📋 Tender Overview
The Supreme Court (SC) ruled that extrajudicial demand is not a prerequisite for judicial foreclosure unless expressly required by law or agreed between the parties.In a Decision penned by Associate Justice Mario V. Lopez, the SCs Second Division granted the petition of Goldland Tower Condominium Corporation (Goldland) against Edward L. Lim (Lim) and Hsieh Hsiu-Ping (Ping).The case stemmed from Pings failure to pay PHP 4.6 million in association dues to Goldland, annotated as a lien on his condominium units title.When Ping failed to pay real estate taxes, the San Juan City Treasurer levied and sold the unit at a public auction, with Lim emerging as the highest bidder. After Ping failed to redeem the unit within the one-year redemption period, the City of San Juan issued a deed transferring the property to Lim.Goldland later filed a judicial foreclosure case with the Regional Trial Court (RTC), asserting that Lim, as the new owner, assumed Pings unpaid association dues. Lim, however, argued that the foreclosure was premature since Goldland never formally demanded payment before filing the case.The RTC decided in favor of Goldland, ordering Lim to pay Pings unpaid association dues. The Court of Appeals reversed the decision, prompting Goldland to elevate the case to the SC.The SC affirmed the RTC ruling, reiterating that a creditor has the right to demand payment once a debt becomes due, either judicially (through the court) or extrajudicially (outside of court). The creditor has the right to initiate foreclosure of the security to satisfy the debt.Article 1169 of the does not require a creditor to make an extrajudicial demand before initiating a judicial demand, unless required by law or agreed upon by the parties involved. It merely requires that a demand, whether judicial or extrajudicial, be made before a debt can be considered legally delayed and begin to have legal interest or damages if not paid. The SC applied the same principle to judicial foreclosures.Goldland, as the creditor, had the right to demand from Ping, and later Lim, the unpaid association dues. Goldlands judicial foreclosure case against Lim served as the required demand on him to pay the debt.The Supreme Court clarified that the annotation on the title serves as a notice to Lim regarding the existence of the debt, but does not constitute a demand for payment. Goldland needed to issue a separate demand for payment to Lim, which it effectively did when it filed for judicial foreclosure. () This press release is prepared for members of the media and the general public by the Supreme Court Public Information Office as a simplified summary of the Courts Decision. For the Courts complete discussion of the case, please read the full text of the Decision in G.R. No. 268143 ( August 12, 2024) at .
