G.R. No. 143233 ; October 18, 2004
SPOUSES TERESITA AND BIENVENIDO KAKILALA, petitioners, vs. CONRADO, NATIVIDAD, ILUMINADA, ROMEO AND AZUCENA, ALL SURNAMED FARAON, respondents.

FACTS

Petitioners Spouses Kakilala entered into a “Contract to Sell” with respondents, the co-owning heirs of Mariano Faraon, for a 501-square meter portion of a larger tract of land in Biñan, Laguna. The contract stipulated a purchase price payable in installments, with possession delivered to the buyers but ownership retained by the sellers until full payment. Petitioners paid the down payment and some installments, took possession, and built a house. Respondents later partitioned the property, with the subject lot being allocated to respondent Conrado Faraon. After petitioners defaulted on further payments, respondents rescinded the contract and filed an unlawful detainer case.
Petitioners, in turn, filed a complaint for “Specific Performance for Non-development and Damages” against respondents before the Housing and Land Use Regulatory Board (HLURB). The HLURB ruled in favor of petitioners, allowing them to suspend payments until the property was fully developed and awarding damages. The HLURB Board of Commissioners modified this by deleting the damages but affirming the suspension of payments. Respondents challenged this HLURB decision before the Court of Appeals.

ISSUE

Whether the HLURB has jurisdiction over the complaint filed by the petitioners.

RULING

The Supreme Court ruled that the HLURB has no jurisdiction over the case. The Court affirmed the decision of the Court of Appeals, which set aside the HLURB’s ruling. The legal logic hinges on the nature of the transaction and the limited jurisdiction of the HLURB under Presidential Decree No. 957, “The Subdivision and Condominium Buyers’ Protective Decree.”
For the HLURB to have exclusive jurisdiction, the subject of the sale must be a “subdivision lot” as statutorily defined—a lot within a registered tract of land that is partitioned primarily for residential purposes into individual lots and offered to the public for sale. The transaction between the parties was an isolated sale of a specific, undivided portion of a co-owned property. At the time of the contract, the land was not subdivided, partitioned into lots, or offered to the public as a subdivision project. The sellers were not engaged as subdivision developers, owners, brokers, or in the real estate business; they were merely co-owners selling a portion of their inheritance. The contract contained none of the standard developer obligations (e.g., providing infrastructure, utilities, open spaces) typical of a subdivision project. Merely labeling receipts with “Faraon Village Subdivision” does not transform an ordinary sale into a subdivision transaction. Therefore, the dispute arose from a simple contract to sell real property, falling under the jurisdiction of regular courts, not the HLURB.