G.R. Nos. 204187 and 206606, April 1, 2019
JAKA INVESTMENTS CORPORATION, Petitioner vs. URDANETA VILLAGE ASSOCIATION, INC. AND AYALA LAND, INC., Respondents

FACTS

Jaka Investments Corporation purchased three lots in Urdaneta Village, Makati City, subject to deed restrictions annotated on the titles, including a requirement for automatic membership in the Urdaneta Village Association, Inc. The original restrictions were set to expire on June 1, 2008. In 2007, the Association’s Board approved, and a general membership meeting ratified, a 25-year extension of both its corporate life and the deed restrictions. Jaka Investments, through a proxy, voted in favor of both extensions. Following the expiration of the original term, Jaka Investments filed a Petition before the Regional Trial Court (RTC) for the cancellation of the restrictions under Section 108 of the Property Registration Decree, arguing they became unlawful limitations upon expiration.
The Association and Ayala Land, Inc. (as successor-in-interest) opposed, contending the dispute was intra-corporate and within the exclusive original jurisdiction of the Housing and Land Use Regulatory Board (HLURB). The RTC denied the motion to dismiss, asserting jurisdiction by applying reasoning from a prior Office of the President case. The Court of Appeals reversed, holding the HLURB had jurisdiction.

ISSUE

Whether the Regional Trial Court or the Housing and Land Use Regulatory Board has jurisdiction over the petition for cancellation of the deed restrictions.

RULING

The Supreme Court affirmed the Court of Appeals and held that jurisdiction lies with the HLURB. The legal logic is anchored on the nature of the controversy as an intra-association dispute. The petition, while framed as a simple action for cancellation of an encumbrance under property law, intrinsically challenges the validity of the homeowners’ association’s act of extending the deed restrictions through a membership vote. This core issue—the validity of corporate acts undertaken by a homeowners’ association—falls squarely within the technical expertise and exclusive original jurisdiction of the HLURB under pertinent laws and jurisprudence. The Court emphasized that jurisdiction is determined by the allegations in the complaint and the relief sought. Jaka Investments’ objective to nullify the restrictions necessarily required an adjudication on the validity of the extension approved by the Association, a matter over which the HLURB has specialized competence. The RTC’s reliance on a separate administrative case was erroneous, as it did not involve a jurisdictional challenge. Consequently, the case was remanded to the HLURB for proper adjudication.