Union Bank of the Philippines v. Housing and Land Use Regulatory Board
REITERATIONFacts
The Antecedents: Martha David purchased a condominium unit from Fereit Realty Development Corporation (FRDC) in 1973. She made a downpayment and paid monthly installments, taking possession in 1975. FRDC, without David's knowledge and the National Housing Authority's (NHA) prior approval, mortgaged the condominium project, including David's unit, to Bancom Development Corporation (Bancom), predecessor-in-interest of Union Bank of the Philippines (UBP). FRDC defaulted on its loan, leading Bancom to foreclose the mortgage. The condominium units, including David's, were sold at a foreclosure sale to Bancom and Far East Bank and Trust Company (FEBTC) as highest bidders. Procedural History: Martha David, and later Teresita Quazon (who had purchased David's unit), filed a complaint with the Housing and Land Use Regulatory Board (HLURB) seeking the annulment of the mortgage, the foreclosure sale, and the condominium certificate of title issued to UBP and FEBTC. They also sought the issuance of a new title in Quazon's name. UBP and FEBTC questioned the HLURB's jurisdiction. The HLURB Arbiter denied their motion to dismiss. The Petition: UBP filed a petition for certiorari and prohibition with preliminary injunction, arguing that the HLURB lacked jurisdiction over the case, particularly the claim for consignation, and that the HLURB had no jurisdiction over contracts predating its creation in 1981.
Issue(s)
Whether the Housing and Land Use Regulatory Board (HLURB) has jurisdiction to hear and decide a condominium buyer's complaint for annulment of a real estate mortgage constituted by the project owner without the buyer's consent and prior NHA approval, annulment of the foreclosure sale, and annulment of the condominium certificate of title. Whether the HLURB has jurisdiction over contracts that took effect prior to its creation in 1981.
Ruling
The petition is DISMISSED. The HLURB has jurisdiction over the case. The dispositive portion of the Supreme Court's decision is: "WHEREFORE, the instant petition is DISMISSED with costs against the petitioner. SO ORDERED."
Ratio Decidendi
On the jurisdiction of the HLURB over the annulment of mortgage, foreclosure sale, and title: The Supreme Court held that the HLURB has exclusive jurisdiction over the case. Presidential Decree (P.D.) No. 957, Section 3, grants the National Housing Authority (NHA) exclusive jurisdiction to regulate the real estate trade and business. Section 18 of P.D. No. 957 explicitly prohibits mortgage on any unit or lot without prior written approval of the NHA, and mandates notification to the buyer. P.D. No. 1344 expanded the NHA's jurisdiction to include cases involving unsound real estate business practices, claims by subdivision lot or condominium unit buyers against project owners, and cases for specific performance of contractual and statutory obligations. The act of FRDC in mortgaging the condominium project without the buyer's knowledge and consent, and without NHA approval, constitutes an unsound real estate business practice and is prejudicial to the buyer, thus falling squarely within the exclusive jurisdiction of the NHA, now the HLURB. Executive Order No. 648 transferred these functions to the Human Settlements Regulatory Commission, renamed HLURB by Executive Order No. 90. On the jurisdiction over contracts predating the HLURB's creation: The Court found this argument to be without merit. The core issue was the validity of the mortgage and subsequent foreclosure sale, which were acts that had continuing effects and directly impacted the rights of the condominium buyer. The jurisdiction of the HLURB is determined by the nature of the complaint, which concerns the regulation of the real estate trade and business as mandated by P.D. No. 957 and P.D. No. 1344. The fact that the initial contract of sale predated the HLURB's formal creation did not divest it of its authority to resolve disputes arising from subsequent actions that violated the protective decrees governing real estate development and sales. The Court emphasized that the HLURB's jurisdiction is broad enough to cover such complaints, as demonstrated by previous rulings.
Main Doctrine
The Housing and Land Use Regulatory Board (HLURB) has exclusive jurisdiction over cases involving the annulment of real estate mortgages constituted by project owners without the buyer's consent and prior approval of the National Housing Authority (NHA), as well as the annulment of foreclosure sales and titles arising therefrom, as these fall under unsound real estate business practices and claims by condominium unit buyers against project owners under Presidential Decrees Nos. 957 and 1344.