March 22, 1999
DAR OPINION NO. 22-99
Mr. Mabini Milan
Rm. 503 Ancon Bldg.
1408 Tomas Mapua St.
Sta. Cruz, Manila
Dear Mr. Milan:
This has reference to your letter dated 24 February 1999 with the following queries, to wit:
1. Can the holder of Emancipation Patent Title sell his lots to other persons? If yes, what are the prerequisites and process involved?
2. Can these lots be converted into residential/commercial purposes? If yes, what are the requirements and process involved?
3. If the lots are surrounded by lots classified into residential/commercial, are they automatically classified as commercial and residential? If not, what are the requirements involved so that the lots could be reclassified?
4. How many hectares of agricultural lands can an individual own? What about a corporation?
Anent your first query, please be clarified that although Presidential Decree No. 27 prohibits the transfer of lands acquired through the Operation Land Transfer Program except thru hereditary succession or to the government, Section 6 of Executive Order No. 228 which amended P.D. No. 27 provides in part that: "ownership of lands acquired by farmer-beneficiaries may be transferred after full payment of amortizations". Pursuant to said amendment, DAR issued Administrative Order No. 8, Series of 1995 of which Item II.3 thereof provides for the following:
"II.3 Transfer of awarded lands under P.D. No. 27 as amended by E.O. No. 228 and R.A. No. 6657 may be allowed provided the following shall be observed:
a) that the productivity of the land shall be maintained;
b) that the buyer will not exceed the aggregate landowner ceiling provided by law; and
c) that the ownership ceiling of five (5) hectares shall be imposed."
From the foregoing, it is clear that lands acquired by virtue of P.D. No. 27, evidenced by an Emancipation Patent, may be transferred provided that beneficiaries thereof have fully paid the amortizations and have complied with the conditions set forth in DAR A.O. No. 8, Series of 1995. As to the other requirements and process involved in the said transfer, we are furnishing you herewith a copy of said guideline for your ready reference.
Anent your second query, please be informed that although the transfer of awarded land is allowed, the productivity of the subject land should be maintained and any change in the nature of its use shall not be allowed except with the approval of the DAR under its rules on conversion or exemption. Please note, however, that the issuance of land use conversion clearances has been temporarily suspended pursuant to Presidential Directive dated 28 December 1998. In line therewith, this Office issued DAR-Memorandum Circular No. 1, Series of 1999, item No. 2 of which provides:
"2. The CLUPPI/RCLUPPI Secretariats shall not accept, immediately upon receipt of a copy of this Circular, new applications for land use conversion in the meantime that DAR is reviewing the guidelines and until such time the new/revised rules and regulations on land conversion are issued. Thereafter, new applications for land conversion may be accepted pursuant to the new/revised guidelines."
Anent your third query, the answer is in the negative. Lots surrounded by properties already classified into residential/commercial use are not deemed automatically classified as such. The following are the requirements for reclassification.
a. The city or municipal development council shall recommend to the Sangguniang Panglunsod or Sangguniang Bayan, as the case may be, the reclassification of agricultural lands within its jurisdiction.
b. Before enacting the ordinance reclassifying agricultural lands, the Sanggunian concerned must first secure the following certificates:
1. Certification from the Department of Agricultural (DA) indicating the total area of existing agricultural lands in the city or municipality; that such lands are not classified as non-negotiable for conversion or reclassification; and that the land has ceased to be economically feasibly and sound for agricultural purposes.
2. Certification from DAR indicating that such lands are not distributed, or not covered by a notice of coverage or not voluntarily offered for coverage under CARP.
The whole reclassification process is laid down under the provisions of Malacañang Memorandum Circular No. 54, Series of 1993 (copy herewith attached).
It must be stressed, likewise, that reclassification differs from land use conversion. Land use reclassification by itself does not place an agricultural property outside the purview of the Comprehensive Agrarian Reform Program (CARP) since it merely specifies how agricultural lands shall be utilized for non-agricultural uses as embodied in the land use plan. In other words, it merely allocates land to different activities or classes of land uses, evolved and enacted through the town planning and zoning process. It is not synonymous with conversion (i.e., actual change of agricultural land to non-agricultural uses) for while the authority to reclassify is lodged with the Local Government Unit (LGU), the authority to convert remains with the DAR.
Anent your last query, Section 6 of R.A. No. 6657 provides in part:
"SECTION 6. Retention Limits. — Except as otherwise provided in this Act . . . in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm . . ."
Section 73(a) of R.A. No. 6657 further provides that the ownership or possession, for the purpose of circumventing the provisions of this Act, of agricultural lands in excess of the total retention limits or award ceilings by any person, natural or juridical, except those under collective ownership by farmer-beneficiaries, is prohibited.
From the foregoing, an individual can only own a maximum of five (5) hectares, a limit set forth by the Comprehensive Agrarian Reform Law (CARL). However under P.D. No. 27, landowners maybe entitled to retain a maximum of seven (7) hectares under certain circumstances or conditions. As regards a corporation, since the same is in legal contemplation regarded as a person (juridical person) having a personality separate and distinct from its stockholders, it is thus likewise entitled to own an agricultural landholding not more than the maximum limit of five (5) hectares, provided it shall maintain the productivity of the land and any change in the nature of its use shall not be allowed except with the approval of the DAR under its rules on conversion or exemption.
Thank you for communicating with us and we hope to have enlightened you on the matter.
Very truly yours,
(SGD.) DANILO T. LARA
Undersecretary for Legal Affairs, and Policy and Planning