November 8, 2000

DAR OPINION NO. 37-00

MEMORANDUM

FOR             :        SEVERINO T. MADRONIO
                                     Assistant Secretary
                                     Field Operations Group

SUBJECT    :     Request for Legal Opinion on Lands Under Lease Contract But Already Awarded to CARP Beneficiaries Under Republic Act No. 6657

This refers to your Memorandum dated 13 July 1999 regarding the letter of Mr. Gaudencio W. Antonio Jr., Managing Director for Operations of the Mindanao Lumber Development Co., Inc. (MILUDECO), relative to the property in issue under lease for fifty (50) years with said company and now being offered and sale by the owner/lessor (Rosalito P. Cuaresma) to MILUDECO.

It appears that subject property was already awarded to Mr. Pascua, et al., under Certificate of Land Ownership Award (CLOA) No. 00531755 registered as TCT No. 2488 on 28 April 1999. Having ceased to be the landowner, Mr. Cuaresma cannot sell the property to the lessee, MILUDECO. His remaining concern after the coverage is limited to payment of just compensation.

The lone issue to be resolved here now is the status of the contract of lease. It is our considered opinion that the contract of lease may continue. Section 72 of R.A. No. 6657 explicitly provides, quote:

"SECTION 72.         Lease . . . . — Lands covered by this Act under lease . . . . contracts shall be disposed of as follows:

(a)        Lease . . . contracts covering private lands may continue under their original terms and conditions until the expiration of the same even if such land has, in the meantime, been transferred to qualified beneficiaries.

Based on the above premises, we submit that the sale is no longer possible. The contract of lease may, however, continue until the expiration of the same.

Please be guided accordingly.

(SGD.) FEDERICO A. POBLETE

Undersecretary for Legal Affairs, and Policy and Planning