September 17, 1997

DAR OPINION NO. 107-97

Mr. Dioscoro U . Masigon

Provincial Agrarian Reform Officer

Kalibo, Aklan

Dear PARO Masigon:

This has reference to your Memorandum addressed to Atty. Daniel Y. Martelino seeking opinion on the queries posed therein, to wit:

1)        Whether Fil-Estate Development Corporation can automatically convert agricultural lands into non-agricultural uses without filing an application for conversion and securing a Conversion Order or Exemption Clearance from the Department of Agrarian Reform?

2)        Whether land transactions can be effected and registered afterwards with the Register of Deeds even without securing DAR Clearance as required under DAR Administrative Order No. 1, Series of 1989?

As gleaned from your letter together with the enclosures therein attached, the subject property has an aggregate area of seventy (70) hectares, more or less, situated at Boracay Island, Malay, Aklan; that it is covered by Original Certificate of Title (OCT) No. LRO-2222 (19502-45) registered in the name of Ciriaco Tirol, Sr.; that in an investigation conducted by the Municipal Agrarian Reform Officer of Malay, Aklan, it was found out that a number of farmers and farmworkers were occupying and cultivating said property and Certificates of Land Transfer (CLTs) have already been issued to them by the DAR; that apart from CLTs issued to them, there are no other records on file to confirm their status as lawful tenants due to non-cooperation of the affected tenants; that sometime in 1994 Fil-Estate Development Corporation has started developing the subject landholding even without DAR Conversion Clearance on the belief that it is exempt from said requirement by virtue of Presidential Proclamation No. 1801; and that, surprisingly, not even a single complaint was lodged by the affected tenants against the landowner.

Administrative Order No. 6, Series of 1994 (Guidelines for the Issuance of Exemption Clearances based on Sec. 3(c) of R.A. No. 6657 and the Department of Justice (DOJ) Opinion No. 44, Series of 1990) item II thereof provides, quote:

"Sec. 3(c) of R.A. No. 6657 states that agricultural land refers to land devoted to agricultural activity as defined in this act and not classified as mineral, forest, residential, commercial or industrial land.

Department of Justice Opinion No. 44, series of 1990 has ruled that with respect to the conversion of agricultural lands covered by R.A. No. 6657 to non-agricultural uses, the authority of DAR to approve such conversion may be exercised from the date of its effectivity, on June 15, 1988. Thus, all lands that are already classified as commercial, industrial or residential before 15 June 1988 no longer need any conversion clearance".

From the aforequoted, what is needed therefore is an exemption clearance for lands already classified as non-agricultural prior to June 15, 1988. In this particular case, the subject landholding has already been declared part and parcel of Tourist Zones and Marine Reserves way back November 10, 1978 pursuant to Presidential Proclamation No. 1801 (Declaring Certain Islands, Coves and Peninsulas in the Philippines as Tourist Zones and Marine Reserves Under the Administration and Control of the Philippine Tourism Authority). Thus, since the land in issue has in effect been previously classified as commercial, (i.e., tourist zone) before 15 June 1988, the date of effectivity of CARL, there is still the need to apply for exemption clearance. The provisions of DOJ Opinion No. 44 in relation to DAR Administrative Order No. 6, Series of 1994 could still be relatively applied in the instant case. Accordingly, notwithstanding the provisions of P.D. No. 1801, the same do not afford automatic exemption of the landholding in issue.

Anent your second query, compliance with the DAR Clearance requirement prior to registration with the Register of Deeds is compulsory for transactions involving transfer of ownership. Specifically, the issuance of DAR Clearance signifies and guarantees that the transaction does not violate agrarian laws and their implementing rules and regulations. The issuance thereof is however not to be construed in itself as a validation of the transaction for it only serves as a safeguard against possible circumvention of agrarian laws. It is therefore submitted that despite the provisions of P.D. No. 1801, the requisite DAR Clearance should as a matter of protective policy and prudence still be required.

We hope to have clarified the matters with you.

Very truly yours,

(SGD.) ARTEMIO A. ADASA, JR.

Undersecretary for Legal Affairs, and Policy and Planning