Disputes involving condominium contracts should be decided by the Human Settlements Adjudication Commission (HSAC)—formerly the Housing and Land Use Regulatory Board (HLURB)—and not the Regional Trial Court (RTC).
This was stated in a decision written by Associate Justice Henri Jean Paul B. Inting dated 2 April 2025. The Supreme Court’s Third Division nullified the RTC’s ruling that held Vivien M. Cadungog and Sung Ha Jung (Sung) civilly liable to each other over a contract to sell involving a condominium unit.
Cadungog, a developer of a condominium building in Cebu City, agreed under the contract to deliver a unit to Sung once he completed payment of PHP 3.5 million. Sung paid a PHP 175,000 downpayment and later PHP 3 million, leaving a balance of PHP 258,950.
But due to the unpaid amount, Cadungog refused to deliver the unit. Sung then filed a criminal complaint against her, citing a violation of Presidential Decree No. (PD) 957, or the Subdivision and Condominium Buyers’ Protective Decree.
The RTC acquitted Cadungog of the criminal charge but still ordered her to either deliver the unit upon full payment of the purchase price or return the amount Sung had already paid.
Cadungog challenged the ruling, arguing that the RTC had no jurisdiction over the civil aspect of her case, which should have been handled by the HLURB.
But the Court of Appeals dismissed her petition, ruling that under the 2000 Rules on Criminal Procedure, civil liability is automatically included in a criminal case unless specifically waived.
The Supreme Court ruled in favor of Cadungog, explaining that while civil liability can be decided in a criminal case, this does not apply when the liability arises from a contract—as in the said case.
The high court emphasized that the civil dispute between Cadungog and Sung stemmed from their contract to sell. Further, under PD 957, as amended, the HLURB (now HSAC) has exclusive jurisdiction over cases involving contractual and legal obligations between buyers and developers of real estate projects.
At the time Sung filed the complaint, it was the HLURB that had authority over such cases.
While the RTC had jurisdiction over the criminal aspect of the case, the SC clarified that it did not have the authority to rule on the civil liability arising from the contract, adding that the RTC’s decision on the civil matter is null and void.