Right-of-Way Acquisition for Gov't Projects

Policy and constitutional anchor

Section 2 declares a policy anchored on Article III, Section 9 of the Constitution: private property cannot be taken for public use without just compensation.
The State must ensure that owners of real property acquired for national government infrastructure projects are promptly paid just compensation for the expeditious acquisition of required right-of-way (Section 2).

Coverage: national projects; LGU adoption

“National government projects” cover all national government infrastructure projects and their public service facilities, engineering works, service contracts, and related and necessary activities (Section 3).
Coverage includes projects undertaken by government-owned and -controlled corporations (Section 3).
Coverage includes all projects covered by Republic Act No. 6957, as amended by Republic Act No. 7718 (Section 3).
Coverage includes site acquisition, supply or installation of equipment and materials, and implementation through completion, operation, maintenance, improvement, repair, and rehabilitation regardless of source of funding (Section 3).
Local government units (LGUs) may adopt the provisions of this Act for local government infrastructure projects, subject to Republic Act No. 7160 (Section 3).

Modes of acquiring right-of-way land

The government may acquire real property needed for right-of-way site or location for any national government infrastructure project through donation, negotiated sale, expropriation, or any other mode of acquisition as provided by law (Section 4).
For lands granted under Commonwealth Act No. 141, as amended (Public Land Act), the implementing agency must apply either:
- acquisition modes in this Act when the landowner is not the original patent holder and prior acquisition was not through a gratuitous title (Section 4), or
- Commonwealth Act No. 141 rules on acquisition of right-of-way on patent lands when the landowner is the original patent holder or the acquisition from the original patent holder was through a gratuitous title (Section 4).
The implementing agency may use donation or similar mode when the landowner is a government-owned or government-controlled corporation (Section 4).
For needed infrastructure to be built, constructed, or installed on the subsurface or subterranean portion of private and government lands owned, occupied, or leased by other persons (e.g., subways, tunnels, underpasses, waterways, floodways, or utility facilities), the government or authorized representatives may enter and use such subsurface portions if the entry and use are made more than fifty (50) meters from the surface (Section 4).

Negotiated sale: offer, valuation, payment

Section 5 authorizes the implementing agency to acquire right-of-way site or location through negotiated sale under defined rules.
The implementing agency must offer the property owner compensation equal to the sum of:
- the current market value of the land,
- the replacement cost of structures and improvements therein, and
- the current market value of crops and trees therein (Section 5(a)).
The implementing agency may determine the offer using a government financial institution with adequate appraisal experience or an independent property appraiser accredited by the BSP or recognized by a professional association recognized by the BSP, procured under Republic Act No. 9184 (Government Procurement Reform Act) and its consulting services rules (Section 5(a)).
If the property owner does not accept the offer, the implementing agency must initiate expropriation proceedings under Section 6 (Section 5(a)).
The property owner has thirty (30) days to decide whether to accept the offer; refusal, failure to accept, or failure to submit documents necessary for payments triggers immediate expropriation initiation under Section 6 (Section 5(a)).
Section 5(b) extends Section 5(a)(2) (replacement cost for structures/improvements) to owners of structures and improvements without legally recognized rights to the land who are:
- Filipino citizens,
- do not own any real property or any other housing facility (urban or rural), and
- are not professional squatters or members of a squatting syndicate as defined in Republic Act No. 7279 (Urban Development and Housing Act of 1992) (Section 5(b)).
For negotiated sale transfer of title to the Republic, the implementing agency must pay for the seller:
- capital gains tax, and
- documentary stamp tax, transfer tax, and registration fees,
  while the owner pays any unpaid real property tax (Section 5(c)).
Upon request, the implementing agency must remit to the LGU the amount for unpaid real property tax, with the remitted amount subject to deduction from the total negotiated price, and must not exceed the negotiated price (Section 5(d)).
The property owner and implementing agency must execute a deed of absolute sale, provided the property owner submits Transfer Certificate of Title, Tax Declaration, Real Property Tax Certificate, and other documents necessary to transfer title to the Republic; the implementing agency must cause annotation of the deed on the Transfer Certificate of Title (Section 5(e)).
After execution of the deed of sale, the implementing agency must pay:
- Fifty percent (50%) of the negotiated price for affected land (exclusive of taxes remitted to the LGU under Section 5(d)), and
- Seventy percent (70%) of the negotiated price for affected structures, improvements, crops and trees (exclusive of unpaid taxes remitted to the LGU under Section 5(d)) (Section 5(f)).
The implementing agency must pay the remaining amounts:
- Fifty percent (50%) of the negotiated price of affected land, and
- Thirty percent (30%) of the negotiated price of affected structures, improvements, crops and trees,
  exclusive of unpaid taxes remitted under Section 5(d), but only when the land is already completely cleared of structures, improvements, crops and trees (Section 5(g)).
Timing for remaining payments depends on whether the land is wholly or partially affected:
- remaining land payment at the time of transfer of title in the name of the Republic (wholly affected), or
- remaining land payment at the time of annotation of deed of sale (partially affected) (Section 5(g)).
Section 5(a) payment-offer framework also applies to outstanding claims for right-of-way payments, except the offer amount must be the price at the time of taking, including legal interest until fully paid (Section 5 last paragraph).

Expropriation: deposits, possession, valuation

When expropriation is necessary for right-of-way acquisition for national government infrastructure projects, the appropriate implementing agency through the Office of the Solicitor General, the Office of the Government Corporate Counsel, or their deputized government or private legal counsel must initiate expropriation proceedings before the proper court under Section 6 (Section 6 opening paragraph).
The implementing agency must immediately deposit with the court (in favor of the owner) an amount equivalent to the sum of:
- One hundred percent (100%) of the value of the land based on the current relevant zonal valuation of the Bureau of Internal Revenue (BIR) issued not more than three (3) years prior to filing the expropriation complaint (subject to Section 6(c)) (Section 6(a)(1)),
- replacement cost at current market value of improvements/structures as determined by the implementing agency, a government financial institution with adequate appraisal experience, and an independent property appraiser accredited by the BSP (Section 6(a)(2)), and
- current market value of crops and trees as determined by a government financial institution or independent property appraiser selected under Section 5(a) (Section 6(a)(3)) (Section 6(a)).
After compliance with the deposit guidelines, the court must immediately issue an order to the implementing agency to take possession of the property and start project implementation (Section 6(a)).
If the court does not issue a writ of possession within seven (7) working days after the deposit, counsel must immediately seek issuance, and the court must issue the writ of possession ex parte, with no hearing required (Section 6(a)).
The court must release the deposited amount to the owner upon presentation of sufficient proofs of ownership (Section 6(a)).
If the owner cannot be found, is unknown, or is deceased with an unsettled estate, after due diligence, or when there are conflicting claims over ownership and improvements/structures, the implementing agency must deposit the same sum for the benefit of the person adjudged entitled in the same proceeding (Section 6(b)).
After compliance with the deposit guidelines in these cases, the court must immediately order taking of possession and project implementation, and the writ of possession must follow the same seven (7) working days timeline and ex parte issuance rule (Section 6(b)).
When the writ is not issued within seven (7) working days, counsel must immediately seek the issuance, and the court must issue it ex parte, with no hearing required, and the court must release the funds to the adjudged person (Section 6(b)).
Where there is no land classification, the city or municipal assessor must produce land classification and corresponding declaration of real property and improvements within sixty (60) days from filing of the expropriation case (Section 6(c)).
Where there is no zonal valuation, or where the current zonal valuation has been in force for more than three (3) years, the BIR must conduct a zonal valuation within sixty (60) days from filing of the expropriation case, based on the land classification done by the city or municipal assessor (Section 6(c)).
For urgent completion where there is no land classification or no existing zonal valuation, or zonal valuation has been 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 as valuation basis (Section 6(d)).
Upon receipt of the writ of possession, the implementing agency may take possession and start implementation (Section 6(e)).
If the owner contests the implementing agency’s proffered value, the court must determine just compensation within sixty (60) days from filing of the expropriation case; once the decision becomes final and executory, the implementing agency must pay the difference between amounts already paid and the court-determined just compensation (Section 6(f)).
For expropriation transfer to the Republic, the implementing agency must pay documentary stamp tax, transfer tax, and registration fees, while the owner pays capital gains tax and any unpaid real property tax (Section 6(g)).

Appraisal standards for negotiated sale

Section 7 requires market-value determination standards to include:
- 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 and demolition of improvements and the value of improvements,
- size, shape, or location, tax declaration, and zonal valuation,
- price manifested in ocular findings and oral and documentary evidence, and
- facts and events enabling affected owners to acquire similarly situated lands of approximate areas to rehabilitate themselves as early as possible (Section 7(a)).
The IRR must include terms of reference used by government financial institutions and independent property appraisers for market-value determination, and those terms must define in detail the standards in Section 7(a) (Section 7 last paragraph).

Environmental impacts and land use

For right-of-way acquisition of national government infrastructure projects, the implementing agency must take into account ecological and environmental impact (Section 8(a)).
Before undertaking a national government project, the implementing agency must consider environmental laws, land-use ordinances, and all pertinent provisions of Republic Act No. 7160 (Section 8(a)).

Relocation of informal settlers; demolition procedures

The government must establish and develop resettlement sites for informal settlers through the Housing and Urban Development Coordinating Council (HUDGC) and the National Housing Authority (NHA), in coordination with LGUs and concerned implementing agencies, including adequate basic services and community facilities, in anticipation of removal from future infrastructure right-of-way areas under Republic Act No. 7279 (Section 9(a)).
When applicable, concerned LGUs must provide and administer the resettlement sites (Section 9(a)).
If expropriated land is occupied by informal settlers who refuse or are unable to demolish structures and other improvements despite a writ of possession issued under Section 6, the court must issue the necessary writ of demolition to dismantle structures within the property (Section 9(a)).
The implementing agency must observe diligently the procedures provided for in Sections 28 and 29 of Republic Act No. 7279 (Section 9(a)).

Advance appropriations for right-of-way

The government must provide adequate appropriations enabling implementing agencies to acquire required right-of-way in advance of project implementation (Section 10(a)).
Appropriations must cover funds for expenses directly related to right-of-way acquisition, including:
- parcellary survey costs and appraisal of affected properties,
- compensation for affected land, structures, improvements, crops and trees,
- development and implementation costs of resettlement projects, including planning, social preparation, and activities under the resettlement action plan,
- related implementing agency expenses, including:
  - capital gains tax for negotiated sale under Section 5, and
  - documentary stamp tax, transfer tax and registration fees for title transfer, and
  - other relevant administrative expenses for right-of-way management (Section 10(a)).
In PPP projects under Republic Act No. 6957 as amended by Republic Act No. 7718, the implementing agency may require the project proponent—through contract terms and conditions—to:
- advance funds covering right-of-way costs reimbursed later by the implementing agency (except for unsolicited proposals), or
- finance right-of-way costs recoverable partly or fully by the proponent from tolls, fees, or tariffs charged to users of the completed project (Section 10(a)).

Development regulation within declared right-of-way

After approval of an infrastructure project by the head of the implementing agency concerned, with funding authorized in the General Appropriations Act and with defined right-of-way, no national government agency or LGU may allow development or construction, or issue building, construction, development, or business permits contrary to the approved plans and purposes within the right-of-way within two (2) years from date of notice of taking.
Such action is prohibited unless the head of the implementing agency explicitly authorizes it for justifiable reasons (Section 11).

Administrative, civil, and criminal sanctions

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

Implementing rules committee and timeline

The implementing rules and regulations must be prepared by a committee within sixty (60) days from the Act’s approval (Section 13(a)).
The committee must prepare the IRR in consultation with key stakeholders (Section 13(a)).
The committee is chaired by the Secretary of the Department of Public Works and Highways (Section 13(b)).
Members include: the Secretary of the Department of Transportation and Communications, the Secretary of the Department of Energy, the Secretary of the Department of Justice, the Secretary of the Department of Budget and Management, the Director General of the National Economic and Development Authority, the Chairperson of the HUDCC, and other representatives of concerned entities as determined by the committee (Section 13(c)-(h)).

Transitory, separability, and repeal

Section 14 provides that the Act applies to all right-of-way transactions except those involving ongoing transactions that, as of effectivity, have been concluded satisfactorily by the parties and have signed a written agreement stating the price to be paid to the property owner.
Section 15 establishes separability: if any provision is declared unconstitutional or invalid, the remaining parts continue in full force and effect.
Section 16 repeals Republic Act No. 8974 and repeals or amends all inconsistent laws, decrees, orders, rules, and regulations or parts thereof.