Case 6: Risks in Buying Escrowed Condo Units in Philippines

A developer placed its multi-story residential condominium project in an escrow with two banks somewhere in Metro Manila, Philippines. Since the project was in escrow, the building was completed, but somehow the developer was able to mortgage the mother title with a Philippine bank. Together with many other buyers, Ms. Ramirez bought a condo unit in the said project. She lived in the condo unit for awhile, when she heard that the banks foreclosed the whole building, due to the inability of the developer to remit the needed payments. Since the whole building was already foreclosed, the developer stopped paying for all the utilities of the building. For many weeks there was no water and electricity for the residents. The residents had to resort to using candles and walking up the stairs of the multi-storey condominium.

Since the mother title was in the possession of a bank, Ms. Ramirez paid her succeeding monthly amortization to one of the banks. Due to the complicated legal status of the project, the bank did not acknowledge her payment. Ms. Ramirez, together with the other residents brought their case to the HLURB.

In an HLURB case, a bank foreclosed two condominium projects of a developer for non-payment of the loan. Although the HLURB had ordered the bank to release the titles to fully or partially paid buyers, the bank still refused to unconditionally surrender the titles of the said property to fully paid buyers. The bank dragged the issue through different court levels that made the buyers in good faith the real losers. (Philippine Daily Inquirer, 2/12/03, p. B5)

Glance at the lessons to learn from this occurence.

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