December 23, 1996

DAR OPINION NO. 149-96

Mr. Nonilo R. Bugash

Corporate Affairs Manager

A Brown Company, Inc.

Ortigas Ave. Extension &

Gloria St.,

Cainta, Rizal

Dear Mr. Bugash:

This refers to your letter dated 30 October 1996 seeking clarification on certain queries posed therein, to wit:

1.         Assuming we were able to secure a development permit from the local government and other line agencies concerned, can we develop the property without violating the Comprehensive Agrarian Reform Law?

2.         Can we also transfer the registration of titles of developed properties to our prospective buyers without securing clearance from the DAR?

You state that on May 16, 1995, you have secured an Order from Director Percival C. Dalugdug of DAR-Region IV, exempting from CARP coverage your 13.2129 hectare property located at Brgy. Tayuman, Binangonan, Rizal; that the exemption order was granted for reason that said parcels of land are undeveloped, hilly, cogonal and over 18% slope, thereby unfit for permanent cultivation; that on November 29, 1995, you were also able to secure a Preliminary Approval and Locational Clearance (PALC) signed by Mayor Isidro B. Pacis of Binangonan, Rival attesting that the site is zoned as residential; that to date, the property is undeveloped under utilized, so you intend to develop the same into a residential subdivision. Hence, this request.

Anent your first query, while it is admitted that a DAR Order of Exemption signifies that the parcel of land cannot be acquired distributed under CARP, this does not render total exemption from the application of the Comprehensive Agrarian Reform Law. DAR A.O. No. 1, Series of 1990 provides that "DAR has exclusive authority to approve or disapprove applications for conversion of agricultural lands for residential, commercial, industrial, and other land uses as may be provided for by law". Under the aforequoted order, since the intention of the landowner is to convert the agricultural land into residential, thereby changing the agricultural use of the land to non-agricultural, a DAR order of conversion must first be obtained.

Anent your second query, the answer is in the negative. In all transactions involving the transfer or sale of agricultural land to another, the issuance of a DAR Clearance is an essential requisite in order that it may be considered a valid transfer. This is so in view of the DAR's policy to protect the rights of the tenants and other farmworkers who may be displaced therein and to see to it that the retention limit allowed by law shall be strictly observed and complied with.

We hope to have clarified the matter in this regard.

Very truly yours,

(SGD.) LORENZO R. REYES

OIC-Undersecretary
LAFMA

Copy furnished:

OSEC

Doc. No. 96-10-00650