G.o.a.l., Inc. v. Court Of Appeals
REITERATIONFacts
The Antecedents: G.O.A.L., INC. (GOAL) obtained a loan from the National Housing Authority (NHA) for the construction of Gemin I Condominium. A contract was entered into with Matson International Corporation for construction, but the contractor abandoned the project at 60% completion. GOAL offered units for sale in 1985, with private respondents being among the buyers. To continue construction, GOAL secured additional funding from NHA, which required GOAL to hold the condominium certificates of title of the private respondents. Procedural History: Private respondents filed a complaint with the Housing and Land Use Regulatory Board (HLURB) alleging illegal construction of the fifth floor, failure to deliver title to Filomeno Teng, and inadequate parking spaces. The HLURB ordered GOAL to stop the fifth-floor construction, deliver Teng's title, and provide adequate parking. This decision was affirmed by the Office of the President Legal Affairs (OPLA) and subsequently by the Court of Appeals. The Petition: GOAL filed a petition for review on certiorari, seeking to set aside the Court of Appeals' decision concerning the construction of the fifth floor, the issuance of title to private respondent Teng, and the provision of free parking spaces.
Issue(s)
Whether the construction of the fifth floor of Gemin I Condominium was illegal. Whether GOAL was justified in failing to deliver the title to private respondent Filomeno Teng due to the contractor's abandonment and the use of the title as collateral for a loan. Whether the parking spaces provided were adequate and in compliance with P.D. 957. Whether the award of moral damages, exemplary damages, and attorney's fees was excessive.
Ruling
The petition is denied. The decision of the Court of Appeals is affirmed.
Ratio Decidendi
On the illegality of the fifth-floor construction: The Court held that the construction of the fifth floor was in violation of Section 22 of P.D. 957. This provision requires not only the permission of the Housing and Land Use Regulatory Board (HLURB) but also the written conformity or consent of the homeowners' association or, in its absence, a majority of the lot buyers. The written approval of the NHA alone was insufficient. Therefore, the Court of Appeals correctly applied the law in affirming the HLURB's order to stop the construction. On the failure to deliver title to Filomeno Teng: The Court rejected GOAL's defense of force majeure due to the contractor's abandonment. It emphasized that upon full payment, GOAL is mandated by law and its own contract to deliver the title. Section 25 of P.D. 957 and the Contract to Sell clearly state that the vendor shall convey all rights and interests to the vendee upon full payment. GOAL's use of Teng's title as collateral for an additional loan was also deemed improper, as GOAL had lost its rights to the unit in favor of the buyer upon full payment. The Court reiterated that innocent parties should not suffer from the developer's lack of business acumen. On the adequacy and nature of parking spaces: The Court clarified that Section 12-D, No. 2 of the Implementing Rules of P.D. 957 does not exclude indoor parking areas from being provided for free; it only excludes "street parking." Parking spaces, not being subject to private ownership, are considered common areas in a condominium. Therefore, private respondents, as unit owners, have an undivided interest in these common areas and must be allowed to use them. GOAL could not claim ownership of the parking area to deny its use to the unit owners. On the award of damages and attorney's fees: The Court found no error in the award of attorney's fees, moral and exemplary damages, and administrative fines. These awards are allowed under civil law and Sections 38 and 39 of P.D. 957. The Court also dismissed GOAL's claim of ignorance of P.D. 957, stating that as a business engaged in activities covered by the decree, GOAL should be aware of its clear and unmistakable provisions. The claim of good faith based on a "doubtful or difficult question of law" was unavailing.
Main Doctrine
A condominium developer cannot alter approved plans, such as constructing an additional floor, without the permission of the Housing and Land Use Regulatory Board (HLURB) and the written consent of the homeowners' association or a majority of lot buyers. Furthermore, the developer is mandated to deliver the title to the buyer upon full payment, and cannot use the buyer's title as collateral for subsequent loans, as this constitutes a violation of the contract to sell and P.D. 957.