G.R. No. 129822 ; June 20, 2012
ORTIGAS & COMPANY, LIMITED PARTNERSHIP, Petitioner, vs. COURT OF APPEALS, HON. JESUS G. BERSAMIRA as Judge-RTC of Pasig City, Branch 166 and the CITY OF PASIG, Respondents.

FACTS

Petitioner Ortigas & Company developed the Ortigas Center, which includes an area in Pasig City originally known as Capitol VI Subdivision. In 1994, respondent City of Pasig filed a complaint for specific compliance before the Regional Trial Court (RTC) of Pasig against Ortigas and Greenhills Properties, Inc. The City alleged that Ortigas failed to comply with Municipal Ordinance No. 5, Series of 1966, which required the designation of recreational and playground facilities in residential subdivisions. The City contended that despite only having preliminary approval for its development plan, Ortigas proceeded with development without final approval.
Ortigas moved to dismiss the case, arguing that the RTC lacked jurisdiction. It asserted that the complaint involved an alleged unsound real estate business practice—specifically, the failure to provide open spaces—which falls under the exclusive jurisdiction of the Housing and Land Use Regulatory Board (HLURB) pursuant to Presidential Decree No. 1344. The RTC denied the motion, ruling that the HLURB’s jurisdiction pertains to disputes arising from buyer-developer transactions, not to a local government unit’s action to enforce a municipal ordinance. The Court of Appeals affirmed the RTC’s denial, prompting Ortigas to elevate the case to the Supreme Court.

ISSUE

Whether the Court of Appeals erred in affirming that jurisdiction over the City’s action for specific compliance with a municipal ordinance lies with the RTC, not the HLURB.

RULING

The Supreme Court ruled that the RTC correctly retains jurisdiction. The Court explained that the HLURB’s exclusive jurisdiction under P.D. No. 1344 is limited to specific cases: (a) unsound real estate business practices; (b) claims for refund and other claims by subdivision lot or condominium unit buyers; and (c) cases involving specific performance of contractual and statutory obligations filed by such buyers. Although paragraph (a) does not explicitly identify the complainant, the provision must be read in context with paragraphs (b) and (c). The evident legislative policy is to protect buyers from unscrupulous real estate trade practices. Therefore, the “unsound real estate business practice” contemplated refers to claims initiated by buyers, not by a local government unit.
In this case, the City of Pasig is not a buyer of a subdivision lot from Ortigas. Its complaint seeks to enforce a municipal ordinance enacted under its general welfare powers to regulate land use and preserve open spaces. Such an action by a local government unit to compel compliance with a local regulation for public interest does not fall under the enumerated cases within HLURB’s exclusive jurisdiction. Consequently, the action is properly cognizable by the RTC as a court of general jurisdiction. The petition was dismissed, and the RTC was ordered to proceed with the case.