FILINVEST Land Inc. (FLI) questioned the amount the Cebu City Treasurer’s Office is collecting from it for the City’s share in the sale of condominium units in their joint venture at the South Road Properties (SRP).
It also stood pat on its decision to withhold payment for the P245.2-million amortization for 2012 for the 10.6-hectare SRP lot it purchased from the City Government.
FLI replied yesterday to the demand letter of City Treasurer Ofelia Oliva, asking the firm to pay its obligation to the City.
The bill amounts to P845.2 million, including the P600 million that Oliva said is the City’s share in FLI’s earnings from the sale of condominium units in the 40-hectare joint development properties.
“We find the claims of the city treasurer on the amount due from the joint venture properties wrong and baseless. We would like to invite the city treasurer to review our sales and collection record so she can be guided on the correct amount of shares that the City ought to receive before she makes public pronouncements,” said Tristan Las Marias, FLI first vice president for the Visayas and Mindanao.
Up for discussion
However, he said the City’s share is still up for discussion.
Oliva said she will send examiners to FLI’s office.
As stated in the joint venture agreement, the City gets a 10-percent share from the sale of built-up units in the 40-hectare area, or a minimum guaranteed return, whichever is higher, which the City gets annually.
But if the minimum guaranteed return, which is the sale price of the land plus 20 percent, is higher than the City’s 10-percent share, FLI is obliged to make additional payments at the end of the five-year development period.
As for the P245.2-million amortization, Las Marias said FLI will not pay yet, arguing that it is not yet due and it also should not earn any interest.
Last Friday, Las Marias sent a letter to Mayor Michael Rama asking for a resolution from the City Council authorizing the mayor to sign and deliver the deed of absolute sale before FLI will release the payment.
Lis pendens
But in a letter sent to Oliva yesterday, he said FLI will not pay yet because the title the City will give the firm, in exchange for its payment, still has an annotation of levy relative to the Rallos claim.
He said Section 31 of the joint venture agreement entitles FLI to defer any payment in the event that there is an ongoing litigation on the titles and properties under the joint venture, “and this gives us the right to suspend payments until the litigation is finally settled.”
While he understands FLI’s obligation to the City, Las Marias said the City should also fulfill its obligation to deliver titles that are clean and free from claims, levies and encumbrances.
The titles of the joint venture properties were annotated “lis pendens,” meaning there is a pending litigation involving the properties, as a result of the City’s court battle with the Rallos heirs.
The City Legal Office, though, already filed a motion for cancellation of memoranda of encumbrances and notice of lis pendens at the Regional Trial Court (RTC) Branch 9 two months ago. The motion is still pending.
In a phone interview, Oliva clarified that as treasurer, it is her responsibility to send demand letters or billings to FLI.
“Whatever I am supposed to do, I will do it. They shouldn’t blame me for sending them demand letters because that’s part of my job… Dili nako concern ang legalities ana, ang ako lang nga gipadalhan nako sila og bill (The legal aspect is not my concern I just sent FLI the bill) as part of my job and if they will pay, well and good. But if they don’t, it’s the problem of the City Legal Office, it’s not mine,” Oliva said.
Published in the Sun.Star Cebu newspaper on June 12, 2012.
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