Developer sues contractor over foreclosure threat

CEBU, Philippines — A real-estate development company in Cebu has filed a petition for permanent injunction to prevent its former contractor from foreclosing a beach town project located in Sitio Suba Basbas,  Barangay Marigondon, Lapu-Lapu City.

In a 15-page petition submitted to Regional Trial Court Branch 7, the Cebu Landmasters Inc. (CLI) asked for a 72-hour Temporary Restraining Order to immediately halt the contractor from proceeding with foreclosure.

The dispute between the petitioner and respondent stems from delays allegedly caused by the contractor during the construction of the Costa Mira Beach Town Residences.

According to CLI, the delays of construction forced them to take over on Jan. 31, 2024.

CLI further claimed that by the time they took over the project, the said contractor was already “39% behind schedule.”

Right after the CLI took over, the contractor allegedly issued letters threatening to enforce a statutory lien under Article 2242 of the Civil Code. Two letters, dated March 11 and 12, 2024 were sent --warning of foreclosure actions affecting the land titles, building, and condominiums units of the beach town.

With these underlying threats, CLI asserted that the petition for an injunction is needed to preserve the status quo and protect the project’s viability.

“Due to the threats of acts gravely prejudicial to the rights of the Petitioner in the Letters of Respondent’s attorneys, the Petitioner is compelled to file the instant Petition,” read a portion in the petition.

CLI is also seeking to restrain the contractor from filing any undue complaints with regulatory bodies or from erecting damaging signages at the construction site.

CLI and its previous contractor began their partnership on July 2, 2022. The Department of Human Settlements and Urban Development authorized the development and granted CLI until Dec. 31, 2025 to complete the project.

The RTC Branch 7 has yet to review the petition for the issuance of TRO, while the contractor was not available for comment as of press time yesterday. — (FREEMAN)