Nothing more than a representative: On unit ownership and condo boards

Does a person have to be a unit-owner in order to be qualified to serve as a member of the board of directors of a condominium corporation?

The answer was clarified in the recent case of Rodriguez v. Pastorfide (G.R. No. 256648, Feb. 24, 2025).

Republic Act No. 11232, or the Revised Corporation Code, is clear that directors of a corporation shall be elected from among the holders of stocks registered in the corporation’s books (Sec. 22). Furthermore, Republic Act No. 4726 or the Condominium Act provides that one shall automatically cease to be a stockholder of a condominium corporation when they cease to own a unit in the project in which the condominium corporation owns or holds the common areas (Sec. 10). Rodriguez further discussed the qualification to serve as a member of the board of directors of a condominium corporation.

Aside from the requirements laid down under the Revised Corporation Code and the Condominium Act, the by-laws of Medical Plaza Makati Condominium Corp. (MPMCC) — which was the condominium corporation involved in Rodriguez — further provides that a person must be a member of MPMCC to be eligible for election as a director. Additionally, MPMCC’s by-laws provide that only registered owners of condominium units of Medical Plaza Makati Condominium (MPMC) may be considered members of the condominium corporation.

A group, which were listed as authorized representatives of different corporations that owned condominium units in MPMC, were candidates in the election of the members of the Board of Directors of MPMCC. Over the objections raised against their qualification, the election of the group was upheld since the different corporations that they represented were member-corporations of MPMCC in good standing, having no delinquencies in their dues and assessments. A member of and unit owner in MPMCC eventually filed an Election Contest before the Regional Trial Court.

The Regional Trial Court (RTC) ruled that the group should not have been elected as members of the Board of Directors since they were not members in their own right. The RTC cited Lim v. Moldex Land, Inc. (G.R. No. 206038, Jan. 25, 2017) wherein the Supreme Court ruled that while Moldex Land, Inc. had the right to appoint representatives to exercise its membership rights and privileges in the condominium corporation, the representatives of Moldex Land, Inc. may not be elected as directors and officers of the condominium corporation.

On further appeal, the Supreme Court clarified in Rodriguez that the ruling in Lim was inapplicable. The Supreme Court explained that the basis for its conclusion in Lim was the fact that the representatives therein were merely appointed as proxies, with limited powers to vote in meetings on behalf of a stockholder or member vis-à-vis the requirement under the Corporation Code that a trustee of a non-stock corporation must be a member thereof.

Conversely, the group elected in Rodriguez were not merely proxies but had broader authority. The Supreme Court held that “by authorizing [the group] to sit on the Board on its behalf, the member-corporations are merely exercising their right to be nominated and elected in MPMCC’s Board as members in good standing of the corporation.” The Supreme Court added that “[t]he member-corporations are themselves deemed to be the actual members sitting on the board of MPMCC, with their representatives merely acting on their behalf.” Since the corporations represented by the group are members of the MPMCC, the condominium corporation, then they can exercise their right to be elected to MPMCC’s Board of Directors.

The Supreme Court clarified that the duties and obligations of Board Members may only be exercised by natural persons. In exercising its right to be elected to the Board, a member-corporation must necessarily appoint a natural person to act on its behalf. A member-corporation may appoint only one natural person to act as its representative for purposes of election to the board of directors. Such natural person, however, need not be a unit-owner.

With Rodriguez, it is now clear that a member-corporation, which is a unit owner in a condominium corporation, can appoint a natural person to act on its behalf and be delegated with powers beyond those of a proxy (as in Lim) and be elected as a member of the board of the condominium corporation even if the representative is not a unit-owner

The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.

Lara Sophia R. Andrada is an associate of the Litigation and Dispute Resolution department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

(632) 8830-8000

lrandrada @accralaw.com