June 18, 2018

Ms. Janeth Andal

Dear Ms. Andal,

It came to my knowledge that you have not commenced any action

with regards to your complaint against Citiglobal. In case you decide to
pursue one, let me give you an overview of the substantive and procedural
aspects of the case.

Substantive Aspect

As can be gleaned from the facts you have relayed, what is involved
here is the failure on the part of Citiglobal to develop the project according
to the terms and conditions of the contract.

• When must the project be completed? Section 21 of the

Implementing Rules and Regulations of PD 957 states that:

Every owner or developer shall construct and provide the facilities,

infrastructures, other forms of development, including water supply and
lighting facilities and as far as practicable improvements, which are
offered and indicated in the approved subdivision or condominium plans,
brochures, prospectus, printed matters, letters or in any form of
advertisement, within one (1) year from the date of the issuance of
license to sell for the subdivision or condominium project or
within such other period of time as may be fixed by the Board.

Request for extension of time to complete development of a subdivision or

condominium project may be granted only in cases where non-completion
of project is caused by fortuitous events, legal orders or such other
reasons that the board may deem fit/proper with the written notice to lot
or unit buyers without prejudice to the exercise of their rights pursuant to
Section 23 of the Decree.

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 The request for extension of time for completion shall be accompanied by
a revised work program duly signed and sealed by a licensed engineer or
architect with project costing and financing scheme there for. In
appropriate cases, the Board may require the posting of additional
performance bond amounting to 20% of development cost of the
unfinished portion of the approved development plan or issue such orders
it may deem proper.

It is thus clear that, as a general rule, Citiglobal only has ONE (1)
YEAR from the date of the issuance of the license to sell to complete the
project. The phrase “or within a period of time as may be fixed by the
board” is only an exception. This exception can only be availed if there is a
request for extension on the part of Citiglobal and such request has been
approved by the Board. As can be observed, Citiglobal cannot just request
for an extension of time within which to complete the project, such request
must be properly grounded as abovementioned.

In connection with the provision cited, few questions can be asked:

1. When was the License to Sell of Citiglobal issued?

2. Has Citiglobal requested for an extension of time within which to
complete the project?
3. If so, was it approved by the HLURB?
4. If it was approved, were you informed though a written notice that
they will be extending the time of completion?
5. Was there a revised work program duly signed and sealed by a
licensed engineer or architect with project costing and financing
scheme?

Assuming that Citiglobal has not requested for any extension of time
to complete the project, then, there is clearly a breach of obligation on
their part.

On the other hand, if the request for extension was granted by the
HLURB and procedures were followed as pointed out above, then there can

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be no breach unless there is again a failure on the part of Citiglobal to
complete the project within the extension period.

Assuming further that Citiglobal completed the project within the

time provided by the rules (original period or the extension period), there
can still be a breach of obligation on their part if they did not follow the
agreed specifications of the unit to be delivered, this is clear in the first
paragraph of Section 21 of the Implementing Rules and Regulations of PD
957. It states there that, every owner or developer shall construct and
provide the facilities, infrastructures, other forms of development, including
water supply and lighting facilities and as far as practicable improvements,
which are offered and indicated in the approved subdivision or
condominium plans, brochures, prospectus, printed matters, letters or in
any form of advertisement…
Therefore, as can be analyzed, the obligation of Citiglobal is not only
limited to the completion of the project ON TIME. Citiglobal also has the
obligation to deliver the unit according to the agreed specifications of the
contract. Based on my interview to you, you have said that the
specifications as represented by the endorsements of Vic Sotto, printed
advertisements and brochures do not match with the actual condition in
the area. You have relayed to me that there is defective plumbing,
electrical works are not properly installed, among others. Based on these
facts, Citiglobal breached its obligation.

Another important question can be asked, assuming that Citiglobal

has completed the project recently and it was not able to request for an
extension of time to complete the project or its request for extension was
denied by the board, would such fact render your complaint moot and
academic? No. This is because a breach has already been committed. You
have the right to rescind the contract and consequently ask for refund.

• What law will govern with respect to your claim for refund?

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 You have told me that you were religiously paying the monthly
amortizations. In fact, only a couple of months left until you can complete
paying the full amount of the contract price. You said that you stopped
paying the amortizations equivalent to two months because you have
realized that Citiglobal is not making good of its obligation to complete the
project according to the terms and conditions agreed. Therefore, you
discontinue paying not because of your fault but because of the fault of the
other party particularly, their failure to develop the project.

PD 957 or the Subdivision and Condominium Buyers’ Protective

Decree is the applicable law in the case at bar and not RA 6552 or the Act
to Provide Protection to Buyers of Real Estate on Installment Basis (Maceda
Law). The basic distinctions between the two laws are the following:

First, PD 957 applies when there is failure to pay installments

attributable to the non- development of the project.

RA 6552 applies when there is failure to pay installments NOT

attributable to the non- development of the project.

Second, PD 957 obligates the developer to refund the total amount

paid including amortization interest but excluding delinquency interest, with
interest thereon at the legal rate.

RA 6552 mandates the developer to refund only a certain

percentage of the installments paid (depending on how many installments
were already paid).

• Section 24 of PD 957 provides:

No installment payment made by a buyer in a new or existing subdivision
or condominium project for the lot or unit he contracted to buy shall be forfeited
in favor of the owner or developer when the buyer, after due notice to the owner
or developer and clearance from the Board desists from further payment due to
the failure of the owner or developer to develop the project according to the
approved plans and within the time limit for complying with the same. Such
buyer may at his option be reimbursed the total amount paid including

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 amortization interests but excluding delinquency interests, with interest thereon
at the legal rate.

Based on the provision cited, it is clear that you can ask a refund of
the total amount paid plus applicable interest. Your payment cannot be
forfeited by the developer even if you have desisted paying on the ground
of non- development of the project. Some important questions can also be
asked in relation to the above cited provision:

1. Were you able to notify the developer that you will discontinue
paying the remaining amortizations?
2. Were you able to get clearance from the Board when you have
decided to discontinue paying the remaining amortizations?

Procedural Aspect

Having discussed to you the substantive aspects of the problem, I

will now highlight the processes in commencing an action at the Housing
and Land Use Regulatory Board.

Although not mandatory, you have the option to undergo conciliation

proceedings at the HLURB for you and Citiglobal to talk and make whatever
arrangements acceptable to both parties regarding your claim against
them. In case no agreement will be reached, then you can now file a
formal complaint at the HLURB. To reiterate, the availment of conciliation
proceedings is just an option, you may avail of this or you may directly file
a formal complaint at the HLURB.

The first step in formally filing a case against Citiglobal, according to

Section 10, Rule 03 of the 2017 HLURB Rules of Procedure, is the filing
with the Regional Office an accomplished and verified complaint (HLURB
Case Form No. 1) in duplicate and as many copies as there are
respondents.

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 Since you are currently in France, it would be impractical for you to
personally file the complaint. The remedy is for you to execute a Special
Power of Attorney designating someone to act in your behalf. The
execution of a Special Power of Attorney (HLURB Form No. 6) is also in
accordance with Section 10, Rule 03 of the 2017 HLURB Rules of
Procedure. In your case, you have told me that Ms. Vilma Monteverde is
your agent. In case a Notarized Special Power of Attoney has not yet been
executed, I am requesting you to execute one. Since you are abroad, you
can have the document prepared and notarized at the Philippine Embassy
near you.

Be it noted also that in case you decide to file a case against

Citiglobal at the HLURB, you need to pay the required docket and other
legal fees unless you are an indigent. Failure to pay the fees is
jurisdictional and may lead to the dismissal of your complaint without
prejudice. This is in accordance with Section 15, Rule 03 of the 2017
HLURB Rules of Procedure.

If you have already decided to pursue a case against Citiglobal

and engage our services, an Engagement Proposal will be sent to you for
your consideration. Thank you very much!

Sincerely Yours,

(SGD.) Atty. Vincent Sheldon Zabala

(SGD.) Atty. Rachelle Anne Billones