Wednesday, March 21, 2012
CEBU CITY -- Filinvest Land Inc. (FLI) will withhold its 2012 payments for the South Road Properties (SRP) lots, because of encumbrances on the titles of the lots it bought from the Cebu City Government.
Titles of the lots that FLI bought have been reportedly annotated “lis pendens,” meaning there is pending litigation involving the properties, as a result of the City’s court battle with the Rallos heirs.
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Based on the computation of the City Treasurer’s Office, FLI is due to pay the City P845.2 million in 2012.
Of the amount, P245.2 million is FLI’s fourth amortization for the lot it purchased, while the P600 million represents the City’s share of the profits from the sale of FLI’s condominium units at the SRP.
FLI informed City Hall of its decision to defer the payment in a letter sent to the Office of the Mayor, the Office of the Vice Mayor and the city councilors. Some city officials confirmed receiving a copy of the letter.
Time out
In the letter sent last March 7, FLI advised city officials that it would defer the payment until the notices of levy annotated on the SRP titles to be released to them are removed.
When sought for comment on the letter, FLI First Vice President for Visayas and Mindanao Tristan Las Marias confirmed that they will not give yet the payment that City Treasurer Ofelia Oliva demanded from them.
“The SRP joint venture agreement between Filinvest and Cebu City requires that the titles, prior to turnover to Filinvest, should be free and clear of any liens and encumbrances except the existing mortgages in favor of the Land Bank of the Philippines,” he said in a statement faxed to Sun.Star Cebu.
However, he added, Sheriff Eugenio Fuentes of the Regional Trial Court Branch 9 issued the notice of levy on the rights and interests of Cebu City on the SRP titles, to compel the City to pay the P133 million it owes the Rallos heirs.
Las Marias also clarified that the areas covered by the affected titles are those earmarked for expansion and are not yet developed or offered in the market. He specified that the two medium-rise buildings they are developing, the Amalfi Oasis and Sanremo Oasis, are not affected by the notice of levy, and have clean titles.
Questioned
Sun.Star Cebu tried calling Mayor Michael Rama on Tuesday for his comments on FLI’s letter, but calls made to his mobile phone were not answered.
In an interview, City Attorney Joseph Bernaldez said they will be drafting a legal opinion on FLI’s concerns.
He believes the City can settle the matter amicably with FLI.
“First of all, the notice of levy issued by the sheriff is highly irregular and we already questioned his actions in court today because he did not follow the procedures. Supposedly, the right to choose the property to be levied rests upon the City of Cebu, and not on the sheriff,” Bernaldez said, citing Section 39 of the Rules of Court.
He explained that when collecting money judgment, the sheriff should first seek the City’s personal properties, such as its cash on hand or cash in bank.
Failing to do that, it may opt for real properties.
If the sheriff chooses real properties, the City should be given a chance to choose what property it wants to levy, said Bernaldez.
“But what he did was siya ang nagbuot-buot unsa na (he decided, on his own, which) property to levy. The City has so many properties, so why choose the lots of Filinvest? There is clearly bad faith here. Klaro kaayo na gituyo na pilion ang lots where there is a joint venture between the City and Filinvest. There is something fishy going on here… There is a sabotage, somewhat a conspiracy,” Bernaldez said.
He said he has yet to personally see the land titles to find out if these have already been annotated.
‘Big problem’
The sheriff has issued the notice of levy on the title of a lot at the SRP for the P133 million the City owes the Rallos heirs, for using their property as a road right-of-way since 1963.
The Rallos heirs picked a 9.7-hectare SRP lot to satisfy the award.
Vice Mayor Joy Augustus Young said he considers FLI’s move a “big problem” because the City stands to lose millions.
“We have a problem here because we are losing money because of this. FLI’s sales could be affected and so will our income because we have a share in each sale they make. So I hope the mayor will also consider that we stand to lose here… He is making it a political issue at the expense of the taxpayers. Our loss is endless, we don’t know how long this will continue,” Young said.
FLI is the first developer to purchase lots at the SRP. In 2009, it signed a joint venture deal with the City for the outright sale of a 10.6-hectare area and the joint development of medium-rise residential buildings on a 40-hectare area.
Young also said challenging the Cebu City Council is a waste of time.
He was referring to the mayor’s challenge to sell some parts of the SRP, but Young said the mayor doesn’t know how to do business.
Young shares Representative Tomas Osmeña’s view that Filinvest and SM Prime Holdings Inc. should be allowed to operate their business first to boost the price per square meter of the SRP.
Cuenco
Rama, though, said he will only sell parcels of the properties as long as this can match foreseen prices.
Former congressman Antonio Cuenco acknowledged that as far as selling the SRP is concerned, it is not up to Rama or Osmeña. It is up to the council, although, both will have influence over it and Rama has the authority to approve or disapprove it.
After being a subject of a paid print advertisement that says he is against the SRP, Cuenco told Sun.Star Cebu that he has been a supporter of the SRP from the start.
He pointed out he was with Osmeña and former congressman Raul del Mar when they sought the approval of the SRP from the National Economic Development Authority, then headed by Solita Monsod.
When Talisay City tried to stake a claim at the SRP, Cuenco said he was primarily responsible for getting then justice secretary Raul Gonzales to make a ruling that Cebu City owns the entire SRP.
Cuenco explained that he supported a proposal to conduct a congressional inquiry on the joint venture contract of the Cebu City Government and FLI to ferret out the truth.
That should not be taken as an affront to the SRP because the issue was on the contract, he said.
‘Excess’
Also on Tuesday, a Cebu City Hall lawyer said the February 27 order of Judge James Stewart Ramon Himalaloan should be reversed for being “unprocedural” and being issued “in excess of discretion.”
Leslie Ann Reyes, one of city lawyers, outlined three key points why Himalaloan, acting presiding judge of the Regional Trial Court Branch 9, should reconsider his order requiring the two depository banks of the City Hall to release their correct account numbers.
“We cannot see any reason why the court has to require the banks to release their correct account numbers,” Reyes said during the hearing of the motion for reconsideration the City Hall filed.
The order directed the Philippine Veterans Bank and Philippine Postal Savings Bank to release in five days the correct account numbers of the City Hall.
This is still in relation to the Rallos case.
During the hearing, Reyes cited a Commission on Audit letter dated October 27, 2011, which mentioned Sec. 1, Rule 7 of the 2009 Revised Rules of Procedures. It stated that “a money judgment is considered a wrong claim,” which is within the original jurisdiction of COA.
Reyes said the move of Court Sheriff Eugene Fuentes -- in simultaneously scheduling the public auction of the SRP lot and garnishing the accounts of City in its depository banks -- was “arbitrary” and done with “evident bad faith, and with grave abuse of authority.” (With Jujemay G. Awit and Gerome M. Dalipe/Sun.Star Cebu)
Published in the Sun.Star Cebu newspaper on March 21, 2012.
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