F U N D A M E N TA L DISTINCTIONS

LEASEHOLD TENANCY TENANT EMANCIPATION DECREE COMPREHENSIVE AGRARIAN REFORM

PROGRAM
Presidential Proclamation No. 131-Instituting a
I - LEGAL BASIS: 1. Presidential Decree No. 27 Tenants Comprehensive Agrarian Reform Program
Emancipation Decree (October 21, 1972) (July 22, 1987)
1. Republic Act No. 3844-
Agricultural Land Reform Code (August 8, 2. Letter Instruction No. 474-PLACING UNDER 2. Republic Act No. 6657 An Act instituting a
1963) OLT TENANTED RICE/CORN LANDS Comprehensive Agrarian Reform Program to
2. Republic Act No. 6389- Code of SEVEN HECTARES OR LESS IN AREA Promote Social Justice and Industrialization,
Agrarian Reform (September 10, 1971) UNDER CERTAIN CONDITION (OCTOBER providing the Mechanism for its
3. Presidential Decree No. 1425- 21, 1976) Implementation and other purposes. (June
Amending Presidential Decree No. 1040 by 15, 1988)
Strengthening the Prohibition against 1. Presidential Decree No. 27 was assumed to
Agricultural Share, Tenancy and Providing be constitutional and upheld as part and 1. The power of President
Penalties for Violation thereof. (June 10, parcel of the law of the land in De Chavez Aquino to promulgate Proc. No. 131 and
1978) vs. Zobel, 155 SCRA 26; Gonzales vs. E.O. Nos. 228 and 229 was authorized
4. Section 12, Republic Act No. 6657- Estrella, 91 SCRA 294 (1979) and under Section 6 of the Transitory Provision
Comprehensive Agrarian Reform Law of Association of Small Landowners in the of the 1987 Constitution.
1988. Philippines Inc. vs. Secretary of Agrarian All assault on the validity of RA 6657
Reform, 175 SCRA 342 (1989) was set aside. (Association of Small
2. Letter of Instruction No. 474 Constitutionality Landowners in the Philippines Inc. vs.
was upheld in Zurbano vs. Estrella, 137 Secretary of Agrarian Reform, 175 SCRA
II JURISPRUDENCE ON CONSTITUTIONALITY SCRA 333 (1989) 342 (1989)

1. Security of Tenure- Primero vs. CIR, The REQUISITES FOR COVERAGE under COVERAGE OF CARL 1988
10 Phil. 675 (1957); Pineda vs. de Guzman, OPERATION LAND TRANSFER (OLT) Scope All PUBLIC and PRIVATE
21 SCRA 1450 (1967). program are the following: Agricultural Lands regardless of tenurial
arrangement and commodity produced,

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)
RULES ON COVERAGE OF LANDS UNDER PD
27.
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 to
different landholders under any system of
tenancy WITHOUT THE KNOWLEDGE AND
CONSENT of the landholder with whom he
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).
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
ASEC AUGUSTO P. QUIJANO
2004 U.P. PRE-WEEK REVIEW
Lecture Outline
Page -2-
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:
Phase One:
1.Rice and corn land under PD 27;
2.Idle and abandoned lands
3.Private lands voluntarily offered by

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. 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
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 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.
Phase Two:
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;
ASEC AUGUSTO P. QUIJANO
2004 U.P. PRE-WEEK REVIEW
Lecture Outline
Page -3-
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)
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

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 Right of Retention by Landowners under
leasehold contract nor by the SALE, ALIENATION Presidential Decree No. 27. Supplemental
OR TRANSFER of the legal possession of the Guideline A.O. No. 04, Series of 1991).
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
2. There must be a system of share-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)
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.
LANDS NOT COVERED BY CARP
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
ASEC AUGUSTO P. QUIJANO
2004 U.P. PRE-WEEK REVIEW
Lecture Outline
Page -4-
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.
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 NON-AGRICLTURAL prior to

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
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 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
ASEC AUGUSTO P. QUIJANO
2004 U.P. PRE-WEEK REVIEW
Lecture Outline
Page -5-
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.

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 No. 27 are TENANT-FARMERS, thus:
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
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
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).
ASEC AUGUSTO P. QUIJANO
2004 U.P. PRE-WEEK REVIEW
Lecture Outline
Page -6-
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 provided-
1. That the child was at
least 15 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

(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.
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 TENANT-BENEFICIARY CREATES a
ASEC AUGUSTO P. QUIJANO
2004 U.P. PRE-WEEK REVIEW
Lecture Outline
Page -7-
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) agricultural lessees and share tenants;
b) regular farmworkers;

3844).
XI - EVIDENCE OF RIGHT/TITLE OVER THE
LANDHOLDING.
AGRICUTLURAL LEASEHOLD CONTRACT
IN GENERAL.-
Beneficiaries under Presidential Decree No. 27 are
- The agricultural lessor and the the following:
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
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-
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 (2-1/2) times the
AVERAGE HARVEST OF THREE
NORMAL CROP YEARS IMMEDIATELY
PRECEDING THE PROMULGATION OF
THIS DEGREE.
ASEC AUGUSTO P. QUIJANO
2004 U.P. PRE-WEEK REVIEW
Lecture Outline
Page -8-
c) seasonal farmworkers;
d) other farmworkers;
e) actual tillers or occupants of public
lands;
f) 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 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

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
ASEC AUGUSTO P. QUIJANO
2004 U.P. PRE-WEEK REVIEW
Lecture Outline
Page -9-
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

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.
ASEC AUGUSTO P. QUIJANO
2004 U.P. PRE-WEEK REVIEW
Lecture Outline
Page -10-
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 farmer-beneficiaries
 ASEC AUGUSTO P. QUIJANO
2004 U.P. PRE-WEEK REVIEW
Lecture Outline
Page -11-

7. In case of Disagreement the Court shall CARP are the following:

determine the reasonably increase in rental.
1. Free Patent for Public Alienation and
8. Capital improvement refers to any Disposable lands;
permanent and tangible improvement on the land
that will result in increased productivity. If done with 2. CERTIFICATE OF LAND OWNERSHIP
the consent of the lessee, then the lease rental shall AWARD (CLOA) for Resettlement sites:
be increased proportionately.
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;
 ASEC AUGUSTO P. QUIJANO
2004 U.P. PRE-WEEK REVIEW
Lecture Outline
Page -12-

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
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

 ASEC AUGUSTO P. QUIJANO
2004 U.P. PRE-WEEK REVIEW
Lecture Outline
Page -13-

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)