Title
DAR Guidelines on Voluntary Land Transfer
Law
Dar Administrative Order No. 08
Decision Date
Dec 10, 1997
Revised guidelines facilitate the voluntary transfer and direct payment for compensable agricultural lands under the Comprehensive Agrarian Reform Program, ensuring fair terms for beneficiaries while outlining procedures for landowners and agrarian reform beneficiaries.
compensable lands
agrarian reform
voluntary land

Legal basis and declared policy

  • Section 20 of Republic Act No. 6657 allows landowners (LOs) of agricultural lands subject to acquisition under CARP to enter into a voluntary arrangement for direct transfer of their lands to beneficiaries.
  • Section 21 of Republic Act No. 6657 provides that direct payment may be made in cash or in kind by the agrarian reform beneficiary (ARB) to the landowner under terms mutually agreed upon by both parties and binding upon registration with and approval by the DAR.
  • Section 44 of Republic Act No. 6657, as amended by Republic Act No. 7905, establishes PARCCOM recommendation of a direct payment scheme between landowner and farmer or farmworker.
  • The policy provides that VLT/DPS beneficiaries are determined by the DAR as the same individuals who would be eligible to purchase the lands if the government acquires the land through Compulsory Acquisition (CA) or Voluntary Offer to Sell (VOS) for distribution under agrarian reform.
  • The policy directs DAR to ensure ARBs are fully aware of and understand available land redistribution options.
  • The policy requires VLT/DPS terms to include the immediate transfer of possession and ownership to the identified beneficiaries, with CLOA issuance and proper annotations.

Core definitions and beneficiary rules

  • No beneficiary related to the LO up to the second degree of consanguinity is considered an awardee under CARP unless a tenancy relationship with the landowner exists or was established prior to 15 June 1988, certified by the MARO and BARC pursuant to Memorandum Circular No. 04, Series of 1994.
  • The ARB who opts for VLT/DPS receives priority in processing documents for the immediate issuance of CLOA.
  • ARBs of the same landholding who do not enter VLT/DPS proceed under standard procedures under DAR Administrative Order (A.O.) No. 2, Series of 1996 for lands subject of Voluntary Offer to Sell and Compulsory Acquisition under Republic Act No. 6657.
  • DAR approval of the VLT/DPS agreement is presumed unless the ARB and/or LO receives a notice of disapproval within thirty (30) days from receipt of the notice/application for VLT/DPS agreement.
  • VLT/DPS agreements must be binding upon registration and approval by DAR under Section 21 of Republic Act No. 6657.

Transaction terms and payment conditions

  • VLT/DPS terms and conditions must be not less favorable to the ARB than those of the government’s standing offer to purchase and sell, if such offers have been made and are fully known to both parties.
  • The ARB and LO may make direct payment in cash or in kind under terms they mutually agree upon, and the terms become binding upon DAR registration and approval.
  • The VLT/DPS agreement must embody obligations ensuring the immediate transfer of possession and ownership and require CLOAs to be issued to ARBs with proper annotations.
  • The agreement must include payment arrangements to address landowner tax delinquencies, including remittance arrangements where the landowner is financially incapable of paying realty taxes.

Disqualifications, cancellation, and distribution after default

  • If the ARB defaults for reasons other than force majeure or fortuitous events and:
    • fails to pay an aggregate of three (3) consecutive amortizations, or
    • deliberately fails to comply with any provision of the agreement,
      the ARB is permanently disqualified as a CARP beneficiary pursuant to Section 20(c) of Republic Act No. 6657 and Memorandum Circular No. 19, Series of 1996.
  • Upon such disqualification, any EP/CLOA issued is cancelled pursuant to A.O. No. 2, Series of 1994 and the land is redistributed in the following order:
    • (1) to a qualified heir of the beneficiary who will abide by the VLT/DPS agreement terms and will pay the entire value of the land; or
    • (2) in the absence of a qualified heir, to a new qualified beneficiary who will abide by the VLT/DPS agreement terms and will pay the entire value of the land.
  • All payments made by the disqualified beneficiary are forfeited in favor of the landowner and treated as lease rentals.
  • If there is non-payment of land for the period the disqualified beneficiary remained in possession, the disqualified beneficiary is assessed the value of lease rentals for use of the land pursuant to Republic Act No. 3844, as amended.
  • If default is due to force majeure or fortuitous events, the beneficiary receives a grace period of not less than one (1) year to pay the obligation on deferred payment, and these obligations must be embodied in the VLT/DPS agreement.
  • Substitution rules apply upon beneficiary replacement:
    • If substituted by a qualified heir, the amount amortized by the original beneficiary and improvements introduced are credited in favor of the heir.
    • If the transferee is other than an heir, the amortized amount and cost of improvements introduced by the original beneficiary may be reimbursed either in one lump sum or on installment basis.

Transfer restrictions, redemption, and mortgage limits

  • Lands acquired under VLT/DPS may not be sold, transferred, or conveyed except through:
    • hereditary succession, or
    • conveyance to the government, or
    • conveyance to other qualified beneficiaries.
  • This transfer restriction applies for a period of ten (10) years.
  • The children or spouse of the transferor have the right to redeem the land from the government within a period of two (2) years from the date of transfer pursuant to Section 12 of Republic Act No. 3844, as amended by Republic Act No. 6389.
  • Lands mortgaged with banking and/or financial institutions may not be the subject of VLT/DPS.

Tax clearance, possession explanation, and receipt requirements

  • Tax delinquencies incurred by the landowner prior to a VLT/DPS arrangement must be paid before registration of the Deed of Voluntary Land Transfer/Direct Payment Scheme (DVLT/DPS).
  • If the landowner is financially incapable of paying realty taxes, the landowner and ARB may arrange with conformity of the Municipal Treasurer for remittance of the ARB’s amortizations to the Municipal Treasurer until unpaid realty taxes of the landowner plus interest, if any, are fully paid.
  • After full settlement of unpaid realty taxes (plus interest, if any), ARB amortizations shall be remitted to the landowner, and the arrangement must be included in the VLT/DPS agreement.
  • The Municipal Treasurer shall issue a realty tax clearance for registration of CLOAs/Emancipation Patents (CLOAs/EPs) based on the arrangement.
  • Realty tax payments become the ARBs’ responsibility from the time DAR makes an award, pursuant to Section 24 of Republic Act No. 6657, and payments are made based on assessment by the Municipal Assessor’s office.
  • All payments made by the ARB under the VLT/DPS agreement must be covered by receipts issued by the LO.
  • Upon submission of receipts showing full payment, the concerned PARO issues a Certificate of Full Payment and requests the Register of Deeds (ROD) for cancellation of the encumbrance annotated at the back of the CLOA; the MARO renders assistance when necessary.
  • The MARO explains the VLT/DPS agreement to the parties in the local dialect prior to signing.

Required documents for VLT/DPS agreement

  • For titled properties, the VLT/DPS documentation requires:
    • (1) owner’s copy of the Title;
    • (2) copy of the latest Tax Declaration;
    • (3) approved segregation or subdivision plan;
    • (4) Real Estate Tax Clearance or Statement of Tax Delinquency; and
    • (5) certification from the ROD that the property is free from liens and/or encumbrances.
  • For untitled properties, the VLT/DPS documentation requires:
    • (1) CENRO certification pursuant to DAR-DENR-LBP Joint Memorandum Circular No. 12 S. 1994;
    • (2) survey plan approved by the Land Management Bureau, or a sketch plan certified by the Land Management Bureau and technical description thereof;
    • (3) certified copy of the claimant’s current Tax Declaration indicating lot numbers and area per the approved plan;
    • (4) instruments of acquisition covering the property in favor of the claimant and of predecessor(s) in interest (e.g., Deed of Sale, Donation, Transfer);
    • (5) certification from the Assessor showing the declarant(s), area covered, and basis for issuances/cancellations from the first declaration up to the Tax Declaration issued in the claimant’s name;
    • (6) certification from the Clerk of Court whether the property is involved in land registration proceedings or a civil case, and whether it was used as bond or bail in other court actions;
    • (7) certification from the ROD and the Assessor’s Office that the property in the approved survey plan is free from liens and encumbrances; and
    • (8) LRA certification that the land is not within the decreed property per LRA records.
  • For foreclosed agricultural lands:
    • if consolidated title exists, the requirement includes consolidated title in the name of the mortgagee plus the same requirements as titled properties Items IV-A (1-5); and
    • if not yet consolidated, the requirements include an affidavit of consolidation duly registered with the ROD or a sheriff’s certificate of sale, plus the same requirements from Items IV-A (2-5).

Operating procedures and processing timelines

  • The landowner initiates negotiation with prospective ARBs and submits to the MARO:
    • (1) Notice/Application for VLT/DPS (Form No. 1);
    • (2) LO Information Sheet (Revised Form No. 1.1);
    • (3) VLT/DPS Agreement (Form No. 5); and
    • (4) the proposed agreement with complete supporting documents under the required document rules.
  • Prior to entering VLT/DPS where the landowner has tax delinquencies, the landowner must settle obligations first; if not payable in cash, the landowner and ARBs may arrange payment pursuant to the VLT/DPS tax arrangement rule.
  • The MARO must:
    • (1) record and review the proposed agreement and supporting documents;
    • (2) if in order, prepare and post the VLT/DPS Form No. 03 including the draft agreement in barangay and municipal halls where the property is located for fifteen (15) days;
    • (3) during posting, conduct investigation with BARC to confirm LO, ARB, land, and current production as pertains to agreement provisions;
    • (4) prepare a Certification of Posting and attach it to the proposed agreement;
    • (5) after posting, call the contracting parties and witnesses for a conference to formalize, sign, and seal the agreement using five (5) copies of Form No. 4;
    • (6) for ARBs related to the LO up to the second degree of consanguinity, issue certification that tenancy relationship existed even prior to 15 June 1988 pursuant to Section 22 of Republic Act No. 6657; and
    • (7) prepare the VLT/DPS folder and forward it to the PARO within five (5) days of signing by the parties.
  • The PARO must:
    • (1) record the provisional VLT agreement in a log book;
    • (2) review and evaluate completeness and consistency and approve within thirty (30) calendar days, otherwise return to DARMO for appropriate action;
    • (3) upon approval, send memorandum directing coordination with the survey party for land survey and execution of the Deed of Voluntary Land Transfer (VLT/DPS Form No. 7); disapproval requires returning the agreement and papers to the MARO;
    • (4) treat the VLT/DPS agreement as approved unless a Notice/Memorandum of disapproval (VLT/DPS Form No. 6) is issued by the PARO and received by the landowner and ARB within thirty (30) days from PARO receipt of documents, with possible suspension of this period upon due notice if a protest is filed or in extreme cases if more time is needed for evaluation;
    • (5) generate CLOAs based on the approved survey plan in the ARB’s name, with a lien annotation in favor of the LO signed by the PARO;
    • (6) prepare the CLOA Recording Sheet and cause signing and sealing of CLOAs duly initialed by the PARO;
    • (7) record signed and sealed CLOAs and enter them in the CLOA Registry Book;
    • (8) cause registration of the Deed of Voluntary Land Transfer and CLOA with the ROD, with the conveyance and transfer free from payment of Capital Gains Tax, Registration Fee, and all other taxes and fees pursuant to Sections 66 and 67 of Republic Act No. 6657;
    • (9) after registration, reflect title number and registration date in the CLOA Registry Book; and
    • (10) transmit the Owner’s Duplicate Certificate of Title to DARMO for distribution to ARBs.
  • After registration, the MARO must:
    • (1) receive and record the Owner’s Duplicate Certificate of Title;
    • (2) distribute the Owner’s Duplicate Certificate of Title (CLOA/EP) to ARBs;
    • (3) maintain a log book of CLOAs/Titles issued within the municipality and keep an individual record per ARB; and
    • (4) remind ARBs of their obligation to pay agreed amortizations in cash or in kind.

Monitoring, reporting, and transitory rules

  • For reporting and monitoring, the PARO submits a quarterly status report on VLT/DPS agreements to the Office of the Undersecretary for Field Operations through the Regional Director, with copies furnished to BLAD and MIS.
  • The MARO submits to PARO a list of ARBs who have fully paid landholdings and a list of titles whose liens and encumbrances have been cancelled by the ROD.
  • Transitory processing provides that VLT/DPS documentation folders already forwarded to or pending in DARRO continue to be processed under A.O. No. 2, Series of 1995, while folders still in DARMOs and DARPOs at effectivity are governed by DAR Administrative Order No. 08.

Repeal and cancellation rules

  • All orders, circulars, rules, and regulations inconsistent with DAR Administrative Order No. 08 are revoked, amended, or modified as applicable.
  • VLT/DPS cancellation consequences for ARB default operate through cancellation of EP/CLOA pursuant to A.O. No. 2, Series of 1994, and redistribution of the land to qualified heirs or qualified new beneficiaries under the VLT/DPS default order of distribution.

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