G.R. No. 163196 ; July 4, 2008
FIRST MARBELLA CONDOMINIUM ASSOCIATION, INC., petitioner, vs. AUGUSTO GATMAYTAN, respondent.

FACTS

Respondent Augusto Gatmaytan is the owner of a condominium unit in Marbella I Condominium. Annotated on his Condominium Certificate of Title is a Declaration of Restrictions, which binds all unit owners, and a Notice of Assessment executed by petitioner First Marbella Condominium Association, Inc. (FMCAI). The Notice states that respondent has outstanding association dues, which constitute a first lien on the unit pursuant to the Master Deed of Restrictions. Petitioner filed a Petition for Extrajudicial Foreclosure of the condominium unit with the Regional Trial Court (RTC) of Pasay City, through the Office of the Clerk of Court and Ex-Oficio Sheriff, alleging respondent’s refusal to pay his accumulated dues despite demand.
The Clerk of Court recommended the petition’s dismissal, finding no mortgagor-mortgagee relationship between the parties as required by Act No. 3135, as amended. The RTC Executive Judge agreed, issuing an Order denying the request for extrajudicial foreclosure. The court held that its authority under Administrative Matter No. 99-10-05-0 is limited to supervising extrajudicial foreclosures of mortgages under Act No. 3135 and chattel mortgages under P.D. No. 1508, and does not extend to foreclosures based on other obligations like unpaid association dues. Petitioner’s motion for reconsideration was denied.

ISSUE

Whether the RTC Executive Judge erred in denying the petition for extrajudicial foreclosure of the condominium unit based on unpaid association dues.

RULING

The Supreme Court denied the petition and upheld the RTC’s dismissal. The Court clarified that while Section 20 of Republic Act No. 4726 (The Condominium Act) grants a condominium corporation a lien for unpaid assessments and allows enforcement “in the same manner as… judicial or extra-judicial foreclosure of mortgage,” this provision does not automatically authorize the extrajudicial foreclosure procedure. The grant of a right is distinct from the procedure for its execution. The specific procedure for extrajudicial foreclosure is governed by Act No. 3135 and the Supreme Court’s administrative issuances.
Administrative Matter No. 99-10-05-0 and the implementing Circular No. 7-2002 explicitly limit the Executive Judge’s authority to applications for extrajudicial foreclosure of mortgages under Act No. 3135 and chattel mortgages under P.D. No. 1508. The petitioner’s lien, though annotated, arises from a contractual obligation for dues and not from a mortgage contract. Therefore, the remedy of extrajudicial foreclosure through the Office of the Clerk of Court and Ex-Oficio Sheriff, as supervised by the Executive Judge, is not available. Petitioner must pursue other judicial avenues to enforce its lien. The RTC did not err in dismissing the petition for lack of authority to act upon it.