It`s time we settled NCEHA`s financial crisis

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It`s time we settled NCEHA`s financial crisis
April 2014 Maiden Internet Edition
“A harmful truth is better than a useful lie” – Thomas Mann
Page 1
It’s time we settled NCEHA’s financial crisis
MANILA, Philippines - The Bureau of Internal Revenue (BIR) has removed the tax
perks given homeowner associations nationwide.
Under Revenue Memorandum Circular 92013 dated January 29, 2013, homeowner
associations, including those in the posh
Forbes Park and Dasmariñas Village in
Makati City, are now required to pay valueadded tax (VAT).
Let’s face it, either we bite the bullet or go broke...
The Bible says “The love of money is the
root of all evil” (Timothy 6:10). In real life, it
is the lack of money that brings grief, more
so when it is impossible to make ends
meet
Here’s a rundown of our monthly financial
position, as of June 2013:
Monthly income from collections:
Total number of homeowners:
620
Percentage of homeowners who pay
60%
Average monthly homeowner dues
₱220.00
Average monthly collection
₱81,840.00
Typical monthly expenses:
SWAG Security Agency
Administrative Expenses:
Personnel (6 employees)
Utilities:
Power (Meralco)
Water (Maynilad)
Telephone (PLDT)
Other monthly expenses
Total monthly expenses
14,000.00
10,287.03
3,000.00
5,000.00
₱128,661.03
Net monthly income (deficit)
(₱46,821.03)
₱55,940.00
40,434.00
Our monthly deficit keeps piling up. As of
that date, our outstanding payables were
as follows:
Mighty Guardians Security Agency ₱16,500.00
Rockland Security Agency
14,000.00
SWAG Security Agency (1 month)
55,500.00
Meralco
35,375.85
Hodieng
3,488.00
Maynilad
10,287.03
PLDT
12,491.80
Screen Mark
15,000.00
Total outstanding payables
₱162,642.68
Cartoon by Randy Bish
http://www.cagle.com/tag/internal-revenue-service/page/2/
Therefore, like condominium operators,
homeowner associations no longer enjoy “RA 9904, which exempts from taxation
tax exemptions on their dues and mem- the association dues and income derived
from rental subject to certain conditions, is
bership fees.
an implied recognition by Congress that
“For tax purposes, the association dues, such receipts are subject to income tax,”
membership fees and other assess- Henares said.
ments/charges collected by a homeowners “Thus, the amounts paid in as dues or fees
association constitute income payments or by homeowner-members of a homeowners
compensation for beneficial services it association form part of the gross income
provides to its members and tenants. The of the latter subject to income tax. This is
previous interpretation that the assess- because a homeowners association furment dues are funds which are merely nishes its members with benefits, adheld in trust by a homeowners’ association vantages and privileges in return for such
lacks legal basis and is hereby aban- payments,” she added.
doned,” BIR Commissioner Kim JacintoThe BIR hopes to raise ₱1.253 trillion this
Henares said.
year, higher than its 2012 goal of ₱1.066
Wrong interpretation – Prior to the circular, trillion.
homeowners associations enjoyed tax incentives under Republic Act 9904, other- In coordination with the Association of
wise known as the “Magna Carta for Quezon City Homeowners Association,
Homeowners and Homeowners Associa- Inc. (AQCHAI) and the Quezon City Subdivision Division, your Board is studying
tions.”
legal remedies and other ways and means
Section 18 of RA 9904 states that where to work around this onerous Internal Revlocal government units lack resources to enue Memorandum Circular 9-2013.
provide for basic services, the associations Second, last August 26, 2012 we were
shall endeavor to tap their means to pro- served by the Office of the City Treasurer
vide for the same.
of Quezon City a Notice of Real Property
The BIR said previous rulings exempted
association dues from VAT, saying that
“condominium corporations do not sell,
barter or exchange goods and property nor
does it render service for a fee but merely
If this were not enough, there are two laws implements the administration of the rethat the Association has now to contend quired services to collect the associated
dues from the unit owners pursuant to its
with.
corporate purpose as trustee of the fund.”
First is a Circular from the Bureau of Internal Revenue that imposes income and However, in the circular, Henares clarified
value-added taxes over collections of that this interpretation was wrong.
monthly dues by homeowners associaShe said association dues, membership
tions.
fees and other assessments or charges
The following was posted on Rappler.Com collected by a condominium corporation
are income payments or compensation for
on February 6, 2013:
(http://www.rappler.com/business/21158-bir-tobeneficial services it provides to its memhomeowners-associations-no-more-tax-perks)
bers and tenants.
Tax Delinquency.
It appears that their records show that our
Association should have been paying real
estate taxes from 1996 onward on properties owned by the Association.
As of now, only the general area where
our park is has been identified as subject
to the tax – which as of the date of notice
now amounts to ₱446,133.
The Quezon City Government can and will
garnish our subdivision properties to satisfy unpaid taxes due. It is not a question of
if, but when it decides to do so.
Your Board is seriously considering the
voluntary turn-over of its real estate hold
Continued on Page 2)
April 2014 (Maiden Internet Edition)
It’s time we settled…
(Continued from Page 1)
ings to the City Government, but this solution has as many cons as there are pros.
It is quite obvious that our Association is
headed for perdition unless we do something about it.
The time has come when all of us
must “bite the bullet” and settle
the financial crisis once and for
all.
Your present Board has therefore taken
the following steps.
1. Sued before the HLURB an initial
nine (9) homeowners who have consistently evaded paying their dues,
some of which date back to the late
1980’s. In this connection, we are dunning
them for interest of 1% per month that their
account has been overdue.
The complaint, bearing Docket Number
NCRHOA-052813-1844 was filed last May
28, 2012. Resolution is expected anytime
soon.
NEWS CAP
Page 2
lion. Imagine how far this amount would
Subdivision
go in easing our financial crisis!
Alpha Village
Ayala Heights
2. Brought to the attention of the
Capitol Hills Golf
Building Official Division, Quezon City
Capitol Homes
Government, the illegal constructions
and illegal occupancy of establish- Capitol Park
ments which have broken the subdivi- Ciudad Regina
sion’s perimeter wall along Common- Don Enrique Heights
wealth Avenue, preparatory to filing suit Doña Petrona
Fil-Invest I
for damages before the proper courts.
Fil-Invest II
The case, bearing Docket Number 12- Granwood Villas
2543 was filed last June 2012. Now due La Vista
for resolution, it concerns the violation of Loyola Grand Villas
P.D. 1096 otherwise known as the Nation- Mapayapa I
al Building Code.
Mapayapa II
Mapayapa III
The violation not only involves the destrucMira Nila
tion of the wall and arrogation unto themNew Capitol Estates II
selves property belonging to the subdivision; this action has enabled criminal ele- New Intramuros Vill.
ments to enter and exit our subdivision North Susana
thereat without detection – and who knows Tierra Pura
if it may even be with the full knowledge Tierra Pura VI
Tivoli Greens
and consent of those who broke the wall.
Vista Real Classica I
In this connection, the Board will also go Xavierville I
after those who have illegally appropriated Xavierville II
property within the subdivision that belongs to the Association.
Mo. Dues
₱500
36/sq. m.
700
1,000 minimum
900
900
500
600
840
400
900
18/sq. m.
1,000
600
500
800
750
550
550
600
700
750
800
750
800
500
Clearing of septic tanks
begins
At this point in time, no more negotiations
with defaulting homeowners shall be enter- Last November 2012, your Board begun in
tained. The Association has nothing to earnest an inventory and property mapping of all the properties turned over by the June 4 – the clearing of septic tanks in the
lose and everything to gain.
Bliss Development Corporation to the As- different zones began today, courtesy of
More suits will be filed in the future against sociation way back on October 21, 1991. Maynilad.
recalcitrant homeowners who have benefitted from the services provided by the 3. Voted unanimously to increase
Association through the courtesy of those monthly dues, which have remained
unchanged since 1984, as follows:
who pay their monthly dues.
Dwelling
Quad
Townhouses
Flexihomes
From
250
200
215
To
400
350
365
Change
150
150
150
This increase shall be effective starting
July 1, 2013,
It is worthy to note that the ₱150 increase
is equivalent to five (5) bottles of San Miguel beer; or three (3) packs of locallymade cigarettes; or less than the price of a
movie show. Surely it is not a burden for
homeowners.
The biggest obstacle in clearing the tanks
of waste residues was that some homeDespite the increases, our subdivision still
owners illegally built structures over the
has the lowest homeowners dues comaccess openings of the underground
http://oxforddictionaries.com/us/definition/american pared with other subdivisions.
tanks. The only way then to clear the sep_english/parasite
tic tanks would be to demolish whatever
For purposes of comparison, here is a list
structure was built over them.
As of that date, the total arrears of de- of dues charged in various neighboring
faulting homeowners totaled ₱1.8 mil- subdivisions, as of 2010:
Continued on Page 3
April 2014 (Maiden Internet Edition)
Clearing of septic...
(Continued from Page 2)
NEWS CAP
in the house. The scammers call and pretend that a family member has been hurt
and needs money for a surgery or medical
procedure of some sort. Then they pressure the helper into forcing open the family
safe, locked drawers, and the like to get
cash and other valuables. The helper is
then told to turn over the loot to the gang
members.
With the legal questions about the authority of the Board over the affairs of the subdivision put to rest once and for all with the
approval of its amended Articles of Incorporation and By-Laws and the subsequent
certification issued by the Housing and
Land Use Regulatory Board (HLURB), the
Defense mechanism: Tell helpers and
Association may now correct what needs
everyone in the house about this scam. To
to be corrected.
find out if they actually remembered what
you said, pretend to be a Dugo-Dugo
Gang member and make them go through
a drill. Take it a step further by rewarding
those that keep their wits about them.
Community alert
Beware of these criminals
Page 3
member much after a man allegedly engaged her in small talk while she was
walking along Ortigas Avenue. All she
could recall was getting inside a certain
van, drinking a glass of water, and handing
over two years’ worth of savings of her
seaman husband. All that in exchange for
a black bag stuffed with sheets of paper.
Defense mechanism: First of all, bear in
mind one of the first things everyone
learns as a kid: Don’t talk to strangers. Of
course, that can’t be helped sometimes so
remember another basic rule: Don’t accept
candy from strangers. In this case, if
strangers are giving you something as
“sweet” as a bagful of cash, you better
refuse. If you’re afraid of being hypnotized,
2. The Budol-Budol Gang
find out how the controversial phenomenon supposedly works to avoid succumbScene of the crime: The Budol-Budol ing to it.
Gang can strike anywhere using their alleged powers of hypnotism and “boodle” or
counterfeit money – hence the name – that
turn out to be just sheets of paper.
3. ATM Scams
Our CCTV Cameras will help identify criminals
Crime does not pay and neither should
you, not with your hard-earned cash,
gadgets, credit cards, and even your life.
Awareness is key to everything so brush
up on the Modus Operandi (MOs) of the
old-timers and newbies in the world of fast
Otsenta’y otso anyos na lola, nabiktima ng bucash cons in the country.
dol-budol - Cheryl Cosim & Erwin Tulfo.
1. The Dugo-Dugo Gang
YouTube: Alerto 24 (Mike Enriquez): DugoDugo - 2 Kasambahay, ipinakulong ng amo sa
hinalang kasabwat ng dugo-dugo gang
Scene of the crime: This group robs affluent homes by tricking unsuspecting
house helpers into helping them get to the
homeowners’ cash and valuables stash.
Plan of attack: Remember that PLDT caller
I.D. commercial? That’s basically how the
Dugo-Dugo Gang operates. After casing a
household, the gang members wait for the
opportune moment when only the helper is
News5Philippines Mar 20, 2012
Interestingly, Google Translate says “budol” means “gullible person.” Plan of attack: Their M.O. may have evolved over
the years but here’s their basic tactic: They
lure or blackmail their victims into giving
them valuables or cash in exchange for a
bag filled with fake bills or products. In one
reported instance in 2008, two suspected
Budol-Budol Gang members managed to
get a cellphone, a Walkman, and ₱2,000
from an unidentified 16-year-old girl in Cebu. The male and female suspects claimed
they were looking for a vehicle to transport
their things. Before they went to search for
a vehicle, they asked the girl to hold on to
a bag supposedly filled with money. In return, they got the girl to give them her valuables as a sort of safety deposit. It wasn’t
long before the girl discovered the bag
contained only fake bills. In 2005, a victim
identified only as Marie claimed some Budol-Budol Gang members hypnotized her
into giving them her money, jewelry, and
mobile phones. She said she did not re-
Scene of the crime: Usually in the vicinity
of ATMs, where scammers try all sorts of
things to make a quick buck at the cost of
unsuspecting card owners. Plan of attack:
ATM scammers have become more technology-savvy through the years. For instance, in 2007, they used magnetic rulers
to trap money, surveillance cameras and
external keypads to get PINs, and scheme
machines to read ATM card information. In
2008, they used a detachable aluminum
contraption and some sort of paste to trap
money. In 2009, police discovered a new
kind of scam, the ATM card switching. 24
Oras explained how the M.O. works: If you
have just withdrawn money from an ATM,
a scammer may approach you and tell you
that you left a P500 bill behind. He or she
will suggest that you check your ATM balance. As you do so, the scammer will
sneakily memorize your PIN and drop a
P500 bill on the ground. When you pick it
up – as you are most probably inclined to
do – the scammer will swipe your card and
replace it with a fake one.
April 2014 (Maiden Internet Edition)
NEWS CAP
Page 4
Editorial: Pets or Pests?
Ang mga naglilingkod
sa ating kapitbahayan:
Some homeowners allow their pets to roam the streets at will,
scrounging for food in garbage bins, in the process overturning and spilling their contents. Worse, they leave ordure in the
streets and in the yards of other homeowners. They also pose
the grave danger of biting people and infecting them with rabies.
Other homeowners keep their pets leashed or penned up.
However, when they take their pets out for a walk, they allow
them to defecate where they will.
Josie Pasion
Both of the above practices have to stop. Why must anyone endure ordure? It is unsightly,
unsanitary, and unsafe. We have seen animal droppings right within the premises of our
chapel and in the park where our young ones play! It’s in our streets – it gets stepped on accidentally and brought into our houses.
It has come to a point when the Board has decided on fines that make it costly for the pet
owner to continue these practices. The next step is to catch these offenders in flagrante and
arrest them. For this purpose and other environmental concerns, the Quezon City Government will be deputizing a few of our neighbors into its environmental police force. We have
also asked for barangay assistance on this matter.
Rolando Ramos
So people, shouldn’t we give a shit about this problem and cooperate in keeping our community clean and healthy?
Andy’s corner
On 17 June 2013, officers from the Environmental Protection & Waste Management Department of Quezon City conducted a seminar on MMDA and city ordinances pertaining to environmental protection and waste management. The whole-day seminar opened our eyes to
the fact that there are existing laws and ordinances that prohibit what common sense tells are
not only bad for the environment but are un-neighborly and even criminal in nature.
Do you know that that by definition, our storm drains are extensions of the natural waterways
system? Did you know that it is a crime to dump any kind of garbage, waste matter, or refuse
into them? Homeowners who have illegally attached their raw sewage pipes to the storm
drains are therefore forewarned: the day of reckoning is much closer than you think.
Alex Testigo
Maridel Fajardo
Do you know that you are prohibited from leaving your motor vehicle parked and unattended
for a long period of time, such that it becomes rusty, coated with dirt, and weeds start growing
under it? Your violation will fall either under an ordinance that prohibits indiscriminate disposal
of waste (if the vehicle doesn’t start) or the ordinance that prohibits obstruction of traffic (if it
does start).
There’s a whole slew of laws governing waterways, the cleanliness of your surroundings,
waste segregation, solid waste management, the use of plastic bags/wraps and Styrofoam.
You are not allowed to urinate or defecate outside designated areas (and by extension, you
should curb your animals from doing the same). In addition, there are laws governing junk
shops and pushcarts. Quezon City Hall is going flat-out to enforce them, through deputized
Environmental Police officers who will be clothed with both authority and responsibility.
Ponciano Peligro
What do these laws have in common? They all contain penalties, beginning with a stern
warning and community service, graduating into first, second and third offense citations, with
the penalty for each citation becoming steeper in terms of fines, incarceration, and/or community service. So, better watch out, better be good I’m telling you why: the enforcers are
coming to town (they’ll know if you’ve been good or bad) so be good for goodness’ sake.
Leandro C. Palma
Arjay Tabalno

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