The Supreme Court (SC) has ruled that disputes over condominium contracts should be handled by the Human Settlements Adjudication Commission (HSAC) and not the Regional Trial Court (RTC).

In a decision written by Associate Justice Henri Jean Paul B. Inting, the court’s Third Division nullified an RTC ruling that held a developer and a buyer civilly liable to each other in a contract to sell a condominium unit.

The case involved Vivien M. Cadungog, a condominium developer, and Sung Ha Jung, a buyer. Sung had agreed to purchase a unit for P3.5 million. He paid a down payment of P175,000, followed by a payment of P3 million, leaving a balance of P258,950.

Due to the unpaid amount, Cadungog refused to turn over the unit. Sung then filed a criminal complaint against her, alleging a violation of the Subdivision and Condominium Buyers’ Protective Decree.

An RTC acquitted Cadungog of the criminal charge but still ordered her to either deliver the unit to Sung upon full payment or return the money he had already paid.

Cadungog challenged the ruling, arguing that the RTC lacked jurisdiction over the civil aspect of the case, which she said should have been handled by the Housing and Land Use Regulatory Board, now known as the Human Settlements Adjudication Commission.

The Court of Appeals dismissed her petition, ruling that civil liability is automatically included in a criminal case unless specifically waived.

However, the Supreme Court ruled in favor of Cadungog. The court explained that while civil liability can be decided in a criminal case, it does not apply when the liability arises from a contract.

The high court stressed that the dispute stemmed from a contract to sell, and under the Subdivision and Condominium Buyers’ Protective Decree, the Human Settlements Adjudication Commission has exclusive jurisdiction over such cases.

The Supreme Court also said that while the RTC had jurisdiction over the criminal matter, it had no authority to rule on the civil liability arising from the contract, making the RTC’s decision null and void.