February 27, 1997

DAR OPINION NO. 18-97

Ms. Ma. Cristina M. Reyes

Manager — Housing

North Sector Accounts

Atrium of Makati

Makati Avenue, Makati City

Dear Ms. Reyes:

This refers to your letter regarding the application of Banker's Realty Investment Corporation for a Joint Venture Project with Pag-ibig Fund for the development of a Pag-ibig City at New San Mateo Subdivision, Gitnang Bayan I, San Mateo Rizal.

You state that the subject properties are two adjacent lots covered by two (2) TCTs all registered under the name of Bankers Realty Investment Corporation with an aggregate area of 34,733 square meters; that you evaluated the proposal and conducted a verification and trace back of the subject properties tax declaration and it appears that it was classified as ricefield in 1991 and later reclassified as residential in 1992. In this connection, the Bankers Realty submitted to your office a DAR conversion clearance allegedly covering said properties signed by then Minister Conrado F. Estrella which however when verified with the DARCO, Assessors Office of San Mateo, Rizal and Bureau of Lands it cannot be established that the subject properties are included in the said Conversion Order/Clearance.

You now ask whether the subject properties require a DAR Conversion or Exemption Clearance considering that in the Tax Declaration the same was classified as residential and as per your inspection the present actual use of the property is for residential purposes.

Anent your request whether a DAR conversion or exemption clearance is necessary to facilitate the consummation of the proposed Joint Venture Agreement with the Bankers Realty Development Inc. We wish to inform you that since the subject property is not identifiable with the properties in the Order issued by then Minister Estrella and considering that the subject property was already reclassified as residential it is best for the landowner to file an application for conversion under DAR A.O. No. 12, Series of 1994 for lands reclassified by the Local Government Unit into non-agricultural uses after June 15, 1988 pursuant to Memorandum Circular No. 54, Series of 1993. This is so since land use reclassification by itself does not place the subject property outside the purview of the Comprehensive Agrarian Reform Program because it merely specifies how agricultural lands shall be utilized. for non-agricultural uses such residential, industrial, commercial, as embodied in the land use plan. In other words, it merely allocates lands to different activities or classes of land uses, evolved and enacted through the town planning and zoning process. Reclassification is not synonymous with conversion under Section 65 of R. A. 6657 for while the authority to reclassify is lodged with the local government units, the authority to convert remain with the DAR.

On the other hand, under the Department of Justice Opinion No. 44, Series of 1990, a parcel of land is considered non-agricultural and therefore, beyond the coverage of CARP if it has been classified as residential, commercial or industrial in the city or municipality land use plan or zoning ordinance approved by the HLURB before 15 June 1988, the date of effectivity of CARL. However, the landowners falling under this category no longer need any conversion clearance but application for an Exemption Clearance should be filed with the Regional Office of the DAR where the land is located. The procedures and requirements are detailed in DAR A.O. No. 6, Series of 1994.

We hope to have clarified the matter with you.

Very truly yours,

(SGD.) ARTEMIO A. ADASA, JR.

Undersecretary for Legal Affairs, and Policy and Planning