RTC Cannot Decide Contractual Condo Disputes Reserved for HLURB/HSAC

Case Alert | Cadungog v. Jung

In the recent case of, the Supreme Court clarified an important jurisdictional distinction involving condominium disputes and criminal violations under.

The case stemmed from a condominium transaction where the buyer filed a criminal complaint for violation of P.D. 957 against the developer. During the proceedings, the RTC not only resolved the criminal aspect of the case but also ruled on contractual matters arising from the parties’ Contract to Sell, including reimbursement and delivery of the condominium unit.

The Supreme Court ruled that while the RTC properly exercised jurisdiction over the criminal prosecution, it had no jurisdiction over the contractual disputes between the buyer and the developer.

According to the Court, the civil liability imposed by the RTC was not civil liability arising from the crime (ex delicto), but civil liability arising from contract (ex contractu). Since the source of the obligation was contractual, jurisdiction belonged exclusively to the HLURB — now the (HSAC) — under P.D. No. 1344.

The Court emphasized that disputes involving:

• refund,
• reimbursement,
• delivery of condominium units,
• specific performance, and
• other buyer-developer contractual obligations

fall within the exclusive jurisdiction of the HLURB/HSAC and must be filed separately from the criminal case.

As a result, the RTC’s ruling on the contractual civil aspect was declared void for lack of subject matter jurisdiction.

The ruling is significant because it reinforces the distinction between civil liability ex delicto and civil liability ex contractu. While civil liability arising from a crime may generally be impliedly instituted with the criminal action, this rule does not apply when the obligation arises from contract. In such cases, jurisdiction is determined not by the criminal charge, but by the nature of the contractual dispute and the special law granting exclusive jurisdiction to the HLURB/HSAC.

The decision serves as an important reminder for lawyers, real estate practitioners, and condominium buyers that criminal proceedings under P.D. 957 do not automatically authorize regular courts to resolve contractual disputes reserved by law to specialized housing adjudication bodies.

For further reading, here is the link of the case:

Cadungog v. Jung, GR. 254543