December 22, 1995

DAR OPINION NO. 88-95

PARO Saturnino D. Sibbaluca

DAR General Santos City

Dear PARO Sibbaluca:

This has reference to your letter relative to the request of the Fleischer Estate Integrated Multi-Purpose Cooperative (FEIMCO) that they be allowed to allocate ten (10) hectares out of the 171 hectares of land awarded to them to be used as homelots under a joint venture housing project with the Local Government Unit. Specifically, you wish to be clarified on the following matters, to wit:

a.         Whether or not the Cooperative can enter into a joint venture agreement with the local government for a housing project on the portion allocated as their homelots;

b.         Whether or not full payment to the Land Bank of the Philippines is a necessary requirement to the whole area awarded, or to the portion intended for a joint housing project;

c.         Whether or not such portion of land intended for a joint housing project will require conversion; and

d.         Whether or not individual titles can be issued to the homelot owners who are not beneficiaries out of the CLOA awarded to the cooperative.

At the outset, we wish to clarify that only the CARP beneficiaries may be legally provided with homelots in the landholding awarded to them. Said right is granted under Section 30 of CARL. As regards non-CARP beneficiaries, however, there is no legal basis for granting in their favor homelots within the awarded lands. Section 27 of CARL explicitly prohibits the transfer of the awarded land or a portion thereof within ten years from award except through hereditary succession or to the government or to the Land Bank of the Philippines or to other qualified beneficiaries. It follows that no transfer of the homelot in favor of non-CARP beneficiaries can be legally effected.

As regards your first query, we see no legal impediment for the Cooperative to enter into a joint venture agreement with the LGU for a housing project, provided that said agreement contains a provision that in case of default by the original housing beneficiaries, the lot shall be transferred to qualified agrarian reform beneficiaries/cooperative members. It goes without saying that said agreement shall be subjected to a review by DAR.

Anent your second query, in the event that a portion of the awarded land is developed for homelot purposes, we see no requirement for full payment of the entire area awarded nor of that portion to be developed. However, should a mortgage be constituted on the homelot because of the housing project, the same shall be subordinate to the LBP lien provided in paragraph 2 Section 26 of RA 6657.

Anent your third query, since the provision of homelots for ARBs is an integral part of the agrarian reform program, it is submitted that the development of a portion of the awarded land for homelot purposes no longer needs any conversion clearance from this Department.

Finally, since non-CARP beneficiaries cannot be owners of homelots in the awarded land, we deem it unnecessary to answer your last query.

Please be guided accordingly

Very truly yours,

(SGD.) HECTOR D. SOLIMAN
Assistant Secretary Legal Affairs Office

Copy furnished:

Dir. Alejo V. Duque

DAR Region XI

Davao City

Dir. Jaime Madridano

DILG

Davao City

Mayor Juanito Purisima

Maitum, Sarangani Province

Mr. Afredo Y. Masamong

Gen. Manager, FEIMCO

Old Poblacion, Maitum

Sarangani Province