G.R. No. 211004 - Saddi vs. Renomeron

Petitioner Goldcrest Realty Corporation is the developer of Cypress Gardens, a ten-storey condominium located at Herrera Street, Legaspi Village, Makati City.
On April 26, 1977, Goldcrest executed a Master Deed and Declaration of Restrictions that constituted Cypress Gardens into a condominium project and incorporated Cypress Gardens Condominium Corporation (the respondent) to manage the project and hold title to all common areas.
Title to the land on which the condominium stands was transferred to Cypress, while Goldcrest retained ownership of the two-level penthouse unit on the ninth and tenth floors (registered under CCT No. S-1079).
Until 1995, Goldcrest, together with its directors, officers, and assigns, controlled the management and administration of the condominium.

After the turnover of management in 1995 to the board of directors of Cypress, it was discovered that certain common areas were being occupied and encroached upon by Goldcrest.
In 1998, Cypress initiated a complaint with the Housing and Land Use Regulatory Board (HLURB), claiming that Goldcrest encroached on common areas by:

Cypress also sought damages for the occupation of the common areas and the refusal of Goldcrest to remove the disputed structures.

It was granted exclusive use of a portion of the roof deck’s limited common area pursuant to Section 4(c) of the Master Deed.
The doors constructed served privacy and security purposes and provided functional modifications to otherwise unusable/common spaces for other unit owners.

Goldcrest’s occupation and construction infringed on the unrestricted use of the common areas by other condominium unit owners.
The construction on the roof deck exceeded the exclusive use granted under the Master Deed.

The enclosure of common area fronting the two elevators on the ninth floor as a storage room by Goldcrest.
A permanent structure encroaching on 68.01 square meters of the roof deck’s common area, with a subsequent note that the structure lacked proper alteration approval.

HLURB Arbiter San Vicente (Decision dated December 2, 1999) ruled in favor of Cypress, ordering:

Removal of all structures impeding the free ingress and egress from both limited and unlimited common areas.
The vacation of the roof deck’s common areas and awarding of actual damages for Goldcrest’s occupation.
Imposition of an administrative fine for the addition of a second penthouse and unauthorized alterations.

Deleting the award for actual damages due to the lack of precise measurement of the encroached area.
Holding that Cypress had no cause of action regarding the limited common area of the roof deck, as only Goldcrest was entitled to its use.

The Office of the President dismissed Cypress’ appeal against the deletion of damages and maintained that Goldcrest misused the common areas by erecting unauthorized structures.
The Court of Appeals partly granted Cypress’ appeal by:

Recognizing that Goldcrest’s rights under Section 4(c) did not extend to constructing permanent structures or leasing the area.
Ordering the removal of the permanent structure constructed on the limited common area of the roof deck.

Both parties’ motions for partial reconsideration were denied, prompting further elevation of the matter.

Whether or not the appellate court erred in ruling that Goldcrest constructed an office structure on what was determined to be an encroached area in the open space of the roof deck.

Whether or not the appellate court erred in ruling that Goldcrest impaired the easement on the portion of the roof deck designated as a limited common area.