Republic of the Philippines

CENTRAL BOARD OF ASSESSMENT APPEALS M a n i l a

THE CITY ASSESSOR OF TAGAYTAY CITY, Respondent-Appellant,

– versus –

LOCAL BOARD OF ASSESSMENT APPEALS OF TAGAYTAY CITY,
Appellee,

CBAA Case No. L-11 Re: Tax Dec’l. No GR-008-3478-R
City of Tagaytay

– and –

JRB REALTY CORPORATION, Petitioner-Appellee.
x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

On January 6, 1993, the Tagaytay City Assessor Lamberto C. Parra

assessed condominium unit 204, Montaire Condominium I (MAC I) owned by

Petitioner-Appellee, JRB Realty Corporation as follows:

[table “” not found /]

JRB Realty Corporation appealed the assessment to the Local Board of

Assessment Appeals (LBAA) of Tagaytay City, claiming that the structure

should only have a market value of P196,792.50, an assessment level of 55%

and an assessed value of P155,166.00.

The Local Board made an ocular inspection of the tenement and after

due hearing, disposed of the case as follows:

“In summation, Unit 204 should be listed for assessment purposes in the following mode:

[table “” not found /]

The case is now before this Board on appeal.

As can be observed, both Respondent-Appellant and Petitioner-Appellee

adhere to Sec. 25 of R.A. 4726 in pursuing their respective claims. It is in how

they look at it, however, that makes the difference.

Sec. 25, R.A. 4726 reads:

“Whenever real property has been divided into condominiums, each condominium separately owned shall be separately assessed, for purposes of real property taxation and other tax purposes to the owners thereof and the tax on each such condominium shall constituted a lien solely thereon.”

According to Respondent-Appellant, OIC City Assessor of Tagaytay City,

Teodoro B. Baybay:

“The sole error committed by the Local Board of Assessment Appeals was pronouncing that the subject unit should be appraised and assessed as a separate unit, following the mandate of R.A. 4726.”

Hence, (1) the consideration of the subject unit as a Type IV-B Building,

(2) the classification of the building as a residential apartment and (3) the

application of P3,800 as the base construction cost per square meter.

Respondent-Appellant maintains that the mandate of R.A. 4726 is to

assess (determine the applicable assessment level) separately and not to

appraise (value) separately, each condominium unit separately owned, applying

the base unit cost of the schedule of values from the whole building itself to

arrive at the fair market value of the unit. To do so otherwise would violate the

principle of uniformity in the appraisal of real property as each unit, though

forming part of the mother building will have a different base unit of schedule of

values per square meter. A mother building then will be made up of units

classified as different buildings and will thus have different base of construction

cost per unit.

That “upon ocular inspection, the condominium building from which Unit

204 form part has the characteristics of a Type V Building for it has reinforced

Reference: Book VII, pp. 129-144

concrete columns, beams, slabs of flooring, footing and roofings. Thus P6,000

per square meter base unit cost schedule value per (m) ².”

Petitioner-Appellee, on the other hand contends that Unit 204 is a Type

III-A Building because its exterior walls, sidings and partitions are of concrete

hollow blocks.

Petitioner-Appellee, in its “Position Statement”, dated Sept. 28, 1994,

however, avers that no requisite ordinance under the Local Government Code

of 1991 (R.A. 7160) has been enacted to provide adequate clearcut

classification of buildings and urges this Board in deciding the case at bar, to

urge sangguniangs concerned to so enact such ordinance to avoid the

predicament experienced by the Tagaytay City Local Board.

Petitioner-Appellee submits the following:

“Annex ‘A’ is the Schedule of Unit Values For Buildings (petitioner-appellee’s Exhs. ‘G-7’ and ‘G-8’ and respondent-appellant Assessor’s Exhs. ‘6-g’ and ‘6-I’ in the proceedings a quo) where there is no provision for condominiums whether residential or commercial, to have been the cause for the predicament of the Tagaytay City Local Board described in its DECISION subject matter of above-entitled case;

“Annex ‘B’, is the 11 December 1992 Ordinance No. 92-13 of Tagaytay City’s sangguniang likewise without provision for condominiums whether residential or commercial to thereby continue the aforesaid predicament of realty tax payers and the Local Board of Tagaytay City;

X x x.

“And because RA 7160 does not describe the different types of buildings, petitioner-appellee has not yet seen an ordinance under RA-7160 of any sangguniang through out the country, x x x, that describes the different types of buildings, so that realty taxpayers are without any basis to ascertain the correctness of Assessor’s tax declarations. To illustrate, what is a Type I-a building, II-a, II-etc., III-a, III etc. and IV and what is the difference of one from the other/s. In net, the obvious intent of Sec. 15 of PD-464 at requiring an Assessor’s schedule to be approved by the Secretary of Finance and its equivalent Sec. 212 of R.A. 7160 at requiring the enactment of the sangguniang concerned, is to remove an Assessor’s discretion that can be abused. Such intent is defeated by absence of the description of types of buildings in Sangguniangs Ordinances Under R.A. 7160.”

Anent the allegations of the parties, this besetting situation was settled by

this Board in JRB Realty Corporation, Petitioner-Appellant, vs. Board of

Assessment Appeals of Pasay City, Appellee, and Municipal Assessor of

Makati, Respondent-Appellee in CBAA Case No. 223, decided on September

26,1986 as follows:

Reference: Book VII, pp. 129-144

“While there appears to be no specific provision in the Real Property Tax Code covering separate units in a building, which would seem to justify respondent-appellee’s application of his ‘prorated assessment method’ based on the idea of ‘one building, one assessment’, the Condominium Act, the special law on the matter fills the legal vacuum. Thus, insofar as separate interest in condominium building is concerned, the provisions of the Condominium Act, particularly Section 25 thereof are applicable. The assessed value of the condominium in question should be determined by its own market value and the corresponding assessment level as provided in Section 20, par. c. of PD No. 464 as amended by PD No. 1383.”

This Board meanwhile commiserates with the above-submitted

predicament by Petitioner-Appellee and supports its appeal for the enactment

of such ordinance as to provide “adequate clearcut classification of buildings”.

Even as Petitioner-Appellee, however, cites the 11 December 1992 Ordinance

No. 92-13 of the Tagaytay City Sanggunian, this case has not been placed

under its coverage in view of Sec. 212, R.A. 7160 (Local Government Code of

1991) which provides:

“Before any general revision of property assessment is made pursuant to the provisions of this Title, there shall be prepared a schedule of fair market values by the provincial, city and municipal assessors of the municipalities within the Metropolitan Manila Area for the different classes of real property situated in their respective local government units for enactment by ordinance of the sanggunian concerned. X x x.” (Underscoring supplied.)

The Ordinance, in other words, was a preparatory enactment to a general

revision of property assessment which has not yet been made therein and

could not have yet been adopted in this case.

Reflective of this Board’s resolution as above-mentioned, viz, CBAA

Case No. 223, is the Tagaytay City LBAA’s decision in the instant case.

Tagaytay City’s LBAA sets in detail how it arrived at its findings and sums it up

to wit:

“Upon ocular inspection, the parties agreed on the following salient features of the condominium unit:

a) The condominium building which houses Unit 204 at its second (2nd) floor is known as the Montaire Condominium I (MAC I), one (1) kilometer, more or less, from the City Hall via the National Road and access road to the site. It is a residential condominium with beams, columns, sidings, flooring and roof deck made of reinforced concrete;

b) The sidings of Unit 204, however, are all made up of concrete hollow blocks;

c) Other structural members in the unit are reinforced concrete; and

Reference: Book VII, pp. 129-144

d) Its 69.05 Square Meters floor area is concrete but covered with a layer of narra wood parquet.

“In arriving at the assessment being disputed by the Petitioner-, the Respondent City Assessor appraised the unit in relation to the use and construction characteristics of the whole condominium building and applied a separate assessment level for the condominium unit, citing the approved Schedule Unit Construction Cost per square meter for buildings for the year 1981-1982, as approved by the Ministry of Finance on November 7, 1978 pursuant to P.D. No. 421, resulting in the aforecited assessment which is applied for Type V buildings. Petitioner, on the other hand, maintains that his condominium unit should be assessed separately from the main building and since the sidings are made of hollow blocks and not reinforced concrete, the appropriate building type for assessment purposes is Type III-A.

“The Respondent City Assessor argues that Unit 204 should really be assessed separately from the main building, as was done in this case, but should be appraised or classified as one building itself since Sec. 25, R.A. 4726, refers only to assessment which is different, as he insists, from appraisal.

“In analyzing the City Assessor’s interpretation of Sec. 25, it is observed that while appraisal and assessment are really two (2) different terms, appraisal is part of the process of assessment. Respondent cites the legal connotation or meaning of assessment as:

‘The act or process of determining the value of a property or a proportion thereof subject to tax including the discovery, listing and appraisal of property.’

This very definition states that assessment includes appraisal. As indeed, the assessment of any property is arrived at, first by appraising or finding its market value and thereafter applying the proper assessment level in accordance with the schedule, resulting in the assessment value or assessment of the property.

“The procedure followed by the City Assessor in this case was to apply a separate assessment based on the same classification and construction cost per square meter of the whole building contrary to the view in CBAA Case No. 223, Exh. H, P. 6, cited by both parties:

‘The assessed value of the condominium in question should be determined by its own market value and the corresponding assessment level x x x x x.’

In more concise terms the said decision on page 4 thereof stresses that assessing separately each condominium separately owned includes separate appraisal. It states:

‘The subject property should be assessed on the basis of the market value of the separate condominium unit and not on the market value of the whole building.’

“Anchored in the foregoing premises it now follows that the classification adopted for the whole condominium building (Type V Building) should not have been applied even proportionally to the separate unit which is separately owned, since there is a special legal mandate for assessment of condominium buildings in relation to their condominium units (Sec. 25, R.A. 4726). Under this particular provision of law, the uniformity aspect in taxation is approximated since all condominium units shall be separately assessed and as long as their construction characteristics are the same the respective appraisal and assessment level will be identical or uniform.

“Reviewing now the preliminary step in the appraisal made on the subject property, that is, determining the type of building, it should evoke interest to note that per ocular inspection, the mother building is of reinforced concrete but Unit 204 has for its sidings or wall partitions

Reference: Book VII, pp. 129-144

concrete hollow blocks, and as earlier stated, the respondent City Assessor has opted for ‘Type V’ and the Petitioner is appealing for ‘Type III-A.’

“In finding a solution to the varying points of view of the parties, this Board encounters certain inaccuracies: firstly, Type V denotes that:

‘It shall be fire resistive building. The structural element shall be of steel, iron, concrete or masonry construction. Steel structural members like columns and beams may either be exposed or encased in concrete. Floor, slabs, walls and roofs shall be reinforced encased in concrete. Ceiling shall be one hour fire resistive construction using fire retardant treated wood within the framing assembly.’

“As this building type was entered for the mother building, the same is violative of Sec. 25, R.A. 4726, furthermore, there is no reference to sidings or wall partitions of concrete hollow blocks which is a construction feature of Unit 204; secondly, Type III-A elected by Petitioners refers to buildings with the following characteristic:

‘Like Type III – Building, footing column and beam shall be reinforced concrete and floor framing shall be reinforced wood. Siding shall be concrete hollow blocks while partition may use concrete hollow blocks or wood where it shall use fire retardant treated wood within the framing assembly. First group roof framing shall be used and shall be trust type roof, covering shall be the same as Type III-B.’ (Exhs. 6- & G-).

“This type of building admittedly uses for wall partitions or sidings concrete hollow blocks but coming to the roofing requirements it calls for truss type roof with Type III-B covering which is galvanized from roofing sheet. This type does not squarely fit Unit 204 since it is located at the second floor of the mother building and its roofing must perforce be the flooring of the next upper unit or floor (roof deck per building plan). Structurized with reinforced concrete or may even be steel encased in concrete.

“Cornered, as it may seem, in the conflict of these comparative deficiencies, a liberative course is still open. Type IV-B provides:

‘Type IV-B – Building shall be reinforced concrete structure which includes footing, column, beam, floors and roof, exterior walls shall be concrete hollow blocks.’

Treated as a separate unit or building for appraisal/assessment purposes the ceiling of Unit 204 is at the same time its roofing and its wall partitions serving as its sidings or exterior walls, responding more accurately to the provisions of TYPE IV-B and should, thus, be adopted as the proper building type in this case.

“Proceeding now to resolve the issues in the final step for appraisal (determining the kind of building and its unit values) wherewith the parties are similarly disharmonized, the Petitioner praying that Unit 204 is a multiple dwelling, so that the appropriate unit value is P2,850.00/square meter, (Type III-A) while, the Respondent City Assessor, applying the one building one assessment idea in unit cost per square meter, categorized Unit 204 under ‘Commercial, 6. Condominium Building’ (Exh. G-A & 6-1) hence, Building Type V – P6,000.00 per square meter.

“The respective definitions of the building kinds which are at odds in connection with appraisal Unit 204, are quoted hereunder:

‘RESIDENTIAL

x x x x x

3. Multiple Dwelling – a building used as a house or residence of three or

Reference: Book VII, pp. 129-144

more families living independently from one another, each occupying one or more rooms as a single housekeeping unit.

x x x x x

‘COMMERCIAL:

6. Condominium Building – a condominium is an interest in real property consisting of a separate interest in a unit in a residential, industrial or commercial building and an undivided interest in common, directly or indirectly on the land on which it is located and in other common areas of the building. (Sec. 2, Rep. Act No. 4726)’

The notable differences recreated a predicament that negates a clear-cut classification attributable to the inadequacy of the guidelines and schedules as there is, at the time of this assessment, no provision for separate units in a residential condominium building, an avertable hitch if only the guidelines or schedules were more comprehensive. It may not be amiss to mention here that in Metropolitan Manila this hiatus was avoided when this following provision was incorporated in their guidelines:

‘A. The following kinds of buildings are hereby established:

1) Residential Condominiums – Individual ownership of a unit in a multi-unit structure (as an apartment building).’ (Exh. 7, E-F, p. 6, CBAA Decision)

Under this handicapped situation, yet mindful of the assessment sanctions in Sec. 25, Condominium Act, this Board finds Respondent’s final appraisal (P6,000.00/square meter) under ‘Commercial – Condominium to be debatable because, as earlier intimated, said unit valuation is for the mother building, not in consonance with Sec. 25, Condominium Act, noting likewise that Unit 204 is a residential unit as indicated in the Tax Declaration by the letter ‘R’, explained by the Respondent himself. In the same vein, Petitioner’s option (P2,850.00/square meter) under multiple dwelling above quoted suffers a similar deficiency as it also refers to the whole building which houses one or more rooms independently occupied by one or more families, again, not in consonance with the policy of separate appraisal (Sec. 25, Condominium Act), with the further observation that under this class it is not clear whether the rooms are separately owned capable of being separately assessed.

“The nearest applicable class, in the opinion of this Board, tested against the use and construction pattern of Unit 204 is No. 6. Apartment, defined in Exh. G/Exh. 7 as:

‘RESIDENTIAL:

x x x x x

6. Apartment – A room or suite of two or more designed and intended for or occupied by one family for living, sleeping and cooking purposes.’

This application finds support in the guidelines adopted by Metropolitan Manila, aforecited, which compares the individual unit to an apartment building (Exh. 7/Exh. E-F, p. 5-6 CBAA Decision).”

Reference: Book VII, pp. 129-144

As proceeded and ratiocinated, this Board finds for and adopts the

disposition made by the Local Board of Assessment Appeals of Tagaytay City

as aforestated that “Unit 204 should be listed for assessment purposes in the

following mode:

[table “” not found /]

Where the issues are factual, the findings of the Local Board should be

respected, it being in a much better position to appreciate and evaluate the

facts by reason of its proximity to the property involved. (CBAA Case No. 18,

Martiniano de la Cruz, Petitioner-Appellant, versus Board of Assessment

Appeals of Quezon City, Appellee and City Assessor of Quezon City,

Respondent-Appellee).

WHEREFORE, the appeal is dismissed and the appealed Decision is

hereby affirmed.

SO ORDERED.

Manila, Philippines, July 25, 1995.

(Signed) MARGARITA G. MAGISTRADO
Chairman

(Signed) ELEANOR A. SANTOS
Member

Reference: Book VII, pp. 129-144