View full case

UNITED BF HOMEOWNERS' ASSOCIATIONS v. CITY MAYOR

FACTS:

The case involves a petition for review of the Court of Appeals' decision upholding the validity of Municipal Ordinance No. 97-08, which reclassified certain areas in the BF Homes Parañaque Subdivision from residential to commercial zones. The subdivision, spanning three cities and being the largest in the country, is the subject of the dispute. The petitioners, consisting of homeowners' associations and residents of the subdivision, argued that the reclassification violated the contracts between the developer and the lot buyers, which specified that the property shall only be used for residential purposes. On the other hand, the public respondents contended that the ordinance is a valid exercise of police power and can override contractual obligations. The Court of Appeals found that the reclassification was valid, considering the increasing population and the need for more commercial establishments in the area.

The petitioners raised multiple issues, including the constitutionality and enforceability of the ordinance while pending review. The Court ruled that the power to enact zoning ordinances lies with the Municipal Council, and Municipal Ordinance No. 97-08 was enacted in accordance with the Local Government Code and Executive Order No. 72. Consequently, the Court held that the petition lacked merit.

ISSUES:

  1. Whether the reclassification of certain portions of BF Homes Parañaque from residential to commercial zone impairs the contracts between the developer of BF Homes Parañaque and the lot buyers.

  2. Whether or not the appellate court erred in affirming the decision of the lower court.

  3. Whether or not the rental rate imposed by the government is just and reasonable.

RULING:

  1. The reclassification of certain portions of BF Homes Parañaque from residential to commercial zone is a legitimate exercise of police power and does not impair the contracts between the developer of BF Homes Parañaque and the lot buyers. The constitutional guaranty of non-impairment of contracts is limited by the exercise of the police power of the State, in the interest of public health, safety, morals, and general welfare.

  2. The Supreme Court affirmed the decision of the Court of Appeals.

  3. The rental rate imposed by the government was found to be just and reasonable.

PRINCIPLES:

  • Municipal ordinances are presumed to have been enacted in accordance with applicable laws, in good faith, and in the exercise of sound judgment. There is a presumption that public officers performed their official duties regularly and legally. (Section 3(m), Rule 131 of the Rules of Court).

  • The reclassification of areas into commercial zones to service the needs of homeowners in a subdivision may be considered reasonable and not discriminatory or oppressive. This is especially true when there is already a long-standing commercialization of the area and when homeowners themselves acknowledge the need for additional commercial areas.

  • The exercise of police power may limit the non-impairment of contracts clause in order to promote public health, safety, morals, and general welfare.

  • Zoning regulations enacted for the general welfare prevail over contractual restrictions on the use of property.

  • Police power is elastic and must be responsive to various social conditions; it must follow the legal progress of a democratic way of life.

  • The reclassification of property for the purpose of promoting the common good is not arbitrary or unreasonable, as long as it is based on reasonable grounds and is in line with public interest.

  • The Supreme Court has the power to review findings of fact when there is a grave abuse of discretion or when the findings are not supported by substantial evidence.

  • The determination of rental rates by the government is within the scope of its regulatory powers, and such rates are deemed valid unless shown to be confiscatory or unreasonable.