Section 18, RA 7279

COMPLIANCE TOSection 18, RA 7279

Sec. 18 of RA 7279: UDHA - Balanced Housing Development &

Board Resolution No. 890, S. of 2012 Revised Implementing RulesRevised Implementing Rules And Regulations To Govern Section 18 Of Republic Act No. 7279, Otherwise Known As The Urban Development and Housing Act of 1992Section 18 of Republic Act No. 7279Balanced Housing DevelopmentBoard Resolution No. 890Series of 2012Signed on: October 12, 2012Published on: December 17, 2012Effective on: January 1, 2013 New FeaturesWhats Out

Credits or charging of already existing socialized housing projects / units as compliance with Sec. 18Memorandum CircularsNos. 01 05, S. of 20132. Recomputation and reduction of the required amount of compliance to an equivalent cost for every housing unit.Board ResolutionNo. 890, S. of 2012Whats BackWhats New3 New FeaturesWhats Out

Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 2012 Required Estimated Cost Amount of Of Construction P 5,000 Compliance \ SH Unit

P 5,000,000.00 X P 5,000 = P 166,666.66 P 150,000.00 3.33% 4

Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 2012Whats Back Joint Venture with Other Developers, but with more safeguards, including the requirement of accreditation of developers of socialized housing projects and NGOs;5

Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 2012Whats NewTakeover Development and Rehabilitation of Non-Performing Socialized Housing Assets of the Housing Agencies; Donation of land and introduction or upgrading of facilities, centers, amenities or other forms of development to a CMP Project;Purchase of Asset-Backed Securities conveyed by SHFC;6

Strict implementation of the required 20% computation of the compliance project.Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 2012 Clearer rules and procedure on the declaration, identification, and annotation of the particular blocks and lots units for more effective monitoring, inspection and accounting and to prevent re-utilization or duplication of compliance.More OptionsMore Houses New Features7

Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 2012 Incorporation and integration of the requirements of the Balanced Housing Development in the entire procedure of registration, licensing, monitoring and regulation of subdivision projects as required under P.D. No. 957, with similar emphasis on public information through new requirements in the notice of publication and posting of billboards;More OptionsMore Houses New Features8

Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 2012 Implementation and use of new forms to facilitate the registration and licensing procedure and at the same time to clearly identify the allotment of specific house, lots or units utilized as compliance New documentary requirements to prevent misrepresentation or circumvention; Introduction of clearance and reporting system among the different regional offices to ensure compliance and completion of the projects anywhere in the Philippines;More OptionsMore Houses New Features9

Strict implementation of the required 20% computation of the compliance project.Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 2012 Clearer rules and procedure on the declaration, identification, and annotation of the particular blocks and lots units for more effective monitoring, inspection and accounting and to prevent re-utilization or duplication of compliance. Implementation and use of new forms to facilitate the registration and licensing procedure and at the same time to clearly identify the allotment of specific house, lots or units utilized as compliance New documentary requirements to prevent misrepresentation or circumvention; Introduction of clearance and reporting system among the different regional offices to ensure compliance and completion of the projects anywhere in the Philippines; Close and regular monitoring of compliance projects and imposition of stiffer penalties including suspension of the license to sell of the main subdivision projects in cases of non-completion of or violation involving the compliance project.More OptionsMore Houses New Features10

Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 2012Disallowance of registration and licensing of new projects in case of incomplete or unfinished compliance projects; New Features11

Strict implementation of the required 20% computation of the compliance project.Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 2012 Implementation and use of new forms to facilitate the registration and licensing procedure and at the same time to clearly identify the allotment of specific house, lots or units utilized as complianceMore Options More Modes of Compliance - New modes are provided in the Revised IRR not only to give more options to the developer but to explore possibly more innovative and responsive ways of housing development that may spur the production of more housing units;12

Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 2012 New documentary requirements to prevent misrepresentation or circumvention;Disallowance of registration and licensing of new projects in case of incomplete or unfinished compliance projects;More OptionsEase of Locating The Project - Developers are allowed to locate the compliance project anywhere in the Philippines if not feasible to be developed within the same city or municipality.Allowable Combination - Developers are allowed to combine and choose among the different modes of compliance, to complete the required 20% project cost.13

Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 2012More OptionsMore HousesMore participants in the Balanced HousingDevelopment Program, including accreditedsubsidiaries, affiliates, other developers ofSHPs, NGOs, the housing agencies, and LGUs;14

Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 2012More OptionsMore HousesMore participants in the Balanced HousingDevelopment Program, including accreditedsubsidiaries, affiliates, other developers ofSHPs, NGOs, the housing agencies, and LGUs; New responsibilities and accountabilities not only on the part of the developers but more particularly on HLURB tasked to implement, monitor, and account for the actual number of socialized housing units produced vis--vis the total number of main subdivisions developed.15

New responsibilities and accountabilities not only on the part of the developers but more particularly on HLURB tasked to implement, monitor, and account for the actual number of socialized housing units produced vis--vis the total number of main subdivisions developed.Section 18 of Republic Act No. 7279Balanced Housing DevelopmentMore HousesMemorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 201216

Section 18 of Republic Act No. 7279Balanced Housing Development17REPUBLIC ACT 7279Section 18. Balanced Housing Development: 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,. . . COMPLIANCE:

Development of new settlement;Slum upgrading or renewal of areas for priority development either through zonal improvement programs or slum improvement and resettlement programs;Joint-venture projects with either the local government units or any of the housing agencies; orParticipation in the community mortgage program

DEFINITIONSProject Area shall mean:e.1 for subdivision projects without housing component, the gross developed land areae.2 for subdivision projects with housing component:e.2.1 gross developed land area ande.2.2 aggregate floor area of all housing units

e.3 for condominium projects, the gross floor area of residential units.

Project Cost refers to cost of the project based on the following: (i) raw land, based on the zonal value at the time of application for subdivision development permit (ii) land development (iii) housing component construction

Asset-Backed Securities certificates in accordance with RA 9267 or the Securitization Act of 2004, as originated or sold by the Social Housing Finance Corporation, to be repaid from the proceeds of the outstanding mortgage loan of CMP beneficiaries.

Community Mortgage Program (CMP) refers to a financing window or scheme that is funded by the Government thru the Social Housing Finance Corporation (SHFC) and that provides long-term loans to a legally-organized association and its qualified members to acquire ownership or tenurial security on the property and the land they occupy.Compliance Project- refers to the socialized housing project, multi-level, medium-rise housing project or condominium project sold at the prevailing price ceiling for socialized housing, or other development utilized to comply with the balanced housing development required under Sect. 18 of RA 7279.Non-Performing Socialized Housing Assets refers to socialized housing units or projects owned by the government housing agencies needing rehabilitation and restoration before they can be made available for sale at the prevailing price ceiling for socialized housing.26Sample Computation of 20% ComplianceArea basedCost basedProject area = 10,000sqmHousing floor area = 2,000sqmTotal project area = 12,000sqmRequired compliance = 20% x 12,000 = 2,400sqmProject area = 10,000 sqmHousing floor area= 2,000 sqmRawland cost (500/sqm) = P5M Land Devt cost (700/sqm)= P7MHousing constn cost (8T/sqm) =P16MTotal project cost = P28MRequired compliance 20% x 28M = P5.6M

Development of New SettlementGuidelines for Sect. 4.1 of Board Res. 890, s.2012

Manner of Compliance - developer of main project shall develop a new settlement with a cost equivalent to at least twenty percent (20%) of the total subdivision project cost of the main project.

MODES OF COMPLIANCEJoint venture project of the developer with an HLURB accredited subsidiary or an HLURB-accredited developer for the production of new socialized housing projects;

Contribution of the developer in new socialized housing projects of HLURB-accredited non-government organizations (NGOs); or

3. The provision of educational facilities, health facilities, productivity/ livelihood centers, and other basic amenities and facilities in socialized housing projects.Slum Upgrading Guidelines for Sect. 4.2 of Board Res. 890, s. 2012

Manner of Compliance - the developer of the main project may participate in various programs and projects of the National Housing Authority for slum upgrading or renewal of areas for priority development (APDs) thru zonal improvements, slum improvement or resettlement programs with costs equivalent to at least 20% of the total project cost of the main subdivision project.Modes of Compliance1. Purchase of any instrument of participation issued by NHA; or

2. Direct contribution to the various programs and projects of NHA Joint Venture with Either the Local Government Units or any of the Housing AgenciesGuidelines for Sect. 4.3 of Board Res. 890, s. 2012Manner of Compliance - the developer of the main subdivision project may enter into a joint venture (JV) with a local government unit (LGU) or any of the housing agencies wherein the developers participation in or contribution to the JV shall be equivalent to at least 20% of the total subdivision project cost of the main subdivision project.Modes of Compliance 1. Development of a socialized housing project or a housing project in a resettlement area; 2. Development and completion of a socialized housing project which has been taken over by HLURB pursuant to Sect. 35 of PD 957; 3. Rehabilitation of non-performing socialized housing assets; or 4 . Provision of educational facilities, health facilities, productivity/livelihood centers and other basic amenities and facilities mentioned in Sect. 21 of UDHA which will benefit a socialized housing project; or 5. Purchase of socialized housing bonds issued by any of the housing agencies and approved by HLURB.Joint Venture with a Local Government UnitDevelopment of SHP or a housing project in resettlement area. The Joint Venture (JV) shall specify:a. The amount of contribution of the developer of the main subdivision project to the JV; b. The particular block and lot numbers or unit numbers of the housing project being allotted to the main project under the current JVA. c. The creation of a special bank account for the JV.

The provision of educational facilities, etcThe JV shall specify: 1. The amount of contribution of the developer of the main subdivision project to the JV; 2. The nature of the educational facilities, health facilities, productivity/livelihood centers or basic amenities and facilities to be provided, the name and location of the socialized housing project which will benefit therefrom ; and 3. The creation of a special bank account for the JV. Joint Venture with any of the Housing AgenciesDevelopment of a socialized housing project or a housing project in a resettlement area. The JV shall specify: a. Amount of contribution of the developer of the main subdivision project to the JV; b. The particular block numbers and lot numbers or unit numbers of the housing project being allotted to the main project; c. The creation of a special bank account for the JV. Joint Venture with any of the Housing AgenciesRehabilitation of non-performing socialized housing assets. The JV shall specify: a. The amount of contribution of the developer of the main subdivision project to the JV; b. The nature, extent and cost of the work to be done on the rehabilitation based on the program of development and c. Creation of a special bank account for the JV.Joint Venture with any of the Housing AgenciesThe provision of educational facilities, etcThe JV shall specify: 1. The amount of contribution of the developer of the main subdivision project to the JV; 2. The nature of the educational facilities, health facilities, productivity/livelihood centers or basic amenities and facilities to be provided, the name and location of the socialized housing project which will benefit therefrom ; and 3. The creation of a special bank account for the JV. Purchase of Socialized Housing BondsThe Certificate shall specify: a. Total purchase price paid for the socialized housing bonds and b. Terms and conditions and undertakings of the socialized housing bonds. Special Bank AccountThe LGU or the housing agency shall deposit all proceeds received under Sections 6,7 and 8 hereof in a special bank account established for that purpose, except for the proceeds received under Section 7.4 hereof which may be deposited in the general or other accounts of the housing agency.Participation in CMPGuidelines for Sect. 4.4 of Board Res. 890, s. 2012Manner of Compliance - the developer of the main subdivision project shall participate in or contribute to a CMP project , the cost shall be equivalent to 20% of the total subdivision project cost of the main subdivision project.Modes of Compliance 1. Providing a parcel of land to a CMP project; 2. Providing and developing a right-of-way or access to roads or public transportation lines to a CMP project or introducing or upgrading of amenities, facilities or other forms of development in an existing CMP project; or 3. Subscription or purchase of asset-backed securities originated or conveyed by the SHFC.

Memorandum Circular No. 07, Series of 2013Guidelines For The Accreditation of Developers of Socialized Housing ProjectsGuidelines For The Accreditation of Non-Government Organizations (NGOs)Board Resolution No. 890Series of 2012ACCREDITATIONMemorandumCircular No. 06, Series of 2013Developers AccreditationNGOs AccreditationACCREDITATIONDevelopers Accreditation

General AccreditationACCREDITATIONAllows JV with any developers of main subdivisionprojects as compliance to Sec. 181. Applicant must be engaged in the development of socialized housing projects; and2. Applicant must have produced at least 2,000 SOCIALIZED HOUSING UNITS.QUALIFICATIONSQualifications & DisqualificationsDevelopers Accreditation44

General AccreditationACCREDITATIONQUALIFICATIONSQualifications & DisqualificationsDevelopers Accreditation1. Pending CDO or suspension of license to sell imposed by any RFO on any of its projects; and2. Unpaid fees, fines or penalties imposed by any RFO on any of its projects.DISQUALIFICATIONS45

ACCREDITATIONAllows JV with any developers of main subdivisionprojects as compliance to Sec. 18Qualifications & DisqualificationsDevelopers AccreditationDISQUALIFICATIONSAllows JV with developers of main subdivision projects as compliance to Sec. 18 ONLY under any of the ff. conditions:If more than 50% of the voting stock of the applicant is owned by the developer of the main subdivision project; orIf more than 50% of the voting stock of the applicant and if more than 50% of the voting stock of the developer of the main subdivision project are owned by the same corporation.Limited Accreditation46

ACCREDITATIONSHBuildersSH BuildersMD1 Co.MD 1HomesMD2Co.MD2 Co.MD3 Co.MD3Co.MD4Co.MD4 Co.MOTHERLAND DEVELOPMENT

Parent or Holding Company+50%subsidiary+50%+50%+50%+50% Developers of Main Subdivision ProjectsLimited AccreditationDeveloper Of SHPsQualifications & DisqualificationsDevelopers AccreditationLimited Accreditation47

ACCREDITATIONApplicant need not possess the qualifications for general accreditation but must not possess any of the disqualifications.Qualifications & DisqualificationsDevelopers AccreditationLimited Accreditation48

ACCREDITATIONApplicant need not possess the qualifications for general accreditation but must not possess any of the disqualifications.Qualifications & DisqualificationsDevelopers AccreditationLimited AccreditationHOWEVER, the developers of the main subdivision projects with which applicant is entering into JV must have the following qualifications, and none of the disqualifications for general accreditation;1. Must be engaged in the business of real estate development for at least five (5) years; and2. Must have produced at least 5,000 units.49NGOs Accreditation

ACCREDITATIONApplicant need not possess the qualifications for general accreditation but must not possess any of the disqualifications.Qualifications & DisqualificationsDevelopers AccreditationLimited AccreditationHOWEVER, the developers of the main subdivision projects with which applicant is entering into JV must have the following qualifications, and none of the disqualifications for general accreditation;1. Must be engaged in the business of real estate development for at least five (5) years; and1. No pending CDO or suspension of license to sell imposed by any RFO on any of its projects; and2. No unpaid fees, fines or penalties imposed by any RFO on any of its projects.50

Non-Government Organization Voluntarily organized under Phil. laws by private citizens and without government representatives among its directors and officers; and

Operating exclusively for non-commercial or non-profit purposes.ACCREDITATIONNGOs Accreditation51

ACCREDITATIONQualifications3. It must have produced at least 500 SOCIALIZED HOUSING UNITS.2. It must be engaged in the development of socialized housing projects or production of socialized housing units or construction of facilities, centers and other basic amenities and facilities; andIt must be a non-stock corporation organizedunder Phil. Laws;NGOs Accreditation52

DisqualificationsACCREDITATIONNGOs Accreditation1. Pending CDO or suspension of CR or LS; and2. Unpaid fees, fines or penalties.53

ACCREDITATIONDocumentary Requirements1. Sworn Application for Accreditation;2. SEC Papers / Latest G.I.S.;3. Latest audited financial & income statements4. Proof of completion of required no. of units;5. Certifications of no pending unpaid fees, fines or penalties; and6. Copy of the official receipt.Issuance of Certificate of Accreditation54

ACCREDITATIONDocumentary Requirements4. Proof of completion of required no. of units;Issuance of Certificate of AccreditationDevelopers AccreditationAdditional Requirementsfor Limited Accreditation:2. Submit certified true copies of latest G.I.S. of the developers of main subdivision projects.Specify names of the developers of the main subdivision projects in the application form; and55

ACCREDITATIONDocumentary RequirementsIssuance of Certificate of AccreditationDevelopers AccreditationAdditional Requirementsfor Limited Accreditation:NGOs AccreditationSubmission of its organizational profile56

ACCREDITATIONProcedure for AccreditationSubmission of application to the RFO where the principal office of the applicant is located; and2. Forwarding of the application with all the required documents and the RFOs recommendation to the Office of the CEO.57

ACCREDITATION1. Sworn Application for Accreditation;2. SEC Papers / Latest G.I.S.;3. Latest audited financial & income statements4. Proof of completion of required no. of units;Additional Requirementsfor Limited Accreditation:2. Submit certified true copies of latest G.I.S. of the developers of main subdivision projects.Specify names of the developers of the main subdivision projects in the application form; andSubmission of its organizational profileProcedure for AccreditationSubmission of application to the RFO where the principal office of the applicant is located; andEffect of AccreditationAccreditation shall allow the joint venture with a developer of socialized housing projects or the contribution to an NGO for the development of socialized housing projects or production of socialized housing units to be utilized as compliance with Section 18 of UDHA by the developer of the main subdivision project.58

ACCREDITATIONGrounds For Suspensionof Accreditation:Issuance of a CDO against the developer or NGO on any of its projects;Suspension or revocation of the CR or LS of any of the developers or NGOs projects; andFailure to complete the development of a compliance project within one year from issuance of CR or LS or within such other period of time fixed by HLURB.Suspension and Revocation Of Accreditation59

ACCREDITATIONGrounds For Suspensionof Accreditation:Suspension and Revocation Of AccreditationRevocation of AccreditationMisrepresentation on the part of the developerin applying for the accreditation60

ACCREDITATIONSuspension and Revocation Of AccreditationProcedure1. RFO shall within five days from occurrence of any of the grounds for suspension or revocation report the incident to the CEO;2. Notice to the developer or NGO to explain in writing;4. Suspension or revocation is immediately executory.3. The CEO shall issue the suspension or revocation; and61

ACCREDITATIONGrounds For Suspensionof Accreditation:Suspension and Revocation Of AccreditationRevocation of AccreditationProcedure2. Notice to the developer or NGO to explain in writing;Effects of Suspension1. Any agreement or JV entered into after suspension or revocation shall not be allowed as compliance;2. Suspension or revocation is without prejudice to obligation or liability already incurred in any JV or agreement entered prior thereto;3. Suspension may be reinstated upon lifting of CDO or of the suspension of LS.62

ACCREDITATIONSuspension and Revocation Of AccreditationProcedureFor NGOs already accredited, they shall request for issuance ofnew certificate of accreditation.Transitory Provision63

Memorandum CircularsNos. 01 05, S. of 2013Board ResolutionNo. 890, S. of 201264

Both the main subdivision project and the compliance project shall be subject to the regular monitoring activity of the RFO where each project is registered. The imposition of fines and other administrative sanctions shall be in accordance with the schedule and guidelines promulgated by HLURB.MONITORING,SANCTIONS ANDREMEDIESGeneral Rules65

Cease and Desist Order (CDO) refers to an order issued by HLURB directed against the developer of a main subdivision project enjoining it from further selling lots and/or units in the said project.MONITORING,SANCTIONS ANDREMEDIESGeneral Rules66

MONITORING,SANCTIONS ANDREMEDIES CR or LS OF THE COMPLIANCE PROJECT LS OF THE MAIN SUBDIVISION PROJECTSUSPENDED or REVOKED SUSPEND / REVOKE & CDO RFORFOOn the ground of, among others,non-completion or non-development of the compliance project within the period fixed by HLURB67

MONITORING,SANCTIONS ANDREMEDIES CR or LS OF THE COMPLIANCE PROJECT LS OF THE MAIN SUBDIVISION PROJECTSUSPENDED or REVOKED SUSPEND / REVOKE & CDO

RFO

RFO68

MONITORING,SANCTIONS ANDREMEDIESReinstatement of the CR or LS of thecompliance project; orSubmission of proof of a differentfull compliance, without prejudiceliabilities already incurred.69

Cease and Desist Order (CDO) refers to an order issued by HLURB directed against the developer of a main subdivision project enjoining it from further selling lots and/or units in the said project.MONITORING,SANCTIONS ANDREMEDIES SUSPEND / REVOKE & CDO Submission of proof of a differentfull compliance, without prejudiceliabilities already incurred. The application for the issuance of CR/LS for a new main subdivision anywhere in the Phils. shall not be accepted or shall be denied ifany of the developers compliance projects has not been completed within the periodfixed by HLURB.70Thank you and visit us atwww.hlurb.gov.ph