August 8, 1994
DAR OPINION NO. 55-94
Atty. Eliezer B. Nuñez
Buenavista, Bohol 6333
Dear Atty. Nuñez:
This is in answer to the following queries you have raised to wit:
1. What is the maximum number of hectares of agricultural lands that a corporation can purchase under PD 27 and RA 6657?
2. Can a landowner sell a portion or the entire landholding that he owns in excess of the five-hectare retention provided in RA 6657?
3. May a landowner execute a Deed of Partition giving each of his children 3 hectares while he and his wife are still alive?
4. Can an incorporator of a corporation engaged in agricultural development own in his own right 5 hectares of agricultural land?
Anent your first query, please be informed that although PD 27 and RA 6657 (otherwise known as the Comprehensive Agrarian Reform Law or CARL) both mandate land redistribution, they are two separate pieces of legislation each having its own area of coverage.
Presidential Decree No. 27 covers tenanted private agricultural lands primarily devoted to rice/corn which fall outside of the landowner's 7-hectare retention. However, if a landowner owns 24 hectares or more of tenanted rice/corn lands the entire area is subject to Operation Land Transfer (OLT) coverage pursuant to P.D. 27. Moreover, tenanted rice/corn lands of 7 hectares or less shall be subject to redistribution to the tenants thereof if the same are owned by landowners who, as of the effectivity of LOI 474 on 21 October 1976, own other agricultural lands of more than 7 hectares of aggregate areas or lands used for residential, commercial, industrial or other urban purposes from which they derive adequate, income to support themselves and their families. Presidential Decree No. 27 does not set a limit to the number of hectares that a corporation can own but rather prescribes the conditions under which tenanted rice/corn lands shall be placed under the coverage of PD 27.
Section 6 of CARL, on the other hand, sets at 5 hectares the limit of agricultural land that each landowner may own. Please note that Section 73 (a) of CARL does not distinguish between natural and juridical persons when speaking of retention limits. Hence under CARL, a corporation may retain a maximum of only 5 hectares.
As regards your second and third queries, the last paragraph of Section 6 of RA 6657 provides that upon its effectivity on 15 June 1988, "any sale, dispositions leases management contract or transfer of possession of private agricultural lands executed by the original landowner in violation of this Act shall be null and void". The reason is that all agricultural lands in excess of the landowner's retention fall under CARL coverage and are subject to acquisition and redistribution to qualified beneficiaries. It follows that said area in excess of the retention limit cannot legally be the subject of a partition in favor of your children.
As regards the last query, the answer is in the affirmative. An incorporator can, in his own right, retain a maximum of five hectares of agricultural land.
We hope we have clarified matters for you.
Very truly yours,
(SGD.) HECTOR D. SOLIMAN
Assistant Secretary
Legal Affairs Office
Copy furnished:
Office of the Secretary
Re: Doc. No. 94-05-0424