October 23, 1996

DAR OPINION NO. 94-96

Atty. Jose C. Llames

Regional Director

DAR — Region VII

Standard Chartered Bank Bldg.

Corner Magallanes & P. Burgos Sts.

Cebu City

Dear Director Llames:

This has reference to the letter of Mrs. Dulce M. Abanilla, General Manager of Metropolitan Cebu Water District (MCWD) seeking opinion on the queries posed therein, to wit:

a)         Whether or not Metropolitan Cebu Water District (MCWD), being a government-owned corporation is bound to comply with the requirements pre-condition to the issuance of a DAR Clearance as a transferee.

b)         If the answer is in the negative, what are the requirements for such exemption.

Anent the first query, as mandated by law the compliance with the requirements prior to the issuance of DAR Clearance is mandatory. This is so because DAR Clearance serves as a safeguard against circumvention of R.A. 6657 (Comprehensive Agrarian Reform Law). Specifically, it signifies that the sale, transfer or conveyance covered thereby is not in contravention of R.A. 6657, and therefore, registration of the subject property follows as a matter of course.

Moreover, Section 6 of R.A. 6657 expressly provides that "no person may own or retain, directly or indirectly, any public or private agricultural land . . . but in no case shall retention by the landowner exceed five (5) hectares. The aforequoted provision underscores the mandates of the law relative to retention area. This prohibition holds true regardless of whether the transferee is a natural or juridical person as the law uses the term "person" in generic sense. As MCWD is contemplating to expand its operations, the same is duty bound to comply with the requirements prescribed by law prior to the issuance of DAR Clearance for the tenor of the law is couched in mandatory character, thus, implying that no one is exempted from complying with the requirement for DAR Clearance. Nevertheless, said prohibition does not foreclose the right of MCWD to acquire additional properties needed for its expansion so long as it complies with the requirements of the power of eminent domain or the power of expropriation.

Anent the second query, DAR Administrative Order No. 1, Series of 1989 (c) enumerates the transactions that may be registered by the Register of Deeds even without clearance from the Department of Agrarian Reform, to wit:

1)        Deed of extra judicial partition of the property of a deceased who died prior to June 15, 1988.

2)        Deed of partition of property owned in common by co-owners prior to June 15, 1988.

3)        Sub-division of title without change of ownership.

4)        Deed of real estate mortgage executed by the original landowner or beneficiary.

Please be guided accordingly.

Very truly yours,

(SGD.) LORENZO R. REYES

OIC-Undersecretary
LAFMA

Copy furnished:

Ms. Dulce M. Abanilla

General Manager

Metropolitan Cebu Water District

M.C. Briones — P. Burgos St.

Cebu City