Capitol gives protesting owners 15 days to demolish encroaching structures, pay back rental

THE six building owners along Osmeña Boulevard in Cebu City that protested the rent the Cebu Provincial Capitol imposed for the buildings encroaching on its claimed properties, have been given 15 days to demolish the encroaching structures and pay 44 years’ worth of rent.

If the establishments fail to do so, the Provincial Capitol will file ejectment charges against them.

Ejectment cases are summary proceedings designed to provide expeditious means to protect actual possession or the right to possession of the property involved.

The Provincial Capitol sent out demand letters to owners of the CAO Mercado Building; Suarez Brothers; the Cebu Doctors’ Hospital and Cebu Doctors’ University; Anita’s; Suarez & Sons Building and ZR & DC Building; and Medical Imports and Mackim Prints on May 18, 2023.

The owners have 15 days from receipt of the letters to act.

In the letter sent to the representative of the CAO Mercado Building, Provincial Legal Officer Donato Villa Jr. said that “as owner of Lot No. 11, Block 8, the Province of Cebu has the right to enjoy and dispose of it without limitation other than those established by law.”

“Moreover, it should be noted that the Province of Cebu, as owner of the said lot, has the right to exclude any person from the enjoyment of said property, as such, it has the right to use any force as may be necessary to repel or prevent the unlawful invasion of the same. Please be informed that your encroachment into Lot No. 11, Block 8 is considered an unlawful invasion of the Province of Cebu’s property,” said Villa.

The Capitol said that upon agreement during previous meetings with the owners, the establishments were given two choices.

The first choice was to demolish the portion of their structures that encroached on Capitol’s property and pay back rentals from the year 1979, set by Capitol as the time the encroachment first happened.

The second choice was for those who chose not to demolish their structures. They would pay the back rent, as well as monthly rent to the Capitol in the amount of P400 per square meter (sqm) from hereon.

The Capitol said the establishments owed rent all the way back to when the buildings were constructed.

Since most of the establishments failed to provide data on when the buildings were built, the Provincial Government set 1979 as the starting year of the rent.

Owe millions

In the case of the CAO Mercado Building, the establishment owes the Capitol a total of P6,892,461.00 since 1979 for encroaching on 106.62 sqm of Capitol-claimed property.

Initially, the rent imposed on the establishment in the first demand letter of the Capitol was only P4,225,470.03, covering the years 2014 to 2023.

From 2014 to 2023, the Suarez Brothers owe P1.47 million for 37.20 sqm encroachment. Cebu Doctors’ Hospital owes P19.49 million for 491.92 sqm. Cebu Doctors’ University owes P3.09 million for 78 sqm. Anita’s owes P4.29 million for 108.32 sqm. Suarez and Sons Building owes P543,342.66 for 13.71 sqm. ZR & DC Building owes P12.34 million for 311.30 sqm. Medical Imports owes P2.56 million for 64.51 sqm., and Mackim Prints owes P175,629.27 for 4.43 sqm.

No meetings

Lawyer Cornelio Mercado, legal representative of Ofelia C. Mercado, owner of the CAO Mercado Building, told SunStar Cebu Wednesday that there were no meetings held between the building owner and the Capitol.

In a May 22, 2023 letter response to Villa, the Mercado camp said they could not have “stopped negotiating” with the Capitol because there was never a negotiation initiated in the first place.

The camp said the Capitol imposed the demands on them and there was no agreement whatsoever.

“Ms. Mercado has done no wrong. Her Constitutional rights must be respected and must not be dragged to a litigation based on your own and the Province’s misguided conclusion of a ‘refusal to negotiate.’ We hope we have made our position clear. We reserve all rights and waive none,” Mercado wrote.

The lawyer did not reveal to SunStar whether they would pay the rent or demolish portions of the properties but only said the demand of the Capitol was “wrong.”


In the case of the Cebu Doctors’ Group of Hospitals (CDGH), president and chairman Dr. Potenciano “Yong” Larrazabal III met with Gov. Gwendolyn Garcia last May 22 in a closed-door meeting at the Capitol.

Sugbo News, the Provincial Government’s media and information site, reported that negotiations between the two parties had resumed.

When asked for a statement, the CDGH said it would be premature to give a comment since the discussions were still ongoing.

“Capitol has asked Dr. Larazzabal as well as other structure owners to give the Province ‘just compensation’ for the illegal encroachment on its property for many years now. As of this writing, negotiations on both sides have resumed,” reported the government-run media.

Mercado said he is not privy to the discussions of Larrazabal or other building owners with the Capitol, but he believes no definite agreement has been made.

The Mercado camp continues to hope that the Capitol will stop forcing them to pay the millions worth of rent, calling the demand “unjust” and “unconstitutional.”

In a protest letter dated April 25, but received by the Office of the Governor only on May 3, the six building owners had protested the Capitol’s charging of rent, calling it “unconstitutional,” and appealed for the withdrawal of the rent demanded by the Capitol for the years 2014 to 2023.

Earlier in April, Sugbo News reported that more than 20 properties had been identified by the Capitol’s Real Estate Division as having encroached on lots owned by the Capitol.