New expropriation law

By: Raul J. Palabrica - @inquirerdotnet

Philippine Daily Inquirer / 03:27 AM March 21, 2016

EXPROPRIATING private property for public use has been a pain in the neck for
the government, both national and local, due to ambiguities in the law and delays
in the judicial process.

To address these problems, President Aquino recently signed into law Republic
Act No. 10752, or “The Right-of-Way Act,” which aimed to facilitate the acquisition
of right-of-way (ROW) site or location for national government infrastructure
projects.

The law applies to all national government infrastructure projects and its public
service facilities, engineering works and service contracts, including those
undertaken by government-owned and -controlled corporations.

The government can acquire private real property for such projects through
donation, negotiated sale, expropriation and other modes of acquisition
authorized by existing laws.

Since negotiated sales and expropriations are often contentious and result in
delays, the law states in detail the procedures to be followed by the government
agency concerned and the time frames that the courts should observe in resolving
expropriation issues.

The idea is, time is of the essence in the acquisition of ROW sites so the process
should be completed as fast as possible without sacrificing the right to just
compensation of property owners.
Negotiated sale

Negotiated sale is the preferred mode in ROW acquisitions (unless the owner
agrees to donate the site) as it avoids going through the tedious process of
expropriation.

In negotiating the purchase of a property, the government agency is required to

offer compensation to the owner in an amount equivalent to the sum of (a) current
market value of the land, (b) replacement cost of structures and improvements on
it, and (c) current value of planted crops and trees.

For this purpose, the agency may engage the services of a government financial
institution with adequate experience in property appraisal, or an independent
property appraiser accredited by the Bangko Sentral ng Pilipinas (BSP), or a
professional association of appraisers recognized by the BSP.

The property appraisal will enable the agency to make a reasonable offer to the
owner and the latter will have no reason to complain that he is being short-
changed.

The owner has 30 days from receipt of the offer to buy his property whether or
not to accept it.

In an act of generosity, the law allows the payment of the replacement cost of
structures and improvements even if their owners “do not have legally recognized
rights to the land” on condition they are Filipino citizens, they do not own any real
property or other housing facility in any urban or rural area, and are not
professional squatters or members of a squatting syndicate, as defined in the
Urban Development and Housing Act of 1992.

Payment terms

If the owner agrees to the sale, 50 percent of the agreed price of the land and 70
percent of the price of the structures, improvements, crops and trees (in both
cases exclusive of unpaid real estate taxes) shall be paid by the agency upon the
signing of the deed of sale.
The balance of 50 percent for the land and 30 percent for the structures and
improvements shall be paid when the title to the land has been transferred to the
Republic of the Philippines and the land is completely cleared of structures,
improvements, crops and trees.

To sweeten the pot in negotiated sales, the capital gains tax payable from the sale
of the land and its improvements (which under existing laws is the seller’s
obligation), shall be paid by the agency for the account of the seller.

However, in case the owner refuses or fails to accept the offer of negotiated sale
within the 30-day period, the agency shall institute expropriation proceedings.

Unlike before when expropriation cases can be filed only by the Solicitor General
or Government Corporate Counsel, this time the action can be instituted by, in
addition to these offices, any government or private legal counsel that they may
deputize for that purpose.

Possession
Upon the filing of the expropriation complaint and the owner is notified of that
action, the agency shall immediately deposit with the court in favor of the owner
the amount equivalent to the sum of:

100 percent of the value of the land based on the current relevant zonal valuation
of the Bureau of Internal Revenue issued not more than three years prior to the
filing of the complaint

Replacement cost at current market value of the improvements and structures as

determined by the agency, a government financial institution with experience in
property appraisal, and an independent property appraisal accredited by the BSP.

Current market value of crops and trees located in the land as determined by a
government financial institution or an independent property appraiser.
Once payment is made, the court is required to immediately issue an order to the
agency to take possession of the land and start the implementation of the project.

If the writ is not issued within seven working days after payment has been
deposited in court, the agency’s lawyer can file a motion for the issuance of the
writ, and the court is obliged to issue it ex parte, or even without a hearing.

Anticipating that the owner may not accept the deposited payment, the law obliges
the court to determine the just compensation to be paid to the owner within 60
days from the date of the filing of the expropriation case.

The difference between the deposited payment and just compensation adjudged
by the court has to be paid by the agency as soon as the court’s decision becomes
final.

Hopefully, the new terms of payment and judicial procedures prescribed by the
law will result in the faster implementation of the government’s infrastructure
projects.

For comments, please send your e-mail to rpalabrica@inquirer.com.ph.

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