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F U N D A M E N TA L

LEASEHOLD TENANCY

TENANT EMANCIPATION DECREE

I - LEGAL BASIS:
1. Republic 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

DISTINCTIONS

ON

COMPREHENSIVE AGRARIAN REFORM PROGRAM


Presidential Proclamation No. 131-Instituting a
1. Presidential Decree No. 27
Comprehensive Agrarian Reform Program (July
Tenants
Emancipation
Decree
22, 1987)
(October 21, 1972)
2. Republic Act No. 6657 An Act instituting a
2. Letter Instruction No. 474-PLACING
Comprehensive Agrarian Reform Program to
UNDER
OLT
TENANTED
Promote Social Justice and Industrialization,
RICE/CORN
LANDS
SEVEN
providing the Mechanism for its Implementation
HECTARES OR LESS IN AREA
and other purposes. (June 15, 1988)
UNDER
CERTAIN
CONDITION
(OCTOBER 21, 1976)
1.
The power of President Aquino
to promulgate Proc. No. 131 and E.O. Nos. 228
1. Presidential Decree No. 27 was
and 229 was authorized under Section 6 of the
assumed to be constitutional and
Transitory Provision of the 1987 Constitution.
upheld as part and parcel of the law
All assault on the validity of RA 6657 was set
of the land in De Chavez vs. Zobel,
aside. (Association of Small Landowners in the
155 SCRA 26; Gonzales vs. Estrella,
Philippines Inc. vs. Secretary of Agrarian Reform,
91 SCRA 294 (1979) and Association
175 SCRA 342 (1989)
of Small Landowners in the Philippines
Inc. vs. Secretary of Agrarian Reform, COVERAGE OF CARL 1988
175 SCRA 342 (1989)
Scope All PUBLIC and PRIVATE Agricultural
2. Letter
of
Instruction No.
474
Lands regardless of tenurial arrangement and

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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

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

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).

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.
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:

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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 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

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:
Landowner owns other agricultural
land of more than seven hectares in
aggregate area, or he owns
COMMERCIAL,
INDUSTRIAL,
RESIDENTIAL or URBAN LAND

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

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Relationship:
1. The parties are the landholder
and the tenant;
2. The subject is agricultural land;
3. There is consent;
4. The purpose is agricultural
production;
5. 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 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,

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.

by

Presidential

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;
2. There must be a system of share-

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.

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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

crop or lease tenancy obtaining


there.
3. The size of the landholding MUST LANDS NOT COVERED BY CARP
NOT EXCEED TWENTY FOUR (24)
hectares provided that at least seven
1. Those which are not suitable for agriculture or
(7) hectares thereof are covered lands
those which are classified as mineral, forest
and more than seven (7) hectares of it
residential, commercial or industrial lands.
consist of other agricultural lands.
(Sec. 3. , RA 6657);
Daez vs. CA, Ibid)
2. Those which have been classified and approved
as NON-AGRICULTURAL prior to June 15,
1988. (DOJ Opinion No. 44, S. 1990)
Right of Retention by Landowners under
Presidential Decree No. 27. Supplemental
3. Those which are EXEMPT pursuant to Sec. 10,
Guideline A.O. No. 04, Series of 1991).
RA 6657.
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:

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;

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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.

6. Those which are retained by the landowners;


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 =
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

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

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No. 1199)
IX - PAYMENT FOR THE COST OF THE
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)

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

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

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X -TRANSFERABILITY OF LANDHOLDING

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.

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
The BENEFICIARIES of Presidential
so "which is carried into effect," Decree No. 27 are TENANT-FARMERS,
(Philippine
Labor
and
Social thus:
Legislation, Martin, 70 Ed. Pp. 405406).
Abandonment to validly
This shall apply to TENANTterminate tenancy
relationship is
FARMERS
of
PRIVATE
characterized by:
AGRICULTURAL LANDS PRIMARILY
DEVOTED TO RICE OR CORN under
(a)an INTENT to ABANDON, and
a SYSTEM OF SHARE-CROP or
(b)an OVERT ACT to carry out
LEASE-TENANCY, whether classified
such intention
as landed estate or not. (Par. 5,

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)

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
g) 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

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Presidential Decree No. 27).


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

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

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) 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

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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,

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 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)

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,
The Mode of Transfer of lands Tenant- transferred or conveyed except through hereditary
Beneficiaries under Presidential Decree No. succession, or to the government, or to the LBP, or to
27 are the following:
other qualified beneficiaries for a period of ten (10)
years; Provided, however, That the children or the
1. OPERATION
LAND
TRANSFER spouse of the transferor shall have a right to
(OLT) under PD 27 and EO 228; and repurchase the land from the government or LBP within
the period of two (2) years. Due notice of the

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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:

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 tenantbeneficiary can AGREE on the
DIRECT SALE terms and conditions
which is not onerous to the tenantbeneficiary.
The value if the land shall
equivalent to two and one half (2-1/2)
times the AVERAGE HARVEST OF
THREE NORMAL CROP YEARS
IMMEDIATELY PRECEDING THE
PROMULGATION
OF
THIS
DEGREE.

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 farmer-beneficiaries CARP
are the following:

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2004 U.P. PRE-WEEK REVIEW
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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 agriculturallessee 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

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

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2004 U.P. PRE-WEEK REVIEW
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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.

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 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
LV = (CNI x 0.6) + (CS x 0.3) +
(MV x 0.1)
where:
LV = Land Value

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2004 U.P. PRE-WEEK REVIEW
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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.

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)

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2004 U.P. PRE-WEEK REVIEW
Lecture Outline
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