Primarily administrative

This case of Marta and her sister Pamela once more clarifies the issue of jurisdiction over disputes between subdivision lot owners and the subdivision association.

Marta and Pamela were the purchasers of a residential lot located in a plush subdivision in Cebu (MLEP). After sometime, they filed with the subdivision homeowners association (MLPAI) an application to construct a residential house. MLPAI approved their application on February 10, 2002, so they started construction of their house.

Upon ocular inspection of the construction, MLPAI found out that Marta and Pamela allegedly violated the prohibition against multi-dwelling stated in the Deed of Restrictions. Hence MLPAI wrote them demanding that they rectify the structure otherwise it will be constrained to forfeit its construction bond and impose stiffer penalties.

The sisters denied having violated the Deed, but MLPAI insisted they did by pointing out (a) the installation of a second water meter and tapping the subdivision’s main water pipeline, and (b) the construction of two separate entrances that are mutually exclusive of each other.

To settle the issue, Pamela and Marta filed with the Regional Trial Court (RTC) a Complaint for Injunction, Declaratory Relief and Annulment of the Provisions of the Articles and By-Laws with a Prayer for the Issuance of a TRO/Writ of Preliminary Injunction.

Upon motion of MPLAI, the RTC dismissed the complaint for lack of jurisdiction holding that it was the Housing and Land Use Regulatory Board (HLURB) that has exclusive and original jurisdiction over the case.

Pamela and Marta questioned the dismissal. They contended that the case they filed against MLPAI was one for declaratory relief and annulment of the provisions of the by-laws hence it is outside the competence of the HLURB to resolve. Were they correct?

No. What determines the nature of the action for the purpose of ascertaining whether a court has jurisdiction over the case are the allegations in the complaint and the nature of the relief sought. Jurisdiction cannot be made to depend on the exclusive characterization of the case by one of the parties.

In this case, it is apparent that although the complaint is denominated as one for declaratory relief/annulment of contracts, the allegations therein reveal otherwise. Marta and Pamela neither asked for interpretation of the questioned by-laws nor did they allege that the same is doubtful or ambiguous and require judicial construction. What they really seek to accomplish is to have a particular provision nullified so that they can be absolved from any violation of the same. While they are questioning the validity or legality of the Articles and By-Laws, they did not however raise any legal ground to support its nullification. The legality of the by-laws in its entirety was never an issue but merely the provision prohibiting multi-dwelling which they assert they did not violate. There is no justiciable controversy here that would warrant declaratory relief or even an annulment of contracts.

The RTC is correct in ruling that the instant controversy falls squarely within the jurisdiction of the HLURB. Originally, administrative supervision over home-owner’s association was vested by law with the SEC. Later on the Home and Insurance Guaranty Corporation (HIGC) assumed the regulatory and adjudicative functions of the SEC over homeowner’s association by virtue of Executive Order 535. Under said E.O., controversies arising out of intra-corporate relations between and among members of home-owners association, between any and all of them and the association of which they are members are within the jurisdiction of the HIGC.