Reality in Realty

The Motor Court

2011-08-04T03:00:00.000-07:00

The Coco Palm Ville Subdivision (CPVS) is a Model C residential subdivision owned, developed and marketed by WVU Real Estate Corporation. The corporation through its Project Manager contracted the special services of two of the engineers and architects of the government’s Land and Building Regulation Authority (LBRA) to prepare all the plans and project feasibility study for the said CPVS Subdivision. This decision ensured the approval of the residential subdivision project at much faster phase than usual. The corporate decision was based on the premise that nobody in the said office would try to oppose any and all of the specifications of the said project since the persons who prepared it were their own. As expected, the project was approved and the corporation spent just fair enough for its processing with minimal facilitation fees.

In the development phase of the project, WVU hired a geodetic engineer who was paid on per residential lot with corresponding transfer certificate of title that would be developed and approved. This assured the faster approval of the individual title through the direct involvement and follow up of the geodetic engineer in the processing of the titles. The geodetic engineer was paid according to the number of the approved titles of residential lots he turned in.

The geodetic engineer excluded an area of one meter wide in the south western portion of the entire subdivision. The rationale that he gave was that “it would safeguard any adverse claim of the owners of the adjacent parcel of land regarding encroachment on their property.” The possible owners of the residential lots in the subdivision would have peace of mind regarding any possible case of encroachment. On the other hand the management of the Sta. Maria Corporation, the owner of the adjacent parcel of land, also gave an allowance of an area of one meter wide parallel to what the WVU Real Estate Corporation excluded. The enterprising informal settlers, who were the recipients of the Sta. Maria Corporation’s residential lot donations, claimed the entire two meters wide area of land jointly excluded by the two corporations. One family of informal settler, who are not included in the list of recipients, just erected a small shack on the two meters wide and eight meters long area just adjacent and opposite the motor court area or the “cul-de-sac” on the south western side of the CPVS Residential Subdivision. The project manager who was then overseeing the final development phase of the subdivision project, warned the mother of the informal settler family that they should not get inside the portion allotted to the motor court. It is an area designed to enable maneuvering of motor vehicles, especially if two vehicles could not pass through a secondary road at the same time. The mother of the informal settler’s family agreed as if she understood the explanation.

About twenty years had passed and the residential lot owners (cum investors) of the opposite lots at the dead end of the motor court or “cul-de-sac” had sold their respective property to second owners. The second owners both built their own houses. But they were both wondering why there was a shack owned by the informal settlers between their lots. At first, the residential lot owner situated on the left side facing the direction of the “cul-de-sac” talked to the son of the informal settler. She explained to him that they have no right to build an extension of their shack within the dead end or “cul-de-sac”, for it is still part of the design and common property of the subdivision. The son of the informal settler, who was also a barangay tanod or peace keeper ignored the explanation of one of the subdivision residents. The lady resident made several attempts to tell the informal settler to vacate the portion of the road’s dead end that they occupied illegally. The owners of the opposite residences at the end of the “cul-de-sac” agreed to take up their complaint to the barangay. But the chairman referred them to the former project manager, hinting that the latter had an authority in deciding over the issue. So, the lot owners went to the former project manager and expressed their complaint. Initially, the former project manager explained that the motor court or dead end was part of the design and common property of the subdivision and it should remain clear of any obstructions for maneuvering purpose. He told them to make an official complaint letter addressed to the Barangay Chairman and noted by the President of the Homeowners’ Association of the CPVS Ville Residential Subdivision. He requested them to include him as one of the principal resource persons required to be present during the preliminary talk about the said case in the barangay. After two weeks the former project manager received a letter of invitation from the Barangay Chairman regarding the said case.

A day before the scheduled preliminary talk about the case, the Barangay Chairman inhibited himself, without any reason stated formally and instead delegated the officer-of-the-day to preside over the case. The former project manager thought that the Chairman possibly avoided a situation where he would have to preside and later on decide on a case involving one of the barangay tanods or peace keepers. On the day of the preliminary talk, the former project manager arrived early and was able to talk to the officer-of-the-day regarding the inclusion and use of the motor court within the design of the subdivision. They were informally discussing the topic when the concerned barangay tanod or peace keeper arrived. They greeted each other courteously for they also knew each other long before. The former project manager started again his explanation about the use of the motor court. He showed them the entire development plan of the CPVS Ville Residential Subdivision which was approved by the LBRA January 30, 1987 (about 24 years ago from the date of the case). He explained to them that under the Minimum Design Standards of Presidential Decree 957, F. Design/Planning Considerations, 1.9 Motor courts / drive courts; that the branch type of motor court is part of the design of the Model C Subdivision and the design and actual measurement conformed to the requirement of law. He showed them the example of the branch type of motor court in Figure 5 of the attachment of P.D. 957 and that the road network and the parks and playground comprised 30% of the total area generally called open space. The saleable area of the subdivision should be 70% maximum. The barangay tanod on hearing the explanation agreed to demolish the extension of his shack. By about this time, the two complainants arrived. Since the barangay tanod gave assurance that he would comply, the former project manager reiterated to the complainants what had transpired from the informal talk about the case. The barangay tanod informed everyone present that he could have complied instantaneously had he been informed by the two complainants. He also lamented the fact that as a barangay tanod, he now has a documented case in the barangay record. He even mentioned that the former project manager allowed his mother to build an extension of their shack in the motor court. The former project manager countered his statement by reiterating that someone like him who knew the requirement and the design of the subdivision would not allow that. He told the barangay tanod that for at least three times he had reminded the tanod’s mother that their shack was encroaching on the motor court. The former project manager, felt that these preceding statements were merely face saving arguments of someone who should be knowledgeable of the law, being part of the peace keeping and law enforcing group. Thus, he requested everyone present that the case will not be recorded just like any other case but merely an occasion to hear explanations from all concerned. The complainants stated that at their combined expense, they would build a concrete wall at the boundary of the dead end. The preliminary talk formally ended.

Alternative Courses of Actions:

o The President or any authorized or designated officers of the Homeowners’ Association should have explained to the concerned barangay tanod about the inclusion of the motor / drive courts in the entire design and specifications of a Model C Residential Subdivision approved under P.D. 957.

o In the absence or inactivity of the Homeowners’ Association officers, the barangay officials, headed by the Chairperson should make sure of the proper implementation of the appropriate laws or rules and regulations within the subdivision, which is still part of the barangay.

o The complainants should have channelled their complaint to the Homeowners’ Association Officers. In the absence or inactivity of the association, then it should be coursed through the barangay council.

Please note that the case or incident enabled an opportuned occasion to explain even partially about the minimum design standards of P.D. 957. As an old cliché say “Ignorance of the law excuses no one.”

Breach of Trust

2011-06-27T10:27:00.000-07:00

Faith and husband Effie dreamed of having their own house and lot in the future. To fulfil their dream and to ensure their children’s future, they figured out that Effie would apply as an oversea’s worker in the Middle East. After filling several applications he was finally hired. Thus, he left his wife and a year-old daughter in the house of his aunt.

After a year, the couple had saved an ample amount of money to make an initial payment for a residential lot. Faith confided what she would like to do to Lorna, a new acquaintance, who happened to be a real estate salesperson or agent in the next town’s newly opened residential subdivision. Lorna invited Faith to go with her in the subdivision site and showed her the available residential lots for sale. Faith consulted her husband through a long distance call. They decided to acquire a lot through one of the monthly instalment schedules that the Residential Subdivision’s owner and developer were offering then. Within the period of three years, they were able to complete the payment of the residential lot. Faith asked Lorna when the title of the lot could be transferred to their names. Lorna told Faith to hold on to a title of lot, which was in the name of another person, as an assurance that soon the new title would be transferred to their names. A year had passed and the title had not been transferred to the name of the couple.

Faith who had paid all the instalments throughout the past felt a little guilt despite the silence of her husband. She decided to seek the advice of her uncle who happened to be a real estate broker in his cousins’ real estate company. Her uncle noted all her narrations regarding the problem and prepared a letter stating the basic facts of the problem to the housing authority of the region. The housing authority’s legal unit answered the letter but would just like to be assured that the complainant was not forum shopping. Her uncle prepared all the required documents to substantiate her complaints to the housing authority and to assure the legal unit also that she was not forum shopping. Faith requested her uncle to put on hold the letters and the evidences regarding the problem. She told her uncle that the salesperson and the subdivision manager talked to her and promised that the title of the new residential lot would be transferred to their names.

In a month’s time, the new title of residential lot was transferred to the name of the couple. The compliance of the subdivision owner and developer could have been a perfect one, had it not been for the hitch that the new residential lot was not the one that Faith originally agreed to buy. Faith and Effie finally agreed to the settlement since the new residential lot was in a choice or primary location within the subdivision. They also thought that if they would pursue the case, the litigation process would be long, expensive and the outcome or the verdict was unsure.

Alternative Courses of Actions:

Faith should have requested for a photocopy each of the residential lot’s title, tax declaration and approved location plan of the subdivision. She should have requested from the Provincial Assessor’s Office for a certified photocopy of the title of the subject residential lot. The certified photocopy of the title would show if the lot was used as collateral for the loans of the subdivision owner from a banking institution, in order to have additional cash for the development of the subdivision. The tax declaration would indicate the amount of the tax that the owner paid for the real estate tax of the lot. The approved location plan would give the actual location of the residential lot within the subdivision.

Faith should have required the subdivision management to prepare a Contract to Sell between them and the subdivision owner. In the said legal instrument the technical description of the residential lot she originally chose to buy should be specified. This could have prevented possible switching of properties.

Upon completion of all the monthly instalments, Faith should have requested for a certified photocopy of the title of the residential lot she originally chose to purchase. In this way, she could have verified if the lot was used as collateral at a much later date or if the title had been transferred to the name of any other buyer of residential lot.

Please note: All law abiding owners and developers know very well that any proven complaint against them regarding fault in transferring paid residential lots will result to administrative sanction on the part of the persons involve in the actual sale of the subject property and cancellation of license to sell of the subdivision, (refer to Sec. 8 and 9 of P. D. 957). This could be the reason why the salesperson and the manager assured Faith of immediate transfer of ownership to the couple.

The compromise in switching properties had been tolerated since the owner-developer offered a residential lot from the prime location within the subdivision.

Let us be prudent in following our amortization or instalment schedule, in turn let us require the owners and developers to act with propriety with regards to transferring to our names what rightfully belongs to us and what we had paid with hard earned money. Be vigilant and wise while we follow our dreams. See you till the next review of our real life experience.

The Three Widows

2011-06-21T02:44:00.000-07:00

The BLL Realty Development Corporation is the owner and developer of a Model C residential subdivision. A total of 120 residential lots were developed and up for sale. Two employees from the Animal Nutrition Unit of Sta. Maria Corporation applied for a residential lot each, through their respective loan from the Countrywide Housing Mortgage and Finance Corporation, a government corporation. Prior to their application to CHMFC, they requested the management of BLL to transfer to their name the respective title of the lot they wanted to purchase and that would be paid through the said loan. The management agreed with this arrangement. Both of the employees’ applications for house and lot loans were approved by the CHMFC.

The proceeds of the house and lot loans were released through a conduit provincial bank branch, in which case, the Lucky Savings and Loans Association, Inc., also known as Lucky Bank. The LSLAI or Lucky Bank had official and legal agreement to take care of releasing the amount of loans and to accept the monthly amortization or payment. Both employees entered into a legal agreement with Ms. Delilah W., a widow, who assisted them in the processing of all the required papers for the loans, for a certain fee.

The proceeds of the loans were released to both employees. Mr. Radge H., one of the employees, hired his relatives to construct his house. On the other hand, Mr. Gus S., the second employee, entered into a legal agreement with Ms. Delilah W. to be the contractor of his house. Ms, Delilah W. requested Ms. Camela U., a widow and the eldest of three siblings who own the BLL Dev. Corp., to permit her to be the contractor of Mr. Gus S.’ house. Due to the irking persistence of Ms. Delilah W., finally Ms. Camela U. relented.

After two months, Mr. Radge H.’s House was completed and inspected by the representatives of CHMFC and LSLAI and the lot balance was released and paid to BLL. Unluckily, in the middle of the construction of his house, Mr. Gus S. died and left Ms. Gus S., the widow, to oversee the construction of their house. After a month, Ms. Delilah W. informed Ms. Gus S. that the construction would stop due to shortage of fund. The representatives of CHMFC and LSLAI inspected the house and found that the toilet and other bathroom fixtures, the grills for the windows and the interior and exterior painting stated in the specifications of the house plan were missing. CHMFC and LSLAI declared that the house was incomplete and stopped the payment of the lot balance.

After six months, Ms. Gus S. received the full benefits due to her husband’s death, but she did not bother to complete the house with the reason that she would save them for their children. The LSLAI foreclosed the property and BLL did not receive any payment at all.

Alternative Courses of Actions:

This is not an attempt to solve the problem but just a venture to look at some alternatives and courses of actions that should have been taken into consideration to avoid or prevent some untoward incidents.

o Mr. Gus S. should have employed a master carpenter and a small team of local artisans to construct his house just like what Mr. Radge H. did.

o Ms. Camela U. should not have allowed Ms. Delilah W. to be the contractor of the house.

The total proceeds of the house and lot loan that the borrower received was about ₱350,000.00.The lot cost was ₱99,450.00 and the contractor’s fee was 35% of what was left for house construction. The contractor’s fee amounted to ₱250,550.00 x .35 = ₱87,692.50. The remaining ₱162,857.50 was the amount left used to build the house.

o Ms. Camela U. should have imposed a contract or agreement with Ms. Delilah W. that specifically stated that as a contractor she would build the house as specified and in conformity with the requirement of both the CHMFC and LSLAI, to assure payment of the lot balance to BLL.

o Ms. Camela U should have imposed on Ms. Delilah W. to post some sort of bond equivalent to the contractor’s fee or the lot balance.

Remember that BLL initiated trust through its agreement to transfer the lot in the name of the employees, thus it could also require other parties to make tangible form of assurance of payment.

Dear readers and followers of this blog, it is now your chance to select the best alternative courses of action or suggest your own version. Keep on thinking, it is good exercise for our memories.