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COVERAGE OR SCOPE
Agricultural Leasehold shall apply The REQUISITES FOR COVERAGE Scope – All PUBLIC and PRIVATE
to all tenanted agricultural lands, under OPERATION LAND Agricultural Lands regardless of tenurial
including but not limited to the TRANSFER (OLT) program are the arrangement and commodity produced,
following – following: including lands of the public domain
suitable for agriculture. (Sec. 4 (1), RA
1. Retained areas under R.A. 6657 1. The land must be DEVOTED to 6657)
and P.D. 27; RICE or CORN crops; and
2. Tenanted Agricultural Lands not 2. There must be a system of SHARE Specific lands covered by CARP.
yet acquired for distribution under CROP or LEASE TENANCY 1. All alienable and disposable lands of
CARP pursuant to RA 6657; obtaining therein. the public domain devoted to or
3. All tenanted areas under Section suitable for agriculture
10 of RA 6657 which may be If either of these requisites is 2. All lands of the public domain in
covered by this Order. ABSENT, the land is NOT COVERED excess of the specific limits as
(Administrative Order No. 4, Series under OLT. Hence, a landowner determined by Congress in the
of 1989) NEED NOT APPLY FOR preceding paragraph;
RETENTION, where his ownership 3. All other lands owned by the
It shall be unlawful for the tenant, over the entire landholding is INTACT Government devoted to or suitable
whenever the area of his holding is and UNDISTURBED. (Euclosia Daez for agriculture; and
five hectares or more, or is of and/or Her Heirs represented by 4. All private lands devoted to or
sufficient size to make him and the Edriano D. Daez vs. the Hon. CA, et suitable for agriculture regardless of
members of his immediate farm al., 325 SCRA 857). the agricultural products raised or
household fully occupied in its that can be raised thereon.
cultivation, to CONTRACT TO Rule 1
WORK at the same time on TWO Landed estates or landholdings PRIORITIES – The DAR, in coordination
OR MORE SEPARATE HOLDINGS larger than 24 hectare (LOI 46 with the PARC shall plan and program
belonging to different landholders (December 7, 1972) - covered by the acquisition and distribution of all
under any system of tenancy OLT and there is no retention to the agricultural lands through a period of ten
WITHOUT THE KNOWLEDGE AND landowner. (10) years from the effectively of this Act.
CONSENT of the landholder with Land shall be acquired and distributed
whom he first entered into tenancy Rule 2 as follows:
relationship. (Par. 1, Sec. 24, republic Landholding of 24 hectares or less
Act No. 1199) (but above 7 hectares (LOI 46 (ibid) Phase One:
and LOI 227 (November 16, 1974) 1. Rice and corn land under PD 27;
covered by OLT but landowner is 2. Idle and abandoned lands
entitled to retention except if LOI 474 3. Private lands voluntarily offered by
(October 21, 1976) applies. the owners for agrarian reform;
4. Foreclosed land by government
Rule 3 financial institutions;
Landholding of seven (7) hectares or 5. Land acquired by the Presidential
less is EXEMPTED from OLT except Commission on Good Government;
if LOI 474 is applicable under the and
following circumstances:
• Landowner owns other 6. All other lands owned by the
agricultural land of more Government devoted to or suitable for
than seven hectares in agriculture
aggregate area, or These shall be acquired and
• he owns COMMERCIAL, distributed immediately upon
INDUSTRIAL, RESIDENTIAL effectivity of the Act, with the
or URBAN LAND where he implementation to be completed
derive an adequate income, within a period of not more than four
DAR Memo, Circular No. 11, (4) years (Sec. 7, par. 2, RA 6657)
s. 1978 (April 21, 1978)
Adequate income is at least Phase Two:
FIVE THOUSAND (P5000.00) 1. All Disposable and alienable public
PESOS per annum. (Gross agricultural lands;
Income). 2. All Arable public agricultural lands
under agro-forest, pasture and
agricultural leases already cultivated
and planted for crops in accordance
with Sec. 6, Art. XIII of the Constitution;
3. All public agricultural lands which are
opened for new development and
resettlement; and
4. All private agricultural lands in excess
of fifty (50) hectares
These shall be distributed immediately
upon the effectivity of the Act, with the
implementation to be completed within a
period of not more than four (4) years.
Phase Three:
All private AGRICULTURAL LANDS
commencing with LARGE landholdings
and proceeding to MEDIUM and SMALL
landholding under the following schedules:
a) Landholdings ABOVE 24 hectares up
to 50 hectares to begin on the fourth
year from effectivity of this act and to
be completed within three years; and,
b) Landholdings from the RETENTION
LIMIT up to 24 hectares, to begin on
the sixth year from effectivity of this
Act and to be completed within four
year.
EXEMPTION OR EXCLUSION FROM COVERAGE
Absence of any of the six (6) Lands not covered by PD No. 27. Lands not covered by CARP
Essential Elements of Tenancy
Relationship: 1. Private agricultural lands which are 1. Those which are not suitable for
NOT PRIMARILY DEVOTED TO agriculture or those which are classified
1. The parties are the landholder RICE OR CORN, or as mineral, forest residential,
and the tenant; 2. There is NO SYSTEM OF SHARE commercial or industrial lands. (Sec. 3.
2. The subject is agricultural land; CROP OR LEASE TENANCY ©, RA 6657);
3. There is consent; obtaining in the landholding. (Daez, 2. Those which have been classified and
4. The purpose is agricultural vs. CA, IBID). approved as NON-AGRICLTURAL prior
production; to June 15, 1988. (DOJ Opinion No. 44,
5. There is personal cultivation; S. 1990)
6. There is sharing of harvest or 3. Those which are EXEMPT pursuant to
payment of rentals. (Caballes vs. Sec. 10, RA 6657.
DAR, Qua vs. Court of Appeals) 4. Those which are devoted to poultry,
swine or livestock-raising as of June
15, 1988 pursuant to the Supreme
Court ruling on Luz. Farms vs. The Hon.
Secretary of Agrarian Reform (192
SCRA 51);
5. Fishponds and prawn farms exempted
pursuant to R.A. No. 7881, and its
implementing Administrative Order No.
3, Series of 1995;
6. Those which are retained by the
landowners;
7. Those lands or portions thereof under
the coverage of EO 407 but found to be
no longer suitable for agriculture and
therefore, could not be given appropriate
valuation by the LBP as determined by
DAR/LBP; and
8. Those lands declared by Presidential
Proclamations for certain uses other
than agricultural.
RETENTION
In Leasehold Tenancy, the The REQUISITES for the exercise by Rules and Procedures Governing the
Landowner or agricultural lessor the landowner of his RIGHT OF Exercise of Retention Rights by
RETAIN OWNERSHIP of the subject RETENTION are the following: Landowners and Award to Children
landholding. under Sec. 6 of RA 6657 (A.O. No. 11,
1. The land must be DEVOTED TO Series of 1990; and A.O. No. 2, S. 2003)
The landowner EXERCISES the RICE OR CORN CROPS;
ATTRIBUTED OF OWNERSHIP. 2. There must be a system of share- 1. Landowners whose landholding are
Under Art. 428 of the New Civil crop or lease tenancy obtaining covered by CARP may retain an area
Code. The OWNER has the RIGHT there. of FIVE (5) hectares. In addition, each
TO DISPOSE OF a thing without 3. The size of the landholding MUST of his children, (legitimate, illegitimate
other limitation than those imposed NOT EXCEED TWENTY FOUR or adopted may be AWARDED three
by law. As an incident of ownership, (24) hectares provided that at least (3) hectares as PREFERRED
Therefore, there is nothing to prevent seven (7) hectares thereof are BENEFICIARY provided –
a landowner from DONATING his covered lands and more than seven
NAKED TITLE TO THE LAND. (7) hectares of it consist of “other a. That the child was at least 15
However, the new owner MUST agricultural lands.” years of age on the June 15,
RESPECT THE RIGHT OF THE 1988 (RA 6657-effectivity); and
TENANT. Right of Retention by Landowners b. The child was actually tilling
The agricultural leasehold relation (Supplemental Guideline A.O. No. 04, the land or directly managing
under this Code shall not be Series of 1991). the farmland from June 15,
extinguished by MERE EXPIRATION 1988 to the filing of the
OF THE TERM OR PERIOD in a The policy statements are as follows: application for retention and/or
leasehold contract nor by the SALE, a. Landowners covered by PD 27 are at the time of acquisition of the
ALIENATION OR TRANSFER of the entitled to retain SEVEN hectares, land under CARP.
legal possession of the landholding. In except those whose entire
case the agricultural lessor SELLS, tenanted rice and corn lands are 2. Retention of husband and wife:
ALIENATES, OR TRANSFER the subject to acquisition and a. For marriages covered by the New
legal possession of the landholding, distribution under OLT. Civil Code, the spouses who
the PURCHASER OR TRANSFEREE owns only CONJUGAL
thereof shall be subrogated to the AN OWNER MAY NOT RETAIN PROPERTIES may retain a total
right and substituted to the UNDER THE FOLLOWING of five (5) hectares unless there is
obligations of the agricultural lessor CASES: an agreement for the JUDICIAL
(see. 10, RA 3844) SEPERATION OF PROPERTIES.
i. If he as of October 21, 1972 However, if either or both of them
owned more than 24 hectares are landowners in their respective
of tenanted rice or corn lands; rights (capital and/or paraphernal)
or they may retain not more than five
ii. By virtue of LOI 474, if he as of (5) hectares each from their
21 October 1972 owns less respective landholdings. In no
than 24 hectares of tenanted case, however, shall the total
rice but additionally owned the retention of such a couple exceed
follows: 10 hectares, and
• Other agricultural land of
more than seven hectares, b. 2. For marriage covered by the
whether tenanted or not, New Family Code (August 3,
whether cultivated or not, 1988), a husband owning capital
and regardless of the income property and/or a wife owning
derived therefrom; paraphernal property may retain
• Land use for commercial, not more than five (5) hectares
industrial, residential or each provided they execute a
other urban purposes, from JUDICIAL SPERATION OF
which he derives adequate PROPERTIES prior to entering
income to support himself the marriage. In the absence of
and his family such an agreement all properties
(capital, paraphernal and
b. Landowners who filed their conjugal) shall be considered held
application for retention BEFORE in absolute community.
27 August 1985, the deadline set by
Administrative Order No. 1, Series
of 1985, may retain not more than
seven hectares of their landholding
covered by PD 27 regardless of
whether or not they complied with
LOI Nos. 41, 45, and 52.
BENEFICIARIES
The beneficiaries under Republic Act The BENEFICIARIES of Presidential The lands covered by the CARP shall be
No. 1199, Republic Act No. 3844 as Decree No. 27 are TENANT- distributed as much as possible to
amended by Republic Act No. 6389 FARMERS, thus: landless residents of the same
are SHARE-TENANT OR barangay, or in the absence thereof,
AGRICULTURAL LESSEES “This shall apply to TENANT- landless resident of the same
(TENANTS). Thus: FARMERS of PRIVATE municipality in the following order of
AGRICULTURAL LANDS priority:
“In the INTERPRETATION AND PRIMARILY DEVOTED TO RICE
ENFORCEMENT of this Act and other OR CORN under a SYSTEM OF a. agricultural lessees and share
laws as well as of the stipulation SHARE-CROP or LEASE- tenants;
between the landholder and the TENANCY, whether classified as b. regular farmworkers;
tenant the COURTS AND landed estate or not. (Par. 5, c. seasonal farmworkers;
ADMINISTRATIVE OFFICIALS Presidential Decree No. 27). d. other farmworkers;
SHALL RESOLVE ALL GRAVE e. actual tillers or occupants of public
DOUBTS IN FAVOR OF THE lands;
TENANT. (Sec. 56, Republic act No. f. collectives or cooperatives of the
1199) above beneficiaries; and
g. others directly working on the land.
3. If the land is cultivated for a period Basic Formula for the valuation of
of less than three years, the lands covered by VOS and CA –
initial consideration is based on
the average normal harvest LV = (CNI x 0.6) + (CS x 0.3) + (MV x
during the preceeding years 0.1)
when the land was actually
cultivated or on the harvest of where:
the first year if newly cultivated, LV = Land Value
and the harvest is normal. CNI = Capitalized Net Income
CS = Comparable Sales
4. After the lapse of the first three MV = Market Value per Tax
normal harvest, the final Declaration
consideration shall be based on
the average normal harvest The above formula shall be used if all
during these three preceding three factors are present, relevant and
agricultural years. applicable.
5. In the absence of any agreement When the CS factor is not present and
as to the rental, the maximum CNI and MV are applicable, the formula shall
allowed shall be applied. be:
LV = (CNI x 0.9) + (MV x 0.1)
6. If Capital Improvement is
introduced not by the lessee to When the CNI factor is not present and
increase productivity, the rentals CS and MV are applicable, the formula
shall be increased proportionally shall be:
to the consequent increase in LV = (CS x 0.9) + (MV x 0.1)
production due to the
improvement. When both CS and CNI are not present
and only MV is applicable, the formula
7. In case of Disagreement the shall be;
Court shall determine the LV = (MV x 2)
reasonably increase in rental.