Filinvest should not withhold payments for SRP, City Hall says

By Princess Dawn H. Felicitas

Thursday, March 22, 2012

FILINVEST Land Inc. (FLI) should not withhold its 2012 payments for the lots it bought at the South Road Properties (SRP) because of the case involving the Cebu City Government and the heirs of Fr. Vicente Rallos, an official said.

Lawyer Janesis Ponce, one of the City’s legal counsels in the Rallos case, said FLI has no legal grounds for withholding its payment to the City.

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In an interview yesterday, Ponce said FLI can withhold its payment to the City if the lot it bought at the SRP has “defects,” which may include absence of titles and improper titling, among others.

“If that’s the case, then that is a legal ground for them to withhold payment because that’s a fault on the part of the City. But particularly for this (Rallos) matter, they are withholding the payment due to a case totally unrelated to their contract with the City,” he said.

But as stated in the joint venture agreement the City Government and FLI entered into on Feb. 3, 2009, the City has to turn over the properties sold to FLI without any lien.

“Cebu City shall sell and transfer to Filinvest, by executing and delivering Deeds of Absolute Sale, and Filinvest shall purchase and acquire from Cebu City, the sale properties free of all liens, charges and encumbrances of any kind, including the cancellation of the LandBank of the Philippines mortgage…,” Section 18 of the contract says.

The 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.

Based on the computation of the City Treasurer’s Office, FLI is due to pay the City P845.2 million for this year.

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 already informed City Hall that it will be deferring the payment to the City until the notices of levy annotated on the SRP titles to be released to them are removed.

Ponce opined that FLI should pay the City, saying that the levy is not an encumbrance to the property itself.

He said that the notice of levy issued by Sheriff Eugenio Fuentes of the Regional Trial Court Branch 9 is “null and void.”

The City Attorney’s Office questioned in court last Tuesday the issuance of the notice of levy, but the judge has yet to rule on the matter.

Ponce said it should be the City, and not the court, who will identify properties to satisfy, if ever the City will pay, the P133 million it owes the Ralloses.

“Their order is questionable,” he said.

The court ordered the public auction of some 9.7 hectares at the SRP, to satisfy the P133 million the City owes the heirs of Fr. Vicente Rallos for using the family’s property in Barangay Sambag 2 as road-right-of-way since 1963.

The subject lot is reportedly part of the 50.6-hectare residential and commercial development project being undertaken by FLI.

Mayor Michael Rama, who was in Palo, Leyte yesterday, said he will be talking with the City Legal Office and the City Treasurer’s Office to discuss FLI’s decision to withhold payments.

Published in the Sun.Star Cebu newspaper on March 22, 2012.