FUNDAMENTAL DISTINCTIONS AMONG TENANCY, TENANT

EMANCIPATION DECREE AND CARP

LEASEHOLD TENANCY

TENANT EMANCIPATION
DECREE

COMPREHENSIVE AGRARIAN REFORM

PROGRAM

1.
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. CAR,
101 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

1. Presidential Decree No. 27

Tenants'
Emancipation Decree
(October 21, 1972)
2. Letter of Instructions No. 474PLACING
UNDER
OLT
TENANTED
RICE/CORN
LANDS SEVEN HECTARES
OR LESS IN AREAS UNDER
CERTAIN
CONDITIONS
(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 Instructions 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:

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 assaults against the

validity of RA 6657 were 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
oftenurial
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;

1. The land must be DEVOTED to

RICE or CORN crops; and
2. There must be a system of
SHARE
CROP or LEASE

Presidential Proclamation No. 131Instituting a Comprehensive Agrarian

Reform Program (July 22, 1987)

of 1989)

TENANCY obtaining therein.

IV AREA OF COVERAGE
It shall be unlawful for the tenant,
whenever the area of his holding is five
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 todifferent
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
Relationship:

Elements

1. The
parties
thetenant;

are

of

the landholder and

2.

The subject is agricultural land;

3.

There is consent;

4.
5.

Tenancy

The purpose is agricultural production;

There is personal cultivation;

6. 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 OWNERSHIPof the
subject landholding.
The
landowner EXERCISES the ATTRIBUTES OF
OWNERSHIP. Under Art. 428 of the New Civil
Code, the OWNER has the RIGHT TO DISPOSE

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.
(Eudosia 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
hectares (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

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.

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 effectivity
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 offeredby the

owners for agrarian reform;
4.

Foreclosed land
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.

Landholding of seven (7)

hectares
or
less
is EXEMPTED from
OLT
except if LOI 474 is applicable
under
the
following
circumstances:
Landowner
owns other
agricultural land
of more
than
seven
hectares in
aggregate area, or he owns
COMMERCIAL, INDUSTRIAL,
RESIDENTIAL or URBAN
LAND where he derives an
adequate income, DAR Memo,
Circular No. 11, s. 1978 (April
21, 1978) Adequate income is
at least FIVE THOUSAND

by government

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

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
theSALE,
ALIENATION OR TRANSFER of the legal
possession of the landholding. In case the
agricultural lessor SELLS, ALIENATES, OR
TRANSFERS the legal possession of the
landholding,
the
PURCHASER
OR
TRANSFEREE thereof shall be subrogated to
the rights 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 areSHARE-TENANT
OR
AGRICULTURAL
LESSEES
(TENANTS). Thus:
In the INTERPRETATION AND
ENFORCEMENT of this Act and other
laws as well as of the stipulations 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)

(P5000.00)
PESOS
annum. (Gross Income).

Lands not covered by Presidential

Decree No. 27.

IX PAYMENT FOR THE COST OF THE

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

open for new development and
resettlement; and

1. Private agricultural lands

which
are
NOT 4.
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)

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:

* The REQUISITES for the exercise

by the landowner of his RIGHT OF
RETENTION are the following:

All
private
AGRICULTURAL
LANDS
commencing with LARGE landholdings and
proceeding
to MEDIUM and SMALL
landholdings under the following schedules:

1.

The land must be DEVOTED

TO RICE OR CORN CROPS;

a)

2.

There must be a system of

share-crop or lease tenancy
obtaining there.

3.

VIII AWARD CEILING

The share-tenant/ agricultural lessee who
is already cultivating a landholding with an area
of FIVE
(5)
HECTARES
or
more or
ofsufficient 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 to
two or more separate holdings belonging to
different
landholders
WITHOUT
THE
KNOWLEDGE AND CONSENT OF THE
LANDOWNER/AGRICULTURAL
LESSOR
(Par. 1, Sec. 24, Republic Act No. 1199)

per

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.

Landholdings ABOVE 24 hectares up to

50 hectares to begin on the fourth 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 years.
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.
(c), RA 6657);

2. Those which have been classified and

approved
as NONAGRICULTURAL 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.

LAND
In the exercise of RIGHT OF PREEMPTION 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. 405-406). 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,

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 owns the
following =

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
used
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 sevenhectare retention area.
However, landowners who
filed their application for
retention AFTER the
27
August 1985 deadline and DID
NOT
COMPLY with
the
requirements of LOI Nos. 41,

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
landowners;

are retained by

the

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 Presidentia

Proclamations for certain uses othe
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 landholdings 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 provided 1.

That the child was at least 15

years of age on June 15, 1988 (RA
6657 effectivity); and

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

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 relinquish 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.
AGRICULTURAL LEASE-HOLD CONTRACT
IN GENERAL.
The agricultural lessor and theagricultural
lessee shall be FREE to ENTERinto any kind
of TERMS, CONDITIONS orSTIPULATIONS 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

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)
toallow his heirs to now
exercise such right under
these Guidelines. Said heirs
must show proof of the original
landowner's intention.
The heirs may also
exercise
the
original
landowner's 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
TENANT-FARMERS, thus:
This shall apply to
TENANT-FARMERS
of
PRIVATE
AGRICULTURAL
LANDS
PRIMARILY
DEVOTED TO RICE OR
CORN under a SYSTEM OF
SHARE-CROP or LEASETENANCY, whether classified
as landed estate or not. (Par.
5, Presidential Decree No. 27)

Code, the spouse who owns

only CONJUGAL PROPERTIES may
retain a total of five (5) hectares unless
there
is
an
agreement
for
the JUDICIAL
SEPARATION
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 marriages covered by the New

Family Code (August 3, 1988), a
husband owning capital property and/or
a
wife
owning
parapherna
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 as possible to landless residents of
the same barangay, or in the absence
thereof, landless residents of the same
municipality in the following order of
priority:
a) agricultural lessees and share tenants;
b) regular farmworkers;
c) seasonal farmworkers;
d) other farmworkers;

e) actual tillers or occupants of public lands;

The
tenant-farmers,
whether in land classified as
landed estate or not shall be
DEEMED OWNER of a portion
constituting a family-size farm
of FIVE (5) hectares if not
irrigated and THREE (3)
HECTARES
IF
IRRIGATED. (Par.
6,

f) collectives or

cooperatives of the above

beneficiaries; and

g)

others directly working on the land.

(Par. 1, Sec. 22, RA 6657)

Presidential Decree No. 27)

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 acquire must be observed, i.e.
Legal prohibition on the acquisition of
property.
By operation of law, the agricultural-lessee
can acquire ownership of the subject
landholding by the exercise of the following
rights.

The tenant shall pay for THE

COST
OF
THE
LAND,
includinginterest of six (6)
percent
per
annum
in
FIFTEEN (15) YEARS of
fifteen (15) equal annual
amortizations.

NOTE: The period is extended to

twenty (20) years equal annual
amortizations under Sec. 6, E.O.
228 of July 17, 1987 by Pres.
Corazon C. Aquino.

of

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
regulations.

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.

NOTE: Sec. 6, EO 228 provides,

"Ownership of lands acquired by
the
farmer-beneficiary may
be
transferred after full payment of
amortizations."

1.

Right of Pre-emption; and

2.

Right of Redemption

XIII CONSIDERATION FOR THE USE OF

VALUE OF THE LAND.
Consideration
Agricultural lands:

2.

for

the

Lease

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 preceding years when

The EMANCIPATION
PATENT awarded to the
TENANT-BENEFICIARY
CREATES a VESTED RIGHT
OF
ABSOLUTE
OWNERSHIP in
the
landholding "a right which
has
become fixed and establishe
d and is no longer open to
doubt
or
controversy."
(Pagtalunan vs. Tamayo, 183
SCRA 252)
The Mode of Transfer of
Lands to Tenant-Beneficiaries under
Presidential Decree No. 27 are the
following:

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)

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) annua
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
annua
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)
annua
amortizations. The LBP shall advise the
DAR of such proceedings and the latter shal
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

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

harvests, 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 reasonable 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.

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 are
not onerous to the tenantbeneficiary.
The value of the land shall
be equivalent to two and one
half
(2-1/2)
times
the AVERAGE HARVEST OF
THREE NORMAL
CROP
YEARS
IMMEDIATELY
PRECEDING
THE
PROMULGATION OF THIS
DECREE.

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.

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
farmerbeneficiaries under the CARP are the
following:

1. Free Patent for Public, Alienable and

Disposable Lands;

2. CERTIFICATE
AWARD
Sites:

OF LAND OWNERSHIP
(CLOA) for Resettlement

3. STEWARDSHIP CONTRACT for Lands

covered by INTEGRATED SOCIAL
FORESTRY PROGRAM (ISFP); and
4.

CLOA for Private Agricultural Lands.

The MODES OF ACQUIRING LANDS for

distribution under CARP:

a. COMPULSORY ACQUISITION
(Sec. 16, RA 6657)

(CA)

b. VOLUNTARY OFFER TO SELL (VOS)

(Sec. 19, RA 6657)

c. VOLUNTARY LAND TRANSFER/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;

7.

Tax Declaration;

8. Assessment made
assessors;

by

government

9. The social and economic

benefits
contributed by the farmers, and
10.

Non-payment of taxes or loans

secured from any government
financing institution on the land.

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 presen

CNI and MV are applicable, the formula sha
LV = (CNI x 0.9) + (MV x 0.1)

A.2.
When
the CNI factor
present and CS and MV are
appli
the formula shall be:
LV = (CS x 0.9) + (MV x 0.1)

A.3.
When
both CS and CNI are no
present and
only MV is
applicabl
theformula shall be:
LV = (MV x 2)