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Questions Concerning Board Resolutions
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What are the new ways which the HLURB has helped the government in its housing program?
It has issued several resolutions which liberalized or relaxes some requirements for developers in the application for a license to sell of a subdivision or condominium project.
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What is the effect of the relaxation of the requirements on the license to sell?
It is hoped that by the relaxation of the requirements for application of the license to sell, it will encourage developers to develop more housing projects and investors to enter into the real estate business, thus more housing for people.
Can you tell us what are these new issuances by HLURB that will encourage developers and investors into housing?
First, we have Resolution No. 737, which authorizes developers to enter into joint venture projects as a mode on compliance to the balanced housing development provision of RA 7279, which requires that all subdivisions must have a socialized housing component equivalent to 20% on the projects cost or project area;
Second is Resolution No. 739, which approved the purchase of HGC special series bonds as a mode of compliance to the 20% socialized housing requirements under RA 7279;
Third is resolution No. 725-A, which deleted the DAR Exemption Clearance as a requirement for the issuance of the Development Permit and License to Sell for subdivision on and condominium projects;
Fourth are Resolution Nos. 748 and 750, which removes the DAR Conversion Clearance as a pre-condition but as a post requirement for the issuance of a License to Sell for residential subdivisions and farmlots, respectively; and
Fifth is Resolution No. 756, which removes the Building Permit as a prior requirement for the License to Sell and Certificate of Registration and make it as a post requirement instead.
All these resolutions, while not removing the protection of buyers, will enable developers and investors to actively participate on the housing program of the government.
Returning to the first Resolution No. 737, what is the reason for allowing developers from entering joint venture projects for complying with the 20% requirement of RA 7279?
Previously, only the NHA and local government units and agencies have been allowed to enter into joint venture agreements with developers complying with the 20% requirement but in line with the government policy of greater private sector participation on the governments housing program, it is already allowed for developers to enter into joint venture projects on socialized housing.
What is the purpose of allowing HGC bonds as compliance to the 20% requirement?
The purpose of the 20% requirement for socialized housing under RA 7279 is to encourage developers and investors to enter into socialized housing. Hence, the purchase of socialized housing bonds, such as HGC bonds is recognized as a mode of compliance to this requirement, the same as being germane to the purpose and scope of the term joint ventures as allowed by the said law.
By not requiring the DAR Conversion Clearance for the application of the License to Sell and Certificate of Registration, does this mean that there is no need to submit this Clearance anymore?
No, the developer must still comply with the law, requiring the DAR Conversion Clearance. However, instead of submitting it upon application for the LS/CR, the HLURB allow the submission of the same as a post requirement.
Is the relaxation of the requirement to submit the DAR Conversion Clearance applicable to all projects?
The exemption only applies to residential projects and farmlots. The purpose of the relaxation is to minimize the red-tape on approval of subdivision and condominium projects, which are recognized as pump primers of the economy.
What is the reason of making the Building Permit merely as a post requirement to the License to Sell?
It has been brought to the attention of the Board that due to the continued malaise on the housing industry, the requirement of the Building Permit for application of the License to Sell has become impractical and expensive because it will prevent the developers to conduct preliminary selling activities to test the market viability of their projects, which is a test required by financial institutions prior to approval of any developmental loans. As a good business practice, the developers usually conduct these preliminary test before they fully invest on the condominium. If the market testing will show that the project is not viable, they can stop or limit the project. But by already paying the expensive Building Permit, the developers will be forced to continue the whole project even if later, market studies would show that the project is not viable or marketable. This will result to loss of funds which might be invested to more viable condominiums.
Erratum: The word “subdivision project” previously mentioned on the above paragraph was changed to “condominium”.
If the Building Permit has been made a post requirement, how will the HLURB ensure that the condominium project or the housing units are structurally sound?
Upon application by the developer, the HLURB will issue a Temporary License to Sell which is valid for six months, thereafter, the developer must submit the required Building Permit. The six months period for the temporary license is jus the period given by HLURB wherein the developer can undertake preliminary marketing activities to test the market.
Is there anything new that the HLURB can help the government’s housing programs?
The HLURB is currently revising its Rules of Procedures. The purpose of such revision is to make the agency more accessible to the public, especially, the complainants against erring developers. To be more accessible, the Board is emphasizing the summary nature of the proceeding before it, so that the public or any person who has a complaint can readily claim protection from unscrupulous developers, even without any lawyer.
Also, the Board is updating its Rules on the Registration of Homeowners Association and its monitoring. Upon assumption of jurisdiction of HLURB on HOAs, it has been the concern of the Board on the lack of compliance by the HOAs on the documentary requirements. Thus, it is trying to simplify the requirements so that it would be easier for them to comply with the same as well as for the Board to monitor their activities.
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