Title
2003 DAR Rules on Landowner Retention Rights
Law
Dar Administrative Order No. 02
Decision Date
Jan 16, 2003
This administrative order establishes revised rules and procedures for landowners in exercising their retention rights under existing agrarian reform laws, ensuring the protection of tenant farmers' rights while outlining specific criteria and timelines for retention applications.
landowner rights
retention rights
agrarian reform

Coverage and governing policies

  • These rules and procedures apply to all applications for retention under PD 27 and RA 6657 (Section 1).
  • Landowner retention is governed by policies allowing the landowner to choose the area to be retained, provided the area is compact and contiguous and least prejudicial to the entire landholding and the majority of the farmers therein (Section 2.1).
  • The landowner must exercise retention by signifying intention to retain within sixty (60) days from receipt of notice of coverage; failure constitutes a waiver (Section 2.2).
  • After manifesting intention, the landowner must indicate the exact location of the retention area within thirty (30) days from the manifestation date; failure authorizes the Municipal Agrarian Reform Officer (MARO) to choose the retention area (Section 2.3).
  • Retention carries an obligation to cultivate the retained land directly or through labor administration and make the retained area productive (Section 2.4).
  • Rights previously acquired by tenant farmers under PD 27 and their security of tenure prior to the approval of RA 6657 must be respected; actual tenant farmers must not be ejected or removed (Section 2.5).
  • Sale, disposition, lease, or transfer of private lands by the original landowner in violation of RA 6657 is null and void; transactions executed prior to RA 6657 are valid only if registered with the Register of Deeds within three (3) months after 15 June 1988 in accordance with Section 6 of RA 6657 (Section 2.6).

Who may apply; retention timing

  • Any person, natural or juridical, owning agricultural lands with an aggregate area of more than five (5) hectares may apply for retention (Section 3.1).
  • A landowner who already exercised retention under PD 27 may no longer exercise the same right under RA 6657; if the landowner opts to retain five (5) hectares in other agricultural lands, the previously retained seven (7) hectares must be placed under CARP coverage immediately (Section 3.1).
  • A landowner owning five (5) hectares or less, of land not yet subject of coverage based on the implementation schedule under Section 7 of RA 6657, may file an application for retention and obtain a Certification of Retention (Section 3.2).
  • If the landowner is deceased, heirs may exercise retention rights if they show proof the decedent had manifested intention during lifetime prior to 23 August 1990 (finality of G.R. No. 78742) (Section 3.3).
  • The landowner may exercise the retention right at any time before receipt of notice of coverage (Section 4.1).
  • Under the Compulsory Acquisition (CA) scheme, the landowner must exercise retention within sixty (60) days from receipt of notice of coverage (Section 4.2).
  • Under Voluntary Offer to Sell (VOS) and Voluntary Land Transfer (VLT)/Direct Payment Scheme (DPS), retention must be exercised simultaneously at the time of offer for sale or transfer (Section 4.3).

Where to file; waiver of retention

  • Applications for retention may be filed with the office of the Regional Director or the Provincial Agrarian Reform Officer (PARO); the receiving office must forward the application to the MARO with jurisdiction over the landholding after assigning a docket number (Section 5).
  • The landowner waives the right to retain by any of the following acts or omissions:
    • Failure to manifest intention within sixty (60) calendar days from receipt of notice of CARP coverage (Section 6.1).
    • Failure to state intention upon offer for sale or application under VLT/DPS (Section 6.2).
    • Execution of any document expressly waiving retention, with MARO and/or PARO and/or Regional Director attesting to due execution (Section 6.3).
    • Execution of Landowner Tenant Production Agreement and Farmer’s Undertaking (LTPA-FU) or Application to Purchase and Farmer’s Undertaking (APFU) covering the subject property (Section 6.4).
    • Entering into VLT/DPS or VOS but failing to manifest intention to retain when filing the application (Section 6.5).
    • Execution and submission of a document indicating consent to CARP coverage of the entire landholding (Section 6.6).
    • Performing an act constituting estoppel by laches—unreasonable failure or neglect to act earlier with due diligence, leading to a presumption of abandonment or decline to assert the right (Section 6.7).

Award criteria and retention limits

  • Retention may be granted when the following criteria are met:
    • The land is private agricultural land (Section 7.1).
    • The chosen retention area is compact and contiguous and least prejudicial to the entire landholding and the majority of farmers (Section 7.2).
    • The landowner executes an affidavit as to the aggregate area of landholding in the entire Philippines (Section 7.3).
    • The landowner submits a list of children fifteen (15) years old or over as of 15 June 1988 who have been actually cultivating or directly managing the farm since 15 June 1988, for identification as preferred beneficiaries, plus evidence (Section 7.4).
    • The landowner executes an affidavit naming all persons directly working on the land (farmers, agricultural lessees and share tenants, regular farmworkers, seasonal farmworkers, other farmworkers, actual tillers or occupants, and/or other persons directly working on the land); if none, a sworn statement attesting to that fact (Section 7.5).
  • Retention limits are as follows:
    • PD 27 landowners are entitled to retain seven (7) hectares, except owners whose entire tenanted rice and corn lands are subject of acquisition and distribution under Operation Land Transfer (OLT) (Section 8.1).
    • A tenanted rice and corn landowner may not retain those lands under these cases:
      • If, as of 21 October 1972, the owner had more than twenty-four (24) hectares of tenanted rice and corn lands (Section 8.1.1); or
      • By virtue of Letter of Instruction (LOI) No. 474, if, as of 21 October 1972, the owner had less than twenty-four (24) hectares of tenanted rice and corn lands but also owned:
        • Other agricultural lands of more than seven (7) hectares, tenanted or not, cultivated or not, regardless of income; or
        • Lands used for residential, commercial, industrial, or other urban purposes from which the owner derives adequate income to support self and family (Sections 8.1.2.1–8.1.2.2).
    • PD 27 landowners who filed retention applications before 27 August 1985 (the DAR AO No. 1, Series of 1985 deadline) may retain not more than seven (7) hectares, regardless of compliance with LOI 41, 45, and 52 (Section 8.2).
    • Landowners who filed after 27 August 1985 may retain seven (7) hectares if they complied with LOI 41, 45, and 52 requiring sworn statements containing the following:
      • List of agricultural lands throughout the Philippines with area and location of each parcel (Section 8.3.1).
      • Principal crops per parcel; for primarily rice and/or corn areas: portions cultivated by tenants, names of tenants, and area tilled by each tenant as of 21 October 1972 (Section 8.3.2 plus Sections 8.3.2.1–8.3.2.3).
      • Average gross harvest of each tenant on parcel rice/corn during the three (3) crop years immediately preceding 21 October 1972 (Section 8.3.3).
      • Liens/encumbrances as of 21 October 1972, including amounts and names/addresses of lien/encumbrance parties (Section 8.3.4).
    • Landowners who filed after 27 August 1985 and did not comply with LOI 41, 45, and 52 may retain only a maximum of five (5) hectares (Section 8.4).
    • Landowners who failed to apply for retention under PD 27 and did not meet the 27 August 1985 deadline may retain a maximum of five (5) hectares under RA 6657, except those disqualified under PD 27 under either of these conditions:
      • As of 21 October 1972, owner had more than twenty-four (24) hectares of tenanted rice and corn lands (Section 8.5.1); or
      • By virtue of LOI No. 474, owner had less than twenty-four (24) hectares of tenanted rice and corn lands but additionally owned other agricultural lands of more than seven (7) hectares (tenanted or not; cultivated or not; regardless of income) or urban-purpose lands yielding adequate income for self and family (Sections 8.5.2.1–8.5.2.2).
    • Landowners whose landholdings are under CARP may retain not more than five (5) hectares; each child, legitimate, illegitimate, or legally adopted, may be awarded up to three (3) hectares as preferred beneficiary if at least fifteen (15) years old as of 15 June 1988 and the child is actually tilling the land or directly managing the farmholding from 15 June 1988 up to filing of the retention application and/or at the time of acquisition under CARP (Section 8.6).
    • Original homestead grantees or their direct compulsory heirs who still own the original homestead at the time of RA 6657 approval may retain the same area as long as they continue cultivating the homestead (Section 8.7).
    • For marriages covered by the New Civil Code, if there is no judicial separation of property agreement, spouses owning only conjugal properties may retain a total of not more than five (5) hectares; if either or both are landowners in their respective rights (capital and/or paraphernal), each may retain not more than five (5) hectares of their respective landholdings, but total couple retention may not exceed ten (10) hectares (Section 8.8).
    • For marriages covered by the Family Code effective 3 August 1988, a husband owning capital property and/or a wife owning paraphernal property may retain not more than five (5) hectares each if they executed a judicial separation of properties prior to entering into such marriage; absent such agreement, only a total of five (5) hectares may be retained because properties are treated as absolute community (one ownership relationship) (Section 8.9).

Effects on tenants and disturbance compensation

  • If the retained area selected by the landowner or awarded by DAR is tenanted, the tenant may choose to remain as a lessee or become a beneficiary in the same or another agricultural land with similar or comparable features (Section 9.1).
  • If the tenant declines to enter leasehold and no land is available to transfer, or if land is available but the tenant refuses transfer, the tenant may choose disturbance compensation from the landowner.
  • Disturbance compensation is based on improvements made and an amount as agreed between the parties, but in no case less than five (5) times the average gross harvest during the last five (5) preceding calendar years pursuant to Section 36 of RA 3844, as amended by Section 7 of RA 6389 (Section 9.2).
  • If parties fail to agree on disturbance compensation, either party may file a petition for fixing compensation with the appropriate Provincial Agrarian Adjudicator (PARAD).
  • The petitioner must show proof of earnest efforts to fix the amount that proved unsuccessful before filing with the PARAD (Section 9.2).
  • A tenant must not be dispossessed or ejected unless disturbance compensation is paid and proof submitted to the MARO (Section 9.2).
  • The tenant must exercise the option within one (1) year from the time the landowner manifests choice, or MARO chooses retention, or an order granting retention is issued (Section 9.3).
  • If the tenant chooses to remain in the retained area, the tenant becomes a leaseholder and loses the right to be an Agrarian Reform Beneficiary (ARB) under CARP; the required lease agreement must follow relevant issuances (Section 9.4).
  • Preemption and redemption under RA 3844, as amended, apply to the lessee (Section 9.5).

Processing responsibilities and approvals

  • The MARO determines whether original homestead grantees or direct compulsory heirs still own and actually cultivate the homestead land when applicable (Section 10.1).
  • The MARO conducts field verification and investigation, together with the landowner or authorized representative, to determine landholding relation, qualifications of applicant and children, tenants/farmworkers/occupants within subject landholding, and other relevant factors (Sections 10.2.1–10.2.4).
  • The MARO notifies all tenants, farmworkers, and/or actual occupants of the schedule of conferences/dialogues on the application (Section 10.3).
  • The MARO facilitates necessary land transfer for tenants opting to be beneficiaries in another landholding of the same landowner with similar or comparable features (Section 10.4).
  • The MARO identifies tenants opting as leaseholders and facilitates execution of corresponding leasehold contracts (Section 10.5).
  • The MARO presides over negotiations between tenant/beneficiaries and landowner to determine disturbance compensation if tenants/beneficiaries accept it from the landowner (Section 10.6).
  • The MARO prepares a sketch plan of the retained area in coordination with the Department of Environment and Natural Resources (DENR) (Section 10.7).
  • The MARO prepares a Retention Folder with findings and recommendations and submits it to the PARO (Section 10.8).
  • If the landowner waives choice of retention area or waives the right to exercise retention, the MARO identifies prime agricultural areas using commodity produced, terrain, infrastructure available, and soil fertility (Section 10.9).
  • If the landowner fails to exercise retention within required periods, the MARO notifies the landowner of the portion selected, using personal service with proof of receipt or registered mail with return card (Section 10.10).
  • The PARO reviews and evaluates MARO reports and recommendations (Section 11.1).
  • If the Retention Folder is in order, the PARO forwards it, with findings and recommendations, to the Regional Director; otherwise, the PARO returns it to the MARO for action, and the PARO may conduct its own field investigation and conferences/dialogues (Section 11.2).
  • After the PARO receives the Retention Folder and Regional Director approval order, the PARO segregates the retained area in coordination with DENR; DENR furnishes the Regional Director four (4) copies for distribution to the PARO, MARO, Register of Deeds, landowner, and other concerned parties (Section 11.3).
  • The PARO conducts the final survey and drafts a Certificate of Retention (Section 11.4).
  • Based on the owner’s duplicate title, approved segregation plan, and technical description, the PARO requests the Register of Deeds to prepare:
    • two (2) separate titles: one for the landholding covered by CA, VOS, or VLT/DPS as the case may be, and one for the landowner’s retained area; and
    • another title in the name of the Republic of the Philippines for lands covered by CA and VOS (Section 11.5).
  • The Regional Director reviews PARO documents and, if in order, issues an Order of Approval attaching the sketch plan; the Order of Approval states that the retained area is subject to final survey by the PARO (Section 12.1).
  • If documents are not in order, the Regional Director issues an Order of Denial (Section 12.1).
  • The Regional Director forwards the approval or denial orders to the PARO for distribution to concerned parties (Section 12.2).
  • The Regional Director forwards copies of all orders of approvals or denials to the BLAD to create a database and to enable periodic monitoring of multiple retention applications/grants in other regions based on BLAD records (Section 12.3).
  • The Regional Director issues the Certificate of Retention (Section 12.4).
  • The Regional Director’s decision approving or disapproving retention becomes final after fifteen (15) days from receipt unless appealed to the DAR Secretary under the Rules of Procedure for Agrarian Law Implementation (ALI) cases (Section 13).

Transitory processing; repeals; separability

  • Pending retention applications are processed under these rules; within ninety (90) days from effectivity, all Regional Offices submit an inventory of past and present pending cases using a format prepared by BLAD within fifteen (15) days from the date of this Order (Section 14).
  • This Order modifies or repeals DAR Administrative Order No. 11, Series of 1990, Administrative Order No. 4, Series of 1991, Administrative Order No. 5, Series of 2000, and all other administrative issuances inconsistent herewith (Section 15).
  • If any provision is declared unconstitutional or illegal, the validity of the remaining provisions is not affected (Section 16).

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