The Supreme Court (SC) has stressed that disputes between and among members of homeowners’ associations in villages are within the jurisdiction of the Housing and Land Use Regulatory Board (HLURB) and not the regional trial court (RTC).
The SC said:
“Intra-corporate controversies within a corporation registered with the SEC (Securities and Exchange Commission) fall within the jurisdiction of the RTC, acting as a special commercial court, pursuant to R.A. No. 8799 (Securities Regulation Code).
“Intra-association disputes within a homeowner's association registered with the HLURB fall within the latter's jurisdiction, now with HSAC (Human Settlements Adjudication Commission) pursuant to E.O. No. 535 (amended Charter of Home Financing Commission), R.A. No. 8763 (Home Guaranty Corporation Act), and R.A. No. 11201 (Human Settlements and Urban Development Act).”
The restatement of the rule was made by the SC in a decision that dismissed the petition of lawyer Pablo B. Francisco against the 2017 ruling of the Court of Appeals (CA) which nullified the 2016 RTC order that acted on the criminal case he filed against Melanio Del Castillo and Sandra Bernales.
Francisco, Del Castillo and Bernales are all members of the board of Brookside Residents Association, Inc. (BRAI) in Antipolo City.
On Sept. 3, 2014, Francisco wanted to inspect and be furnished with copies of the financial books and records of BRAI for the years 2008 to 2013.
When his request was not granted, Franciso filed a criminal case before the RTC in Antipolo City against Del Castillo and Bernales for violation of Republic Act No. 9904, the Magna Cara for Homeowners and Homeowners' Associations.
The RTC took cognizance of the case, issued the arrest order, and denied Del Castillo and Bernales’ motion to dismiss the charges. They posted bail and later elevated to the CA.
On July 31, 2017, the CA granted Del Castillo and Bernales’ petition. The CA ruled that “failure to furnish the copies of BRAI's financial books and records was merely an intra-association dispute, jurisdiction of which lies with the HLURB.”
The CA pointed out that “while the HLURB was empowered under Section 23 of R.A. No. 9904 to impose a fine as a penalty for violation of the rights of a member..., the penalty could hardly be considered punitive in character because the prohibited act is not considered a crime defined and penalized under the Revised Penal Code or other penal statutes.”
Undeterred, Francisco elevated the issue before the SC. In a unanimous full court decision made public last Nov. 25 and written by Associate Justice Jhosep Y. Lopez, the SC said:
“The registration of a homeowner's association with the BLURB vested it with jurisdiction to resolve disputes arising out of the relations between and among members of homeowner's association, and between any or all of them and the homeowner's association of which they are members.
“As the enforcement of a homeowner's right to inspect association books and records is a dispute among homeowners, it is the HLURB that has jurisdiction to resolve the dispute.
“To reiterate, the jurisdiction of the RTC over intra-corporate disputes was merely derived from the jurisdiction of the SEC over intra-corporate disputes involving stockholders and corporations. When it takes cognizance of a case, the RTC does not act as a court of general jurisdiction but as a special commercial court exercising limited jurisdiction over specific corporate cases.
“The HLURB differs from this set-up because there was no transfer of jurisdiction from the HLURB to the RTC. Rather, there has been a transfer of jurisdiction from the SEC to the HLURB.
“Considering that homeowners' associations are under the jurisdiction of the HLURB and not under the Corporation Code, the provisions of the Corporation Code, imposing a penalty based on a criminal liability for violation of the right to inspect corporate books, does not apply. Rather, it is the provisions of R.A. No. 9904, authorizing the imposition of the penalty of fine that should be applied.
“Consequently, the Regional Trial Court does not have the jurisdiction to proceed with the prosecution of the Information filed against Melanio Del Castillo and Sandra Bernales, which was properly quashed by the Court ·of Appeals.
“IN VIEW OF THE FOREGOING, the petition is DENIED. The Decision dated July 31, 2017 and the Resolution dated January 8, 2018 of the Court of Appeals in CA-GR. SP. No. 148877 are hereby AFFIRMED. The Information filed against Melania Del Castillo and Sandra Bemales with the Regional Trial Court, Branch 71, of Antipolo City is hereby QUASHED. SO ORDERED.”