Republic of the Philippines

Office of the President

HOUSING LAND USE AND REGULATORY BOARD
SOUTHERN MINDANAO REGION
14F, Pryce Tower Condominium
Bajada, Davao City

JOAN B. SANICO REPRESENTED BY HLURB Case No._______

MUHAIMAIN SAPIE
Complainant,

-versus- FOR: FRAUDULENT PRACTICE

AND MACHINATIONS OF
MAJOR HOMES HOLDINGS, INC.; SELLING CONDOMINIUM
Quinto Oreta- President of Major VIOLATION OF PD 957
Holdings;
Liza Marquez- Customer Service Head
Respondents.
x---------------------------------------------------------------x

COMPLAINT

The Complainant respectfully allege:

PREFATORY STATEMENT

The jurisdiction of the HLURB The law

recognized, too, that subdivision and
condominium development involves public
interest and welfare and should be brought
to a body, like the HLURB, that has technical
expertise. In the exercise of its powers, the
HLURB, on the other hand, is empowered to
interpret and apply contracts, and determine
the rights of private parties under these
contracts. This ancillary power, generally
judicial, is now no longer with the regular
courts to the extent that the pertinent
HLURB laws provide.

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 JURISDICTION

It is worthy to note that the HLURB has exclusive jurisdiction over

complaints arising from contracts between the subdivision developer and
the lot buyer, or those aimed at compelling the subdivision developer to
comply with its contractual and statutory obligations to make the
Subdivision a better place to live in. This interpretation is in line with one
of P.D. 957’s “Whereas clauses,” which provides:

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. x x x.

P.D. 957 was promulgated to closely regulate real estate subdivision and
condominium businesses. Its provisions were intended to encompass all
questions regarding subdivisions and condominiums. The decree aimed to
provide for an appropriate government agency, the HLURB, to which
aggrieved parties in transactions involving subdivisions and condominiums
may take recourse.

THE PARTIES

The complainant Joan B. Sanico is represented herein by his attorney-in

fact, MUHAIMAIN SAPIE, by virtue of a Special Power o Attorney which is
hereto attached and marked as Annex “A”. For purposes of this Complaint,
all notices, orders and other processes must be sent to:

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 ATTY. GILDA S. MAHINAY, MA Econ.
Lawyer/Notary Public
187 Dominica St. Solariega Plantacion
Talomo, Davao City
PTR No. 2470304/January 8, 2019
IBP No. 068212/ January 10,2019
Roll No. 70474
MCLE (on process)

“Every nation has a Messenger and when their Messenger

comes everything is decided between them justly. They are not
wronged.” (Surah Yunus, 47)

The Respondents, MAJOR HOMES HOLDINGS, INC.; Quinto Oreta- President

of Major Holdings; Liza Marquez- Customer Service Head. They can be
served with summons at 167 Epifanio Delos Santos Ave., Edsa Brgy Hills,
Mandaluyong City 1554.

NATURE OF THE COMPLAINT LODGED

AGAINST THE RESPONDENTS

This is a complaint against the defendants for depriving the complainants

to own their lots through fraudulent machinations of real estate business
practice sans compliance of License to Sell issued by the Housing Land Use
and Regulatory Board (HLURB). Hence, there was violation of PD 957.

FACTUAL ANTECEDENTS

The complainant is an Overseas Contract Worker (OCW) based in Dubai.

Sometime in 2015, the brokers/agents of Major Holdings, Inc. for purposes
of conducting pre-sell of condominium Units.

The complainant gave a downpayment based on the oral agreement and

understandings. To comply with her obligations, she had been sending
money from Dubai to the account of Major Holdings, Inc. Hereto attached
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and marked as Annex “B to B___”, the receipts. The respondents never
gave her a copy of the Contract to Sell.

After two years of making payments, the respondents never comply with
their obligations, so a communication in the WhatsApp ensued. The
brokers and agents never made their promises. The fraudulent
machinations and deceits are manifested in the communications which are
hereto attached and marked as Annex “C to C____;

To sum up, the complainant had already parted her money to almost Php
500,000.00. hereto attached the Statement of Account which and marked
as Annex “D”;

ISSUES AND DISCUSSIONS

WHETHER OR NOT THE DEFENDANTS

ARE LIABLE UNDER PD 957

A review of the pertinent provisions of P.D. 957 plainly shows that the
execution of a contract of sale between the parties is not an essential
ingredient before there could be a violation of Section 5, viz:

SECTION 5. License to sell. - Such owner or dealer to

whom has been issued a registration certificate shall
not, however, be authorized to sell any subdivision lot
or condominium unit in the registered project unless he
shall have first obtained a license to sell the project
within two weeks from the registration of such project.
The Authority, upon proper application therefore, shall
issue to such owner or dealer of a registered project a
license to sell the project if, after an examination of
the registration statement filed by said owner or dealer
and all the pertinent documents attached thereto, he is
convinced that the owner or dealer is of good repute,
that his business is financially stable, and that the
proposed sale of the subdivision lots or condominium
units to the public would not be fraudulent.

SECTION 2. Definition of Terms - When used in this

Decree, the following terms shall, unless the context

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 otherwise indicates, have the following respective
meanings: x x x x x x x x x b) Sale or sell.

– “Sale” or “sell” shall include every disposition, or

attempt to dispose, for a valuable consideration, of a
subdivision lot, including the building and other
improvements thereof, if any, in a subdivision project
or a condominium unit in a condominium project. “Sale”
and “sell” shall also include a contract to sell, a
contract of purchase and sale, an exchange, an attempt
to sell, an option of sale or purchase, a solicitation of a
sale, or an offer to sell, directly or by an agent, or by a
circular, letter, advertisement or otherwise. c) Buy and
purchase. - The “buy” and “purchase” shall include any
contract to buy, purchase, or otherwise acquire for a
valuable consideration a subdivision lot, including the
building and other improvements, if any, in a
subdivision project or a condominium unit in a
condominium project. x x x

x x x x x x SECTION 39. Penalties. - Any person who shall

violate any of the provisions of this Decree and/or any
rule or regulation that may be issued pursuant to this
Decree shall, upon conviction, be punished by a fine of
not more than twenty thousand (₱20,000.00) pesos
and/or imprisonment of not more than ten years:
Provided, That in the case of corporations, partnership,
cooperatives, or associations, the President, Manager or
Administrator or the person who has charge of the
administration of the business shall be criminally
responsible for any violation of this Decree and/or the
rules and regulations promulgated pursuant thereto.

In conjunction with Section 2 of P.D. 957, Section 5 has an extended

definition of “sale,” which forbids all activities that dispose or attempt
to dispose of subdivision lots or condominium units absent a prior
issuance of an HLURB license to sell.

The prohibition includes all agreements that are in the nature of a

“contract to sell, a contract of purchase and sale, an exchange, an
attempt to sell, an option of sale or purchase, a solicitation of a sale,
or an offer to sell.” One of the reasons behind the expanded meaning
of the term “sale” was to deter the rising cases of swindling and
fraudulent manipulations perpetrated by unscrupulous subdivision and
condominium sellers and operators against unknowing buyers. Thus, for
the state to be able to closely supervise and regulate real estate

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 subdivision and condominium businesses, owners or dealers thereof
must have a license to sell before they engage in any type of “sale”
within the meaning of the law.

WHETHER OR NOT SELLING LOT

WITHOUT LICENSE IS A CRIME

P.D. 957 has been enacted to regulate for the public good the sale of
subdivision lots and condominiums. Its Section 5 prohibits such sale
without the prior issuance of an HLURB license and punishes those who
engage in such selling. The crime is regarded as malum prohibitum since
P.D. 957 is a special law designed to protect the welfare of society and
ensure the carrying on of the purposes of civil life. It is the commission
of that act as defined by law, not its character or effect that determines
whether or not its provision has been violated. Malice or criminal intent
is immaterial in such crime. In crimes that are mala prohibita, the
forbidden acts might not be inherently immoral. Still they are punished
because the law says they are forbidden. With these crimes, the sole
issue is whether the law has been violated.

WHETHER OR NOT PD 957

PROTECTS AGAINST REAL ESTATE
MISREPRESENTATIONS

The primary purpose of this decree is to protect the buyers of condominium

projects and subdivision developments against misrepresentations
and fraudulent activities of developers, sellers and operators.

Nowadays, real estate competition among developers, agents and

operators is becoming more stiff. Some of these people would do anything
just to close the deal with their clients. And the idea of “doing just
anything” to close the deal is a double edged sword.

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To do anything good to benefit both parties (the client and the seller) is
what’s ideal and just. However, what if only one party benefits more in
the transaction? In this case, it is usually the seller.

This happens when sellers (property developers, operators, brokers and

salespersons) over-promise something to clients but under-deliver,
deceive the client by fraudulent presentation or by simply feeding the
client with information which are not true, incomplete or
incomprehensive.

There were (and still are) numerous complaints against these unscrupulous
activities of property developers, operators, brokers and salespersons
reported to different government agencies such as the Housing and Land
Use Regulatory Board (HLURB) and National Housing Authority (NHA).

Thus, this decree, PD 957, was passed to resolve these problems and to
protect the welfare of the property buyers.

WHETHER OR NOT SECTION 9 OF

THE PD 957 TALKS ABOUT
THE REVOCATION OF REGISTRATION
CERTIFICATE AND LICENSE TO SELL

The following is a ground to revoke the registration of certificate and

license to sell:

a. Is insolvent; or

b. has violated any of the provisions of this Decree or any

applicable rule or regulation of the Authority, or any
undertaking of his/its performance bond; or

c. Has been or is engaged or is about to engage in fraudulent

transactions; or

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 d. Has made any misrepresentation in any prospectus,
brochure, circular or other literature about the
subdivision project or condominium project that has been
distributed to prospective buyers; or

e. Is of bad business repute; or

f. Does not conduct his business in accordance with law or

sound business principle

With the acts of the respondents, it is but logical to revoke the certificate
of registration of the Major Holdings, Inc.

WHETHER OR NOT THERE IS A DELAY

TURN-OVER OF THE PROJECT
UNDER SECTION 23 OF PD 957

Aside from the above mentioned sanction to the owner or the developer of
the condominium or subdivision project, Section 23 of P.D. 957 covers the
most common dilemma of property buyers, delay in the delivery of the
project.

SECTION 23. Non-Forfeiture of Payments.

No installment payment made by a buyer in a new or

existing subdivision or condominium project for the lot or
unit he contracted to buy shall be forfeited in favor of
the owner or developer when the buyer, after due notice
to the owner or developer desists from further payment
due to the failure of the owner or developer to develop
the project according to the approved plans and within
the time limit for complying with the same. Such buyer
may at his option be reimbursed the total amount paid
including amortization interests but excluding
delinquency interests, with interest thereon at the legal
rate.

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It is almost always that buyers of the condominium or subdivision
properties cannot do anything about the announcement of delays in the
delivery of their purchase. However with Section 23 of P.D. 957, the buyer
can actually do 2 things:

1. Desist from further payment after due notice to the owner or

developer of the project and clearance from the Board (HLURB) as
mandated in the 2009 revised implementing rules and regulations for
the decree.

2. Demand to be reimbursed the total amount paid including

amortization interests but excluding delinquency interests, with
interest thereon at the legal rate.

ADVERTISEMENTS THAT WOULD

MISLED OR DECEIVE THE PUBLIC

SECTION 19. Advertisements

Advertisements that may be made by the owner or

developer through newspaper, radio, television, leaflets,
circulars or any other form about the subdivision or the
condominium or its operations or activities must reflect
the real facts and must be presented in such manner that
will not tend to mislead or deceive the public.

The owner or developer shall [be] answerable and liable

for the facilities, improvements, infrastructures or other
forms of development represented or promised in
brochures, advertisements and other sales
propaganda disseminated by the owner or developer or
his agents and the same shall form part of the sales
warranties enforceable against said owner or developer,
jointly and severally.

Failure to comply with these warranties shall also be

punishable in accordance with the penalties provided for
in this Decree.

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The “NO DOWN PAYMENT” promotion when presented to common people,
will ordinarily be perceived as “no equity required” for the unit and the
buyer will just have to mortgage the whole amount or otherwise pay the
total contract price upfront.

But actually, this “NO DOWN PAYMENT” that they’re saying, only means
there is no lump sum amount needed for the down payment to purchase
the unit. This is because the down payment (or the equity) of the property
is stretched out to the allowable term given by the developer or owner of
the project.

For example, most developers usually require 20% downpayment and the
rest can be bank-financed or HDMF-financed (PAG-IBIG); What they do is
they allow buyers to pay the 20% downpayment over a period of several
months or years.

And it is only when that 20% payment is completed and when a loan for the
remaining 80% has been taken out, that the buyer can start using his
property. So essentially, there still is a downpayment required. The
complainant was misled or deceived by the advertisement like this.

Most importantly, know Section 33 of this P.D which states:

SECTION 33. Nullity of Waivers

Any condition, stipulation, or provision in

contract of sale whereby any person waives
compliance with any provision of this Decree or
of any rule or regulation issued thereunder shall
be void.

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 APPLICABLE LAWS AND JURISPRUDENCE

A. PD 957

It is outlined in P.D. 1344, “Empowering the National Housing Authority to

Issue Writ of Execution in the Enforcement of its Decision under
Presidential Decree No. 957,” viz:

Sec. 1. In the exercise of its functions to regulate real estate trade and
business and in addition to its powers provided for in Presidential Decree
No. 957, the National Housing Authority shall have the exclusive
jurisdiction to hear and decide cases of the following nature.

Sec 1. In the exercise of its functions to regulate real estate

trade and business and in addition to its powers provided
for in Presidential Decree No. 957, the National Housing
Authority shall have the exclusive jurisdiction to hear and
decide cases of the following nature.

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by

subdivision lot or condominium unit buyer against the
project owner, developer, dealer, broker or salesman; and

C. Cases involving specific performance of contractual and

statutory obligations filed by buyers of subdivision lots or
condominium units against the owner, developer, broker or
salesman.

Generally, the extent to which an administrative agency may exercise its

powers depends largely, if not wholly, on the provisions of the statute
creating or empowering such agency. Presidential Decree No. 1344,
“Empowering the National Housing Authority to Issue Writ of Execution in
the Enforcement of its Decision under Presidential Decree No. 957,”
clarifies and spells out the quasi-judicial dimensions of the grant of
jurisdiction to the HLURB in the following specific terms.

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It is a settled rule that the jurisdiction of the HLURB to hear and decide
cases is determined by the nature of the cause of action, the subject
matter or property involved and the parties.

CASE ON FRAUDULENT ACTS IN SELLING THE

LOTS

Through fraudulent acts and connivance of [T.P. and Ernesto Marcelo] and
the late Liwag and without the knowledge and consent of the complainants
all in violation of P.D. 957 and its implementing regulations, respondents
T.P. and Ernesto Marcelo transferred the same lot where the deep well is
located which is covered by TCT No. C-41785 in favor of
spouses Hermogenes Liwag and Emeteria Liwag to the great damage and
prejudice of complainants x x x.

We find that this statement sufficiently alleges that the subdivision owner
and developer fraudulently sold to Hermogenes the lot where the water
facility was located. Subdivisions are mandated to maintain and provide
adequate water facilities for their communities. Without a provision for an
alternative water source, the subdivision developer’s alleged sale of the
lot where the community’s sole water source was located constituted a
violation of this obligation. Thus, this allegation makes out a case for an
unsound real estate business practice of the subdivision owner and
developer. Clearly, the case at bar falls within the exclusive jurisdiction of
the HLURB.

DECISION OF HLURB CANNOT BE

INTERFERED BY REGULAR COURTS
EXCEPT WHEN THERE IS GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION

First: On the matter of lack of jurisdiction of this Court over this case – This
Court is fully aware of the cited decisions of respondents particularly those
which pertain to the exclusive jurisdiction of the Housing and Land Use

12
Regulatory Board (HLURB) as provided for under pertinent laws to the
exclusion of the regular courts and this is one of them. It cannot be gain
said that while [plaintiff] harps on Arts. 20 and 21 of the New Civil Code of
the Philippines to be the basis of his cause of action for damages before
this Court, the issue of his claiming damages against respondent Concepts
& Systems Dev’t. Inc. (CSDI), has already been resolved in HLURB Case No.
REM-091699-10646 in favor of CSDI and against him to which a Writ of
Execution has been issued, partially implemented by co-respondent Sheriff
Lucas Eloso Eje and to which [plaintiff] is asking this Court to issue a
temporary restraining order in order to suspend the full implementation of
said writ. While [plaintiff] claims that his cause of action is one of damages,
the truth is his main objective is to have this Court enjoin the enforcement
of the writ of execution issued by the HLURB. Such subterfuge is easily
discernible in view of the amount of damages [plaintiff] is only claiming in
this case against that which respondent CSDI is entitled to if the writ of
execution is fully satisfied. This cannot be done for it is tantamount to
undue interference with the decision of a quasi-judicial body which, as
above-stated, is vested by law and jurisprudence with exclusive authority
to hear and decide cases between sellers and buyers of subdivision lots and
condominium units, among others.

The Court, therefore, hereby adopts by reference the arguments of

respondent CSDI relative to this Court’s lack of jurisdiction to hear and
decide this case which need no longer be repeated herein as it will not
serve any useful purpose.

Maria Luisa Park Association, Inc. v. Almendras

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

13
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.

Chua v. Ang

x x x The law recognized, too, that subdivision and condominium

development involves public interest and welfare and should be brought
to a body, like the HLURB, that has technical expertise. In the exercise of
its powers, the HLURB, on the other hand, is empowered to interpret and
apply contracts, and determine the rights of private parties under these
contracts. This ancillary power, generally judicial, is now no longer with
the regular courts to the extent that the pertinent HLURB laws provide.

Viewed from this perspective, the HLURB’s jurisdiction over contractual

rights and obligations of parties under subdivision and condominium
contracts comes out very clearly.

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

14
principal power entrusted to them of regulating certain activities falling
under their particular expertise.

PRAYER

WHEREFORE, It is respectfully prayed to this Honorable Office ORDERING

the respondents to refund the money paid to Major Holdings, Inc. with legal
interest per year; and praying further to pay the following: MORAL
DAMAGES of Php 100,000.00; EXEMPLARY DAMAGES of Php 100,000.00;
ACTUAL DAMAGES of Php 50,000.00; ATTORNEY’S FEES of Php 100,000.00

Other reliefs equitable under the premises are likewise prayed for.

RESPECTFULLY SUBMITTED. This 12h day of August 2019, at Davao City,

Philippines.

MUHAIMAIN M. SAPIE
Complainant

Assisted by:

ATTY. GILDA S. MAHINAY, MA Econ.

Lawyer/Notary Public
187 Dominica St. Solariega Plantacion
Talomo, Davao City
PTR No. 2470304/January 8, 2019
IBP No. 068212/ January 10,2019
Roll No. 70474
MCLE (on process)

“Every nation has a Messenger and when their Messenger

comes everything is decided between them justly. They are not
wronged.” (Surah Yunus, 47)

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 VERIFICATION AND CERTIFICATION OF NON-FORUM SHOPPING

I, MUHAIMAIN SAPIE, after having been duly sworn in accordance with law,
hereby depose and state:

1. I have caused the preparation and filing of the foregoing Complaint;

I have read and understood the contents thereof; The allegation
therein are true and correct based on my personal knowledge and
authentic records;

2. I have not theretofore commenced any other action or proceeding

involving the same issues in the Supreme Court, the Court of Appeals
and any other agency. That if we should thereafter learn that similar
action or proceeding have been filed or is pending before the
Supreme Court, Court of Appeals, or any other tribunal or agency,
we will undertake to report such fact within five (5) days therefrom.

IN WITNESS WHEREOF, I hereunto set my hand this 12thh day of August 2019,
at Davao City, Philippines.

MUHAIMAIN M. SAPIE
Complainant

SUBSCRIBED AND SWORN to before me in Davao City, Philippines, this 12th day of August
2019 the affiant exhibiting before me his/her Drivers License No. NO2-03004225 issued
on January 3, 2019 at Davao City, Davao del Sur, Philippines.

ATTY. GILDA S. MAHINAY, MA Econ.

Lawyer/Notary Public
187 Dominica St. Solariega Plantacion
Talomo, Davao City
PTR No. 2470304/January 8, 2019
IBP No. 068212/ January 10,2019
Roll No. 70474
MCLE (on process)

“Every nation has a Messenger and when their Messenger

comes everything is decided between them justly. They are not
wronged.” (Surah Yunus, 47)

Doc. No. _____;

Page No. _____;
Book No. _____;
Series of 2019

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