February 4, 1998

DAR OPINION NO. 11-98

Dr. Dale Monico T . Ello

96 Col. Nunag St.,

Glan, Sarangani

Dear Dr. Ello:

This refers to your letter with the following queries, to wit:

1)        What is the procedure in determining just compensation? Approximately, how much are we obligated by law to give them? Can you give us a sample of your computation?

2)        What is the right and Just procedure in discharging the said property without, having the tenants discharged from it?

3)        In case our tenants decide to leave out of their own choice, are see still obligated by law to give any compensation?

You state that your parents acquired a 6.3 hectare coconut land in 1968; that it was your parents who worked for the titling of said coconut land in your father's name; that this land has been tenanted by three (3) different families in three different times; that the first family who tenanted said land was too big that they decided to leave the area to find a better one; that they recommended their nephew, whose family proved so industrious and trustworthy and that You like their presence so much, but due to unexpected tragedy in 1980, they have to leave the place and it was in that instance that the present tenant volunteered to take their place; that you have already given up 14.7 hectares through VOS and that this 6.3 hectare land is the only significant agricultural landholding left which you and your brother may inherit from your parents; that you want to preserve said land for sentimental reasons, but at the same time you realized some difficulties in the management thereof; that your parents are already in their advanced age and your only brother, who is a priest, has other priorities to attend to and that you are so occupied with your medical practice; that said management has created a problem of trust over your tenant which lately had aggravated to the point that the trust which binds your relationship has totally been lost; and that It is practically for this reason and other reasons perhaps of lesser weight that you are posing the above queries.

Anent your first query, R.A. No. 6657 states that in determining just compensation, the following factors shall be taken into account: a) the cost of acquisition of the land; b) its nature, actual use and income; c) sworn valuation by the owner; d) the assessment made by the government assessors; e) social and economic benefit contributed by the farmers, farmworkers and by the government; and f) taxes and loans. It bears stressing at this point that the final determination of just compensation is a judicial function. However, DAR as the lead implementing agency of the CARP may initially determine the value of the lands covered by CARP. Should the landowner disagree with the initial findings of the DAR, the latter may bring or file an action in the proper Adjudication Board of the DAR. As regards the computation of just compensation, we are furnishing you herewith a copy of DAR Administrative Order No. 6, Series of 1992 and A.O. No. 11 Series of 1994 for your ready reference to help you out on the matter.

Anent your second query, discharge by the landowner of his landholding will not discharge the tenants (if any) therefrom. The change of ownership over the land will not make the tenancy relationship with the new owner cease to exist. The new owner merely steps into the shoes of the former owner and he is bound by the tenancy relationship existing prior to his acquisition of the land. It goes without saying that change of ownership over the landholding will not automatically amount to the displacement of tenants over the said landholding. The new owner has to recognize the tenants because they enjoy security of tenure.

As regards your last query, should the tenant decide to leave the landholding on their own choice, you are no longer obligated to give any disturbance compensation to them. The payment of disturbance compensation as provided for in Section 36 of R.A. No. 3844, as amended by R.A. 6389, pertains to the compensation given to the affected agricultural lessees in cases of legal conversion, that is, in cases where the use of the land for purposes other than agricultural is approved by DAR upon the application of the landowner. Otherwise stated, the payment of disturbance compensation only covers cases of legal conversion undertaken at the instance of the landowner (Pagtalunan vs. Tamayo, G.R. No. 54281, March 19, 1990). Since the tenants acted on their own volition, it is a clear indication that they no longer wanted to be tenants of said landholding. Commensurate compensation as may be deemed just and reasonable, may however still be due and demandable as a token of fairness and gesture of goodwill.

Thank you for communicating with us and we hope to have enlightened you on the matter.

Very truly yours,

(SGD.) ARTEMIO A. ADASA, JR.

Undersecretary for Legal Affairs, and Policy and Planning