September 21, 1994

DAR OPINION NO. 77-94

MR. JONATHAN CASTRO

3567 Durango St.

Makati, Metro Manila

Dear Mr. Castro:

This has reference to your letter dated 18 August 1994, seeking the opinion of this Office relative to the following queries:

1)        Can a CLT be validly issued in favor of a tenant without the knowledge or participation of the landowner?

2)        Should a CLT be issued in favor of a tenant even if he has been remiss in his duty to give the landowner his share of the harvest?

3)        Can a tenant, before the landowner is fully paid, legally sell the latter's property on the basis of a CLT issued in favor of the former?

4)        Are ricelands exempt from CARP coverage, particularly from the prohibition against the sale of agricultural lands? If a tenant may transfer the property covered by a CLT, won't this defeat the purpose of land reform?

5)        Who determines the just compensation to be paid to the landowner? How is this amount determined? Can this amount be questioned by the landowner? If so, how should he go about doing so?

6)        Does a landowner have any right of retention over a parcel of land consisting of one (1) hectare, more or less?

7)        Finally, is our family entitled to any relief/remedy under the circumstances set forth above?

Anent your first query, as part of due process, the landowner is entitled to notice regarding the identification of the tenant who will be issued a CLT. However, at the outset, we wish to clarify that the CLT is not an evidence of ownership. In the case entitled "Engracia Vinzons-Magana versus Hon. Conrado Estrella" (G.R. No. 60269; Sept. 12, 1991) the Court held that "the mere issuance of the certificate of land transfer does not vest in the farmer-grantee ownership of the land described therein. At most, the certificate merely evidences the government's recognition of the grantee as the party qualified to avail of the statutory mechanisms for the acquisition of ownership of the land tilled by him as provided under Presidential Decree No. 27". Should the landowner not agree with the issuance of the CLT, he may file a petition for cancellation thereof on valid grounds, such as non-existence of tenancy relations.

As regards your second query, please be informed that non-payment by the tenant of lease rentals to the landowner will not necessarily disqualify him from being a CLT holder of the farmlot under his cultivation. This is so because non-payment of rentals can be a ground for the tenant's ejectment from the landholding only if there is a judgment by the court which is final and executory finding that said non-payment is deliberate and not due to crop failure by reason of force majeure. This-presupposes that there must first be a case filed for non-payment of lease rentals and a finding that the tenant was deliberately remiss. Only after the tenant has been declared by the court as remiss will he be disqualified from being a CLT recipient. However, once a property is identified as falling under Operation Land Transfer (OLT) coverage pursuant to PD 27, the disqualification of the tenant will not affect said OLT coverage. The property will be reallocated to a deserving farmer-beneficiary.

The answer to your third and fourth queries is in the negative. Since the CLT does not vest title to the land in favor of the tenant, the same cannot be transferred to another person by way of sale or otherwise.

Anent your fifth query, lands covered under P.D. 27 were valued by the DAR in accordance with the formula specified therein, to wit: "two and one-half (2 ½) times the average harvest of three normal crop years immediately preceding the promulgation of (the) Decree." In lieu thereof, landowners and tenants were allowed to enter into Landowner-Tenant Production Agreements, and the valuation of the lands covered thereby was made in accordance therewith. For PD 27 lands not yet valued as of the effectivity of E.O. 228 on 18 August 1987, Section 2 of said E.O. provides that "the valuation of rice and corn lands, covered by P.D. No. 27 shall be based on the average gross production determined by the Barangay Committee on Land Production in accordance with Department Memorandum Circular No. 26, series of 1973 and related issuances and regulation of the Department of Agrarian Reform. The average gross production per hectare shall be multiplied by two and a half (2.5), the product of which shall be multiplied by Thirty Five Pesos (P35.00), the government support price for one cavan of 50 kilos of palay on October 21, 1972, or Thirty One Pesos (P31.00), the government support price for one cavan of 150 kilos of corn on October 21, 1972, and the amount arrived at shall be the value of the rice and corn land, as the case may be, for the purpose of determining its cost to the farmer and compensation to the landowner. As for lands falling under the coverage of RA 6657, the responsibility of determining compensation rests with the Land Bank of the Philippines pursuant to E.O. 405, S. of 1990. DAR Administrative Order No. 6 Series of 1992 provides a basic formula for the valuation of lands covered by Voluntary Offer to Sell and compulsory acquisition pursuant to CARL, taking into account the factors enumerated in Section 17 thereof. If the landowner is not satisfied with the valuation of his property, he may file a case questioning the same before the Provincial Adjudicator of the place where the property is situated. Should he still not be satisfied with the decision of the DAR Adjudication Board, he may petition the Special Agrarian Court to resolve the issue of valuation.

The answer to your sixth query is in the affirmative landowner may retain his 1-hectare landholding, provided it is his only agricultural land. However, under P.D. 27 in relation to LOI 474, said one-hectare property cannot be retained if 1) it is tenanted: 2) planted to rice/corn; and 3) the landowner has "other agricultural lands of more than seven hectares in aggregate areas or lands used for residential, commercial, industrial or other urban purposes from which he derives adequate income to support himself and his family". In such a case, the tenanted rice/cornland will be covered under P.D. 27 regardless of area. Under RA 6657, he is entitled to retain a maximum of 5 Hectares of his agricultural lands provided he has not exercised retention under P.D. 27.

Finally, you wish to explore the possibility of settling your land problems amicably, we advise that you seek the assistance of the Municipal Agrarian Reform Officer(MARO) of the place where the property is situated. This is in addition to the remedies aforementioned.

We hope we have clarified matters for you.

Very truly yours,

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