The Supreme Court clarified that pursuing administrative remedies with the Housing and Land Use Regulatory Board (HLURB) does not preclude filing criminal charges for violations of Presidential Decree (P.D.) No. 957, also known as “The Subdivision and Condominium Buyers Protective Decree.” This means that even if the HLURB is addressing contractual issues between a buyer and a developer, the City Prosecutor can still investigate and prosecute potential criminal offenses related to the same real estate transaction. This decision reinforces the dual-track approach available to aggrieved buyers, strengthening their protection against unscrupulous developers.

Can a Prosecutor Ignore a Developer’s Non-Compliance? Supreme Court Clarifies HLURB’s Role in Criminal Cases

This case revolves around spouses Leonardo and Milagros Chua who entered into a Contract to Sell a condominium unit with Fil-Estate Properties, Inc. (FEPI). Despite the passage of three years, FEPI failed to construct and deliver the unit, prompting the Chuas to file a criminal complaint against FEPI’s officers and directors for violating P.D. No. 957. The City Prosecutor dismissed the complaint, claiming the HLURB had exclusive jurisdiction over the matter. This decision forced the Supreme Court to address a vital question: Does the HLURB’s authority over real estate matters prevent criminal prosecution for violations of P.D. No. 957?

The Supreme Court held that the City Prosecutor erred in dismissing the complaint, explaining the separate but related jurisdictions of the HLURB and the Prosecutor’s Office. While the HLURB possesses exclusive jurisdiction to regulate real estate trade and business, particularly in resolving disputes between buyers and developers regarding contractual and statutory obligations, it lacks the power to impose criminal penalties. P.D. No. 1344 specifies HLURB’s quasi-judicial functions:

SEC. 1. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature:

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; and

C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots or condominium units against the owner, developer, dealer, broker or salesman.

Section 39 of P.D. No. 957, however, prescribes criminal penalties for violations of the Decree. Determining criminal liability falls under the jurisdiction of criminal procedure as embodied in the Rules of Court. Provincial or City Prosecutors, judges, and other authorized officers are tasked with determining the existence of probable cause. Thus, the HLURB’s power to impose administrative fines under Section 38 does not preclude criminal prosecution.

The Court emphasized the independence of administrative and criminal actions, noting that pursuing one does not automatically bar the other, save for some circumstances prescribed by law such as labor disputes where the reverse would be true. Here, the Court explained, unless the law expressly requires it (and P.D. 957 does not) or that forum shopping occurs, a criminal complaint with the prosecutor’s office could be pursued without the need of a final HLURB determination on any administrative action.

This delineation of authority strengthens the protection afforded to subdivision and condominium buyers. By affirming the prosecutor’s role in investigating and prosecuting potential criminal violations, the Court has ensured that developers can be held accountable for non-compliance with P.D. No. 957. It also serves as a warning to company boards and other high ranking staff, because should there be criminal culpability, they, too, can be prosecuted along with the company. Ultimately, this decision serves the public interest by encouraging ethical practices in the real estate industry and protecting vulnerable consumers.

FAQs

What was the key issue in this case?	The central issue was whether the HLURB’s jurisdiction over real estate matters precludes criminal prosecution for violations of P.D. No. 957. The Supreme Court clarified that it does not.
What is P.D. No. 957?	P.D. No. 957, also known as “The Subdivision and Condominium Buyers Protective Decree,” aims to protect buyers from unscrupulous real estate developers. It regulates the real estate trade and imposes penalties for violations.
Does the HLURB have the power to impose criminal penalties?	No, the HLURB does not have the power to impose criminal penalties. Its authority is limited to imposing administrative fines and resolving disputes between buyers and developers.
Who determines criminal liability for violations of P.D. No. 957?	Provincial or City Prosecutors, judges, and other authorized officers determine criminal liability based on the Rules of Court. They assess the existence of probable cause.
Can a buyer pursue both administrative and criminal remedies?	Yes, a buyer can generally pursue both administrative remedies with the HLURB and criminal prosecution with the prosecutor’s office, so long as it does not constitute forum shopping.
What happens if a developer fails to deliver a condominium unit?	A developer who fails to deliver a condominium unit may face both administrative sanctions from the HLURB and criminal charges filed by the prosecutor’s office.
What was the Supreme Court’s ruling in this case?	The Supreme Court ruled that the City Prosecutor erred in dismissing the criminal complaint, emphasizing the independence of administrative and criminal actions.
Why did the Supreme Court take on the case directly?	The Supreme Court, as a matter of judicial courtesy, should not hear cases outright and without the benefit of lower courts hearing them. But the Court took cognizance of this case considering the urgency and public interest in prompt justice when it comes to housing.

In conclusion, the Supreme Court’s decision in this case has reinforced the protections available to subdivision and condominium buyers. By clarifying the respective roles of the HLURB and the prosecutor’s office, the Court has strengthened the mechanisms for holding unscrupulous developers accountable. Aggrieved buyers can now confidently pursue both administrative and criminal remedies to protect their investments and rights.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: SPS. LEONARDO AND MILAGROS CHUA v. HON. JACINTO G. ANG, G.R. No. 156164, September 04, 2009