July 15, 1996

DAR OPINION NO. 55-96

DR. AUGUSTO A. CAMARA

Makati Medical Center (G-3)

Dela Rosa Street

Legaspi Village, Makati City

Dear Dr. Camara:

This refers to your letter seeking the amendment of DAR Administrative Order No. 8, Series of 1995 to require the waiver of the former landowner prior to the sale by farmer-beneficiaries of awarded lands.

You contend that you are directly affected by said AO since your ricelands were covered under PD 27 and you opted for a direct transfer scheme with your tenants. You believe that said transfer is a conditional sale, and that the conditions are:

a)         That the tenant will farm the land himself and not get tenants;

b)         That he/she will be an active member of a Samahang Nayon or cooperative;

c)         That he/she will continue to plant palay;

d)         That he/she will not convert the land to other uses; and

e)         That he/she will not be allowed to transfer the land to anyone except to the heirs and the government.

Your understanding is that under conditional sales the vendor may waive the conditions agreed upon; that AO 8, however, practically violates all of said conditions; that although in conditional sales, the vendor may waive the conditions agreed upon, AO 8 does not provide for such waiver; and that AO 8 is therefore defective because it allows the conditions of a conditional sale to be voided, to the possible prejudice of the landowner.

It is submitted that the suggested amendment of DAR AO 8, Series of 1995 is no longer necessary.

At the outset, please be clarified that AO 8, Series of 1995 was issued, following the issuance of Executive Order No. 228 dated 17 July 1987 which provides in Section 6 thereof that ownership of lands acquired by a farmer-beneficiary may be transferred after full payment of amortizations. Otherwise stated, it is the law, specifically EO 228, that allows said transfer by farmer-beneficiaries, and AO 8 clarifies said provision, precisely to prevent the indiscriminate transfer of awarded lands. Moreover, under Presidential Decree No. 27, as amended by EO 228, the tenant-farmers are deemed full-owners as of 21 October 1972 of the land they acquired by virtue of said Decree. Full ownership is, however, transferred to the tenant beneficiary upon full payment of the compensation on the land.

Applying the aforecited provisions to your landholding placed under OLT coverage and subject of the direct transfer agreement between you and your tenant, it is clear that your tenant cannot transfer said property to another unless he has fully paid the compensation thereon pursuant to said agreement.

Finally, we wish to invite your attention to Policy Statement No. 2 of DAR AO 8 which clarifies that although the transfer of awarded lands is allowed, the productivity of the land shall be maintained, and any change in the nature of its use shall not be permitted except with the approval of the DAR under its rules on conversion or exemption.

We hope to have clarified matters with you.

Very truly yours,

(SGD.) LORENZO R. REYES

OIC-USEC
LAFMA

Copy furnished:

OSEC

Document No. 96040317