Osea vs. Ambrosio

CASE DIGEST: G.R. No. 162774, April 7, 2006

Administrative Law

FACTS:

Petitioners contend that the breach of contract in view of respondents' failure to comply with the building plans and technical specifications of the residential dwelling involves a violation of the Civil Code which is within the jurisdiction of regular courts, and not with the HLURB whose jurisdiction covers only cases of unsound real estate business practice and those that may be included within, or is incidental to, or is a necessary consequence of its jurisdiction.

Respondents argue, on the other hand, that the HLURB has exclusive jurisdiction, it arising from contracts between the subdivision developer and the house and lot buyer or those aimed at compelling the subdivision developer to comply with its contractual and statutory obligations.

ISSUE:

Whether or nor HLURB has jurisdiction?

HELD:

HLURB has jurisdiction.

P.D. No. 957 Section 3 of this statute provides:

“. . . National Housing Authority [now HLURB]. — The National Housing Authority shall have exclusive jurisdiction to regulate the real estate trade and business in accordance with the provisions of this Decree.”

The need for the scope of the regulatory authority thus lodged in the HLURB is indicated in the second, third and fourth preambular paragraphs of P.D. 957 which provide:

“WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or sellers have reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems, and other similar basic requirements, thus endangering the health and safety of home and lot buyers;

WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles to the buyers or titles free from liens and encumbrances, and to pay real estate taxes, and fraudulent sales of the same subdivision lots to different innocent purchasers for value;”

xxx xxx xxx

“WHEREAS, this state of affairs has rendered it imperative that the real estate subdivision and condominium businesses be closely supervised and regulated, and that penalties be imposed on fraudulent practices and manipulations committed in connection therewith.”

The provisions of P.D No. 957 were intended to encompass all questions regarding subdivisions and condominiums. The intention was aimed at providing for an appropriate government agency, the HLURB, to which all parties aggrieved in the implementation of provisions and the enforcement of contractual rights with respect to said category of real estate may take recourse. The business of developing subdivisions and corporations being imbued with public interest and welfare, any question arising from the exercise of that prerogative should be brought to the HLURB which has the technical know-how on the matter. In the exercise of its powers, the HLURB must commonly interpret and apply contracts and determine the rights of private parties under such contracts. This ancillary power is no longer a uniquely judicial function, exercisable only by the regular courts.

As observed in C.T. Torres Enterprises, Inc. v. Hibionada:

The argument that only courts of justice can adjudicate claims resoluble under the provisions of the Civil Code is out of step with the fast-changing times. There are hundreds of administrative bodies now performing this function by virtue of a valid authorization from the legislature. This quasi-judicial function, as it is called, is exercised by them as an incident of the principal power entrusted to them of regulating certain activities falling under their particular expertise.

In the Solid Homes case for example the Court affirmed the competence of the Housing and Land Use Regulatory Board to award damages although this is an essentially judicial power exercisable ordinarily only by the courts of justice. This departure from the traditional allocation of governmental powers is justified by expediency, or the need of the government to respond swiftly and competently to the pressing problems of the modern world. (Emphasis and underscoring supplied)

Furthermore, Executive Order (EO) No. 90 series of 1986, "IDENTIFYING THE GOVERNMENT AGENCIES ESSENTIAL FOR THE NATIONAL SHELTER PROGRAM AND DEFINING THEIR MANDATES, CREATING THE HOUSING AND URBAN DEVELOPMENT COORDINATING COUNCIL, RATIONALIZING FUNDING SOURCES AND LENDING MECHANISMS FOR HOME MORTGAGES AND FOR OTHER PURPOSES," so named the HLURB to recognize its mandate and authority over the development of housing in general and low-cost housing in particular. Thus Section 1 (c) of said EO provides:

Human Settlements Regulatory Commission — The Human Settlements Regulatory Commission; renamed as the Housing and Land Use Regulatory Board, shall be the sole regulatory body for housing and land development. It is charged with encouraging greater private sector participation in low-cost housing through liberalization of development standards, simplification of regulations and decentralization of approvals for permits and licenses.

This Court has thus consistently held that complaints for breach of contract or specific performance with damages filed by a subdivision lot or condominium unit buyer against the owner or developer fall under the exclusive jurisdiction of the HLURB.

Moreover, under the doctrine of primary administrative jurisdiction, courts cannot or will not determine a controversy where the issues for resolution demand the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative tribunal to determine technical and intricate matters of fact.

Under the circumstances attendant to the case, the HLURB has the expertise to determine the basic technical issue of whether the alleged deviations from the building plans and the technical specifications affect the soundness and structural strength of the house.

Petitioners' position that an action for damages is not incidental to or a necessary consequence of the cases within the purview of the HLURB's jurisdiction does not lie. Being the sole regulatory body for housing and land development, the HLURB will be reduced to a functionally sterile entity if, as petitioners contend, it lacks the power to settle disputes concerning land use and housing development and acquisition, including the imposition of damages if the evidence so warrants.