC. 5. Exemptions. – The following lands shall be exempt from the coverage of this Act:

(a) Those included in the coverage of Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law;

(b) Those actually used for national defense and security of the State;

(c) Those used, reserved or otherwise set aside for government offices, facilities and other
installations, whether owned by the national government, its agencies and instrumentalities,
including government-owned or -controlled corporations, or by the local government
units: Provided, however, That the lands herein mentioned, or portions thereof, which have not
been used for the purpose for which they have been reserved or set aside for the past ten (10)
years from the effectivity of this Act, shall be covered by this Act;

(d) Those used or set aside for parks, reserves for flora and fauna, forests and watersheds, and
other areas necessary to maintain ecological balance or environmental protection, as determined
and certified to by the proper government agency; and

(e) Those actually and primarily used for religious, charitable, or educational purposes, cultural
and historical sites, hospitals and health centers, and cemeteries or memorial parks.
The exemptions herein provided shall not apply when the use or purpose of the abovementioned
lands has ceased to exist.

ARTICLE III

NATIONAL URBAN DEVELOPMENT AND HOUSING

FRAMEWORK

SEC. 6. Framework for Rational Development. – There shall be a National Urban Development
and Housing Framework to be formulated by the Housing and Land Use Regulatory Board under
the direction of the Housing and Urban Development Coordinating Council in coordination with all
local government units and other concerned public and private sectors within one (1) year from
the effectivity of this Act.

The Framework shall refer to the comprehensive plan for urban and urbanizable areas aimed at
achieving the objectives of the Program. In the formulation of the Framework, a review and
rationalization of existing town and land use plans, housing programs, and all other projects and
activities of government agencies and the private sectors which may substantially affect urban
land use patterns, transportation and public utilities, infrastructure, environment and population
movements shall be undertaken with the concurrence of the local government units concerned.

ARTICLE IV

LAND USE, INVENTORY, ACQUISITION AND

DISPOSITION

SEC. 7. Inventory of Lands. – Within one (1) year from the effectivity of this Act, all city and
municipal governments shall conduct an inventory of all lands and improvements thereon within
their respective localities. The inventory shall include the following:

(a) Residential lands;

(b) Government-owned lands, whether owned by the national government or any of its
subdivisions, instrumentalities, or agencies, including government-owned or -controlled
corporations and their subsidiaries;

(c) Unregistered or abandoned and idle lands; and

(d) Other lands.

In conducting the inventory, the local government units concerned, in coordination with the
Housing and Land Use Regulatory Board and with the assistance of the appropriate government
agencies, shall indicate the type of land use and the degree of land utilization, and other data or
information necessary to carry out the purposes of this Act.

For planning purposes, the Housing and Urban Development Coordinating Council shall be
furnished by each local government unit a copy of its inventory which shall be updated every three
(3) years.
SEC. 8. Identification of Sites for Socialized Housing. – After the inventory, the local government
units, in coordination with the National Housing Authority, the Housing and Land Use Regulatory
Board, the National Mapping Resource Information Authority, and the Land Management Bureau,
shall identify lands for socialized housing and resettlement areas for the immediate and future
needs of the underprivileged and homeless in the urban areas, taking into consideration the
degree of availability of basic services and facilities, their accessibility and proximity of job sites
and other economic opportunities, and the actual number of registered beneficiaries.

Government-owned lands under paragraph (b) of the preceding section which have not been
used for the purpose for which they have been reserved or set aside for the past ten (10) years
from the effectivity of this Act and identified as suitable for socialized housing, shall immediately
be transferred to the National Housing Authority subject to the approval of the President of the
Philippines or by the local government unit concerned, as the case may be, for proper disposition
in accordance with this Act.

SEC. 9. Priorities in the Acquisition of Land. – Lands for socialized housing shall be acquired in
the following order:

(a) Those owned by the government or any of its subdivisions, instrumentalities, or agencies,
including government-owned or -controlled corporations and their subsidiaries;

(b) Alienable lands of the public domain;

(c) Unregistered or abandoned and idle lands;

(d) Those within the declared Areas for Priority Development, Zonal Improvement Program sites,
and Slum Improvement and Resettlement Program sites which have not yet been acquired;

(e) Bagong Lipunan Improvement of Sites and Services or BLISS sites which have not yet been
acquired; and

(f) Privately-owned lands.

Where on-site development is found more practicable and advantageous to the beneficiaries, the
priorities mentioned in this section shall not apply. The local government units shall give budgetary
priority to on-site development of government lands.

SEC. 10. Modes of Land Acquisition. – The modes of acquiring lands for purposes of this Act shall
include, among others, community mortgage, land swapping, land assembly or consolidation,
land banking, donation to the government, joint-venture agreement, negotiated purchase, and
expropriation: Provided, however, That expropriation shall be resorted to only when other modes
of acquisition have been exhausted: Provided, further, That where expropriation is resorted to,
parcels of land owned by small property owners shall be exempted for purposes of this
Act: Provided, finally, That abandoned property, as herein defined, shall be reverted and
escheated to the State in a proceeding analogous to the procedure laid down in Rule 91 of the
Rules of Court.

For the purpose of socialized housing, government-owned and foreclosed properties shall be
acquired by the local government units, or by the National Housing Authority primary through
negotiated purchase: Provided, That qualified beneficiaries who are actual occupants of the land
shall be given the right of first refusal.

SEC. 11. Expropriation of Idle Lands. – All idle lands in urban and urbanizable areas, as defined
and identified in accordance with this Act, shall be expropriated and shall form part of the public
domain. These lands shall be disposed of or utilized by the government for such purposes that
conform with their land use plans. Expropriation proceedings shall be instituted if, after the lapse
of one (1) year following receipt of notice of acquisition, the owner fails to introduce improvements
as defined in Section 3(f) hereof, except in the case of force majeure and other fortuitous events.
Exempted from this provision, however, are residential lands owned by small property owners or
those the ownership of which is subject of a pending litigation.

SEC. 12. Disposition of Lands for Socialized Housing. – The National Housing Authority, with
respect to lands belonging to the national government, and the local government units with
respect to other lands within their respective localities, shall coordinate with each other to
formulate and make available various alternative schemes for the disposition of lands to the
beneficiaries of the Program. These schemes shall not be limited to those involving transfer of
ownership in fee simple but shall include lease, with option to purchase, usufruct or such other
variations as the local government units or the National Housing Authority may deem most
expedient in carrying out the purposes of this Act.

Consistent with this provision, a scheme for public rental housing may be adopted.

SEC. 13. Valuation of Lands for Socialized Housing. – Equitable land valuation guidelines for
socialized housing shall be set by the Department of Finance on the basis of the market value
reflected in the zonal valuation, or in its absence, on the latest real property tax declaration.

For sites already occupied by qualified Program beneficiaries, the Department of Finance shall
factor into the valuation the blighted status of the lands as certified by the local government unit
or the National Housing Authority.

SEC. 14. Limitations on the Disposition of Lands for Socialized Housing. – No land for socialized
housing, including improvements or rights thereon, shall be sold, alienated, conveyed,
encumbered or leased by any beneficiary of this Program except to qualified Program
beneficiaries as determined by the government agency concerned.

Should the beneficiary unlawfully sell, transfer, or otherwise dispose of his lot or any right thereon,
the transaction shall be null and void. He shall also lose his right to the land, forfeit the total
amortization paid thereon, and shall be barred from the benefits under this Act for a period of ten
(10) years from the date of violation.

In the event the beneficiary dies before full ownership of the land is vested on him, transfer to his
heirs shall take place only upon their assumption of his outstanding obligations. In case of failure
by the heirs to assume such obligations, the land shall revert to the government for disposition in
accordance with this Act.

ARTICLE V

SOCIALIZED HOUSING
SEC. 15. Policy. – Socialized housing, as defined in Section 3 hereof, shall be the primary strategy
in providing shelter for the underprivileged and homeless. However, if the tenurial arrangement in
a particular socialized housing program is in the nature of leasehold or usufruct, the same shall
be transitory and the beneficiaries must be encouraged to become independent from the Program
within a given period of time, to be determined by the implementing agency concerned.

SEC. 16. Eligibility Criteria for Socialized Housing Program Beneficiaries. – To qualify for the
socialized housing program, a beneficiary:

(a) Must be a Filipino citizen;

(b) Must be an underprivileged and homeless citizen, as defined in Section 3 of this Act;

(c) Must not own any real property whether in the urban or rural areas; and

(d) Must not be a professional squatter or a member of squatting syndicates.

SEC. 17. Registration of Socialized Housing Beneficiaries. – The Housing and Urban
Development Coordinating Council, in coordination with the local government units, shall design
a system for the registration of qualified Program beneficiaries in accordance with the Framework.
The local government units, within one (1) year from the effectivity of this Act, shall identify and
register all beneficiaries within their respective localities.

SEC. 18. Balanced Housing Development. – The Program shall include a system to be specified
in the Framework plan whereby developers of proposed subdivision projects shall be required to
develop an area for socialized housing equivalent to at least twenty percent (20%) of the total
subdivision area or total subdivision project cost, at the option of the developer, within the same
city or municipality, whenever feasible, and in accordance with the standards set by the Housing
and Land Use Regulatory Board and other existing laws. The balanced housing development as
herein required may also be complied with by the developers concerned in any of the following
manner:

(a) Development of new settlement;

(b) Slum upgrading or renewal of areas for priority development either through zonal improvement
programs or slum improvement and resettlement programs;

(c) Joint-venture projects with either the local government units or any of the housing agencies;
or

(d) Participation in the community mortgage program.

SEC. 19. Incentives for the National Housing Authority. – The National Housing Authority, being
the primary government agency in charge of providing housing for the underprivileged and
homeless, shall be exempted from the payment of all fees and charges of any kind, whether local
or national, such as income and real estate taxes. All documents or contracts executed by and in
favor of the National Housing Authority shall also be exempt from the payment of documentary
stamp tax and registration fees, including fees required for the issuance of transfer certificates of
titles.
SEC. 20. Incentives for Private Sector Participating in Socialized Housing. – To encourage
greater private sector participation in socialized housing and further reduce the cost of housing
units for the benefit of the underprivileged and homeless, the following incentives shall be
extended to the private sector:

(a) Reduction and simplification of qualification and accreditation requirements for participating
private developers;

(b) Creation of one-stop offices in the different regions of the country for the processing, approval
and issuance of clearances, permits and licenses: Provided, That clearances, permits and
licenses shall be issued within ninety (90) days from the date of submission of all requirements
by the participating private developers;

(c) Simplification of financing procedures; and

(d) Exemption from the payment of the following:

(1) Project-related income taxes;

(2) Capital gains tax on raw lands used for the project;

(3) Value-added tax for the project contractor concerned;

(4) Transfer tax for both raw completed projects; and

(5) Donor’s tax for lands certified by the local government units to have been donated for
socialized housing purposes. Provided, That upon application for exemption, a lien on the title of
the land shall be annotated by the Register of Deeds: Provided, further, That the socialized
housing development plan has already been approved by the appropriate government agencies
concerned: Provided, finally, That all the savings acquired by virtue of this provision shall accrue
in favor of the beneficiaries subject to the implementing guidelines to be issued by the Housing
and Urban Development Coordinating Council.

Appropriate implementing guidelines shall be prepared by the Department of Finance, in

consultation with the Housing and Urban Development Coordinating Council, for the proper
implementation of the tax exemption mentioned in this section within one (1) year after the
approval of this Act.

Property owners who voluntarily provide resettlement sites to illegal occupants of their lands shall
be entitled to a tax credit equivalent to the actual nonrecoverable expenses incurred in the
resettlement, subject to the implementing guidelines jointly issued by the Housing and Urban
Development Coordinating Council and the Department of Finance.

SEC. 21. Basic Services. – Socialized housing or resettlement areas shall be provided by the
local government unit or the National Housing Authority in cooperation with the private developers
and concerned agencies with the following basic services and facilities:

(a) Potable water;

(b) Power and electricity and an adequate power distribution system;

(c) Sewerage facilities and an efficient and adequate solid waste disposal system; and

(d) Access to primary roads and transportation facilities.

The provisions of other basic services and facilities such as health, education, communications,
security, recreation, relief and welfare shall be planned and shall be given priority for
implementation by the local government unit and concerned agencies in cooperation with the
private sector and the beneficiaries themselves.

The local government unit, in coordination with the concerned national agencies, shall ensure that
these basic services are provided at the most cost-efficient rates, and shall set a mechanism to
coordinate operationally the thrusts, objectives and activities of other government agencies
concerned with providing basic services to housing projects.

SEC. 22. Livelihood Component. – To the extent feasible, socialized housing and resettlement
projects shall be located near areas where employment opportunities are accessible. The
government agencies dealing with the development of livelihood programs and grant of livelihood
loans shall give priority to the beneficiaries of the Program.

SEC. 23. Participation of Beneficiaries. – The local government units, in coordination with the
Presidential Commission for the Urban Poor and concerned government agencies, shall afford
Program beneficiaries or their duly designated representatives an opportunity to be heard and to
participate in the decision-making process over matters involving the protection and promotion of
their legitimate collective interests which shall include appropriate documentation and feedback
mechanisms. They shall also be encouraged to organize themselves and undertake self-help
cooperative housing and other livelihood activities. They shall assist the government in preventing
the incursions of professional squatters and members of squatting syndicates into their
communities.

In instances when the affected beneficiaries have failed to organize themselves or form an
alliance within a reasonable period prior to the implementation of the program or projects affecting
them, consultation between the implementing agency and the affected beneficiaries shall be
conducted with the assistance of the Presidential Commission for the Urban Poor and the
concerned nongovernment organization.

SEC. 24. Consultation with Private Sector. – Opportunities for adequate consultation shall be
accorded to the private sector involved in socialized housing project pursuant to this Act.

ARTICLE VI

AREAS FOR PRIORITY DEVELOPMENT, ZONAL

IMPROVEMENT PROGRAM SITES AND SLUM
IMPROVEMENT AND RESETTLEMENT PROGRAM
SITES

SEC. 25. Benefits. – In addition to the benefits provided under existing laws and other related
issuance to occupants of areas for priority development, zonal improvement program sites and
slum improvement and resettlement program sites, such occupants shall be entitled to priority in
all government projects initiated pursuant to this Act. They shall also be entitled to the following
support services:

(a) Land surveys and titling at minimal cost;

(b) Liberalized terms on credit facilities and housing loans and one hundred percent (100%)
deduction from every homebuyer’s gross income tax of all interest payments made on
documented loans incurred for the construction or purchase of the homebuyer’s house;

(c) Exemption from the payment of documentary stamp tax, registration fees, and other fees for
the issuance of transfer certificate of titles;

(d) Basic services as provided for in Section 21 of this Act; and

(e) Such other benefits that may arise from the implementation of this Act.

ARTICLE VII

URBAN RENEWAL AND RESETTLEMENT

SEC. 26. Urban Renewal and Resettlement. – This shall include the rehabilitation and
development of blighted and slum areas and the resettlement of Program beneficiaries in
accordance with the provisions of this Act. On-site development shall be implemented whenever
possible in order to ensure minimum movement of occupants of blighted lands and slum areas.
The resettlement of the beneficiaries of the Program from their existing places of occupancy shall
be undertaken only when on-site development is not feasible and after compliance with the
procedures laid down in Section 28 of this Act.

SEC. 27. Action Against Professional Squatters and Squatting Syndicates. – The local
government units, in cooperation with the Philippine National Police, the Presidential Commission
for the Urban Poor (PCUP), and the PCUP-accredited urban poor organization in the area, shall
adopt measures to identify and effectively curtail the nefarious and illegal activities of professional
squatters and squatting syndicates, as herein defined.

Any person or group identified as such shall be summarily evicted and their dwellings or structures
demolished, and shall be disqualified to avail of the benefits of the Program. A public official who
tolerates or abets the commission of the abovementioned acts shall be dealt with in accordance
with existing laws.

For purposes of this Act, professional squatters or members of squatting syndicates shall be
imposed the penalty of six (6) years imprisonment or a fine of not less than Sixty thousand pesos
(P60,000.00) but not more than One hundred thousand pesos (P100,000), or both, at the
discretion of the court.

SEC. 28. Eviction and Demolition. – Eviction or demolition as a practice shall be discouraged.
Eviction or demolition, however, may be allowed under the following situations:
(a) When persons or entities occupy danger areas such as esteros, railroad tracks, garbage
dumps, riverbanks, shorelines, waterways, and other public places such as sidewalks, roads,
parks, and playgrounds;

(b) When government infrastructure projects with available funding are about to be implemented;
or

(c) When there is a court order for eviction and demolition.

In the execution of eviction or demolition orders involving underprivileged and homeless citizens,
the following shall be mandatory:

(1) Notice upon the affected persons or entities at least thirty (30) days prior to the date of eviction
or demolition;

(2) Adequate consultations on the matter of resettlement with the duly designated representatives
of the families to be resettled and the affected communities in the areas where they are to be
relocated;

(3) Presence of local government officials or their representatives during eviction or demolition;

(4) Proper identification of all persons taking part in the demolition;

(5) Execution of eviction or demolition only during regular office hours from Mondays to Fridays
and during good weather, unless the affected families consent otherwise;

(6) No use of heavy equipment for demolition except for structures that are permanent and of
concrete materials;

(7) Proper uniforms for members of the Philippine National Police who shall occupy the first line
of law enforcement and observe proper disturbance control procedures; and

(8) Adequate relocation, whether temporary or permanent: Provided, however, That in cases of
eviction and demolition pursuant to a court order involving underprivileged and homeless citizens,
relocation shall be undertaken by the local government unit concerned and the National Housing
Authority with the assistance of other government agencies within forty-five (45) days from service
of notice of final judgment by the court, after which period the said order shall be
executed: Provided, further, That should relocation not be possible within the said period, financial
assistance in the amount equivalent to the prevailing minimum daily wage multiplied by sixty (60)
days shall be extended to the affected families by the local government unit concerned.

This Department of the Interior and Local Government and the Housing and Urban Development
Coordinating Council shall jointly promulgate the necessary rules and regulations to carry out the
above provision.

SEC. 29. Resettlement. – Within two (2) years from the effectivity of this Act, the local government
units, in coordination with the National Housing Authority, shall implement the relocation and
resettlement of persons living in danger areas such as esteros, railroad tracks, garbage dumps,
riverbanks, shorelines, waterways, and in other public places such as sidewalks, roads, parks,
and playgrounds. The local government unit, in coordination with the National Housing Authority,
shall provide relocation or resettlement sites with basic services and facilities and access to
employment and livelihood opportunities sufficient to meet the basic needs of the affected
families.

SEC. 30. Prohibition Against New Illegal Structures. – It shall be unlawful for any person to
construct any structure in areas mentioned in the preceding section.

After the effectivity of this Act, the barangay, municipal or city government units shall prevent the
construction of any kind of illegal dwelling units or structures within their respective localities. The
head of any local government unit concerned who allows, abets or otherwise tolerates the
construction of any structure in violation of this section shall be liable to administrative sanctions
under existing laws and to penal sanctions provided for in this Act.

ARTICLE VIII

COMMUNITY MORTGAGE PROGRAM

SEC. 31. Definition. – The Community Mortgage Program (CMP) is a mortgage financing program
of the National Home Mortgage Finance Corporation which assists legally organized associations
of underprivileged and homeless citizens to purchase and develop a tract of land under the
concept of community ownership. The primary objective of the program is to assist residents of
blighted or depressed areas to own the lots they occupy, or where they choose to relocate to, and
eventually improve their neighborhood and homes to the extent of their affordability.

SEC. 32. Incentives. – To encourage its wider implementation, participants in the CMP shall be
granted with the following privileges or incentives:

(a) Government-owned or -controlled corporations and local government units, may dispose of
their idle lands suitable for socialized housing under the CMP through negotiated sale at prices
based on acquisition cost plus financial carrying costs;

(b) Properties sold under the CMP shall be exempted from the capital gains tax; and

(c) Beneficiaries under the CMP shall not be evicted nor dispossessed of their lands or
improvements unless they have incurred arrearages in payments of amortizations for three (3)
months.

SEC. 33. Organization of Beneficiaries. – Beneficiaries of the Program shall be responsible for
their organization into associations to manage their subdivisions or places of residence, to secure
housing loans under existing Community Mortgage Program and such other projects beneficial to
them. Subject to such rules and regulations to be promulgated by the National Home Mortgage
Finance Corporation, associations organized pursuant to this Act may collectively acquire and
own lands covered by this Program. Where the beneficiaries fail to form an association by and
among themselves, the National Home Mortgage Finance Corporation shall initiate the
organization of the same in coordination with the Presidential Commission for the Urban Poor and
the local government units concerned. No person who is not a bona fide resident of the area shall
be a member or officer of such association.

ARTICLE IX
RELATED STRATEGIES

SEC. 34. Promotion of Indigenous Housing Materials and Technologies. – The local government
units, in cooperation with the National Housing Authority, Technology and Livelihood Resource
Center, and other concerned agencies, shall promote the production and use of indigenous,
alternative, and low-cost construction materials and technologies for socialized housing.

SEC. 35. Transport System. – The local government units, in coordination with the Departments
of Transportation and Communications, Budget and Management, Trade and Industry, Finance,
and Public Works and Highways, the Home Insurance Guaranty Corporation, and other
concerned government agencies, shall devise a set of mechanisms including incentives to the
private sector so that a viable transport system shall evolve and develop in the urban areas. It
shall also formulate standards designed to attain these objectives:

(a) Smooth flow of traffic;

(b) Safety and convenience of travel;

(c) Minimum use of land space;

(d) Minimum damage to the physical environment; and

(e) Adequate and efficient transport service to the people and goods at minimum cost.

SEC. 36. Ecological Balance. – The local government units shall coordinate with the Department
of Environment and Natural Resources in taking measures that will plan and regulate urban
activities for the conservation and protection of vital, unique and sensitive ecosystems, scenic
landscapes, cultural sites and other similar resource areas.

To make the implementation of this function more effective, the active participation of the citizenry
in environmental rehabilitation and in decision-making process shall be promoted and
encouraged. The local government units shall recommend to the Environmental and Management
Bureau the immediate closure of factories, mines and transport companies which are found to be
causing massive pollution.

SEC. 37. Population Movements. – The local government units shall set up an effective
mechanism, together with the appropriate agencies like the Population Commission, the National
Economic and Development Authority and the National Statistics Office, to monitor trends in the
movements of population from rural to urban, urban to urban, and urban to rural areas. They shall
identify measures by which such movements can be influenced to achieve balance between
urban capabilities and population, to direct appropriate segments of the population into areas
where they can have access to opportunities to improve their lives and to contribute to national
growth and recommend proposed legislation to Congress, if necessary.

The Population Commission, the National Economic and Development Authority, and the National
Statistics Office shall likewise provide advanced planning information to national and local
government planners on population projections and the consequent level of services needed in
particular urban and urbanizable areas. This service will include early-warning systems on
expected dysfunctions in a particular urban area due to population increases, decreases, or age
structure changes.
SEC. 38. Urban-rural Interdependence. – To minimize rural to urban migration and pursue urban
decentralization, the local government units shall coordinate with the National Economic and
Development Authority and other government agencies in the formulation of national development
programs that will stimulate economic growth and promote socioeconomic development in the
countryside.

ARTICLE X

PROGRAM IMPLEMENTATION

SEC. 39. Role of Local Government Units. – The local government units shall be charged with
the implementation of this Act in their respective localities, in coordination with the Housing and
Urban Development Coordinating Council, the national housing agencies, the Presidential
Commission for the Urban Poor, the private sector and other nongovernment organizations.

They shall prepare a comprehensive land use plan for their respective localities in accordance
with the provisions of this Act.

SEC. 40. Role of Government Housing Agencies. – In addition to their respective existing powers
and functions, and those provided for in this Act, the hereunder mentioned housing agencies shall
perform the following:

(a) The Housing and Urban Development Coordinating Council shall, through the key housing
agencies, provide local government units with necessary support such as:

(1) Formulation of standards and guidelines as well as providing technical support in the
preparation of town and land use plans;

(2) In coordination with the National Economic and Development Authority and the National
Statistics Office, provide data and information for forward-planning by the local government units
in their areas, particularly on projections as to the population and development trends in their
localities and the corresponding investment programs needed to provide appropriate types and
levels of infrastructure, utilities, services and land use patterns; and

(3) Assistance in obtaining funds and other resources needed in the urban development and
housing programs in their areas of responsibility.

(b) The National Housing Authority, upon request of local government units, shall provide
technical and other forms of assistance in the implementation of their respective urban
development and housing programs with the objective of augmenting and enhancing local
government capabilities in the provision of housing benefits to their constituents;

(c) The National Home Mortgage Finance Corporation shall administer the Community Mortgage
Program under this Act and promulgate rules and regulations necessary to carry out the
provisions of this Act; and

(d) The Home Insurance Guaranty Corporation shall design an appropriate guarantee scheme to
encourage financial institutions to go into direct lending for housing.
SEC. 41. Annual Report. – The Housing and Urban Development Coordinating Council and the
local government units shall submit a detailed annual report with respect to the implementation of
this Act to the President and the Congress of the Republic of the Philippines.

ARTICLE XI

FUNDING

SEC. 42. Funding. – Funds for the urban development and housing program shall come from the
following sources:

(a) A minimum of fifty percent (50%) from the annual net income of the Public Estate Authority, to
be used by the National Housing Authority to carry out its programs of land acquisition for
resettlement purposes under this Act;

(b) Proceeds from the disposition of ill-gotten wealth, not otherwise previously set aside for any
other purpose, shall be applied to the implementation of this Act and shall be administered by the
National Home Mortgage Finance Corporation;

(c) Loans, grants, bequests and donations, whether from local or foreign sources;

(d) Flotation of bonds, subject to the guidelines to be set by the Monetary Board;

(e) Proceeds from the social housing tax and, subject to the concurrence of the local government
units concerned, idle lands tax as provided in Section 236 of the Local Government Code of 1991
and other existing laws;

(f) Proceeds from the sale or disposition of alienable public lands in urban areas; and

(g) Domestic and foreign investment or financing through appropriate arrangements like the build-
operate-and-transfer scheme.

SEC. 43. Socialized Housing Tax. – Consistent with the constitutional principle that the ownership
and enjoyment of property bear a social function and to raise funds for the Program, all local
government units are hereby authorized to impose an additional one-half percent (0.5%) tax on
the assessed value of all lands in urban areas in excess of Fifty thousand pesos (P50,000).

ARTICLE XII

TRANSITORY PROVISIONS

SEC. 44. Moratorium on Eviction and Demolition. – There shall be a moratorium on the eviction
of all Program beneficiaries and on the demolition of their houses or dwelling units for a period of
three (3) years from the effectivity of this Act: Provided, That the moratorium shall not apply to
those persons who have constructed their structures after the effectivity of this Act and for cases
enumerated in Section 28 hereof.

ARTICLE XIII
COMMON PROVISIONS

SEC. 45. Penalty Clause. – Any person who violates any provision of this Act shall be imposed
the penalty of not more than six (6) years of imprisonment or a fine of not less than Five thousand
pesos (P5,000) but not more than One hundred thousand pesos (P100,000), or both, at the
discretion of the court: Provided, That, if the offender is a corporation, partnership, association or
other juridical entity, the penalty shall be imposed on the officer or officers of said corporation,
partnership, association or juridical entity who caused the violation.

SEC. 46. Appropriations. – The amount necessary to carry out the purposes of this Act shall be
included in the annual budget of implementing agencies in the General Appropriations Act of the
year following its enactment into law and every year thereafter.

SEC. 47. Separability Clause. – If for any reason, any provision of this Act is declared invalid or
unconstitutional, the remaining provisions not affected thereby shall continue to be in full force
and effect.

SEC. 48. Repealing Clause. – All laws, decrees, executive orders, proclamations, rules and
regulations, and other issuances, or parts thereof which are inconsistent with the provisions of
this Act, are hereby repealed or modified accordingly.

SEC. 49. Effectivity Clause. – This Act shall take effect upon its publication in at least two (2)
national newspapers of general circulation.