RETENTION

RETENTION
Sec. 4, Art, XIII of the 1987 Constitution subjects the distribution of agricultural lands for agrarian reform to reasonable retention limits as Congress may prescribe.

Section 6, RA 6657 observes the right of the persons to own, or retain, directly or indirectly, any public or private agricultural land, the size of which shall vary according to the factors governing a viable family-size farm such as commodity produced, terrain, infrastructure, and soil fertility, but in no case shall exceed five (5) hectares.

WHO ARE COVERED?

All persons whether natural or juridical are covered have the right of retention. Thus, juridical persons like corporations and partnerships are also subject to the five (5) hectare limit.

MAXIMUM RETENTION LIMIT FOR MARRIED

COUPLES

The maximum retention limit is determined by the nature of their property relations.

MARRIAGES UNDER THE CIVIL CODE

In the absence of an agreement for the judicial separation of property, spouses who own only conjugal properties may retain a total of not more than five (5) hectares of such properties.

However, if either or both of them are landowners in their own respective rights (capital and/paraphernal), they may retain not more than five (5) hectares of their respective landholdings.
In no case, however, shall the total retention of such couple exceed ten (10) hectares. (DAR Adm. O. No. 5 [2000], sec. 9 [g])

MARRIAGES UNDER THE FAMILY CODE

For marriages covered by the Family Code, which took effect on 3 August 1988, a husband owning capital property and/or a wife owning paraphernal property may retain not more than five (5) hectares each provided they executed a judicial separation of properties prior to entering into marriage. In the absence of such an agreement, all properties (capital, paraphernal and conjugal) shall be considered to be held in absolute community, i.e., the ownership relation is one, and therefore, only a total of five (5) hectares may be retained. (DAR Adm. O. No. 5 [2000], sec. 9 [h]).

CHILDREN OF LANDOWNERS
If a landowner has children, three (3) hectares may be awarded to each subject to the following qualifications: that he is at least fifteen (15) years old as of 15 June 1988; and that he is actually tilling the land or directly managing it. (Rep. Act No. 6657 [1988], sec. 6). The award to the child is not to be taken from the retained land of the owner and is awarded to the child in his own right as a beneficiary. He is also prohibited from making any constructions therein or commit it to purposes incompatible with its agricultural nature.

APPLIES TO ALL LANDS REGARDLESS OF

ACQUISITION The five (5)-hectare retention limit applies to all lands regardless of how acquired (i.e., by purchase, award, succession, donation) as the law does not distinguish.

Example: A child who was awarded three (3) hectares as a preferred beneficiary under Sec. 6 of RA 6657 and subsequently acquires a five (5)-hectare landholding of his parent by succession can retain only five (5) hectares of the total landholding.

RIGHT OF RETENTION WHEN EXERCISED

Under the Compulsory Acquisition (CA) scheme, the landowner shall exercise his right of retention within sixty (60) days from receipt of the Notice of Coverage from DAR.

Under the Voluntary Offer to Sell (VOS) scheme, the right of retention shall be exercised at the time the land is offered to sell.
- Sec. 4 of DAR AO 5 (2000)

RETAINED AREA
Landowners can choose which area is to be retained by them. However, it is required that the chosen area be the following: the area be compact and contiguous, and shall be least prejudicial to the entire landholding and the majority of the farmers therein. (DAR Adm. O. No. 5 [2000], sec. 2 [b]).

IS THIS ALLOWED?

IF CHOSEN RETAINED AREA IS TENANTED

Two Options of TENANTS: To remains as a lessee. If he chooses to remain in the area retained, he shall be considered a lease holder and shall lose his right to be a beneficiary; or

Be a beneficiary in the same or another agricultural land with similar or comparable features. The tenant must exercise either option within one (1) year after the landowner manifests his choice of the area for retention, or from the time the MARO has chosen the area to be retained by the landowner, or from the time an order is issued granting the retention (DAR Adm. O. No. 5 [2000], sec. 10).

IF CHOSEN AREA IS TENANTED

Sec. 10 of DAR AO 5 (2000) further provides that in case the tenant declines to enter into leasehold and there is no available land to transfer, or if there is, the tenant refuses the same, he may choose to be paid disturbance compensation by the landowner. As a matter of policy, all rights acquired by the tenantfarmers under PD 27 and the security tenure of the farmers or farmworkers on the land prior to the approval of RA 6657 shall be respected. (DAR Adm. O. No. 5 [2000], sec. 2 [c]).

EXEMPTIONS FROM THE RETENTION LIMIT

1.

Original homestead grantees or their direct compulsory heirs at the time of the approval of RA 6657 who continue to cultivate the same. Sec. 6 of Article XIII of the 1987 Constitution. xxx subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities to their ancestral lands. Section 6, RA 6657. Retention Limits. xxx Provided further, That original homestead grantees or their direct compulsory heirs (1) who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they (2) continue to cultivate said homestead.

2. Those entitled to retain seven (7) hectares under PD 27

ASSOCIATION OF SMALL LANDOWNERS V DAR

In Association cases, the Supreme Court held that landowners who failed to exercise their rights to retain under PD 27 can avail of the rights of retention under Sec. 6 of RA 6657 and retain only five (5) hectares. However, in the resolution of the Supreme Court on the motion for reconsideration in the said case, the Court qualified that those who, prior to the promulgation of RA 6657, complied with the requirements under Letter of Instruction (LOI) Nos. 41, 45 and 52 regarding the registration of the land holdings, shall be allowed to enjoy the seven (7) hectare retention limit.

ASSOCIATION OF SMALL LANDOWNERS V DAR

1.

Those landowners who complied with the requirement of either LOI 41, 45 or 52; Those who filed their applications before the deadline set (27 August 1985 as provided by AO. 1 [1985]) whether or not they have complied with LOI Nos. 41, 45 and 52; Those who filed their applications after the deadline but complied with the requirements of LOI 41, 45 or 52; and Heirs of a deceased landowner who manifested, while still alive, the intention to exercise the right of retention prior to 23 August 1990

2.

3.

4.

EXEMPTIONS FROM THE RETENTION LIMIT

As amended under RA 9700: 3. Provincial, city and municipal government units acquiring private agricultural lands by expropriation or other modes of acquisition to be used for actual, direct and exclusive public purposes, such as roads and bridges, public markets, school sites, resettlement sites, local government facilities, public parks and barangay plazas or squares, consistent with the approved local comprehensive land use plan, provided that:

Lands subject to CARP shall first undergo the land acquisition and distribution process of the program When these lands have been subjected to expropriation, the agrarian reform beneficiaries therein shall be paid just compensation."

WAIVER HOW EXERCISED

Executing an affidavit, letter or any other document duly attested by the MARO, Provincial Agrarian Reform Officer (PARO) or Regional Director (RD) indicating that he is expressly waiving his retention right over subject landholding; Signing of the Landowner-Tenant Production Agreement and Farmers Undertaking (LTPA-FU) or Application to Purchase and Farmers Undertaking (APFU) covering subject property; Entering into a Voluntary Land Transfer/Direct Payment Scheme (VLT-DPS) agreement as evidenced by a Deed of Transfer over the subject property;

WAIVER HOW EXERCISED

Offering the subject landholding under VOS scheme and failure to indicate his retained area; Signing/submission of other documents indicating consent to have the entire property covered, such as the form letter of the LBP on the disposition of the cash and bond portions of a land transfer claim for payment, and the Deed of Assignment, warranties and undertaking executed in favor of the LBP; Performing acts which constitute estoppel by laches; and Doing such act or acts as would amount to a valid waiver in accordance with applicable law and jurisprudence. - Sec. 7 of DAR AO 5 (2000)

EXEMPTIONS AND EXCLUSIONS

EXEMPTIONS AND EXCLUSIONS

Sec. 10 of RA 6657, as amended by RA 7881 (1995), specifically enumerates the exemptions and exclusions from CARP, as follows: Sec. 10(A) Lands actually, directly or exclusively used for 1. parks and wildlife, 2. forest reserves, 3. reforestation, 4. fish sanctuaries and breeding grounds, 5. watersheds and mangroves

EXEMPTIONS AND EXCLUSIONS

Sec 10(B) Private lands actually, directly and exclusively used for prawn farms and fishponds Provided that said prawn farms and fishponds have not been distributed and Certificate of Land Ownership Award (CLOA) issued to agrarian reform beneficiaries (ARBs) under CARP

EXEMPTIONS AND EXCLUSIONS

Sec 10(C) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes, seeds and seedling research and pilot production center, church sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the inmates, government ad private research and quarantine centers and all lands within eighteen percent (18%) slope and over, except those already developed.

LUZ FARMS V SECRETARY OF DAR

Sec. 3 (b) and Sec. 11 of RA 6657 were declared unconstitutional by the Supreme Court in so far as they include lands devoted to raising livestock, swine and poultry within its coverage. The use of land is incidental to but not the principal factor or consideration of productivity in this industry.

DAR V SUTTON

DAR AO No. 9, series of 1993 which prescribes a maximum retention limit for owners of lands devoted to livestock (in this case, cattle breeding) raising as unconstitutional as DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of agrarian reform.

FISH PONDS AND PRAWN FARMS

NOT all fish ponds and prawn farms are exempted. Requisites are as follows:

Actually, directly and exclusively used for prawn farms and fishponds as of 12 March 1995, the date of effectivity of RA 7881. Lands have not been distributed to ARBs and no CLOAs have been issued.

FISH PONDS AND PRAWN FARMS

In cases were the fishponds or prawn farms have been subjected to CARP, by voluntary offer to sell, commercial farms deferment or notice of compulsory acquisition, they can be exempt from CARP if a simple and absolute majority of the actual regular workers or tenants consent to the exemption within one (1) year from the effectivity of RA 7881 or on 12 March 1995. In cases where the fishponds or prawnponds have not been subjected to CARP, the consent of the farm workers shall no longer be necessary (Rep. Act No. 6657 [1998], sec. 10[b], as amended.)

CMU V DAR (1992)

The parcel of land involved was transferred by the state to CMU through PD 467 which provided for its communication to a specific use and purpose. Thus, the said land was already set aside for a specific purpose and, in effect, was taken outside the coverage of agrarian reform by law.

CMU V DAR (1992)

The Court here expressly held that as to the determination of when and what lands are found to be necessary for use by the CMU, the school is in the best position to resolve and answer the question and pass upon the problem of its needs in relations to its avowed objectives for which the land was given to it by the State

CMU V DAR (1992)

It thus held that the 400 hectares of land ordered segregated is not covered by the CARP because under Section 10 of RA 6657, lands that are actually, directly, and exclusively used and found to be necessary for school site and campus, including experimental farm stations for educational purposes, and for establishing seed and seedling research and pilot production centers are exempt from the coverage of CARP.

DAR V DECS (2004)

In order to be exempt from the coverage: 1) the land must be "actually, directly, and exclusively used and found to be necessary;" and 2) the purpose is "for school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes. It applied the "plain meaning rule" or verba legis in statutory construction in this case. Where the words of a statute are clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation.

LANDS WITH 18% SLOPE AND ABOVE

NOT ALL Lands with 18% SLOPE are exempted. NOT Exempted: 1. Lands with 18% slope or over 2. Found to be agriculturally developed as of 15 June 1988.

EFFECTS OF EXEMPTION

The first view is that lands exempted or excluded from the law are permanently taken out from coverage of the CARP. The second view is that excluded and exempted lands can be covered by CARP when the reason for their exemption ceases to exist.

MILESTONE FARMS, INC. V OP

To succumb to petitioners contention that "when a land is declared exempt from the CARP on the ground that it is not agricultural as of the time the CARL took effect, the use and disposition of that land is entirely and forever beyond DARs jurisdiction" is dangerous, suggestive of selfregulation. Precisely, it is the DAR Secretary who is vested with such jurisdiction and authority to exempt and/or exclude a property from CARP coverage based on the factual circumstances of each case and in accordance with law and applicable jurisprudence.