LEASEHOLD TENANCY TENANT EMANCIPATION DECREE
I - LEGAL BASIS:
1.Republic Act No. 3844- Agricultural Land
Reform Code (August 8, 1963)
2.Republic Act No. 6389- Code of Agrarian
Reform (September 10, 1971)
3.Presidential Decree No. 1425-Amending
Presidential Decree No. 1040 by Strengthening the
Prohibition against Agricultural Share, Tenancy and
Providing Penalties for Violation thereof. (June 10,
1978)
4.Section 12, Republic Act No. 6657-
Comprehensive Agrarian Reform Law of 1988.
II – COVERAGE OR SCOPE
Agricultural Leasehold shall apply to all
tenanted agricultural lands, including but not limited to
the following –
A. Retained areas under R.A. 6657 and P.D. 27;
B. Tenanted Agricultural Lands not yet
acquired for distribution under CARP pursuant to RA
6657;
C. All tenanted areas under Section 10 of
RA 6657 which may be covered by this Order.
(Administrative Order No. 4, Series of 1989)
III - AREA OF COVERAGE
It shall be unlawful for the tenant, whenever the area
of his holding is five hectares or more, or is of
sufficient size to make him and the members of his
immediate farm household fully occupied in its
cultivation, to CONTRACT TO WORK at the same
time on TWO OR MORE SEPARATE HOLDINGS
belonging to different landholders under any system
of tenancy WITHOUT THE KNOWLEDGE AND
CONSENT of the landholder with whom he first entered
COMPREHENSIVE AGRARIAN REFORM PROGRAM
I - LEGAL BASIS:
1. Presidential Decree No. 27 – Tenant’s
Emancipation Decree (October 21, 1972)
2. Letter Instruction No. 474-PLACING UNDER OLT
TENANTED RICE/CORN LANDS SEVEN
HECTARES OR LESS IN AREA UNDER CERTAIN
CONDITION (OCTOBER 21, 1976)
II – COVERAGE OR SCOPE
The REQUISITES FOR COVERAGE under
OPERATION LAND TRANSFER (OLT) program are
the following:
1. The land must be DEVOTED to RICE or
CORN crops; and
2. There must be a system of SHARE CROP or
LEASE TENANCY obtaining therein.
If either of these requisites is ABSENT, the
land is NOT COVERED under OLT. Hence, a
landowner NEED NOT APPLY FOR RETENTION,
where his ownership over the entire landholding is
INTACT and UNDISTURBED.
III - AREA OF COVERAGE
RULES ON COVERAGE OF LANDS UNDER PD 27.
Rule 1
Landed estates or landholdings larger than 24 hectare
(LOI 46 (December 7, 1972) - covered by OLT and
there is no retention to the landowner.
Rule 2
Landholding of 24 hectares or less (but above 7
hectares (LOI 46 (ibid) and LOI 227 (November 16,
1974) covered by OLT but landowner is entitled to
retention except if LOI 474 (October 21, 1976) applies.
I - LEGAL BASIS:
Presidential Proclamation No. 131-Instituting a
Comprehensive Agrarian Reform Program (July 22,
1987)
2. Republic Act No. 6657 – An Act instituting a
Comprehensive Agrarian Reform Program to Promote
Social Justice and Industrialization, providing the
Mechanism for its Implementation and other purposes.
(June 15, 1988)
II – COVERAGE OR SCOPE
COVERAGE OF CARL 1988
Scope – All PUBLIC and PRIVATE Agricultural Lands
regardless of tenurial arrangement and commodity
produced, including lands of the public domain suitable
for agriculture. (1st par. Sec. 4, RA 6657)
Specific lands covered by CARP.
a. All alienable and disposable lands of the public
domain devoted to or suitable for agriculture
b. All lands of the public domain in excess of the
specific limits as determined by Congress in
the preceding paragraph;
c. All other lands owned by the Government
devoted to or suitable for agriculture; and
d. All private lands devoted to or suitable for
agriculture regardless of the agricultural
products raised or that can be raised
thereon.
III - AREA OF COVERAGE
PRIORITIES – The DAR, in coordination with the PARC
shall plan and program the acquisition and distribution
of all agricultural lands through a period of ten (10) years
from the effectively of this Act. Land shall be acquired and
distributed as follows:
 into tenancy relationship. (Par. 1, Sec. 24, Republic Act
No. 1199)
IV – EXEMPTION OR EXCLUSION FROM COVERAGE
Absence of any of the six (6) Essential Elements of
Tenancy Relationship.
Essential Elements of Tenancy Relationship:
1. The parties are the landholder and the tenant;
2. The subject is agricultural land;
3. There is consent;
4. The purpose is agricultural production;
5. There is personal cultivation;
6. There is sharing of harvest or payment of
rentals.
V - RETENTION
In Leasehold Tenancy, the Landowner or agricultural
lessor RETAIN OWNERSHIP of the subject landholding.
The landowner EXERCISES the ATTRIBUTED OF
OWNERSHIP. Under Art. 428 of the New Civil Code. The
OWNER has the RIGHT TO DISPOSE OF a thing without
other limitation than those imposed by law. As an incident of
ownership, Therefore, there is nothing to prevent a landowner
from DONATING his NAKED TITLE TO THE LAND. However,
the new owner MUST RESPECT THE RIGHT OF THE
TENANT.
The agricultural leasehold relation under this Code shall
not be extinguished by MERE EXPIRATION OF THE
TERM OR PERIOD in a leasehold contract nor by the
SALE, ALIENATION OR TRANSFER of the legal
possession of the landholding. In case the agricultural
lessor SELLS, ALIENATES, OR TRANSFER the legal
possession of the landholding, the PURCHASER OR
TRANSFEREE thereof shall be subrogated to the right
Phase One:
Rule 3
Landholding of seven (7) hectares or less is EXEMPTED
from OLT except if LOI 474 is applicable under the
following circumstances:
Landowner owns other agricultural land of more
than seven hectares in aggregate area, or he owns
COMMERCIAL, INDUSTRIAL, RESIDENTIAL or
URBAN LAND where he derive an adequate
income, DAR Memo, Circular No. 11, s. 1978 (April
21, 1978) Adequate income is at least FIVE
THOUSAND (P5000.00) PESOS per annum. (Gross
Income).
IV – EXEMPTION OR EXCLUSION FROM COVERAGE
Lands not covered by Presidential Decree No. 27.
Phase Two:
1. Private agricultural lands which are NOT PRIMARILY
DEVOTED TO RICE OR CORN, or
2. There is NO SYSTEM OF SHARE CROP OR LEASE
TENANCY obtaining in the landholding.
V - RETENTION
*The REQUISITES for the exercise by the landowner of
his RIGHT OF RETENTION are the following:
1. The land must be DEVOTED TO RICE OR CORN
CROPS;
2. There must be a system of share-crop or lease
tenancy obtaining there.
3. The size of the landholding MUST NOT EXCEED
TWENTY FOUR (24) hectares provided that at least
seven (7) hectares thereof are covered lands and
more than seven (7) hectares of it consist of “other
agricultural lands.” Daez vs. CA, Ibid)
Right of Retention by Landowners under Presidential
Decree No. 27. Supplemental Guideline A.O. No. 04, Series
of 1991).
1.Rice and corn land under PD 27;
2.Idle and abandoned lands
3.Private lands voluntarily offered by the
owners for agrarian reform;
4.Foreclosed land by government financial
institutions;
5.Land acquired by the Presidential
Commission on Good Government; and
6.All other lands owned by the Government
devoted to or suitable for agriculture
These shall be acquired and distributed
immediately upon effectivity of the Act, with the
implementation to be completed within a
period of not more than four (4) years (Sec. 7,
par. 2, RA 6657)
1. All Disposable and alienable public
agricultural lands;
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 forth year from
effectivity of this act and to be completed
within three years; and,
b) Landholdings from the RETENTION LIMIT
 and substituted to the obligations of the agricultural
lessor (see. 10, RA 3844)
VI - BENEFICIARIES
The beneficiaries under Republic Act No. 1199,
Republic Act No. 3844 as amended by Republic Act No.
6389 are SHARE-TENANT OR AGRICULTURAL
LESSEES (TENANTS). Thus:
“In the INTERPRETATION AND ENFORCEMENT of
this Act and other laws as well as of the stipulation between
the landholder and the tenant the COURTS AND
ADMINISTRATIVE OFFICIALS SHALL RESOLVE ALL
GRAVE DOUBTS IN FAVOR OF THE TENANT. (Sec. 56,
Republic act No. 1199)
VII - AWARD CEILING
The share-tenant/agricultural lessee who is already
cultivating a landholding with an area of FIVE (5)
HECTARES or more or of sufficient size to make him and
member of his immediate farm household fully occupied in
its cultivation is prohibited to CONTRACT TO WORK at the
same time two or more separated holding belonging to
different landholder WITHOUT THE KNOWLEDGE AND
CONSENT OF THE LANDOWNER/AGRICULTURAL
LESSOR (Par. I, Sec. 24, Republic Act. No. 1199)
VIII - PAYMENT FOR THE COST OF THE LAND.
In the exercise of RIGHT OF PRE-EMPTION by the
agricultural lessee-tenant, he must EITHER TENDER
PAYMENT OF, OR PRESENT A CERTIFICATE FROM
THE LBP that it shall make payment under Section 80 of
Republic Act No. 3844 (10% CASH and 90% in six percent,
tax free, redeemable bonds issued by the LBP.) If the
landowner refuses to accept TENDER or PRESENTMENT,
the agricultural lessee may CONSIGN it in COURT, (Sec.
11, Republic Act No. 3844 as amended by Republic Act No.
6389.
The REDEMPTION PRICE shall be, the
REASONABLE PRICE OF THE LAND at the time of sale.
(Sec. 12, Republic Act No. 3844 as amended by Republic
The policy statements are as follows:
a. Landowners covered by PD 27 are entitled to retain
SEVEN hectares, except those whose entire
tenanted rice and corn lands are subject to
acquisition and distribution under OLT.
AN OWNER MAY NOT RETAIN UNDER THE
FOLLOWING CASES:
a) If he as of October 21, 1972 owned more than 24
hectares of tenanted rice or corn lands; or
b) By virtue of LOI 474, if he as of 21 October 1972
owns less than 24 hectares of tenanted rice
but additionally owned the follows =
 Other agricultural land of more than
seven hectares, whether tenanted or not,
whether cultivated or not, and regardless
of the income derived therefrom; or
 Land use for commercial, industrial,
residential or other urban purposes,
from which he derives adequate income
to support himself and his family
b. Landowners who filed their application for retention
BEFORE 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.
Landowners who filed their application
AFTER 27 August 1985 but complied with the
requirement of LOI No. 41, 45 and 52 shall
likewise be entitled to such a seven hectares
retention area.
However landowner who filed their application
for retention AFTER the 27 August 1985 deadline
and DID NOT COMPLY with the requirements of
LOI Nos. 41, 45, and 52 shall only be entitled to a
maximum of five (5) hectares as retention area.
c. A landowner WHO HAS DIED must have
manifested during his lifetime his intention to
up to 24 hectares, to begin on the sixth year
from effectivity of this Act and to be
completed within four year.
IV – EXEMPTION OR EXCLUSION FROM COVERAGE
LANDS NOT COVERED BY CARP
1. Those which are not suitable for agriculture or those
which are classified as mineral, forest residential,
commercial or industrial lands. (Sec. 3., RA 6657);
2. Those which have been classified and approved as
NON-AGRICLTURAL prior to June 15, 1988. (DOJ
Opinion No. 44, S. 1990)
3. Those which are EXEMPT pursuant to Sec. 10, RA
6657.
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.
V - RETENTION
Rules and Procedures Governing the Exercise of Retention
Rights by Landowners and Award to Children under Sec. 6
 Act No. 6389)
IX -TRANSFERABILITY OF LANDHOLDING
1. Sale, Alienation or Transfer of the legal
possession of the landholding.
2. Extinguishment of Agricultural Leasehold
Relations (Sec. 8, RA 3844)
A. ABANDONMENT of the landholding without the
knowledge of the agricultural lessor. (Teodoro vs.
Macaraeg, 27 SCRA 7 (1969) To constitute
abandonment there must be an absolute
relinquishment of the premises of the tenant. This
"overt act" must be coupled with his intention to do so
"which is carried into effect," (Philippine Labor and
Social Legislation, Martin, 70 Ed. Pp. 405-406).
Abandonment to validly terminate tenancy relationship
is characterized by:
(a) an INTENT to ABANDON, and
(b) an OVERT ACT to carry out such intention
There must be, therefore, NO ANIMUS
REVERTENDI on the part of the tenant (Labor,
Agrarian and Social Legislation, Montemayor, 2nd Ed.,
1968, pp. 54-55)
B. VOLUNTARY SURRENDER of the landholding
by the agricultural lessee, written notice of
which shall be served three months in advance
(Nisnisan, et al., vs. CA, 294 SCRA 173 (1998).
As a mode of extinguishing tenancy
relationship it connotes a decision in the part of
the tenant to return the possession of the
landholding and relinquished his right as tenant
thereon uninfluenced by any compelling factor,
coming particularly from the landholder. For
surrender to be valid, there must be (a) an
intention to abandon, and (b) an external act or
an omission to act, by which such intention is
carried out into effect. When a tenant
voluntarily yields the land, he terminates the
tenancy relationship by his unilateral act.
NOTE: SUBLEASING by the agricultural lessee
exercise his right of retention prior to 23
AUGUST 1990 (The finality of the Supreme
Court decision in the case "Association of Small
Landowners of the Philippines, Inc. et al. vs.
Honorable Secretary of Agrarian Reform) to
allow his heirs to now exercise such right under
these Guidelines. Said heirs must show proof of
the original landowners intention.
The heirs may also exercise the original
landowners' right of retention if they can prove
that the decedent HAD NO KNOWLEDGE of
OLT coverage over the subject property.
VI - BENEFICIARIES
The BENEFICIARIES of Presidential Decree No. 27 are
TENANT-FARMERS, thus:
“This shall apply to TENANT-FARMERS of
PRIVATE AGRICULTURAL LANDS PRIMARILY
DEVOTED TO RICE OR CORN under a SYSTEM OF
SHARE-CROP or LEASE-TENANCY, whether
classified as landed estate or not. (Par. 5, Presidential
Decree No. 27).
VII - AWARD CEILING
“The tenant-farmers, whether in land classified as
landed estate or not shall be DEEMED OWNER of a
portion constituting of family-size farm of FIVE (5)
hectares if not irrigated and THREE (3) HECTARES
IF IRRIGATED. (Par. 6, Presidential Decree No. 27)
VIII - PAYMENT FOR THE COST OF THE LAND.
The tenant shall pay for THE COST OF THE LAND,
including interest of six (6) percent per annum in
FIFTEEN (15) YEARS of fifteen (15) equal annual
amortizations.
NOTE: The period in extended to twenty (20) years
equal annual amortization under Sec. 6, E.O.. 228
of July 17, 1987 by Pres. Corazon C. Aquino.
IX -TRANSFERABILITY OF LANDHOLDING
of RA 6657 (A.O. No. 11, Series of 1990; and A.O. No. 2, S.
2003)
A. Landowners whose landholding are covered by CARP
may retain an area of FIVE (5) hectares.
In addition, each of his children, (legitimate,
illegitimate or adopted may be AWARDED three (3)
hectares as PREFERRED BENEFICIARY provided-
1. That the child was at least 15
years of age on the June 15, 1988 (RA 6657-
effectivity); and
2. The child was actually tilling
the land or directly managing the farmland
from June 15, 1988 to the filing of the
application for retention and/or at the time of
acquisition of the land under CARP.
Retention of husband and wife:
1. For marriages covered by the New Civil Code,
the spouses who owns only CONJUGAL
PROPERTIES may retain a total of five (5)
hectares unless there is an agreement for the
JUDICIAL SEPERATION OF PROPERTIES.
However, if either or both of them are
landowners in their respective rights (capital
and/or paraphernal) they may retain not more
than five (5) hectares each from their
respective landholdings. In no case, however,
shall the total retention of such a couple
exceed 10 hectares, and
2. For marriage covered by the New Family
Code (August 3, 1988), a husband owning
capital property and/or a wife owning
paraphernal property may retain not more
than five (5) hectares each provided they
execute a JUDICIAL SPERATION OF
PROPERTIES prior to entering the marriage.
In the absence of such an agreement all
properties (capital, paraphernal and conjugal)
shall be considered held in absolute
community.
VI - BENEFICIARIES
QUALIFIED BENEFICIARIES.- The lands covered by
 is also a ground for the extinguishments of Agricultural
Leasehold Relations. (Par.(2), Sec. 27, Republic Act No.
3844).
X - EVIDENCE OF RIGHT/TITLE OVER THE LANDHOLDING.
AGRICUTLURAL LEASEHOLD CONTRACT IN
GENERAL.-
- The agricultural lessor and the agricultural lessee
shall be FREE to ENTER into any kind of TERMS,
CONDITIONS or STIPULATIONS in a LEASEHOLD
CONTRACT as long as they are not contrary to LAW,
MORALS OR PUBLIC POLICY. (Sec. 15 Republic Act
No. 3844).
Except in case of mistake, violence,
intimidation, undue influence, or fraud, an
AGRICULTURAL CONTRACT reduced in writing and
registered as hereinafter provided, SHALL BE
CONCLUSIVE BETWEEN THE CONTRACTING
PARTIES, if not DENOUNCED OR IMPUGNED
WITHIN THIRTY DAYS AFTER REGISTRATION (Sec.
17, Republic Act No. 3844)
XI - MODES OF TRANSFER OF THE LAND TO THE
TENANT OR BENEFICIARY
The landowner-agricultural lessor can FREELY
AND VOLUNTARILY TRANSFER the landholding to
the agricultural lessor by way of:
1. Sale
2. Donation
3. Succession – the agricultural lessee as DEVISEE
to the testator’s free portion in the will.
However, the limitation imposed by law on his right
to acquired must be observed, i.e. Legal prohibition on
the acquisition of property
By operation of law, the agricultural-lessee can
acquired ownership of the subject landholding by the
exercise of the following rights.
The TITLE to the land owned by the tenant shall
not be transferable except BY HEREDITARY
SUCCESSION or TO THE GOVERNMENT in
accordance with this Decree, the Code of Agrarian
Reform and other existing laws and regulation.
NOTE: Sec. 6, EO 228 provides, “Ownership of
lands acquired by farmer-beneficiary may be
transferred after full payment of amortization.
X - EVIDENCE OF RIGHT/TITLE OVER THE
LANDHOLDING.
The EMANCIPATION PATENT. Awarded to the
TENANT-BENEFICIARY CREATES a VESTED RIGHT
OF ABSOLUTE OWNERSHIP in the landholding – “a
right which has become fixed and established and is no
longer open to doubt or controversy. “
XI - MODES OF TRANSFER OF THE LAND TO THE
TENANT OR BENEFICIARY
The Mode of Transfer of lands Tenant-Beneficiaries under
Presidential Decree No. 27 are the following:
1. OPERATION LAND TRANSFER (OLT) under PD 27
and EO 228; and
Operation Land Transfer is the ORDERLY and
SYSTEMATIC TRANSFER of land from the
landowner to the tenant-farmer under Presidential
Decree No. 27.
2. DIRECT PAYMENT SCHEME (DPS). – The landowner
and the tenant-beneficiary can AGREE on the
DIRECT SALE terms and conditions which is not
onerous to the tenant-beneficiary.
XII - CONSIDERATION FOR THE USE OF VALUE OF THE
LAND.
The value if the land shall equivalent to two and
one half (2-1/2) times the AVERAGE HARVEST OF
the CARP shall be distributed as much a possible to
landless residents of the same barangay, or in the
absence thereof, landless resident of the same
municipality in the following order of priority:
a) agricultural lessees and share tenants;
b) regular farmworkers;
c) seasonal farmworkers;
d) other farmworkers;
e) actual tillers or occupants of public lands;
f) collectives or cooperatives of the above
beneficiaries; and
g) others directly working on the land.
(Par. 1, Sec. 22, RA 6657)
The children of landowners who are qualified under
Sec. 6 of this Act shall be given preference in the
distribution of the land of their parents; And, further, that
actual tenant-tillers in the landholding shall be ejected or
removed therefrom. (Par. 2, Sec.22, RA 6657).
“Distribution Limit – No qualified beneficiary may own
more than Three (3) hectares of agricultural land” (Sec. 23, RA
6657)
VII - AWARD CEILING
“Award Ceiling for Beneficiaries. – Beneficiaries shall
be awarded an area NOT EXCEEDING THREE (3)
HECTARES which may cover a CONTIGUOUS tract of land or
SEVERAL PARCELS of land cumulated up to the prescribed
award limits.” (Sec. 25, RA 6657).
VIII - PAYMENT FOR THE COST OF THE LAND.
Payment by Beneficiaries.- Lands awarded pursuant to
this Act shall be paid for the beneficiaries to the LBP in thirty
(30) annual amortizations at six percent (6%) per annum. The
payments for the first three (3) years after the award may be at
reduced amounts as established by the PARC: Provided, That
the first five (5) annual payments may not be more than five
percent (5%) of the value of the annual gross production as
established by the DAR. Should the scheduled annual
payments after the fifth year exceed ten percent (10%) of the
annual gross production and the failure to produce accordingly
 THREE NORMAL CROP YEARS IMMEDIATELY is not due to the beneficiary’s fault, the LBP may reduce the
1. Right of Pre-Emption; and PRECEDING THE PROMULGATION OF THIS interest rate or reduce the principal obligation to make the
2. Right of Redemption DEGREE. repayment affordable.

XII - CONSIDERATION FOR THE USE OF VALUE OF THE The LBP shall have a lien by way of mortgage on the land
LAND. awarded to the beneficiary; and this mortgage may be
foreclosed by the LBP for non-payment of an aggregate of
Consideration for the Lease of Agricultural lands: three (3) annual amortizations. The LBP shall advise the DAR
of such proceedings and the latter shall subsequently award
1. Not more than 25 per centum of the average normal the forfeited landholding to other qualified beneficiaries. A
harvest during the three agricultural years immediately beneficiary whose land, as provided herein, has been
preceding the date the leasehold was established. foreclosed shall thereafter be permanently disqualified from
becoming a beneficiary under this Act. (Sec.26, RA 6657).

2. Deductible items IX -TRANSFERABILITY OF LANDHOLDING

a. Seedlings
b. Cost of Harvesting Transferability of Awarded Lands.- lands acquired by
c. Cost of Threshing beneficiaries under this Act may not be sold, transferred or
d. Cost of Loading conveyed except through hereditary succession, or to the
e. Cost of Hauling government, or to the LBP, or to other qualified beneficiaries
f. Cost of Processing for a period of ten (10) years; Provided, however, That the
children or the spouse of the transferor shall have a right to
3. If the land is cultivated for a period of less than three repurchase the land from the government or LBP within the
years, the initial consideration is based on the average normal period of two (2) years. Due notice of the availability of the
harvest during the preceeding years when the land was land shall be given by the LBP to he Barangay Agrarian
actually cultivated or on the harvest of the first year if newly Reform Committee (BARC) of the barangay where the land is
cultivated, and the harvest is normal. situated. The Provincial Agrarian Reform Coordinating
Committee (PARCCOM), as herein provided, shall, in turn, be
4. After the lapse of the first three normal harvest, the given due notice thereof by the BARC.
final consideration shall be based on the average normal
harvest during these three preceding agricultural years. If the land has not yet been fully paid by the beneficiary,
the rights to the land may be transferred or conveyed, with
5. In the absence of any agreement as to the rental, the prior approval of the DAR, to any heir of the beneficiary or to
maximum allowed shall be applied. any other beneficiary who, as a condition for such transfer or
conveyance, shall cultivate the land himself. Failing
6. If Capital Improvement is introduced not by the compliance herewith, the land shall be transferred to the LBP
lessee to increase productivity, the rentals shall be increased which shall give due notice of the availability of the land in the
proportionally to the consequent increase in production due to manner specified in the immediately preceding paragraph.
the improvement.
In the event of such transfer to the LBP, the latter shall
7. In case of Disagreement the Court shall determine the compensate the beneficiary in one lump sum for the amounts
reasonably increase in rental. the latter has already paid, together with the value of
improvements he has made on the land.(Sec. 27, RA 6657).
8. Capital improvement refers to any permanent and
tangible improvement on the land that will result in increased X - EVIDENCE OF RIGHT/TITLE OVER THE
productivity. If done with the consent of the lessee, then the LANDHOLDING.
lease rental shall be increased proportionately.
The TITLES awarded to farmer-beneficiaries CARP are
the following:

1. Free Patent for Public Alienation and Disposable

lands;

2. CERTIFICATE OF LAND OWNERSHIP AWARD

(CLOA) for Resettlement sites:

3. STEWARDSHIP CONTRACT for Lands covered by

INTERGRATED SOCIAL FORESTRY PROGRAM
(ISFP); and

4. CLOA for Private of Agricultural Lands.

XI - MODES OF TRANSFER OF THE LAND TO THE

TENANT OR BENEFICIARY

The MODES OF ACQUIRING LANDS for distribution under

CARP:

a. COMPULSORY ACQUISITION (CA) (Sec. 16, RA

6657)
b. VOLUNTARY OFFER TO SELL (VOS) (Sec. 19,
RA 6657)
c. VOLUNTARY LAND TRANFER/DIRECT
PAYMENT SCHEME (VLT/DPS) (Sec. 20, RA
6657).

XII - CONSIDERATION FOR THE USE OF VALUE OF THE

LAND.

Factors/Criteria considered in determining just

compensation:

1. Cost of Acquisition of the land;

2. Current Value of like properties;
3. Nature of the land;
4. Actual use;
5. Income;
6. Sworn valuation by the landowner;
7. Tax Declaration;
8. Assessment made by government assessors;
 9. The social and economic benefits
contributed by the farmers, and
10.Non-payment of taxes or loans secured from any
government financing institution on the land.

Basic Formula for the valuation of lands covered by VOS

and CA –

LV = (CNI x 0.6) + (CS x 0.3) +

(MV x 0.1)

where:
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration

The above formula shall be used if all three

factors are present, relevant and applicable.

A.1. When the CS factor is not present and

CNI and MV are applicable, the formula shall be:

LV = (CNI x 0.9) + (MV x 0.1)

A.2. When the CNI factor is not present and

CS and MV are applicable, the formula shall be:

LV = (CS x 0.9) + (MV x 0.1)

A.3. When both CS and CNI are not present and only MV
is applicable, the formula shall be;

LV = (MV x 2)