After Spouses Villar defaulted in their payment of their monthly amortizations for the property they purchased from Pilar Development Corporation (PDC), PDC sent them a Notice of Cancellation and filed an ejectment suit with the Metropolitan Trial Court (MeTC).

The MeTC ruled in favor of PDC, but, on appeal, the Regional Trial Court (RTC) reversed and set aside the MeTC ruling because of the MeTC’s alleged lack of jurisdiction. In other words, the MeTC was supposedly not the proper authority to rule on PDC’s complaint.

The RTC explained that the case was not just a simple unlawful detainer, although it was denominated as such, but that it involved the validity of cancellation of the contract based on the non-payment of the cash surrender value and the right of the Villars to refund it. These, according to the RTC, are issues that exclusively belong to the Housing and Land Use Regulatory Board (HLURB) under Presidential Decree Nos. 957 and 1344.

Upon review, the Supreme Court found that the RTC misappreciated the facts and misapplied the law.

It held that “the mere relationship of the parties, i.e., that of being subdivision owner/developer and subdivision lot buyer, does not automatically vest jurisdiction in the HLURB. For an action to fall within the exclusive jurisdiction of the HLURB, the decisive element is the nature of the actions as enumerated in Section 1 of P.D. 1344.”

“On this matter,” the Supreme Court pointed out, “we have consistently held that the concerned administrative agency, the National Housing Authority before and the HLURB, has jurisdiction over complaints aimed at compelling the subdivision developer to comply with its contractual and statutory obligations.”

The Supreme Court noted that the case was filed by the subdivision owner (PDC) and not the buyer of a subdivision lot (Spouses Villar), and the cause of action is one for recovery of possession of the property on account of the cancellation of the parties’ contract to sell for non-payment by the Spouses Villar of their monthly amortizations. Spouses Villar, as buyers, had no cause of action against PDC as subdivision owner, which may possibly give rise to any actionable act under Section 1 of P.D. No. 1344.

Accordingly, no jurisdiction could possibly be vested with the HLURB.

Pilar Development Corporation v. Spouses Villar, G.R. No. 158840, October 27, 2006