G.R. No. 248743. September 07, 2022
LPL GREENHILLS CONDOMINIUM CORPORATION, SPOUSES CLEMARTIN ARBOLEDA AND MARIA ANGELITA ARBOLEDA, MARIO ANTONI SALAZAR AND LAURO S. LEVISTE II, PETITIONERS, VS. CATHARINA BROUWER, REPRESENTED HEREIN BY ATTORNEY-IN-FACT MANFRED DE KONING, RESPONDENT.

FACTS

Respondent Catharina Brouwer is the registered owner of two condominium units (Unit Nos. 16-I and 16-J) at the LPL Greenhills Condominium. She failed to settle her monthly association dues and other assessments. After issuing notices of assessment and annotating them on the Condominium Certificates of Title (CCTs), and with respondent still failing to pay, petitioner LPL Greenhills Condominium Corporation (LPL) filed petitions to sell the units in extrajudicial foreclosure pursuant to Section 20 of the Condominium Act (R.A. 4726) and its Master Deed of Restrictions. Notices of sale were posted and published. The extrajudicial foreclosure sales were conducted, with petitioners Mario Antoni Salazar and Lauro S. Leviste II as the successful bidder for Unit 16-I, and petitioners Spouses Clemartin and Maria Angelita Arboleda for Unit 16-J. Certificates of sale were issued and registered. Respondent, through her attorney-in-fact, filed a Complaint for declaration of nullity of the foreclosure proceedings, arguing they were void because: (1) LPL’s Master Deed and By-Laws did not authorize the extrajudicial foreclosure as required by Act No. 3135; (2) there was no board resolution authorizing the foreclosure; and (3) the proceedings lacked proper notice. The Regional Trial Court (RTC) declared the foreclosure sales null and void, ordered the cancellation of the annotations of the certificates of sale, and declared respondent still the registered owner. The Court of Appeals (CA) affirmed the RTC decision but deleted the award of attorney’s fees.

ISSUE

Whether the Court of Appeals erred in ruling that the extrajudicial foreclosure sales are null and void for lack of a special authority from the condominium unit owner empowering the condominium corporation to foreclose extrajudicially.

RULING

No, the Court of Appeals did not err. The petition is bereft of merit. The Supreme Court ruled that evidence of a condominium corporation’s special authority to sell is a precondition to the enforcement of its lien for unpaid dues via extrajudicial foreclosure. The power to foreclose a lien extrajudicially must be expressly granted. Petitioners’ reliance on Chateau de Baie Condominium Corp. v. Spouses Moreno was erroneous, as that case did not dispense with the requirement for a special authority. The Court examined LPL’s Master Deed of Restrictions and By-Laws and found that they did not contain any provision expressly granting LPL the authority to extrajudicially foreclose the subject units. The provisions cited by petitioners only established a lien and the corporation’s right to collect dues, but did not constitute a clear and explicit grant of the power to sell at public auction without judicial intervention. Since such express authority is lacking, the extrajudicial foreclosure sales were null and void. The Court also found no merit in petitioners’ ancillary issue regarding respondent’s counsel’s legal personality, noting it was raised for the first time on appeal and is a factual issue not reviewable in a Rule 45 petition. The assailed CA Decision was affirmed.