F U N D A M E N TA L

LEASEHOLD TENANCY
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.

DISTINCTIONS

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
1. Presidential Decree No. 27 was
President Aquino to promulgate Proc.
assumed to be constitutional and
No. 131 and E.O. Nos. 228 and 229
upheld as part and parcel of the law
was authorized under Section 6 of the
of the land in De Chavez vs. Zobel,
Transitory Provision of the 1987
155 SCRA 26; Gonzales vs. Estrella,
Constitution.
91 SCRA 294 (1979) and Association
All assault on the validity of RA
of Small Landowners in the Philippines
6657 was set aside. (Association of
Inc. vs. Secretary of Agrarian Reform,
Small Landowners in the Philippines
175 SCRA 342 (1989)
Inc. vs. Secretary of Agrarian Reform,

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II

JURISPRUDENCE
CONSTITUTIONALITY

ON

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)

2. Letter
of
Instruction No.
474
175 SCRA 342 (1989)
Constitutionality
was
upheld
in
Zurbano vs. Estrella, 137 SCRA 333 COVERAGE OF CARL 1988
(1989)
Scope All PUBLIC and PRIVATE
Agricultural Lands regardless of tenurial
The REQUISITES FOR COVERAGE
arrangement and commodity produced,
under
OPERATION
LAND
including lands of the public domain
TRANSFER (OLT) program are the
suitable for agriculture. (1st par. Sec. 4,
following:
RA 6657)
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

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

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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 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.

857).
RULES ON COVERAGE OF LANDS
UNDER PD 27.
Rule 1
Landed estates or landholdings larger
than 24 hectare (LOI 46 (December 7,
1972) - covered by OLT and there is no
retention to the landowner.
Rule 2
Landholding of 24 hectares or less (but
above 7 hectares (LOI 46 (ibid) and
LOI 227 (November 16, 1974) covered
by OLT but landowner is entitled to
retention except if LOI 474 (October 21,
1976) applies.
Rule 3
Landholding of seven (7) hectares or
less is EXEMPTED from OLT except if
LOI 474 is applicable under the following
circumstances:
Landowner owns other agricultural
land of more than seven hectares in
aggregate area, or he owns
COMMERCIAL,
INDUSTRIAL,

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 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

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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
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

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
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;

These shall be acquired and

distributed immediately upon
effectivity of the Act, with the
implementation to be completed
within a period of not more than
four (4) years (Sec. 7, par. 2, RA
6657)
Phase Two:
1. All Disposable and alienable
public agricultural lands;
2. All Arable public agricultural
lands
under
agro-forest,
pasture and agricultural leases
already cultivated and planted
for crops in accordance with
Sec. 6, Art. XIII of the
Constitution;
3. All public agricultural lands
which are opened for new
development and resettlement;
and
4. All private agricultural lands
in excess of fifty (50) hectares
These shall be distributed
immediately upon the effectivity of

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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.

2. There must be a system of sharecrop 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 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 Right of Retention by Landowners under
SELLS, ALIENATES, OR TRANSFER the Presidential Decree No. 27. Supplemental
legal possession of the landholding, the Guideline A.O. No. 04, Series of 1991).
PURCHASER OR TRANSFEREE thereof
shall be subrogated to the right and
The policy statements are as follows:
substituted to the obligations of the
a. Landowners covered by PD 27 are
agricultural lessor (see. 10, RA 3844)
entitled to retain SEVEN hectares,
except those whose entire tenanted
VII - BENEFICIARIES
rice and corn lands are subject to
acquisition and distribution under OLT.
The beneficiaries under Republic Act
No. 1199, Republic Act No. 3844 as
amended by Republic Act No. 6389 are
AN OWNER MAY NOT RETAIN

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

- AWARD CEILING

The share-tenant/agricultural lessee

who is already cultivating a landholding
with an area of FIVE (5) HECTARES or
more or of sufficient size to make him
and member of his immediate farm
household fully occupied in its cultivation
is prohibited to CONTRACT TO WORK at
the same time two or more separated
holding
belonging
to
different
landholder
WITHOUT
THE
KNOWLEDGE AND CONSENT OF THE
LANDOWNER/AGRICULTURAL

UNDER THE FOLLOWING CASES:

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

LANDS NOT COVERED BY CARP

1. Those which are not suitable for
agriculture or those which are
classified
as
mineral,
forest
residential, commercial or industrial
lands. (Sec. 3. , RA 6657);
2. Those which have been classified and
approved as 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

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LESSOR (Par. I, Sec. 24, Republic Act.

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)

more than seven hectares of their

Administrative Order No. 3, Series of
landholding covered by PD 27
1995;
regardless of whether or not they
complied with LOI Nos. 41, 45, and
6. Those which are retained by the
52.
landowners;
Landowners who filed their
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
Exercise
of
Retention
Rights
by
c. A landowner WHO HAS DIED must Landowners and Award to Children under
have manifested during his Sec. 6 of RA 6657 (A.O. No. 11, Series of
lifetime his intention to exercise 1990; and A.O. No. 2, S. 2003)
his right of retention prior to 23
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.

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X -TRANSFERABILITY OF LANDHOLDING

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.

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

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 6657effectivity); 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

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such intention
There must be, therefore, NO
ANIMUS REVERTENDI on the part of
the tenant (Labor, Agrarian and Social
Legislation, Montemayor, 2nd Ed.,
1968, pp. 54-55)
B. VOLUNTARY SURRENDER of
the landholding by the agricultural
lessee, written notice of which
shall be served three months in
advance (Nisnisan, et al., vs. CA,
294 SCRA 173 (1998).
As a mode of extinguishing
tenancy relationship it connotes a
decision in the part of the tenant
to return the possession of the
landholding and relinquished his
right
as
tenant
thereon
uninfluenced by any compelling
factor, coming particularly from
the landholder. For surrender to
be valid, there must be (a) an
intention to abandon, and (b) an
external act or an omission to act,

as landed estate or not. (Par. 5,

Presidential Decree No. 27).
The tenant-farmers, whether in
land classified as landed estate or not
shall be DEEMED OWNER of a
portion constituting of family-size farm
of FIVE (5) hectares if not irrigated
and THREE (3) HECTARES IF
IRRIGATED. (Par. 6, Presidential
Decree No. 27)
The tenant shall pay for THE COST
OF THE LAND, including interest of
six (6) percent per annum in
FIFTEEN (15) YEARS of fifteen (15)
equal annual amortizations.
NOTE: The period in extended to
twenty (20) years equal annual
amortization under Sec. 6, E.O..
228 of July 17, 1987 by Pres.
Corazon C. Aquino.
The TITLE to the land owned by
the tenant shall not be transferable
except
BY
HEREDITARY

PROPERTIES.
However, if
either or both of them are
landowners in their respective
rights
(capital
and/or
paraphernal) they may retain
not more than five (5) hectares
each from their respective
landholdings. In no case,
however, shall the total retention
of such a couple exceed 10
hectares, and
2. For marriage covered by the
New Family Code (August 3,
1988), a husband owning capital
property and/or a wife owning
paraphernal
property
may
retain not more than five (5)
hectares each provided they
execute
a
JUDICIAL
SPERATION OF PROPERTIES
prior to entering the marriage. In
the absence of such an
agreement
all
properties
(capital,
paraphernal
and
conjugal) shall be considered
held in absolute community.

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by which such intention is carried

out into effect. When a tenant
voluntarily yields the land, he
terminates
the
tenancy
relationship by his unilateral act.
(Anacleto Inson vs. Planas de
Asis, et.al., CA GR No. Sp-01769,
October 11, 1974.)
NOTE: SUBLEASING by the
agricultural lessee is also a ground for
the extinguishments of Agricultural
Leasehold Relations. (Par.(2), Sec. 27,
Republic Act No. 3844).
XI - EVIDENCE OF RIGHT/TITLE OVER
THE LANDHOLDING.
AGRICUTLURAL
LEASEHOLD
CONTRACT IN GENERAL.-

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 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- The agricultural lessor and the Beneficiaries under Presidential Decree No.
agricultural lessee shall be FREE to 27 are the following:
ENTER into any kind of TERMS,
CONDITIONS or STIPULATIONS in a
1. OPERATION
LAND
TRANSFER
LEASEHOLD CONTRACT as long as
(OLT) under PD 27 and EO 228; and

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;
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

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they are not contrary to LAW,

MORALS OR PUBLIC POLICY. (Sec.
15 Republic Act No. 3844).
Except in case of mistake,
violence,
intimidation,
undue
influence,
or
fraud,
an
AGRICULTURAL CONTRACT reduced
in writing and registered as
hereinafter provided, SHALL BE
CONCLUSIVE
BETWEEN
THE
CONTRACTING PARTIES, if not
DENOUNCED
OR
IMPUGNED
WITHIN THIRTY DAYS AFTER
REGISTRATION (Sec. 17, Republic Act
No. 3844)
XII -

MODES OF TRANSFER OF THE

LAND TO THE TENANT OR
BENEFICIARY
The landowner-agricultural lessor
can FREELY AND VOLUNTARILY
TRANSFER the landholding to the
agricultural lessor by way of:

Operation Land Transfer is the

ORDERLY
and
SYSTEMATIC
TRANSFER of land from the
landowner to the tenant-farmer under
Presidential Decree No. 27.

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)
2. DIRECT PAYMENT SCHEME (DPS). hectares of agricultural land (Sec. 23, RA
The landowner and the tenant- 6657)
beneficiary can AGREE on the
DIRECT SALE terms and conditions
Award Ceiling for Beneficiaries.
which is not onerous to the tenant- Beneficiaries shall be awarded an area NOT
beneficiary.
EXCEEDING THREE (3) HECTARES which
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
IMMEDIATELY PRECEDING THE
Payment by Beneficiaries.- Lands
PROMULGATION
OF
THIS awarded pursuant to this Act shall be paid
DEGREE.
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

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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:

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).

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2004 U.P. PRE-WEEK REVIEW
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1. Not more than 25 per centum of the

average normal harvest during the three
agricultural years immediately preceding the
date the leasehold was established.
2. Deductible items
a. Seedlings
b. Cost of Harvesting
c. Cost of Threshing
d. Cost of Loading
e. Cost of Hauling
f. Cost of Processing
3. If the land is cultivated for a period of
less than three years, the initial consideration
is based on the average normal harvest
during the preceeding years when the land
was actually cultivated or on the harvest of
the first year if newly cultivated, and the
harvest is normal.
4. After the lapse of the first three normal
harvest, the final consideration shall be
based on the average normal harvest during
these three preceding agricultural years.

Transferability of Awarded Lands.- lands

acquired by beneficiaries under this Act may
not be sold, transferred or conveyed except
through hereditary succession, or to the
government, or to the LBP, or to other
qualified beneficiaries for a period of ten (10)
years; Provided, however, That the children
or the spouse of the transferor shall have a
right to repurchase the land from the
government or LBP within the period of two
(2) years. Due notice of the availability of
the land shall be given by the LBP to he
Barangay Agrarian Reform Committee
(BARC) of the barangay where the land is
situated. The Provincial Agrarian Reform
Coordinating Committee (PARCCOM), as
herein provided, shall, in turn, be given due
notice thereof by the BARC.
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

ASEC AUGUSTO P. QUIJANO

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.

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 CARP are the following:
1. Free Patent for Public Alienation and
Disposable lands;
2. CERTIFICATE
OF
LAND
OWNERSHIP AWARD (CLOA) for
Resettlement sites:
3. STEWARDSHIP
CONTRACT
for
Lands covered by INTERGRATED

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2004 U.P. PRE-WEEK REVIEW
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SOCIAL FORESTRY
(ISFP); and

PROGRAM

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
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;

in

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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

ASEC AUGUSTO P. QUIJANO

2004 U.P. PRE-WEEK REVIEW
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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)