Right-of-Way Acquisition for Gov't Projects

Policy and constitutional basis

Section 2 anchors the Act on Article III, Section 9 of the Constitution, requiring that private property shall not be taken for public use without just compensation.
Section 2 directs the State to ensure that owners of real property acquired for national government infrastructure projects are promptly paid just compensation for the expeditious acquisition of the required right-of-way.

Coverage: national projects, LGU adoption

Section 3 defines “national government projects” as all national government infrastructure projects and their public service facilities, engineering works, and service contracts, including projects undertaken by government-owned and -controlled corporations.
Section 3 includes projects covered by Republic Act No. 6957, as amended by Republic Act No. 7718 (“Build-Operate-and-Transfer Law”), and related and necessary activities such as site acquisition, supply/installation of equipment and materials, construction, completion, operation, maintenance, improvement, repair, and rehabilitation, regardless of source of funding.
Section 3 allows LGUs, subject to Republic Act No. 7160 (Local Government Code of 1991), to adopt the Act’s provisions for local government infrastructure right-of-way acquisition.

Modes of acquiring right-of-way property

Section 4 authorizes government acquisition of real property needed as right-of-way site or location for any national government infrastructure project through donation, negotiated sale, expropriation, or any other mode provided by law.
Section 4 requires special handling for lands granted through Commonwealth Act No. 141 (Public Land Act, as amended):
- If the landowner is not the original patent holder and any previous acquisition was not through a gratuitous title, the implementing agency must follow the other acquisition modes in the Act.
- If the landowner is the original patent holder or the land was acquired from the original patent holder through a gratuitous title, the implementing agency must follow Commonwealth Act No. 141 rules on acquisition of right-of-way on patent lands.
Section 4 allows the implementing agency to utilize donation or similar mode when the landowner is a government-owned or government-controlled corporation.
Section 4 permits government entry and use of the subsurface/subterranean portion of private and government lands for required infrastructure components (e.g., subways, tunnels, underpasses, waterways, floodways, or utility facilities) as part of the infrastructure and development project, if entry and use are made more than fifty (50) meters from the surface.

Negotiated sale: appraisal basis, offer, payment schedule

Section 5 allows the implementing agency to acquire right-of-way site or location through negotiated sale under rules set in Section 5.
Section 5(a) requires the implementing agency to offer the owner compensation price consisting of:
- (1) the current market value of the land;
- (2) the replacement cost of structures and improvements therein; and
- (3) the current market value of crops and trees therein.
Section 5(a) authorizes valuation through:
- a government financial institution with adequate property appraisal experience, or
- an independent property appraiser accredited by the BSP or recognized professional association of appraisers, procured under Republic Act No. 9184 (Government Procurement Reform Act) and its IRR on consulting services.
Section 5(a) gives the property owner thirty (30) days to decide whether to accept the offer; if the owner refuses or fails to accept, or fails to submit documents necessary for payments, the implementing agency must immediately initiate expropriation under Section 6.
Section 5(b) extends the applicability of Section 5(a)(2) to owners of structures/improvements who lack legally recognized rights to the land and meet all criteria:
- must be a Filipino citizen;
- must not own any real property or any other housing facility (urban or rural); and
- must not be a professional squatter or member of a squatting syndicate as defined in Republic Act No. 7279 (Urban Development and Housing Act of 1992).
Section 5(c) allocates taxes/fees for transfer of title to the Republic in negotiated sale:
- the implementing agency pays the seller’s capital gains tax and documentary stamp tax, transfer tax, and registration fees;
- the owner pays any unpaid real property tax.
Section 5(d) requires, if requested by the property owner, the implementing agency to remit to the concerned LGU an amount for unpaid real property tax, subject to deduction from the total negotiated price, and not more than the negotiated price.
Section 5(e) mandates a deed of absolute sale after the property owner submits Transfer Certificate of Title, Tax Declaration, Real Property Tax Certificate, and other necessary transfer documents; the implementing agency must cause annotation of the deed on the Transfer Certificate of Title.
Section 5(f) requires payment upon execution of the deed:
- 50% of the negotiated price of affected land (exclusive of taxes remitted under Section 5(d)); and
- 70% of the negotiated price of affected structures, improvements, crops, and trees (exclusive of unpaid taxes remitted under Section 5(d)).
Section 5(g) requires payment of the remaining balance when conditions and timing are met:
- remaining 50% of affected land and remaining 30% of affected structures/improvements/crops/trees (exclusive of unpaid taxes remitted under Section 5(d)), provided that the land is already completely cleared of structures, improvements, crops, and trees;
- timing is at the time of transfer of title to the Republic if wholly affected, or at the time of annotation of the deed of sale if partially affected.
Section 5 further provides that Section 5(a) applies to outstanding claims for right-of-way payments, but the offer amount is the price at the time of taking, including legal interest until fully paid.

Expropriation: deposit, immediate taking, deadlines

Section 6 requires that when right-of-way must be acquired through expropriation, the implementing agency must immediately initiate expropriation proceedings before the proper court through the Office of the Solicitor General, the Office of the Government Corporate Counsel, or their deputized government or private legal counsel.
Section 6(a) requires that, upon filing of the complaint or any time thereafter after due notice to the defendant, the implementing agency must immediately deposit in court for the owner an amount equivalent to the sum of:
- (1) 100% of the value of the land based on the BIR current relevant zonal valuation issued not more than three (3) years prior to filing of the expropriation complaint, subject to Section 6(c);
- (2) replacement cost at current market value of improvements and structures as determined by:
  - the implementing agency,
  - a government financial institution with adequate property appraisal experience, and
  - an independent property appraiser accredited by the BSP; and
- (3) current market value of crops and trees determined by a government financial institution or independent property appraiser selected under Section 5(a).
Section 6(a) mandates that upon compliance with the deposit guidelines, the court must immediately issue an order for the implementing agency to take possession and start project implementation.
Section 6(a) requires the implementing agency’s counsel to seek the issuance of a writ of possession if, within seven (7) working days after deposit, the court has not issued it; the writ of possession is issued ex parte and no hearing is required.
Section 6(a) requires the court to release the deposited amount to the owner upon presentation of sufficient proofs of ownership.
Section 6(b) applies deposit and possession rules when the owner cannot be found, is unknown, or is deceased with no settled estate, after due diligence, or when there are conflicting claims; in such cases, the implementing agency deposits the same required sum for the benefit of the person adjudged entitled in the same proceeding.
Section 6(c) mandates that in provinces/cities/municipalities/areas with no land classification, the city or municipal assessor must, within sixty (60) days from filing of the expropriation case, come up with required land classification and corresponding declaration of real property and improvement.
Section 6(c) mandates that in provinces/cities/municipalities/areas with no zonal valuation, or where current zonal valuation has been in force for more than three (3) years, the BIR must, within sixty (60) days from filing, conduct zonal valuation based on land classification done by the city or municipal assessor.
Section 6(d) requires that for cases of utmost urgency and importance with no land classification/no existing zonal valuation or valuation in force for more than three (3) years, the implementing agency must use the BIR zonal value and land classification of similar lands within the adjacent vicinity.
Section 6(e) provides that upon receipt of the writ of possession, the implementing agency may take possession and start implementation.
Section 6(f) requires that if the owner contests the proffered value, the court shall determine just compensation within sixty (60) days from filing of the expropriation case; when the decision becomes final and executory, the implementing agency must pay the owner the difference between amounts already paid and just compensation.
Section 6(g) allocates taxes/fees for expropriation transfer of title:
- implementing agency pays documentary stamp tax, transfer tax, and registration fees;
- owner pays capital gains tax and any unpaid real property tax.

Valuation standards for negotiated sale

Section 7 requires that to determine market value for negotiated sale, the following standards must be observed:
- classification and use for which the property is suited;
- development cost for improving the land;
- value declared by the owners;
- current selling price of similar lands in the vicinity;
- reasonable disturbance compensation for removal/demolition of improvements and value of those improvements;
- size, shape, or location, tax declaration, and zonal valuation;
- price of land manifested in ocular findings and oral and documentary evidence presented; and
- facts and events enabling owners to have sufficient funds to acquire similarly situated lands of approximate areas to rehabilitate themselves early.
Section 7 requires IRR preparation to include detailed terms of reference used by government financial institutions and independent appraisers in determining market value, defining in detail the standards.

Environmental considerations

Section 8 requires implementing agencies, for right-of-way acquisitions for national government infrastructure projects, to take into account ecological and environmental impact.
Section 8 mandates that before any national government project is undertaken, the implementing agency must consider environmental laws, land-use ordinances, and pertinent provisions of Republic Act No. 7160.

Relocation and demolition of informal settlers

Section 9 mandates that, through the Housing and Urban Development Coordinating Council (HUDGC) and the National Housing Authority (NHA), and in coordination with LGUs and implementing agencies, resettlement sites must be established and developed for informal settlers, including adequate basic services and community facilities, in anticipation of informal settlers removed from right-of-way sites for future infrastructure projects under Republic Act No. 7279.
Section 9 requires concerned LGUs, whenever applicable, to provide and administer the resettlement sites.
Section 9 provides that when expropriated land occupied by informal settlers is subject to a writ of possession, and the informal settlers refuse or are unable to demolish structures/improvements despite the writ, the court must issue the necessary writ of demolition to dismantle all structures found in the property.
Section 9 requires the implementing agency to diligently observe the procedures in Sections 28 and 29 of Republic Act No. 7279.

Advance appropriations and PPP funding modes

Section 10 requires the government to provide adequate appropriations allowing implementing agencies to acquire right-of-way in advance of project implementation.
Section 10 requires appropriations to cover expenses directly related to right-of-way acquisition, including:
- cost of parcellary surveys and appraisal;
- compensation for affected land, structures, improvements, crops, and trees;
- cost of development and implementation of resettlement projects, including planning, social preparation, and other activities under the resettlement action plan; and
- related implementing agency expenses, including capital gains tax for negotiated sale under Section 5, documentary stamp tax, transfer tax and registration fees for transfer of titles, and other relevant administrative expenses for right-of-way management.
Section 10 authorizes PPP project arrangements (under Republic Act No. 6957, as amended by Republic Act No. 7718) to require, as part of contract terms, project proponents to:
- (1) advance funds covering right-of-way cost to be reimbursed later by the implementing agency (except for unsolicited proposals); or
- (2) finance right-of-way cost recoverable partly or fully by the proponent from tolls, fees, or tariffs charged to users of the completed project.

Regulation of developments in declared right-of-way

Section 11 prohibits, after approval of an infrastructure project by the head of the implementing agency with funding authorized in the General Appropriations Act and with defined right-of-way, any national government agency or LGU from allowing development/construction or issuing permits contrary to the approved plans and purposes within the right-of-way within two (2) years from the date of notice of taking.
Section 11 allows permits or actions contrary to plans and purposes only when explicitly authorized by the head of the implementing agency for justifiable reasons.

Sanctions for violations

Section 12 subjects any violation of the Act to appropriate administrative, civil, or criminal sanctions.
Section 12 provides that sanctions may include suspension or dismissal from government service and forfeiture of benefits, consistent with applicable law.

Implementing rules, committee composition, timeline

Section 13 requires a committee to prepare the Implementing Rules and Regulations (IRR) for proper implementation of the Act within sixty (60) days from its approval, in consultation with key stakeholders.
Section 13 establishes the committee composition:
- Secretary of the Department of Public Works and Highways as Chairperson;
- Secretary of the Department of Transportation and Communications;
- Secretary of the Department of Energy;
- Secretary of the Department of Justice;
- Secretary of the Department of Budget and Management;
- Director General of the National Economic and Development Authority;
- Chairperson of the HUDCC; and
- other representatives of concerned entities as determined by the committee.

Transitory, separability, repeal

Section 14 applies the Act to all right-of-way transactions except ongoing transactions that, as of effectivity, have been concluded satisfactorily by parties and where the parties have signed a written agreement as to the price to be paid to the property owner.
Section 15 contains a separability rule: unconstitutional or invalid provisions do not affect other parts that remain effective.
Section 16 repeals Republic Act No. 8974 and repeals or amends all laws, decrees, orders, rules, and regulations or parts inconsistent with Republic Act No. 10752.