Atty. Reyes G. Geromo v. La Paz Housing

Summary

This Supreme Court case involves homebuyers who purchased defective housing units built over an old creek with improperly compacted soil. The Court applied the Civil Code's warranty against hidden defects provisions and the res ipsa loquitur doctrine to hold the developer liable. The case establishes that developers have strict liability for structural defects that render units unfit for habitation, even without proof of specific negligence. The Court emphasized the protective purpose of PD 957 for subdivision buyers and awarded substantial damages including temperate, moral, and exemplary damages. The decision reinforces developer accountability and buyer protection in real estate transactions, while clarifying that financing institutions like GSIS are not liable for construction defects unless directly involved in development contracts.