Odyssey Park, Inc.

October 21, 1982 Odyssey Park, Inc. c/o Mr. Carmelito A. Montano 3rd Floor, Vernida IV Bldg. Alfaro Street , Salcedo Village, Makati, Metro Manila Gentlemen: This has reference to your letter dated September 7, 1982 requesting for opinions on the queries posed therein. From the facts stated in your letter, it appears that Odyssey Park, Inc has a project in Baguio City, wherein you are selling a 45-year leasehold rights on your Vacation Home Units on a weekly scheme, allegedly a new concept of leasehold ownership in the Philippines, the lease price thereof depends on the respective type of vacation home units. LexLib Relative thereto, you want to inquire on the following: 1. The rules and regulations governing the sale of 45-year leasehold rights; 2. Whether there is a need to secure a permit to sell the same from the Securities and Exchange Commission; and 3. Whether the Commission could issue certification to the effect that you are free to sell said leasehold rights. It is the contention of your Legal Department that leasehold relationship falls within the purview of the Civil Code, hence, the Commission does not have the regulatory supervision in your operation. Please be informed that the Revised Securities Act (Batas Pambansa Blg. 178) which was approved on February 23, 1982, has expanded the meaning of "Securities" to include contracts and investments even where there is no tangible return on investments but an appreciation of capital as well as enjoyment of particular privileges and services. Section 2(a) of the Revised Securities Act, thus provides in part. " Definitions . For purposes of this Act: (a) Securities" shall include . . . proprietary or non-proprietary membership certificates, commodity futures contracts, transferable stock options, pre-need plans, pension plans, life plans, joint venture contracts and similar contracts and investments where there is no tangible return of investments plus profit but an appreciation of capital as well as enjoyment of particular privileges and services . . ." (Emphasis supplied) From the foregoing definitions, the investment scheme described in your letter and in the attachments thereto, falls within the scope of definition of "securities." However, said investment scheme constitutes an exempt security under Section 5(a) (7), of the Revised Securities Act, provides thus; "SECTION 5. Exempt Securities . (a) Except as expressly provided, the requirement of registration under subsection (a) of Section Four of this Act shall not apply to any of the following classes of securities: xxx xxx xxx (7) Any security covering any right or interest in real property including a subdivision lot or condominium unit, where the sale or transfer of such security is subject to the supervision and regulation of the Ministry of Human Settlements or any of its authorized constituent or attached agencies ." (Emphasis supplied) xxx xxx xxx It is worth mentioning that the regulation of real estate trade and business which includes the regulation of relationship between lessors and lessees is now vested with the Human Settlement Regulatory Commission (HSRC), an attached agency of the Ministry of Human Settlement (MHS) pursuant to Executive Order No. 648. Hence the regulation and/or licensing of securities covering leasehold rights in no longer within the jurisdiction of the Securities and Exchange Commission. Accordingly, the sale thereof needs no prior approval of this Commission, subject however to the rules and regulations of the Human Settlement Regulatory Commission. Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Associate Commissioner