March 11, 1997
DAR OPINION NO. 25-97
Acting PARO Ernesto B. Tan
Department of Agrarian Reform
Salvacion Bldg., Gen. Luna St.
Davao City
Dear PARO Tan:
This has reference to your request for clarification on the DAR policy regarding the following issues:
1. Where the mortgage loan granted by the creditor bank is greater than the LBP-LVO valuation made on the mortgaged property subject of the VOS; and
2. When does the interest on the mortgage loan cease to run, from the date of the filing of the VOS application as alleged by the landowner, or on the date of its approval by the Regional Director?
Anent your first query, in determining just compensation, the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declaration, and the assessment made by government assessors shall be considered. Owners of lands which have been the subject of mortgage may also secure a statement of account from the creditor which may recommend the settlement of the obligation through payment in Land Bank Bonds. Sec. 72 (b) of R.A. 6657 further provides that mortgages and other claims registered with the Register of Deeds shall be assumed by the government up to an amount equivalent to the landowner's compensation value as provided in this Act. If in the process of valuation, the amount of the property turns out to be lower than the amount of loan granted by the creditor bank, and the offeror does not agree with such valuation, he may bring the matter to the DAR Adjudication Board (DARAB) for the preliminary determination of just compensation and if he disagrees with the decision of the Board, he may elevate the matter to the Special Agrarian Court which shall have original and exclusive jurisdiction over all petitions for the final determination of just compensation to landowners.
Anent your second query, we would like to inform you that as of the moment, we have no definite policy or guidelines yet regarding the same. We would like to assure you, however, that your query would be given priority by the DAR Guidelines Drafting Committee the soonest time possible in order to remedy similar circumstances which may occur in the future.
Please be guided accordingly.
Very truly yours,
(SGD.) ARTEMIO A. ADASA, JR.
Undersecretary for Legal Affairs, and Policy and Planning