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F U N D A M E N TA L

DISTINCTIONS

LEASEHOLD TENANCY I - LEGAL BASIS: Act No. 3844Agricultural Land Reform Code (August 8, 1963) 2. Republic Act No. 6389- Code of Agrarian Reform (September 10, 1971) 3. Presidential Decree No. 1425Amending 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. 6657Comprehensive Agrarian Reform Law of 1988. II JURISPRUDENCE ON
1. Republic

TENANT EMANCIPATION DECREE

COMPREHENSIVE AGRARIAN REFORM PROGRAM Presidential Proclamation No. 1311. Presidential Decree No. 27 Instituting a Comprehensive Agrarian Tenants Emancipation Decree Reform Program (July 22, 1987) (October 21, 1972) 2. Republic Act No. 6657 An Act 2. Letter Instruction No. 474- PLACING instituting a Comprehensive Agrarian UNDER OLT TENANTED Reform Program to Promote Social RICE/CORN LANDS SEVEN Justice and Industrialization, providing HECTARES OR LESS IN AREA the Mechanism for its Implementation UNDER CERTAIN CONDITION and other purposes. (June 15, 1988) (OCTOBER 21, 1976) 1. The power of President Aquino 1. Presidential Decree No. 27 was to promulgate Proc. No. 131 and E.O. assumed to be constitutional and Nos. 228 and 229 was authorized upheld as part and parcel of the law under Section 6 of the Transitory of the land in De Chavez vs. Zobel, Provision of the 1987 Constitution. 155 SCRA 26; Gonzales vs. Estrella, All assault on the validity of RA 91 SCRA 294 (1979) and Association 6657 was set aside. (Association of of Small Landowners in the Philippines Small Landowners in the Philippines Inc. vs. Secretary of Agrarian Reform, Inc. vs. Secretary of Agrarian Reform,

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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 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
A. Retained

175 SCRA 342 (1989) 175 SCRA 342 (1989) 2. Letter of Instruction No. 474 Constitutionality was upheld in COVERAGE OF CARL 1988 Scope All PUBLIC and PRIVATE Zurbano vs. Estrella, 137 SCRA 333 Agricultural Lands regardless of tenurial (1989) arrangement and commodity produced, The REQUISITES FOR COVERAGE including lands of the public domain under OPERATION LAND suitable for agriculture. (1st par. Sec. 4, TRANSFER (OLT) program are the RA 6657) following: Specific lands covered by CARP. 1. The land must be DEVOTED to a. All alienable and disposable lands RICE or CORN crops; and of the public domain devoted to 2. There must be a system of or suitable for agriculture SHARE CROP or LEASE b. All lands of the public domain in TENANCY obtaining therein. excess of the specific limits as If either of these requisites is determined by Congress in the ABSENT, the land is NOT preceding paragraph; COVERED under OLT. Hence, a c. All other lands owned by the landowner NEED NOT APPLY FOR Government devoted to or RETENTION, where his ownership suitable for agriculture; and over the entire landholding is d. All private lands devoted to or INTACT and UNDISTURBED. suitable for agriculture regardless (Euclosia Daez and/or Her Heirs of the agricultural products represented by Edriano D. Daez vs. raised or that can be raised the Hon. CA, et al., 325 SCRA thereon.

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It shall be unlawful for the tenant, 857). whenever the area of his holding is RULES ON COVERAGE OF LANDS five hectares or more, or is of UNDER PD 27. sufficient size to make him and the Rule 1 members of his immediate farm Landed estates or landholdings larger household fully occupied in its than 24 hectare (LOI 46 (December 7, cultivation, to CONTRACT TO 1972) - covered by OLT and there is no WORK at the same time on TWO OR retention to the landowner. MORE SEPARATE HOLDINGS Rule 2 belonging to different landholders Landholding of 24 hectares or less (but under any system of tenancy above 7 hectares (LOI 46 (ibid) and WITHOUT THE KNOWLEDGE AND LOI 227 (November 16, 1974) covered CONSENT of the landholder with by OLT but landowner is entitled to whom he first entered into tenancy retention except if LOI 474 (October 21, relationship. (Par. 1, Sec. 24, republic 1976) applies. 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: Rule 3 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

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

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1. The parties are the landholder 2. 3. 4. 5. 6.

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.)

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 Decree No. 27.
1.

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

by

Presidential

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

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; 2. There must be a system of sharecrop or lease tenancy obtaining there.

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new owner MUST RESPECT THE RIGHT OF THE TENANT.

3. The size of the landholding MUST

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 Right of Retention by Landowners under TRANSFER the legal possession of the Presidential Decree No. 27. Supplemental landholding, the PURCHASER OR Guideline A.O. No. 04, Series of 1991). TRANSFEREE thereof shall be The policy statements are as follows: subrogated to the right and a. Landowners covered by PD 27 are substituted to the obligations of the entitled to retain SEVEN hectares, agricultural lessor (see. 10, RA 3844) except those whose entire tenanted rice and corn lands are subject to VII - BENEFICIARIES acquisition and distribution under OLT. AN OWNER MAY NOT RETAIN The beneficiaries under Republic Act UNDER THE FOLLOWING CASES: 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
a) If he as of October 21, 1972 owned

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)

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.

more than 24 hectares of tenanted rice or corn lands; or b) By virtue of LOI 474, if he as of 21

LANDS NOT COVERED BY CARP 1. Those which are not suitable for agriculture or those which are

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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

October 1972 owns less than 24 hectares of tenanted rice but additionally owned the follows = 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

classified as mineral, forest residential, commercial or industrial lands. (Sec. 3. , RA 6657); 2. Those which have been classified and approved as NON-AGRICLTURAL 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;

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LAND. In the exercise of RIGHT OF PREEMPTION by the agricultural lesseetenant, 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 LANDHOLDING OF

application AFTER 27 August 1985 but complied with the requirement 7. Those lands or portions thereof under of LOI No. 41, 45 and 52 shall the coverage of EO 407 but found to likewise be entitled to such a be no longer suitable for agriculture seven hectares retention area. and therefore, could not be given However landowner who filed appropriate valuation by the LBP as their application for retention determined by DAR/LBP; and AFTER the 27 August 1985 deadline and DID NOT COMPLY 8. Those lands declared by Presidential with the requirements of LOI Nos. Proclamations for certain uses other 41, 45, and 52 shall only be than agricultural. entitled to a maximum of five (5) hectares as retention area. Rules and Procedures Governing the of Retention Rights by c. A landowner WHO HAS DIED must Exercise have manifested during his Landowners and Award to Children under lifetime his intention to exercise Sec. 6 of RA 6657 (A.O. No. 11, Series of his right of retention prior to 23 1990; and A.O. No. 2, S. 2003) A. Landowners whose landholding are AUGUST 1990 (The finality of the covered by CARP may retain an area Supreme Court decision in the of FIVE (5) hectares. case "Association of Small In addition, each of his children, Landowners of the Philippines, Inc. (legitimate, illegitimate or adopted et al. vs. Honorable Secretary of may be AWARDED three (3) hectares Agrarian Reform) to allow his heirs as PREFERRED BENEFICIARY to now exercise such right under providedthese Guidelines. Said heirs must 1. That the child was at least 15

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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 The BENEFICIARIES of Presidential constitute abandonment there must be an absolute relinquishment of the Decree No. 27 are TENANT-FARMERS, premises of the tenant. This "overt thus: act" must be coupled with his intention This shall apply to TENANTto do so "which is carried into effect," FARMERS of PRIVATE (Philippine Labor and Social AGRICULTURAL LANDS PRIMARILY Legislation, Martin, 70 Ed. Pp. 405DEVOTED TO RICE OR CORN under 406). Abandonment to validly a SYSTEM OF SHARE-CROP or terminate tenancy relationship is LEASE-TENANCY, whether classified characterized by: as landed estate or not. (Par. 5, Presidential Decree No. 27). (a) an INTENT to ABANDON, and The tenant-farmers, whether in (b) an OVERT ACT to carry out land classified as landed estate or not such intention shall be DEEMED OWNER of a portion constituting of family-size farm There must be, therefore, NO

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.

years of age on the 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 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,

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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

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

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

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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).

transferred after full payment of amortization. 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 established and is no longer open to doubt or controversy. (Pagtalunan vs. Tamayo, 183 SCRA 252)

priority:
a) agricultural lessees and share b) c) d) e) f) g)

The Mode of Transfer of lands TenantBeneficiaries under Presidential Decree No. XI - EVIDENCE OF RIGHT/TITLE OVER 27 are the following: THE LANDHOLDING. The children of landowners who are 1. OPERATION LAND TRANSFER qualified under Sec. 6 of this Act shall AGRICUTLURAL LEASEHOLD (OLT) under PD 27 and EO 228; and be given preference in the distribution of CONTRACT IN GENERAL.the land of their parents; And, further, Operation Land Transfer is the that actual tenant-tillers in the - The agricultural lessor and the ORDERLY and SYSTEMATIC landholding shall be ejected or removed agricultural lessee shall be FREE to TRANSFER of land from the therefrom. (Par. 2, Sec.22, RA 6657). ENTER into any kind of TERMS, landowner to the tenant-farmer under CONDITIONS or STIPULATIONS in a Presidential Decree No. 27. Distribution Limit No qualified LEASEHOLD CONTRACT as long as beneficiary may own more than Three (3) they are not contrary to LAW, 2. DIRECT PAYMENT SCHEME (DPS). hectares of agricultural land (Sec. 23, RA MORALS OR PUBLIC POLICY. (Sec. The landowner and the tenant- 6657)

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)

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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

beneficiary can AGREE on the Award Ceiling for Beneficiaries. DIRECT SALE terms and conditions which is not onerous to the tenant- Beneficiaries shall be awarded an area NOT EXCEEDING THREE (3) HECTARES which beneficiary. may cover a CONTIGUOUS tract of land or The value if the land shall SEVERAL PARCELS of land cumulated up equivalent to two and one half (2-1/2) to the prescribed award limits. (Sec. 25, RA times the AVERAGE HARVEST OF 6657). THREE NORMAL CROP YEARS Payment by Beneficiaries.- Lands IMMEDIATELY PRECEDING THE PROMULGATION OF THIS awarded pursuant to this Act shall be paid for the beneficiaries to the LBP in thirty (30) DEGREE. 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.

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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

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

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.

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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 normal harvest, shall be based harvest during agricultural years. lapse of the first three the final consideration on the average normal these three preceding

(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,

5. In the absence of any agreement as to the rental, the maximum allowed shall be applied.

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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.

together with the value of improvements he has made on the land.(Sec. 27, RA 6657). The TITLES awarded to farmerbeneficiaries CARP are the following:
1. Free Patent for Public Alienation and

Disposable lands;
2. CERTIFICATE

OF LAND OWNERSHIP AWARD (CLOA) for Resettlement sites: CONTRACT for Lands covered by INTERGRATED SOCIAL FORESTRY PROGRAM (ISFP); and

3. STEWARDSHIP

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

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(VOS) (Sec. 19, RA 6657) c. VOLUNTARY LAND TRANFER/DIRECT PAYMENT SCHEME (VLT/DPS) (Sec. 20, RA 6657). Factors/Criteria considered determining just compensation: in

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 by government assessors; 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

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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:

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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)