Unequal Treatment

Cost comparison between the yet-to-be-finalized LPC model vs. the Parañaque and Muntinlupa Model:                                                  

                                                  

Particulars	Las Piñas	Parañaque
Service Connection Fee	7,142	7,142
Excavation Cost	free	5,980
Water System Cost	free	15,360
Right of Way Cost to BFHI	14,400	-
Total	21,542	28,482

We can punch holes in the arguments proffered to explain and justify the unequal treatment of the concessionaire. But that and the explanatory justifications will not alter the fact that there is unequal treatment.

But it is one thing for a thing to be no longer possible, and another to accept that as a principle, and consequently, no longer seek to level the playing field.

A Different Water Deal For LPC HOs

W

e thank Congressman Roilo Golez for providing us with the information on an agreement in principle between Las Piñas City, Maynilad, BF Homes, Inc. and BF Homes Las Piñas homeowners. Here are the proposed agreements with our concerns/comments:

First, BFHI will declare the LPC portion of BF Homes Subdivision as OPEN AREA, thus it may not be considered as a gated, private community anymore, as such, it won’t be covered by the provision of the IRR of PD1345 which mandates that the costs of construction of water reticulation systems in gated, private subdivisions have to be for the account of the homeowners;

Comments: This seems to be an  incorrect interpretation of the decree as to who will shoulder the cost to render the water system to operate at a desired level. Here is the relevant portion of the decree:

“Section 2. Upon takeover of the water system, the MWSS shall evaluate such system considering the adequacy, potability and other prevailing operating conditions. The MWSS shall thereafter cause the system to operate at the desired level as to provide adequate and potable water supply. The cost to render the system operable shall be chargeable to the subdivision owner/developer provided that the provision of adequate water supply has been specified or implied in the contract of sale or other forms used in offering the housing units within the project for sale. Otherwise, the cost to make the system operational shall be chargeable to the homeowners of the subdivision.” (Emphasis provided).

As marketed and widely advertised in 1969, BF Homes Parañaque was to have been self-contained with open spaces for parks and recreation, a commercial center, a church, a school and a water system touted to be tapped from an inexhaustible water table.

Adequate and stable supply of water is an assurance, among others, made by the BF Homes, Inc. However, this basic necessity and commitment has been denied by the developer to its lot buyers (now residents and homeowners) to the immeasurable detriment of the latter.

Clearly, the  cost to rehabilitate the system should be charged to the developer BFHI as provided by the decree.

This is not quite understood by the public, but the executive order of President Arroyo, which has been touted to finally make possible the takeover of a subdivision’s water system by the homeowners association, is actually only the implementing rules and regulations (IRR) for the old decree.

The IRR provides that the petition for takeover shall be made by either the developer or the duly constituted homeowners association. But there are other basic requirements for the petition that only the developer can comply with, such as the mandatory pressure tests and the technical data on the pipes and equipment, so that even if the association files the petition, it will not move, until the developer complies with the technical requirements. And in BF Homes, the developer’s intransigence is legend! The problem is thus reduced to a Sisyphean situation, that is to say, endlessly laborious or futile.

“Takeover” does not mean confiscation. It means takeover under the principles of due process and just compensation since BFHI still owns the waterworks system on paper.

But MWSS/Maynilad did not “takeover” the BF Waterworks under PD1345. Instead, Maynilad contracted to provide each enclave potable water system separate from that of BF Waterworks.

For instance, in a letter to an enclave, BFHI threatened legal action for the excavation on the road lots for the purpose of laying water pipes without securing permit from the developer. “The road lots inside the subdivision BF Homes Parañaque are still private in nature as there is yet no donation made in favor of the local government or any homeowners association. Being private roads, no exaction or any construction works may be made therein without the written permit from the developer or owner.”

The cost of the subdivision lots sold include all costs such as roads and parks, open spaces and other improvements. As the Supreme Court stressed in the in the doctrinal White Plains case: “The owners of a subdivision include all costs, such as the setting aside of road spaces and open areas for parks, and possibly the construction of curbs and whatever improvements it may have published entice lot buyers, in computing the value at which all lots shall be sold. If the subdivision reneges on any of its commitments, as exemplified in this case, the lot buyers are short-changed. They are made to pay more for less than what was agreed upon.” Having paid for them when they bought their properties, the homeowners, in effect, are the beneficial owners of these amenities.

A good alternative is for the mayors of the 3 cities to expeditiously, with unwavering political will, pursue the acquisition by the LGUs of the road lots, open spaces, etc. of BF Homes by public auction of these properties for non-payment of real property taxes - as the LGUs can immediately transfer title to the properties in their favor per the LGU code of 1991 and the Issuance of the Land Registration Authority. This suggestion has been gathering dust and dusted every election and conveniently forgotten afterwards.

Second, once declared open area, Maynilad seems to have agreed to underwrite the cost of construction to be funded from its CAPEX budget, thus, unlike in the  Parañaque and Muntinlupa areas, MWSI seems to have agreed not to pass on the burden to the homeowners-consumers, subject to the approval of MWSS and the availability and prioritization of MWSI’s CAPEX funds;

Comments: After Maynilad’s President Rogelio Singson statement that “…[we] still cannot subsidize private subdivisions under existing policies of MWSS and under HLURB/PD-1345”, it is pertinent to ask what are the existing policies of MWSS that allows Maynilad (under its charter?) to charge private subdivision homeowners for the cost of construction of water system.

In BF Homes Parañaque, the construction cost of the water system is equally divided among the  homeowners in the enclave. What is unfair is that the commercial establishments along the main roads where the main pipes are installed do not have to pay for the construction cost but only connection cost and charged the commercial rate of the water consumed as compared to the lower residential rate for homeowners.

What is disgusting is the requirement that not only homeowners have to pay for the water system but also “donate” it to Maynilad. The homeowners have to pay 48 monthly installments so they obviously do not own the water system. How can they legally donate the system they don’t own?

To top it all, the tertiary pipes (black pipes) are temporary installations on the sidewalk. After 48 months, a new tertiary pipes will be (permanently?) installed. Since Maynilad “cannot subsidize construction cost in private subdivisions” (except BF Homes Las Piñas?) so BF Homes Parañaque homeowners will have to dig into their pockets again for another round of installation cost of the tertiary pipes.

Third, in consideration for its declaration of the LPC portion of BF Homes Subdivision as open area, there shall be, for  four years only, an add-on charge of P10.00 per cubic meter of actual consumption as a RIGHT-OF WAY (ROW) toll fee in favor of and payable to BF Homes, Inc. Assuming an average consumption of 30cu.m. /month, the cost to the homeowner is P300/month for a total of P14,400 in 4 years. This ROW toll fee shall be billed as a separate line item and included in the monthly water bill /SOA of Maynilad which MWSI has agreed to include, subject to the approval of the MWSS-Regulatory Office. MWSI, however, clarified that if the customer won’t pay this ROW toll fee item in the bill/SOA they will not disconnect.

Fourth, the homeowner has the option to accept or reject this ROW toll fee, but it would seem he/she really has no viable option as rejection means no potable water service connection.

Comments: This arrangement is beneficial to both Maynilad and the developer but not to the homeowners. Maynilad avoids the cost of due process and just compensation for the system and the developer gets to charge P10 per cu.m. used by the homeowners by way of compensation for the system that Maynilad is supposed to pay when it acquires the system. This tantamount to tolerating and rewarding the utter misrepresentation and dereliction of duty committed by the developer while penalizing the residents and homeowners in continuously depriving them of much needed potable water.

At the risk of being repetitious, there is no sense of personal honor of keeping one’s word anymore. We have become a society of Pontius Pilates, washing our hands of responsibilities as he did. Yet a man who does not keep his promises is not a man; he is a weasel.

Maynilad's response to our queries

Here’s the response of Maynilad President Rogelio Singson to our queries.

“As far as the extension is concerned, we still have to get final RP government approval through the Department of Finance.

“With respect to private subdivisions, the existing policies of MWSS will still govern the concessionaires.  When we say we are ready to include and assist private subdivisions, what we are doing in BF will continue.  We still cannot subsidize private subdivisions under existing policies of MWSS and under HLURB/PD-1345. All we can offer is exactly what we have done to BF residents, assist in providing financing. As we have committed, we are now aggressively laying out main distribution pipes to service the whole BF Paranaque.  We hope to be able to also do the same for BF Las Piñas under the same arrangement with the homeowners associations.  This is the best assistance Maynilad can provide at this time.  Thanks for your support.  Should you need further information, you may contact me or Reggie Cruz for further discussion.”

The Revised Memorandum of Agreement Suggestions

H

ere are comments and suggestions by a homeowner on the Revised Memorandum of Agreement between the Maynilad and the Association.

1

 Rights & Obligations of MAYNILAD

Par. 1[b]. I suggest that the last phrase “bill the Association therefor”  should read “bill the ASSOCIATION or the homeowners direct therefore;”  Indeed, the homeowners will get billed directly.

Par. 1[h]. I suggest to insert “should  the full amount of the bill remain unpaid …”  This is to ensure that the homeowner pays not only his water consumption but also the cost of secondary pipes and the service connection fee stated in the bill.

2

 Rights & Obligations of the ASSOCIATION

Par. 2[a] Why should Maynilad not be the one responsible “to engage” [choose their sub-contractor who is competent/knowledgeable and with expertise to lay down the pipes for a fast and efficient flow and distribution of water?] I was just thinking that Maynilad, having the expertise, can supervise the job, and not the ASSOCIATION.

Par. 2[b]. In this provision, the ASSOCITAION acts as guarantor for those homeowners who may not pay his share in the second piping cost, despite his earlier commitment. Where will the ASSOCIATION get funds to pay for this, if it happens?

Par. 2[c]. I suggest the following insertions be made to conform to the Letter May 21’09 from the Water Committee.

“c… each individual member/homeowner … which includes The Cost of Water meter and the guaranty deposit of …, payable in six [6] equal monthly installments of  P1,190.40 per household.”

Par. 2[f]. Deed of Donation. I was just thinking  that maybe we should not rush the transfer of ownership of the secondary and tertiary pipes to Maynilad in light of the provisions in Section 3[e] granting Maynilad the right to terminate the MOA and DISCONNECT the water line in case of breach by individual homeowners/ASSOCIATION of any provision in the MOA. [What if a great number of homeowners do not pay after 1 or 2 installments of the service connection fee or say do not pay after the 5th or 6th installment of the cost of secondary pipes. These scenarios may be remote but I just raised this so our Board  can think of when it will be the proper time to execute such deed.

3

 Special Provisions

Par. 3[c]. After the phrase “[48] monthly installments”, please insert “as well as the service connection fee stated in Section 2[c] above, beginning on the first month’s ….”

Par. 3[e]. Due notice only? I suggest a period be indicated in the notice of termination [say 15 or 30 days or more] so that it is not terminated immediately. Then the ASSOCIATION may be able to do something so that the MOA will not be terminated.

BF Homeowners short-changed

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I

n BF Homes, the developer’s intransigence is legend! There is therefore a need to fast track the installation of the water system.

Homeowners are not exactly overjoyed with the prospect of shelling out P38,200 (each household) and relinquish their rights in favor of Maynilad on the Distribution System and the interconnecting lines being constructed. Worst, they have to execute the corresponding Deed of Donation in favor of Maynilad.

By losing ownership through donation of the water distribution system, homeowners could be digging themselves another problem if and when Maynilad, a private entity, losses its concession.

The cost of the subdivision lots sold include all costs such as roads and parks, open spaces and other improvements. Homeowners are short-changed because the developer reneged on its commitments. It is unfair when homeowners are made to pay again for the water system and donate it to a private concessionaire.

There is no sense of personal honor of keeping one’s word anymore. We have become a society of Pontius Pilates, washing our hands of responsibilities as he did. Yet a man who does not keep his promises is not a man; he is a weasel.

Summary judgment: its implication

L

as Piñas RTC (Br. 255) Presiding Judge Raul Bautista Villanueva, in a 29-page SUMMARY JUDGMENT issuance dated 25 August 2009 but made publicly available 2 September 2009 only, LIFTED the preliminary injunction against Maynilad Water Services, Inc. and its Contractors but declares EO 688 as UNCONSTITUTIONAL, and the IRR of PD 1345 as VOID.

The Dispositive portion of the Summary Judgment reads:

“WHEREFORE, the foregoing considered, the “Joint Petition” dated 26 February 2008 of the Petitioners BF Homes, Inc. and PWCC is PARTIALLY GRANTED and judgment is hereby rendered as follows:

Declaring Executive Order No. 688 as UNCONSTITUTIONAL, and the Rules and Regulations Implementing the Provisions of Presidential No. 1345, entitled “Empowering the MWSS to Take Over the Centralized Water Supply Systems in Residential Subdivisions Within its Territorial Jurisdiction” as “VOID”;

Dismissing the said petition against the respondent HLURB and insofar as PD 1345 is concerned;

Making permanent the Writ of Preliminary Injunction issued against the respondent MWSS with respect to the implementation of EO 688 and its IRR; and,

Proclaiming Maynilad  Water Services, Inc. and its contractors as no longer covered by the Writ of Preliminary Injunction dated 10 September 2008 with respect to water pipes laying being undertaken by it since the same, though found irregular, is subject to any existing business or property right of the petitioners.

Its implication

Here are the thoughts of a BF Homeowner received by email:

1

 BF Homes and PWCC can ask for a reconsideration of the lifting of the injunction against Maynilad and its contractors, but it looks like BFHI won’t, based on the press statement of Cong. Golez. So, if BFHI makes good of its pronouncements, the whole of BF Homes Parañaque, Las Piñas, and Muntinlupa will have adequate, clean, potable and less-costly water by Christmas Day 2009 according to Maynilad President Rogelio Singson.

2

 Since EO 688 has been declared unconstitutional and the IRR of PD 1345 void, the legal   basis of MWSS /Maynilad to pass on the cost of a water distribution or reticulation system to the homeowners of private subdivisions may have disappeared. But the ruling declaring the EO unconstitutional and the IRR void is not yet final and executory. It is expected that MWSS through the Solgen and the OGCC may likely appeal this ruling directly to the SC as it involves a question of constitutionality of government issuances. Considering that it will take a long, long time before the constitutionality issue is resolved by the Supreme Court, the expedient way to have water before Christmas is for the enclaves and homeowners to just go ahead and pay for the cost of the enclave water system with the possibility of pay back at some future time, just like the 2000 others who now have Maynilad water.

3

 In the presentation of Maynilad for the extension of their concession agreement by 15 additional years, Maynilad President Singson, in a public consultation meeting held few months back, committed the inclusion of the private subdivisions in the capex funding for the construction of water systems. So the homeowners should support and endorse the approval of the term extension proposal of Maynilad so that the burden of paying for the water infrastructure will not be passed on to the homeowners. But what about those who have already paid for theirs? Will Maynilad treat it as investment to be returned at some future time? We can only hope for it for now.

4

 What if BFHI changes its mind later and restrains Maynilad again which may be brought about by non-agreement as to the serviceable facilities Maynilad is willing to accept and pay. Then we are back to square x again.

5

 What should homeowners do then?  a) ask Maynilad to fast track the completion to beat any new TRO, b) ask the mayors of the 3 cities to expeditiously, with unwavering political will, pursue the acquisition by the LGUs of the road lots, open spaces, etc. of BF Homes by public auction of these properties for non-payment of real property taxes - as the LGUs can immediately transfer title to the properties in their favor per the LGU code of 1991 and the Issuance of the Land Registration Authority.

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