Title
Rules for Landowner Retention Right under CARP
Law
Dar Administrative Order No. 05, S. 2000
Decision Date
Aug 30, 2000
DAR Administrative Order No. 05-00 revises the rules and procedures for landowners to exercise their right of retention under CARP, aiming to protect the rights of both landowners and tenant-farmers in the Philippines.
revised rules
procedures
exercise of retention right

Legal basis and guiding Supreme Court ruling

  • PD No. 27, Section 6 is cited as the statutory basis for regulating retention rights by landowners.
  • RA No. 6657 is cited as the enabling law for revising the rules and procedures on retention rights.
  • The framework is aligned with the Supreme Court ruling (G.R. No. 78742, 14 July 1989), including the rule’s reference date 23 August 1990 for heirs to exercise retention rights.

Policy statements and core mandates

  • Landowners must be allowed to choose the area to be retained, which must be compact and contiguous, and must be least prejudicial to the entire landholding and the majority of the farmers therein.
  • Landowners must cultivate the retained land directly or through labor administration to make the retained area productive.
  • The security of tenure and rights of actual tenant-farmers must be respected: tenant-farmers in the landholding shall not be ejected or removed.
  • The 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 remain valid only when registered with the Register of Deeds within three (3) months after 15 June 1988, consistent with Section 6 of RA 6657.

Coverage and who may exercise retention

  • The rules apply to all applications for retention under PD 27 and RA 6657.
  • Any person, natural or juridical, that owns agricultural lands with an aggregate area of more than five (5) hectares may apply for a retention area using Retention Form No. 1.
  • A landowner who already exercised retention under PD 27 may no longer exercise the same right under RA 6657; if the landowner retains five (5) hectares in other agricultural lands, the seven (7) hectares previously retained must be immediately placed under CARP coverage.
  • A landowner who owns five (5) hectares or less or lands not yet subject of coverage based on the schedule of implementation under Section 7 of RA 6657 may still file an application for retention and be issued a Certificate of Retention.
  • The retention right of a deceased landowner may be exercised by heirs if:
    • The decedent manifested during lifetime an intention to exercise retention prior to 23 August 1990; and
    • The heirs present proof of the decedent’s intention.
  • Heirs may also exercise the decedent’s retention right if they can prove the decedent had no knowledge of the OLT coverage over the subject property.
  • Under the CA scheme, the landowner exercises retention within sixty (60) days from receipt of the Notice of Coverage; under the VOS scheme, retention is exercised at the time the land is offered for sale.

When and how retention is exercised

  • Under Compulsory Acquisition (CA), the landowner must exercise retention within sixty (60) days from receipt of the Notice of Coverage.
  • Under Voluntary Offer to Sell (VOS), the landowner must exercise retention at the time the land is offered for sale.
  • In VOS, the offer must specify and segregate:
    • the portion covered by VOS, and
    • the portion applied for retention.
  • If the VOS offer fails to segregate/indicate the retained portion, the landowner is deemed to have waived the right to retention over the subject property.
  • Failure to exercise retention within the period under the rules waives the landowner’s right to choose the retained area; thereafter, the Municipal Agrarian Reform Officer (MARO) designates the retained area.
  • The MARO must notify the landowner by personal service with proof of receipt or by registered mail with return card regarding the portion selected as retention area.
  • The landowner must inform the MARO in writing whether the landowner accepts or rejects the selected area within sixty (60) days from receipt of the notice; failure to respond within that period means no objection to the selected area.
  • If the landowner disagrees, the landowner may file a protest with the MARO under the Rules of Procedure for Agrarian Law Implementation (ALI) Cases.
  • Any duly completed application for retention may be filed with BLAD, the Regional Director (RD), PARO, or MARO; if filed with an office other than the MARO, the receiving office must forward the application to the MARO with jurisdiction.

Waiver, award criteria, and retention limits

  • A landowner is deemed to have waived retention over a parcel by any of the following:
    • Executing an affidavit, letter, or other document attested by MARO, PARO, or RD expressly waiving the retention right.
    • Signing the Landowner-tenant Production Agreement and Farmer’s Undertaking (LTPA-FU) or Application to Purchase and Farmer’s Undertaking (APFU) covering the subject property.
    • Entering into a Voluntary Land Transfer/Direct Payment Scheme (VLT-DPS) agreement evidenced by a Deed of Transfer over the subject property.
    • Offering the subject landholding under VOS and failing to indicate the retained area.
    • Signing/submitting consent documents to have the entire property covered (including LBP forms on disposition of cash and bond portions and the Deed of Assignment, warranties and undertaking in favor of LBP).
    • Performing acts that constitute estoppel by laches.
    • Doing acts that amount to a valid waiver under applicable laws and jurisprudence.
  • The rules treat estoppel by laches as unreasonable or unexplained delay in asserting a right that, through due diligence, could or should have been done earlier, warranting presumption of abandonment or decline to assert the right.
  • The elements of laches are:
    • conduct giving rise to a cause of action,
    • delay in asserting the right after awareness and opportunity,
    • lack of knowledge by the other party that the right would be asserted, and
    • injury or prejudice if relief is granted or suit is not barred.
  • Retention award is based on criteria requiring, among others:
    • the land is a private agricultural land;
    • the chosen area is compact and contiguous and least prejudicial to the entire landholding and the majority of farmers;
    • the landowner executes an affidavit on the aggregate area of landholding; and
    • 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.
  • Retention area limits include the following:
    • Landowners covered by PD 27 may retain seven (7) hectares, except where their entire tenanted rice and corn lands are subject of acquisition and distribution under OLT; tenanted rice and corn lands may not be retained in specified cases tied to land ownership as of 21 October 1972 and to LOI No. 474.
    • Landowners affected by PD 27 who filed applications for retention before 27 August 1985 may retain not more than seven (7) hectares regardless of compliance with LOI No. 41, 45 and 52.
    • Landowners who filed after 27 August 1985 may retain seven (7) hectares if they complied with LOI No. 41, 45 and 52, including submission of sworn statements listing agricultural lands, principal crops and tenant cultivation details as of 21 October 1972, average gross harvests during the three (3) crop years immediately preceding 21 October 1972, and liens/encumbrances as of 21 October 1972.
    • Landowners who filed after 27 August 1985 and did not comply with LOI No. 41, 45 and 52 are entitled only to a maximum of five (5) hectares; landowners who fail to qualify under PD 27 retention rules are also allowed to retain a maximum of five (5) hectares under RA 6657.
    • A landowner whose landholdings are covered under CARP may retain not more than five (5) hectares; each child (legitimate, illegitimate, or legally adopted) may be awarded not more than three (3) hectares, if the child is at least fifteen (15) years old as of 15 June 1988 and has been actually tilling or directly managing from 15 June 1988 up to application filing and/or acquisition under CARP.
    • Original homestead grantees or their direct compulsory heirs who still own the original homestead at approval of RA 6657 may retain the same area as long as they continue cultivating the homestead.
    • For marriages covered by the New Civil Code, spouses who own only conjugal properties may retain a total of not more than five (5) hectares; if either or both are landowners in their own rights, each may retain not more than five (5) hectares, but total retention of the couple must not exceed ten (10) hectares.
    • For marriages covered by the Family Code effective 3 August 1988, husband owning capital and/or wife owning paraphernal may retain not more than five (5) hectares each only if they executed a judicial separation of properties prior to marriage; absent such agreement, only a total of five (5) hectares may be retained.

Effects when retained area is tenanted or CLTs exist

  • If the retained area is tenanted, the tenant must be given the option to:
    • remain as lessee, or
    • be beneficiary in the same or another agricultural land with similar or comparable features.
  • If the tenant declines to enter leasehold and no available land to transfer exists, or the tenant refuses available transfer, the tenant may be paid disturbance compensation agreed between the parties.
  • Disturbance compensation is never less than five (5) times the average of the gross harvests during the last five (5) preceding calendar years under Section 36 of RA 3844, as amended by Section 7 of RA 6389.
  • If parties cannot agree on disturbance compensation, either party may petition the Provincial Agrarian Adjudicator (PARAD) to fix the amount.
  • Before filing the petition with PARAD, the petitioner must show proof of earnest efforts to fix disturbance compensation that proved unsuccessful.
  • The tenant shall not be dispossessed or ejected unless disturbance compensation is paid and proof is submitted to the MARO.
  • The tenant must exercise the option within one (1) year from the landowner’s manifestation of choice, or from the MARO’s choice, or from the order granting retention.
  • 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 lease agreement for tenants remaining in the retained area must be executed under DAR Administrative Order (AO) No. 5, Series of 1993, titled “Agricultural Leasehold and the Determination of Lease Rental for Tenanted Lands”, and other relevant issuances.
  • Preemption and redemption under RA 3844, as amended, apply to the lessee.
  • If the retained area is covered by CLTs, CLOAs, or EPs, the DAR must:
    • inform ARBs concerned and
    • give them opportunity to contest the landowner’s claim.
  • The DAR must ensure affected ARBs who desire it are given priority in redistribution of other lands of the landowner or other lands identified by DAR for redistribution, subject to rights of those already in the area.
  • Affected ARBs may choose the option available under the tenanted-area effects rules.
  • Beneficiaries must exercise the option within one (1) year from the time CLTs, EPs, or CLOAs are cancelled.
  • To prevent or minimize ARB dislocation, the landowner of lands other than rice and corn must be persuaded to choose retention areas from those other lands yet to be awarded.
  • If CLTs, EPs, or CLOAs are cancelled due to the landowner’s retention, all amortizations paid by ARBs must be fully reimbursed to them, in addition to benefits or rights accorded to good-faith holders under the New Civil Code.

Operating procedures and official responsibilities

  • The MARO issues a Notice of Coverage informing the landowner that:
    • land is subject to CARP acquisition,
    • the landowner may exercise retention right, and
    • qualified children may be awarded not more than three (3) hectares each.
  • The MARO receives retention applications from landowners who have not yet exercised retention under PD 27.
  • The MARO determines whether original homestead grantees or their direct compulsory heirs still own and actually cultivate the homestead land.
  • The MARO conducts field verification and investigation with the landowner or authorized representative to determine:
    • landholding relation to the application for retention,
    • qualifications of applicants and their children as compulsory heirs,
    • tenants, farmworkers, and/or actual occupants within the subject landholding, and
    • other retention-relevant factors.
  • The MARO invites all concerned parties to a conference/dialogue regarding the application using Retention Form No. 3.
  • The MARO identifies and facilitates land transfer for tenants who opt to become beneficiaries in another landholding of the same landowner with similar or comparable features.
  • The MARO identifies tenants opting to be leaseholders and facilitates execution of leasehold contracts.
  • The MARO facilitates negotiations between tenants/beneficiaries on disturbance compensation when they opt to accept it from the landowner.
  • The MARO prepares a sketch plan of the retained area in coordination with the Land Management Bureau (LMB) of DENR.
  • The MARO prepares a Retention Folder containing findings and recommendations and submits it to the PARO.
  • The MARO identifies prime agricultural areas owned by landowners who waived their right to choose retention area or waived their right to exercise retention, considering:
    • commodity produced,
    • terrain,
    • soil fertility, and
    • infrastructure available.
  • The MARO notifies the landowner of the selected portion as retention area by personal service with proof of receipt or by registered mail with return card when the landowner fails to exercise retention within the specified period.
  • The PARO reviews and evaluates the MARO report and recommendations; if the Retention Folder is in order, the PARO forwards it with findings to the RD; if not, the PARO returns it to the MARO.
  • After receiving the Retention Folder and the RD’s Order of Approval, the PARO segregates the retained area in coordination with LMB-DENR; DENR furnishes the RD four (4) copies for distribution to the PARO, MARO, Register of Deeds, landowner, and other concerned parties.
  • The PARO conducts final survey and issues a Certificate of Retention (Retention Form No. 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 for the landholding covered by compulsory acquisition, VOS, or VLT/DPS as the case may be (landowner’s title for acquired/disposed portion and landowner’s title for retained area), and
    • another title in the name of the Republic of the Philippines for lands covered by CA and VOS.
  • The Regional Director (RD) reviews and evaluates documents submitted by the PARO; if documents are in order, the RD issues an Order of Approval attaching the sketch plan and specifying retention is subject to final survey by the PARO; otherwise, the RD issues an Order of Denial.
  • The RD forwards the Order of Approval or Denial to the PARO for distribution to concerned parties.
  • The RD’s approval/disapproval decision becomes final after fifteen (15) days from receipt of the decision unless duly appealed to the DAR Secretary under the Rules of Procedure for ALI Cases.

Transitory, repealing, separability provisions

  • Pending applications for retention are processed under the procedures in these rules through Section 17.
  • The Order modifies or repeals DAR Administrative Order No. 4, Series of 1990 and DAR Administrative Order No. 4, Series of 1991, and other inconsistent issuances.
  • If any provision is declared unconstitutional, the validity of remaining provisions is not affected.

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