Goldcrest Realty Corporation vs. Cypress Gardens Condominium Corporation

An exclusive easement of use over a condominium’s limited common area does not carry the right to erect permanent structures that are unnecessary for the use or preservation of the easement, increase the burden on the servient estate, alter the approved condominium plan without consent, or otherwise violate the restrictions imposed on the dominant estate under Articles 626 and 627 of the Civil Code and Section 22 of Presidential Decree No. 957; any such act constitutes impairment of the easement and is prohibited.

Goldcrest Realty Corporation developed Cypress Gardens, a ten-storey condominium building in Legaspi Village, Makati City. In 1977, Goldcrest executed a Master Deed and Declaration of Restrictions constituting the project as a condominium and creating respondent Cypress Gardens Condominium Corporation to hold title to the common areas and manage the project. Under Section 4(c) of the Master Deed, the portion of the roof deck not shaded red in the plan was set aside as a limited common area with an exclusive easement of use appurtenant to Goldcrest’s penthouse unit on the roof deck. Goldcrest retained ownership of the penthouse and controlled the condominium’s management until 1995. After management was turned over to the condominium corporation’s board, disputes arose over Goldcrest’s continued occupation and alleged encroachment on common areas.

• The Master Deed and Easement: Goldcrest Realty Corporation was the developer of Cypress Gardens, a ten-storey condominium project on Herrera Street, Legaspi Village, Makati City. On April 26, 1977, it executed a Master Deed and Declaration of Restrictions, incorporating respondent Cypress Gardens Condominium Corporation as the management entity and transferring title to the common areas, including the land, to Cypress under TCT No. S-67513. Goldcrest retained ownership of the two‑level penthouse unit covering the ninth and tenth floors under CCT No. S-1079. Section 4(c) of the Master Deed created a limited common area consisting of a portion of the roof deck, appurtenant as an exclusive easement for the use of the penthouse unit.

• Alleged Encroachments: After the administration and management of the condominium were turned over to Cypress’s board of directors in 1995, it was discovered that Goldcrest occupied and built upon certain common areas belonging to the condominium corporation. In 1998, Cypress filed a complaint before the HLURB to compel Goldcrest to vacate the encroached areas and remove: (a) a door Goldcrest erected along the stairway between the eighth and ninth floors; (b) a door built in front of the ninth‑floor elevator lobby; and (c) a cyclone wire fence on the roof deck. Cypress also prayed for actual damages for Goldcrest’s continued occupation and refusal to dismantle the structures.

• Ocular Inspections: Two ocular inspections were conducted under the directive of the HLURB Arbiter. The first inspection revealed that Goldcrest had enclosed the common area fronting the two elevators on the ninth floor and used it as a storage room, and had constructed a permanent structure encroaching on 68.01 square meters of the roof deck’s common area. The second inspection noted that Goldcrest had not secured an alteration approval for the permanent structure. No distinction was made at that stage between the limited and unlimited common areas of the roof deck.

• Off‑Setting Findings: Goldcrest defended its acts by invoking the exclusive use granted under Section 4(c) of the Master Deed, claiming that the doors were for privacy and security, and that the occupied common areas were unusable and inaccessible to other unit owners. It later built an office structure on the roof deck’s limited common area and leased it to third persons. The exact metes and bounds of the encroachment were not determined because the area was never formally measured, though the permanent structure’s existence and its location within the limited common area were uncontroverted.

• Lack of Measurement and Impossibility of Implementation: Petitioner Goldcrest contended that the Court of Appeals erred in ruling that it had built an office structure on the roof deck’s limited common area because the areas allegedly encroached upon were never actually measured during the ocular inspections. It argued that, without a measurement, the directive to “remove the permanent structures constructed on the limited common area of the roof deck” was impossible to implement.

• Right to Build and Lease under Exclusive Use Easement: Petitioner maintained that since the roof deck’s limited common area was reserved for its exclusive use under Section 4(c) of the Master Deed, the construction of structures thereon and the leasing of those structures to third persons did not impair the easement. It insisted that its acts fell within the rights granted by the exclusive easement.

• Specific Identification of Limited Common Area: Respondent Cypress countered that the absence of an actual measurement did not render the appellate court’s directive impossible to implement, because the limited common area of the roof deck was specifically identified and delineated by Section 4(c) of the Master Deed and the referenced plan (Annex “B,” sheet 10).

• Impairment of Easement: Respondent argued that erecting permanent structures and leasing them to third parties constituted an impairment of the easement because such acts went beyond the contemplation of the easement originally granted. It insisted that the exclusive use did not carry the right to build permanent improvements for commercial purposes.

• Factual Finding and Feasibility of Removal: Whether the Court of Appeals erred in finding that petitioner built an office structure on the roof deck’s limited common area despite the absence of an actual measurement of the encroached area, and whether the resulting directive to remove the permanent structures was impossible to implement.

• Impairment of Easement by Construction and Lease: Whether petitioner’s construction of permanent structures on the roof deck’s limited common area and the leasing of those structures to third persons impaired the appurtenant exclusive easement.

• Factual Finding and Feasibility of Removal: The absence of an actual measurement of the encroached area was no longer material because the award for actual damages had been deleted and was not in issue. The Court of Appeals’ finding that Goldcrest built an office structure on the limited common area was amply supported by substantial evidence: the ocular inspection reports submitted by the HLURB inspector, the fact that the second ocular inspection was intended to measure the encroached area, the administrative fine imposed on Goldcrest for building an unauthorized structure on the limited common area, and Goldcrest’s failure to deny either the structure’s existence or its encroachment. The directive to remove the permanent structures was not impossible to implement because the limited common area was specifically identifiable by reference to Section 4(c) of the Master Deed and the corresponding plan.

• Impairment of Easement by Construction and Lease: The construction of an office structure and its lease to third parties constituted an impairment of the easement. Under the Civil Code, the owner of a dominant estate is subject to strict restrictions: it may exercise only those rights necessary for the use of the easement, may not use the easement except for the benefit of the immovable originally contemplated, may not alter or render the easement more burdensome, and may not construct anything on the servient estate that is not necessary for the use and preservation of the easement. Here, the office structure was neither necessary for the use nor preservation of the roof deck’s limited common area; its weight increased the strain on the condominium’s foundation and introduced unnecessary safety risks to all unit owners, thus making the easement more burdensome; and the construction illegally altered the approved condominium plan without the prior written approval required by the Declaration of Restrictions, in violation of Section 22 of Presidential Decree No. 957. These breaches fell squarely within the prohibited acts that result in impairment of an easement.

• Restrictions on the Rights of a Dominant Estate Owner: Under Articles 626 and 627 of the Civil Code, the owner of a dominant estate is subject to the following restrictions in the exercise of an easement, violation of any of which constitutes impairment: (1) it may exercise only the rights necessary for the use of the easement; (2) it cannot use the easement except for the benefit of the immovable originally contemplated; (3) it cannot exercise the easement in any manner other than that previously established; (4) it cannot construct anything on the servient estate that is not necessary for the use and preservation of the easement; (5) it cannot alter or make the easement more burdensome; (6) it must notify the servient estate owner of its intention to make necessary works; and (7) it must choose the most convenient time and manner to build such works so as to cause the least inconvenience to the servient estate owner. The Court applied these restrictions to conclude that Goldcrest’s office structure violated limitations (4), (5), and (3) by being unnecessary, burdensome, and beyond the originally intended use, thereby impairing the easement.

• Alteration of Condominium Plan under P.D. 957: Section 22 of Presidential Decree No. 957 (The Subdivision and Condominium Buyers’ Protective Decree) prohibits an owner or developer from altering the approved subdivision or condominium plan—including roads, open spaces, and facilities for public use—without the permission of the Authority and the written consent of the duly organized homeowners association or, in its absence, the majority of the lot buyers. The Court found that Goldcrest’s construction of an office structure on the roof deck altered the approved condominium plan without the required consent, constituting a separate violation.

• Condominium Declaration of Restrictions — Structural Alterations and Impairment of Easements: Section 4 of the condominium’s Declaration of Restrictions prohibits any unit owner, tenant, or occupant from undertaking structural repairs or alterations that would jeopardize the building’s safety or impair any easement, absent prior written approval of the condominium corporation and the owners of directly affected units. The office structure, built without such approval, violated this restriction and independently justified the order to remove it.

• “The owner of the dominant estate cannot violate any of the following prescribed restrictions on its rights on the servient estate, to wit: (1) it can only exercise rights necessary for the use of the easement; (2) it cannot use the easement except for the benefit of the immovable originally contemplated; (3) it cannot exercise the easement in any other manner than that previously established; (4) it cannot construct anything on it which is not necessary for the use and preservation of the easement; (5) it cannot alter or make the easement more burdensome; (6) it must notify the servient estate owner of its intention to make necessary works on the servient estate; and (7) it should choose the most convenient time and manner to build said works so as to cause the least convenience to the owner of the servient estate.” — This passage encapsulates the codal restrictions the Court applied to define impairment of an easement.

• “First, it is obvious that the construction and the lease of the office structure were neither necessary for the use or preservation of the roof deck’s limited area. Second, the weight of the office structure increased the strain on the condominium’s foundation and on the roof deck’s common limited area, making the easement more burdensome and adding unnecessary safety risk to all the condominium unit owners. Lastly, the construction of the said office structure clearly went beyond the intendment of the easement since it illegally altered the approved condominium project plan…” — The Court’s application of the restrictions to the specific facts.

• Breliant v. Preferred Equities Corp., 109 Nev. 842 (1993) and Bijou Irr. Dist. v. Empire Club, 804 P.2d 175 (Colo. 1991), cited in 25 Am. Jur. 2d Easements and Licenses § 71 — These American authorities were invoked to support the proposition that whether a particular act impairs an easement is a question of fact, requiring an assessment of the act’s propriety in relation to the character and purpose of the easement.

• Articles 625, 626, and 627, Civil Code — These provisions codify the rights and restrictions of the dominant estate owner. Article 625 grants all rights necessary for the use of the easement. Article 626 prohibits using the easement except for the benefit of the immovable originally contemplated and in the manner previously established. Article 627 allows necessary works at the dominant owner’s expense but prohibits altering or rendering the easement more burdensome, and requires notice to the servient owner with conduct at the least inconvenient time and manner. The Court applied these articles to hold that Goldcrest’s office structure was unlawful.

• Section 22, Presidential Decree No. 957 (Subdivision and Condominium Buyers’ Protective Decree) — This section prohibits unauthorized alteration of approved subdivision or condominium plans. The construction of the office structure on the roof deck without HLURB permission and without the consent of the homeowners association or majority of unit buyers was a direct violation.

• Section 4, Declaration of Restrictions of Cypress Gardens Condominium — This provision bars structural repairs or alterations that jeopardize safety or impair an easement without prior written approval of the condominium corporation and affected unit owners. The permanent office structure was constructed without such approval and was found to impair the easement, constituting a breach of the condominium’s own restrictive covenant.

Associate Justices Conchita Carpio Morales, Dante O. Tinga, Presbitero J. Velasco, Jr., and Arturo D. Brion concurred.