F U N D A M E N TA L

DISTINCTIONS

LEASEHOLD TENANCY
I - LEGAL BASIS:
1. Republic Act No. 3844- Agricultural Land Reform Code
(August 8, 1963)
2. Republic Act No. 6389- Code of Agrarian Reform
(September 10, 1971)
3. Presidential Decree No. 1425-Amending Presidential
Decree No. 1040 by Strengthening the Prohibition against
Agricultural Share, Tenancy and Providing Penalties for Violation
thereof. (June 10, 1978)
4. Section 12, Republic Act No. 6657- Comprehensive
Agrarian Reform Law of 1988.
II JURISPRUDENCE ON CONSTITUTIONALITY
1. Security of Tenure- Primero vs. CIR, 10 Phil. 675 (1957);
Pineda vs. de Guzman, 21 SCRA 1450 (1967).
III COVERAGE OR SCOPE
Agricultural Leasehold shall
apply
to
all tenanted
agricultural lands, including but not limited to the following
A. Retained areas under R.A. 6657 and P.D. 27;
B. Tenanted Agricultural Lands not yet acquired for
distribution under CARP pursuant to RA 6657;
C. All tenanted areas under Section 10 of RA 6657 which may
be covered by this Order. (Administrative Order No. 4, Series of
1989)
IV - AREA OF COVERAGE
hectares or more, or is of sufficient size to make him and the
members of his immediate farm household fully occupied in
its cultivation, to CONTRACT TO WORK at the same time on
TWO OR MORE SEPARATE HOLDINGS belonging to different
landholders under any system of tenancy WITHOUT THE
KNOWLEDGE AND CONSENT of the landholder with whom he

first entered into tenancy relationship. (Par. 1, Sec. 24, republic Act
No. 1199)
V EXEMPTION OR EXCLUSION FROM COVERAGE
Absence of any of the six (6) Essential Elements of Tenancy
Relationship.
Essential Elements of Tenancy Relationship:
1.
2.
3.
4.
5.
6.

The parties are the landholder and the tenant;

The subject is agricultural land;
There is consent;
The purpose is agricultural production;
There is personal cultivation;
There is sharing of harvest or payment of rentals.
(Caballes vs. DAR, 168 SCRA 247; Qua vs. Court of Appeals,
198 SCRA 247.)

VI - RETENTION
In Leasehold Tenancy, the Landowner or agricultural lessor RETAIN OWNERSHIP
of the subject landholding.

The
landowner
EXERCISES
the
ATTRIBUTED
OF
OWNERSHIP. Under Art. 428 of the New Civil Code. The OWNER has
the RIGHT TO DISPOSE OF a thing without other limitation than
those imposed by law. As an incident of ownership, Therefore, there is
nothing to prevent a landowner from DONATING his NAKED TITLE TO
THE LAND. However, the new owner MUST RESPECT THE RIGHT OF
THE TENANT.
The agricultural leasehold relation under this Code shall not be
extinguished by MERE EXPIRATION OF THE TERM OR PERIOD in
a leasehold contract nor by the SALE, ALIENATION OR TRANSFER
of the legal possession of the landholding. In case the agricultural
lessor SELLS, ALIENATES, OR TRANSFER the legal possession of
the landholding, the PURCHASER OR TRANSFEREE thereof shall
be subrogated to the right and substituted to the obligations of
the agricultural lessor (see. 10, RA 3844)

VII

- BENEFICIARIES
The beneficiaries under Republic Act No. 1199, Republic Act No.
3844 as amended by Republic Act No. 6389 are SHARE-TENANT
OR AGRICULTURAL LESSEES (TENANTS). Thus:
In the INTERPRETATION AND ENFORCEMENT of this Act
and other laws as well as of the stipulation between the landholder
and the tenant the COURTS AND ADMINISTRATIVE OFFICIALS
SHALL RESOLVE ALL GRAVE DOUBTS IN FAVOR OF THE
TENANT. (Sec. 56, Republic act No. 1199)

VIII

- AWARD CEILING

The share-tenant/agricultural lessee who is already cultivating a

landholding with an area of FIVE (5) HECTARES or more or of
sufficient size to make him and member of his immediate farm
household fully occupied in its cultivation is prohibited to
CONTRACT TO WORK at the same time two or more separated
holding belonging to different landholder WITHOUT THE
KNOWLEDGE
AND
CONSENT
OF
THE
LANDOWNER/AGRICULTURAL LESSOR (Par. I, Sec. 24, Republic
Act. No. 1199)
IX - PAYMENT FOR THE COST OF THE LAND.
In the exercise of RIGHT OF PRE-EMPTION by the agricultural
lessee-tenant, he must EITHER TENDER PAYMENT OF, OR
PRESENT A CERTIFICATE FROM THE LBP that it shall make
payment under Section 80 of Republic Act No. 3844 (10% CASH and
90% in six percent, tax free, redeemable bonds issued by the LBP.)
If the landowner refuses to accept TENDER or PRESENTMENT, the
agricultural lessee may CONSIGN it in COURT, (Sec. 11, Republic
Act No. 3844 as amended by Republic Act No. 6389.
The REDEMPTION PRICE shall be, the REASONABLE PRICE
OF THE LAND at the time of sale. (Sec. 12, Republic Act No. 3844
as amended by Republic Act No. 6389)
X -TRANSFERABILITY OF LANDHOLDING

1. Sale, Alienation or Transfer of the legal possession of the

landholding.
2. Extinguishment of Agricultural Leasehold Relations (Sec.
8, RA 3844)
A. ABANDONMENT of the landholding without the knowledge of
the agricultural lessor. (Teodoro vs. Macaraeg, 27 SCRA 7 (1969)
To constitute abandonment there must be an absolute
relinquishment of the premises of the tenant. This "overt act" must
be coupled with his intention to do so "which is carried into effect,"
(Philippine Labor and Social Legislation, Martin, 70 Ed. Pp. 405406). Abandonment to validly terminate tenancy relationship is
characterized by:
(a) an INTENT to ABANDON, and
(b) an OVERT ACT to carry out such intention
There must be, therefore, NO ANIMUS REVERTENDI on the part
of the tenant (Labor, Agrarian and Social Legislation, Montemayor,
2nd Ed., 1968, pp. 54-55)
B. VOLUNTARY SURRENDER of the landholding by the
agricultural lessee, written notice of which shall be served
three months in advance (Nisnisan, et al., vs. CA, 294 SCRA
173 (1998).
As a mode of extinguishing tenancy relationship it
connotes a decision in the part of the tenant to return the
possession of the landholding and relinquished his right as
tenant thereon uninfluenced by any compelling factor,
coming particularly from the landholder. For surrender to be
valid, there must be (a) an intention to abandon, and (b) an
external act or an omission to act, by which such intention is
carried out into effect. When a tenant voluntarily yields the
land, he terminates the tenancy relationship by his unilateral
act. (Anacleto Inson vs. Planas de Asis, et.al., CA GR No.
Sp-01769, October 11, 1974.)
NOTE: SUBLEASING by the
agricultural lessee is also a
ground for the extinguishments of Agricultural Leasehold Relations.
(Par.(2), Sec. 27, Republic Act No. 3844).
XI - EVIDENCE OF RIGHT/TITLE OVER THE LANDHOLDING.

AGRICUTLURAL LEASEHOLD CONTRACT IN GENERAL.- The agricultural lessor and the agricultural lessee shall be
FREE to ENTER into any kind of TERMS, CONDITIONS or
STIPULATIONS in a LEASEHOLD CONTRACT as long as they
are not contrary to LAW, MORALS OR PUBLIC POLICY. (Sec.
15 Republic Act No. 3844).
Except in case of mistake, violence, intimidation, undue
influence, or fraud, an AGRICULTURAL CONTRACT reduced in
writing and registered as hereinafter provided, SHALL BE
CONCLUSIVE BETWEEN THE CONTRACTING PARTIES, if not
DENOUNCED OR IMPUGNED WITHIN THIRTY DAYS AFTER
REGISTRATION (Sec. 17, Republic Act No. 3844)

XII -

MODES OF TRANSFER OF THE LAND TO THE TENANT OR

BENEFICIARY
The landowner-agricultural lessor can FREELY AND
VOLUNTARILY TRANSFER the landholding to the agricultural
lessor by way of:
1. Sale
2. Donation
3. Succession the agricultural lessee as DEVISEE to the
testators free portion in the will.
However, the limitation imposed by law on his right to acquired
must be observed, i.e. Legal prohibition on the acquisition of
property
By operation of law, the agricultural-lessee can acquired
ownership of the subject landholding by the exercise of the
following rights.
1. Right of Pre-Emption; and
2. Right of Redemption

XIII - CONSIDERATION FOR THE USE OF VALUE OF THE LAND.

Consideration for the Lease of Agricultural lands:

1. Not more than 25 per centum of the average normal harvest

during the three agricultural years immediately preceding the date the
leasehold was established.

2. Deductible items
a. Seedlings
b. Cost of Harvesting
c. Cost of Threshing
d. Cost of Loading
e. Cost of Hauling
f. Cost of Processing
3. If the land is cultivated for a period of less than three years, the
initial consideration is based on the average normal harvest during the
preceeding years when the land was actually cultivated or on the harvest
of the first year if newly cultivated, and the harvest is normal.
4. After the lapse of the first three normal harvest, the final
consideration shall be based on the average normal harvest during
these three preceding agricultural years.
5. In the absence of any agreement as to the rental, the maximum
allowed shall be applied.
6. If Capital Improvement is introduced not by the lessee to
increase productivity, the rentals shall be increased proportionally to the
consequent increase in production due to the improvement.
7. In case of Disagreement the Court shall determine the
reasonably increase in rental.
8. Capital improvement refers to any permanent and tangible
improvement on the land that will result in increased productivity. If done
with the consent of the lessee, then the lease rental shall be increased
proportionately.

TENANT EMANCIPATION DECREE

1. Presidential Decree No. 27 Tenants Emancipation Decree
(October 21, 1972)

2. Letter Instruction No. 474-PLACING UNDER OLT TENANTED

RICE/CORN LANDS SEVEN HECTARES OR LESS IN AREA
UNDER CERTAIN CONDITION (OCTOBER 21, 1976)
1. Presidential Decree No. 27 was assumed to be constitutional
and upheld as part and parcel of the law of the land in De
Chavez vs. Zobel, 155 SCRA 26; Gonzales vs. Estrella, 91 SCRA
294 (1979) and Association of Small Landowners in the Philippines
Inc. vs. Secretary of Agrarian Reform, 175 SCRA 342 (1989)
2. Letter of Instruction No. 474 Constitutionality was upheld in
Zurbano vs. Estrella, 137 SCRA 333 (1989)
The REQUISITES FOR COVERAGE under OPERATION LAND
TRANSFER (OLT) program are the following:
1. The land must be DEVOTED to RICE or CORN crops; and
2. There must be a system of SHARE CROP or LEASE
TENANCY obtaining therein.
If either of these requisites is ABSENT, the land is NOT
COVERED under OLT. Hence, a landowner NEED NOT
APPLY FOR RETENTION, where his ownership over the entire
landholding is INTACT and UNDISTURBED. (Euclosia Daez
and/or Her Heirs represented by Edriano D. Daez vs. the Hon.
CA, et al., 325 SCRA 857).
RULES ON COVERAGE OF LANDS UNDER PD 27.

Rule 1
Landed estates or landholdings larger than 24 hectare (LOI 46
(December 7, 1972) - covered by OLT and there is no retention to
the landowner.
Rule 2
Landholding of 24 hectares or less (but above 7 hectares (LOI 46
(ibid) and LOI 227 (November 16, 1974) covered by OLT but
landowner is entitled to retention except if LOI 474 (October 21,
1976) applies.

Rule 3
Landholding of seven (7) hectares or less is EXEMPTED from OLT
except if LOI 474 is applicable under the following circumstances:
7

Landowner owns other agricultural land of more than seven

hectares in aggregate area, or he owns COMMERCIAL,
INDUSTRIAL, RESIDENTIAL or URBAN LAND where he derive
an adequate income, DAR Memo, Circular No. 11, s. 1978 (April
21, 1978) Adequate income is at least FIVE THOUSAND
(P5000.00) PESOS per annum. (Gross Income).

Lands not covered by Presidential Decree No. 27.

1. Private agricultural lands which are NOT PRIMARILY DEVOTED
TO RICE OR CORN, or
2. There is NO SYSTEM OF SHARE CROP OR LEASE TENANCY
obtaining in the landholding. (Daez, vs. CA, IBID).
*The REQUISITES for the exercise by the landowner of his RIGHT
OF RETENTION are the following:
1. The land must be DEVOTED TO RICE OR CORN CROPS;
There must be a system of share2. crop or lease tenancy obtaining there.
3. The size of the landholding MUST NOT EXCEED TWENTY FOUR
(24) hectares provided that at least seven (7) hectares thereof are
covered lands and more than seven (7) hectares of it consist of
other agricultural lands. Daez vs. CA, Ibid)

Right of Retention by Landowners under Presidential Decree No.

27. Supplemental Guideline A.O. No. 04, Series of 1991).
The policy statements are as follows:
a. Landowners covered by PD 27 are entitled to retain SEVEN
hectares, except those whose entire tenanted rice and corn lands
are subject to acquisition and distribution under OLT.
AN OWNER MAY NOT RETAIN UNDER THE FOLLOWING CASES:

a) If he as of October 21, 1972 owned more than 24 hectares of

tenanted rice or corn lands; or
b) By virtue of LOI 474, if he as of 21 October 1972 owns less
than 24 hectares of tenanted rice but additionally owned the
follows =
8

 Other agricultural land of more than seven hectares,

whether tenanted or not, whether cultivated or not, and
regardless of the income derived therefrom; or
Land use for commercial, industrial, residential or other
urban purposes, from which he derives adequate income
to support himself and his family
b. Landowners who filed their application for retention BEFORE
27 August 1985, the deadline set by Administrative Order No.
1, Series of 1985, may retain not more than seven hectares
of their landholding covered by PD 27 regardless of whether or
not they complied with LOI Nos. 41, 45, and 52.
Landowners who filed their application AFTER 27 August
1985 but complied with the requirement of LOI No. 41, 45 and
52 shall likewise be entitled to such a seven hectares
retention area.
However landowner who filed their application for retention
AFTER the 27 August 1985 deadline and DID NOT COMPLY
with the requirements of LOI Nos. 41, 45, and 52 shall only be
entitled to a maximum of five (5) hectares as retention area.
c. A landowner WHO HAS DIED must have manifested during
his lifetime his intention to exercise his right of retention
prior to 23 AUGUST 1990 (The finality of the Supreme Court
decision in the case "Association of Small Landowners of the
Philippines, Inc. et al. vs. Honorable Secretary of Agrarian
Reform) to allow his heirs to now exercise such right under
these Guidelines. Said heirs must show proof of the original
landowners intention.
The heirs may also exercise the original landowners' right
of retention if they can prove that the decedent HAD NO
KNOWLEDGE of OLT coverage over the subject property.

The BENEFICIARIES of Presidential Decree No. 27 are TENANTFARMERS, thus:

This shall apply to TENANT-FARMERS of PRIVATE
AGRICULTURAL LANDS PRIMARILY DEVOTED TO RICE OR
CORN under a SYSTEM OF SHARE-CROP or LEASE-TENANCY,
whether classified as landed estate or not. (Par. 5, Presidential
Decree No. 27).

The tenant-farmers, whether in land classified as landed estate

or not shall be DEEMED OWNER of a portion constituting of
family-size farm of FIVE (5) hectares if not irrigated and
THREE (3) HECTARES IF IRRIGATED. (Par. 6, Presidential
Decree No. 27)
The tenant shall pay for THE COST OF THE LAND, including
interest of six (6) percent per annum in FIFTEEN (15) YEARS
of fifteen (15) equal annual amortizations.
NOTE: The period in extended to twenty (20) years equal
annual amortization under Sec. 6, E.O.. 228 of July 17, 1987 by
Pres. Corazon C. Aquino.
The TITLE to the land owned by the tenant shall not be
transferable except BY HEREDITARY SUCCESSION or TO THE
GOVERNMENT in accordance with this Decree, the Code of
Agrarian Reform and other existing laws and regulation.
NOTE: Sec. 6, EO 228 provides, Ownership of lands acquired
by farmer-beneficiary may be transferred after full payment of
amortization.
The EMANCIPATION PATENT. Awarded to the TENANTBENEFICIARY CREATES a VESTED RIGHT OF ABSOLUTE
OWNERSHIP in the landholding a right which has become fixed
and established and is no longer open to doubt or controversy.
(Pagtalunan vs. Tamayo, 183 SCRA 252)
The Mode of Transfer of lands Tenant-Beneficiaries
Presidential Decree No. 27 are the following:

under

1. OPERATION LAND TRANSFER (OLT) under PD 27 and EO

228; and
Operation Land Transfer is the ORDERLY and
SYSTEMATIC TRANSFER of land from the landowner to the
tenant-farmer under Presidential Decree No. 27.
2. DIRECT PAYMENT SCHEME (DPS). The landowner and the
tenant-beneficiary can AGREE on the DIRECT SALE terms and
conditions which is not onerous to the tenant-beneficiary.
The value if the land shall equivalent to two and one half (21/2) times the AVERAGE HARVEST OF THREE NORMAL
10

CROP
YEARS
IMMEDIATELY
PROMULGATION OF THIS DEGREE.

PRECEDING

THE

COMPREHENSIVE AGRARIAN REFORM PROGRAM

Presidential Proclamation No. 131-Instituting a Comprehensive
Agrarian Reform Program (July 22, 1987)
2. Republic Act No. 6657 An Act instituting a Comprehensive
Agrarian Reform Program to Promote Social Justice and
Industrialization, providing the Mechanism for its Implementation
and other purposes. (June 15, 1988)
1. The power of President Aquino to promulgate Proc. No. 131
and E.O. Nos. 228 and 229 was authorized under Section 6 of the
Transitory Provision of the 1987 Constitution.
All assault on the validity of RA 6657 was set aside.
(Association of Small Landowners in the Philippines Inc. vs.
Secretary of Agrarian Reform, 175 SCRA 342 (1989)
COVERAGE OF CARL 1988
Scope All PUBLIC and PRIVATE Agricultural Lands regardless
of tenurial arrangement and commodity produced, including
lands of the public domain suitable for agriculture. (1st par. Sec. 4,
RA 6657)
Specific lands covered by CARP.
a. All alienable and disposable lands of the public domain
devoted to or suitable for agriculture
b. All lands of the public domain in excess of the specific
limits as determined by Congress in the preceding
paragraph;
c. All other lands owned by the Government devoted to or
suitable for agriculture; and
d. All private lands devoted to or suitable for agriculture
regardless of the agricultural products raised or that can
be raised thereon.

11

PRIORITIES The DAR, in coordination with the PARC shall plan

and program the acquisition and distribution of all agricultural lands
through a period of ten (10) years from the effectively of this Act. Land
shall be acquired and distributed as follows:
Phase One:
1.Rice and corn land under PD 27;
2. Idle and abandoned lands
3.
Private lands voluntarily offered by the owners for
agrarian reform;
4. Foreclosed land by government financial institutions;
5. Land acquired by the Presidential Commission on Good
Government; and
6. All other lands owned by the Government devoted to or
suitable for agriculture
These shall be acquired and distributed immediately
upon effectivity of the Act, with the implementation to be
completed within a period of not more than four (4) years
(Sec. 7, par. 2, RA 6657)
Phase Two:
1. All Disposable and alienable public agricultural lands;
2. All Arable public agricultural lands under agro-forest,
pasture and agricultural leases already cultivated and
planted for crops in accordance with Sec. 6, Art. XIII of the
Constitution;
3. All public agricultural lands which are opened for new
development and resettlement; and
4. All private agricultural lands in excess of fifty (50)
hectares
These shall be distributed immediately upon the effectivity
of the Act, with the implementation to be completed within a
period of not more than four (4) years.
Phase Three: All private AGRICULTURAL LANDS commencing with
LARGE landholdings and proceeding to MEDIUM and
SMALL landholding under the following schedules:
a) Landholdings ABOVE 24 hectares up to 50 hectares to
begin on the forth year from effectivity of this act and to be
completed within three years; and,
b) Landholdings from the RETENTION LIMIT up to 24
hectares, to begin on the sixth year from effectivity of this
Act and to be completed within four year.
12

LANDS NOT COVERED BY CARP

1. Those which are not suitable for agriculture or those which are
classified as mineral, forest residential, commercial or industrial
lands. (Sec. 3. , RA 6657);
2. Those which have been classified and approved as NONAGRICLTURAL prior to June 15, 1988. (DOJ Opinion No. 44, S.
1990)
3. Those which are EXEMPT pursuant to Sec. 10, RA 6657.
4. Those which are devoted to poultry, swine or livestock-raising
as of June 15, 1988 pursuant to the Supreme Court ruling on
Luz. Farms vs. The Hon. Secretary of Agrarian Reform (192
SCRA 51);
5. Fishponds and prawn farms exempted pursuant to R.A. No.
7881, and its implementing Administrative Order No. 3, Series of
1995;
6. Those which are retained by the landowners;

7. Those lands or portions thereof under the coverage of EO 407 but

found to be no longer suitable for agriculture and therefore,
could not be given appropriate valuation by the LBP as
determined by DAR/LBP; and
8. Those lands declared by Presidential Proclamations for certain
uses other than agricultural.
Rules and Procedures Governing the Exercise of Retention Rights by
Landowners and Award to Children under Sec. 6 of RA 6657 (A.O.
No. 11, Series of 1990; and A.O. No. 2, S. 2003)
A. Landowners whose landholding are covered by CARP may retain
an area of FIVE (5) hectares.
In addition, each of his children, (legitimate, illegitimate or
adopted may be AWARDED three (3) hectares as PREFERRED
BENEFICIARY provided1. That the child was at least 15 years of age on the June 15,
1988 (RA 6657-effectivity); and
13

2. The child was actually tilling the land or directly managing

the farmland from June 15, 1988 to the filing of the
application for retention and/or at the time of acquisition of
the land under CARP.
Retention of husband and wife:
1. For marriages covered by the New Civil Code, the spouses
who owns only CONJUGAL PROPERTIES may retain a
total of five (5) hectares unless there is an agreement for the
JUDICIAL SEPERATION OF PROPERTIES. However, if
either or both of them are landowners in their respective
rights (capital and/or paraphernal) they may retain not more
than five (5) hectares each from their respective
landholdings. In no case, however, shall the total retention
of such a couple exceed 10 hectares, and
2. For marriage covered by the New Family Code (August 3,
1988), a husband owning capital property and/or a wife
owning paraphernal property may retain not more than
five (5) hectares each provided they execute a JUDICIAL
SPERATION OF PROPERTIES prior to entering the
marriage. In the absence of such an agreement all
properties (capital, paraphernal and conjugal) shall be
considered held in absolute community.
QUALIFIED BENEFICIARIES.- The lands covered by the CARP
shall be distributed as much a possible to landless residents of the
same barangay, or in the absence thereof, landless resident of the
same municipality in the following order of priority:
a)
b)
c)
d)
e)
f)
g)

agricultural lessees and share tenants;

regular farmworkers;
seasonal farmworkers;
other farmworkers;
actual tillers or occupants of public lands;
collectives or cooperatives of the above beneficiaries; and
others directly working on the land.
(Par. 1, Sec. 22, RA 6657)

The children of landowners who are qualified under Sec. 6 of this

Act shall be given preference in the distribution of the land of their
parents; And, further, that actual tenant-tillers in the landholding shall
be ejected or removed therefrom. (Par. 2, Sec.22, RA 6657).
14

Distribution Limit No qualified beneficiary may own more than

Three (3) hectares of agricultural land (Sec. 23, RA 6657)
Award Ceiling for Beneficiaries. Beneficiaries shall be awarded
an area NOT EXCEEDING THREE (3) HECTARES which may cover a
CONTIGUOUS tract of land or SEVERAL PARCELS of land cumulated
up to the prescribed award limits. (Sec. 25, RA 6657).
Payment by Beneficiaries.- Lands awarded pursuant to this Act shall
be paid for the beneficiaries to the LBP in thirty (30) annual
amortizations at six percent (6%) per annum. The payments for the first
three (3) years after the award may be at reduced amounts as
established by the PARC: Provided, That the first five (5) annual
payments may not be more than five percent (5%) of the value of the
annual gross production as established by the DAR. Should the
scheduled annual payments after the fifth year exceed ten percent
(10%) of the annual gross production and the failure to produce
accordingly is not due to the beneficiarys fault, the LBP may reduce the
interest rate or reduce the principal obligation to make the repayment
affordable.

The LBP shall have a lien by way of mortgage on the land awarded
to the beneficiary; and this mortgage may be foreclosed by the LBP for
non-payment of an aggregate of three (3) annual amortizations. The
LBP shall advise the DAR of such proceedings and the latter shall
subsequently award the forfeited landholding to other qualified
beneficiaries. A beneficiary whose land, as provided herein, has been
foreclosed shall thereafter be permanently disqualified from becoming a
beneficiary under this Act. (Sec.26, RA 6657).
Transferability of Awarded Lands.- lands acquired by beneficiaries
under this Act may not be sold, transferred or conveyed except through
hereditary succession, or to the government, or to the LBP, or to other
qualified beneficiaries for a period of ten (10) years; Provided, however,
That the children or the spouse of the transferor shall have a right to
repurchase the land from the government or LBP within the period of two
(2) years. Due notice of the availability of the land shall be given by the
LBP to he Barangay Agrarian Reform Committee (BARC) of the
barangay where the land is situated. The Provincial Agrarian Reform
Coordinating Committee (PARCCOM), as herein provided, shall, in turn,
be given due notice thereof by the BARC.
15

If the land has not yet been fully paid by the beneficiary, the rights
to the land may be transferred or conveyed, with prior approval of the
DAR, to any heir of the beneficiary or to any other beneficiary who, as a
condition for such transfer or conveyance, shall cultivate the land
himself. Failing compliance herewith, the land shall be transferred to
the LBP which shall give due notice of the availability of the land in the
manner specified in the immediately preceding paragraph.
In the event of such transfer to the LBP, the latter shall
compensate the beneficiary in one lump sum for the amounts the latter
has already paid, together with the value of improvements he has made
on the land.(Sec. 27, RA 6657).
The TITLES awarded to farmer-beneficiaries CARP are the
following:
1. Free Patent for Public Alienation and Disposable lands;
2. CERTIFICATE OF LAND OWNERSHIP AWARD (CLOA) for
Resettlement sites:
3. STEWARDSHIP
CONTRACT
for
Lands
covered
by
INTERGRATED SOCIAL FORESTRY PROGRAM (ISFP); and
4. CLOA for Private of Agricultural Lands.

The MODES OF ACQUIRING LANDS for distribution under CARP:

a. COMPULSORY ACQUISITION (CA) (Sec. 16, RA 6657)
b. VOLUNTARY OFFER TO SELL (VOS) (Sec. 19, RA 6657)
c. VOLUNTARY LAND TRANFER/DIRECT PAYMENT SCHEME
(VLT/DPS) (Sec. 20, RA 6657).
Factors/Criteria considered in determining just compensation:
1. Cost of Acquisition of the land;
2. Current Value of like properties;
3. Nature of the land;
4. Actual use;
5. Income;
6. Sworn valuation by the landowner;
16

7. Tax Declaration;
8. Assessment made by government assessors;
9. The social and economic benefits
contributed by the farmers, and
10.Non-payment of taxes or loans secured
government financing institution on the land.

from

any

Basic Formula for the valuation of lands covered by VOS and CA

LV = (CNI x 0.6) + (CS x 0.3) +
(MV x 0.1)

where:
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all three
factors are present, relevant and applicable.
A.1. When the CS factor is not present and
CNI and MV are applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2. When the CNI factor is not present and
CS and MV are applicable, the formula shall be:
LV = (CS x 0.9) + (MV x 0.1)
A.3. When both CS and CNI are not present and only MV is
applicable, the formula shall be;
LV = (MV x 2)

17