Goldcrest Realty Corp. v. Cypress Gardens Condominium Corp.
REITERATIONFacts
The Antecedents: Petitioner Goldcrest Realty Corporation (Goldcrest) developed the Cypress Gardens condominium. Goldcrest executed a Master Deed and Declaration of Restrictions, constituting Cypress Gardens into a condominium project and incorporating respondent Cypress Gardens Condominium Corporation (Cypress) to manage common areas. Goldcrest retained ownership of the penthouse unit and controlled management until 1995. After the turnover, Cypress discovered Goldcrest occupying and encroaching upon common areas. In 1998, Cypress filed a complaint with damages against Goldcrest before the Housing and Land Use Regulatory Board (HLURB), seeking to compel Goldcrest to vacate and remove structures from these areas, including a door along a stairway, a door in the elevator lobby, and a cyclone wire fence on the roof deck. Goldcrest contended it had exclusive use of a roof deck area and that the structures were for privacy and security. Procedural History: HLURB Arbiter San Vicente ruled in favor of Cypress, ordering Goldcrest to remove obstructing structures, vacate the roof deck, pay damages, and pay an administrative fine. The HLURB Special Division modified this, deleting actual damages due to lack of evidentiary basis and holding Cypress had no cause of action regarding the roof deck's limited common area use. Cypress appealed to the Office of the President, which dismissed the appeal, affirming the HLURB Special Division's decision. Cypress then elevated the matter to the Court of Appeals, which partially granted the appeal, affirming the Office of the President's decision but additionally directing Goldcrest to remove permanent structures constructed on the limited common area of the roof deck. Both parties moved for reconsideration, which were denied. The Petition: Goldcrest filed a petition for review on certiorari with the Supreme Court, raising two issues: whether the appellate court erred in ruling that Goldcrest built an office structure on an encroached area of the roof deck, and whether the appellate court erred in ruling that Goldcrest impaired the easement on the roof deck's limited common area. Goldcrest argued that the Court of Appeals' findings were erroneous due to the lack of actual measurements of the encroached areas, making the directive to remove structures impossible to implement. Cypress countered that the specific identification of the limited common area in the Master Deed made the directive implementable and that Goldcrest's actions, including building structures and leasing them, went beyond the scope of the granted easement and illegally altered the condominium plan.
Issue(s)
Whether the Court of Appeals erred in ruling that Goldcrest built an office structure on a supposed encroached area in the open space of the roof deck. Whether the Court of Appeals erred in ruling that Petitioner impaired the easement on the portion of the roof deck designated as a limited common area.
Ruling
The petition is DENIED for lack of merit. The assailed Decision dated September 29, 2005 of the Court of Appeals in CA G.R. SP. No. 79924 is hereby AFFIRMED.
Ratio Decidendi
On the issue of whether the Court of Appeals erred in ruling that Goldcrest built an office structure on a supposed encroached area in the open space of the roof deck: The Court ruled in favor of Cypress. The failure to measure the encroached areas during previous ocular inspections was no longer relevant as the award for actual damages was not in issue. The Court found that the Court of Appeals' finding was supported by substantial evidence, including ocular inspection reports, the intent of a second inspection to measure the area, Goldcrest being fined for building a structure on the limited common area, and Goldcrest's failure to deny the structure's existence or encroachment. Furthermore, the Court found no merit in Goldcrest's submission that the lack of measurement made the directive to remove structures impossible to implement, as the limited common area was specifically identified by Section 4(c) of the Master Deed. On the issue of whether the Court of Appeals erred in ruling that Petitioner impaired the easement on the portion of the roof deck designated as a limited common area: The Court affirmed the ruling that Goldcrest impaired the easement. The question of whether an act impairs an easement is a question of fact. The Court found no reason to overturn the consistent findings of the HLURB, Office of the President, and Court of Appeals that Goldcrest had no right to erect an office structure on the limited common area despite its exclusive right to use it. The Court noted that Goldcrest's acts not only impaired the easement but also illegally altered the condominium plan, violating Presidential Decree No. 957. The Court enumerated restrictions on the dominant estate owner's rights on the servient estate, including exercising only necessary rights, not using the easement except for the originally contemplated benefit, not altering or making the easement more burdensome, and not constructing anything not necessary for its use and preservation. Goldcrest breached these restrictions by constructing an office structure that was not necessary for the use or preservation of the limited area, increasing the strain on the condominium's foundation and roof deck, making the easement more burdensome, and adding unnecessary safety risks. The construction also clearly went beyond the intendment of the easement by illegally altering the approved condominium project plan.
Main Doctrine
The exclusive use of a limited common area in a condominium project granted by a Master Deed does not grant the owner the unrestricted right to build structures thereon or to lease such area to third persons, as such acts may impair the easement and violate the condominium plan.