Posted on May 12, 2016
10:40:00 PM
By Vince Alvic A. F.
Nonato, Reporter
THE Housing and Land Use
Regulatory Board has the power to compel real estate developers to disclose
their financial condition on a regular basis, the Department of Justice (DoJ)
said.
FREEPIK.COM
The DoJ stated this
position in a four-page legal opinion at the request of Bangko Sentral ng
Pilipinas (BSP) Deputy Governor Vicente S. Aquino.
The DoJ cited Executive
Order No. 648, which transfers to the HLURB (then the Human Settlements
Regulatory Commission) the National Housing Authority’s (NHA) function of
“regulation of the real estate trade and business.”
The opinion stated that the
power to require project owners and developers to submit financial reports
“(is) implied from the express grant of power to regulate the real estate trade
and business.”
Meanwhile, Presidential
Decree No. 957, or the Subdivision and Condominium Buyers Protective Decree,
originally granted the NHA the power to suspend or revoke licenses when the
registration statement is found to be misleading.
With the regulatory
functions being transferred to what is now the HLURB, the DoJ said it may thus
require the regular submission of financial reports on the basis of that law.
But the opinion noted that
the presidential decree’s clause stated a purpose of deterring undesirable
activities. Because of this, it urged the BSP and the HLURB to explain the
connection of disclosure reports to this purpose.
“We note only that HLURB
must be able to demonstrate that the information sought has a reasonable
connection to the prevention of undesirable activities... In this case, it is
not readily apparent (at first appreciation) how the information sought... to
be required to be disclosed are related to the purpose of PD 957...,” the
opinion read.
The BSP has held discussions
with the HLURB to look into the issue of requiring financial reports from
project developers. The Financial Stability Coordination Council steering
committee had proposed a report template to capture shadow banking activities,
as it required details on financial condition, borrowing from non-bank sources,
and installment sales.
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