Case Summary (G.R. No. 221641)
Factual Background
On December 8, 2016, PDM-HOA lodged a formal Complaint against Daalco, insisting that all open spaces, roads, and parks within the subdivision should be donated to the Bacolod City government in compliance with Presidential Decree (PD) No. 1216. PDM-HOA accused Daalco of only partially complying by donating specific areas, such as Lot 4 and Road Lot 5B. The homeowners association further demanded the transfer of ownership and management of the water facility to themselves to ensure residents had access to quality water services under Republic Act (RA) No. 9904, known as the Magna Carta for Homeowners and Homeowners Associations.
Daalco countered that its contributions met the legal requirement of 30% donation of open spaces, as they intended to donate 38,335 square meters out of a total 127,142 square meter project area. Daalco argued that PD No. 1216 does not mandate the donation of water facilities or the underlying land to local governments and raised concerns regarding its rights since the water system also served the Palmas del Mar Resort Hotel.
HLURB Decision
The Housing and Land Use Regulatory Board (HLURB) Arbiter ruled in favor of PDM-HOA, ordering Daalco to donate the property associated with the water system to Bacolod City and to turn over management to the PDM-HOA after adequate consultation with its general membership. The Arbiter emphasized that PD No. 1216 did not provide any exceptions for the donation of open spaces, and cited RA No. 9904 as validation for PDM-HOA’s right to manage the water system.
HSAC Decision
Daalco appealed the HLURB decision to the Human Settlements Adjudication Commission (HSAC), which upheld the HLURB ruling. The HSAC referred to the precedent set in Liwag v. Happy Glen Loop Homeowners Association, Inc., affirming that Lot 4 A, where the water pipes were located, constituted part of the open spaces owed to Bacolod City.
Court of Appeals Ruling
Upon further appeal, the Court of Appeals (CA) sided with PDM-HOA, asserting that Daalco was legally required to donate Lot 4 in its entirety, despite their claim of already donating enough area to satisfy legal requirements. The CA recognized the water facilities as part of the subdivision's essential services and reiterated PDM-HOA’s right to manage the waterworks system under RA No. 9904, prioritizing resident welfare over Daalco's business interests.
Parties’ Arguments
In its petition, Daalco argued that the CA erred by enforcing an obligation to donate the entirety of Lot 4, claiming from legal precedents that developers are not compelled to donate open spaces. Daalco also maintained that the water system was designed to serve both the subdivision and the Resort, thereby contesting PDM-HOA’s capability to manage such facilities effectively.
PDM-HOA countered that Daalco had already submitted development plans that included Lot 4 as open space, rendering any deviations harmful to the subdivision’s residents.
Supreme Court Ruling
The Supreme Court reversed the CA’s decision, holding that Daalco was not obligated to donate the property housing the water system. The ruling underscored that the applicable provisions of PD No. 957, as amended, did not compel the donation of water system properties,
...continue readingCase Syllabus (G.R. No. 221641)
Case Background and Parties
- The petitioner is Daalco Development Corporation, a subdivision developer.
- The respondent is Palmas del Mar Homeowners Association (PDM-HOA), represented by its President Gil Fernandez.
- The controversy arose from Daalco's obligation to donate parts of the subdivision including open spaces and roads to the local government and the management of the subdivision's water system.
Factual Context
- On December 8, 2016, PDM-HOA filed a complaint demanding:
- Donation to Bacolod City of all open spaces, roads, and parks as mandated by Presidential Decree No. 1216.
- Turnover of the water facility ownership and management to PDM-HOA, under Republic Act No. 9904 (Magna Carta for Homeowners and Homeowners' Association).
- PDM-HOA asserted Daalco only donated parts of the subdivision (portions of Lot 4 and Road Lot 5B).
- Daalco claimed compliance with the 30% open space requirement with a combined donated area of 38,335 sqm out of 127,142 sqm total area.
- Daalco argued that water facilities and pipes are not covered by PD No. 1216's donation requirements and highlighted its business interest since the water system also serves a resort.
Decisions of Lower Bodies
- HLURB Arbiter Decision (August 3, 2017):
- Ordered donation of subject properties (including water system areas) to Bacolod City.
- Directed turnover of water system management to PDM-HOA after general membership consultation.
- Cited PD No. 1216 for open spaces donation and RA No. 9904 Section 8(g) for HOA management rights.
- HSAC Decision (December 9, 2020):
- Affirmed HLURB decision.
- Cited jurisprudence (Liwag v. Happy Glen Loop HOA) that the lot with water pipes is open space subject to donation.
- Confirmed PDM-HOA's right to manage waterworks system after consultation.
- Court of Appeals Ruling (February 16, 2022):
- Affirmed the requirement to donate Lot 4 in entirety despite prior donations.
- Applied PD No. 1216 Section 31 and Liwag precedent.
- Recognized PDM-HOA's right to manage water system prioritizing residents' welfare over developer's business interests.
- Denied reconsideration motion by Daalco.
Core Legal Issues
- Whether the subdivision developer is compelled to donate the land occupied by the water facilities to the local government.
- Whether PDM-HOA has the right to manage the water system and compel Daalco to turn over management.