G.R. No. 140086; June 8, 2005
TEOVILLE HOMEOWNERS ASSOCIATION, INC., petitioner, vs. EDWARD L. FERREIRA, REAM DEVELOPMENT CORPORATION and GUILLERMO BUENAVENTURA, respondents.

FACTS

The dispute involves Lot 98 of Teoville Subdivision. Originally a saleable lot, REAM Development Corporation, the successor developer, donated the centralized water system facilities (a water tank and pump) erected on Lot 98 to the homeowners association in 1985. The facilities later became inoperative. Subsequently, REAM subdivided Lot 98 into Lots 98-A and 98-B and sold Lot 98-A to Edward Ferreira, then the association chairman, who obtained a Transfer Certificate of Title. In 1993, the homeowners association filed a complaint with the HLURB seeking annulment of the sale and re-subdivision, claiming Lot 98 was an open space where the donated water system stood.
The HLURB Arbiter initially dismissed the case for lack of jurisdiction, reasoning that a Torrens title had already been issued, placing the matter within the jurisdiction of the Regional Trial Court. However, the HLURB Board of Commissioners reversed this, declaring the re-subdivision and sale null and void for violating PD 957, as the installation of the water system constituted a development that designated the lot as an open space for public use. The Court of Appeals later reinstated the Arbiter’s dismissal, prompting this petition.

ISSUE

Whether the Housing and Land Use Regulatory Board (HLURB) has jurisdiction over the complaint seeking the annulment of the re-subdivision of Lot 98 and the sale of a portion thereof to a private individual.

RULING

Yes, the HLURB has jurisdiction. The Supreme Court reversed the Court of Appeals and reinstated the decision of the HLURB Board of Commissioners. The core legal logic is that the HLURB’s jurisdiction over cases involving the sale of subdivision lots and the requirements of Presidential Decree No. 957 (The Subdivision and Condominium Buyers’ Protective Decree) is exclusive. The act of subdividing the lot and selling a portion thereof falls squarely within the regulatory ambit of PD 957.
Crucially, the Court held that the installation of the water system facility on Lot 98 transformed its character. By constructing a subdivision development (the water system) intended for common use, the developer, in effect, represented the lot as part of the subdivision’s open space or common area. Section 22 of PD 957 explicitly prohibits any alteration in the development plan, including open spaces, without prior HLURB approval and the written consent of the homeowners. REAM’s re-subdivision and sale of a portion of the lot without such approval constituted a direct violation of this provision. Therefore, the HLURB properly exercised its jurisdiction to declare these acts null and void, as they pertain to the enforcement of subdivision laws and regulations, irrespective of the subsequent issuance of a Torrens title. The case primarily involves the nullity of the developer’s acts under PD 957, not a direct collateral attack on the certificate of title itself.