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[ DAR ADMINISTRATIVE ORDER NO. 02, s. 2003, January 16, 2003 ]

2003 RULES AND PROCEDURES GOVERNING LANDOWNER RETENTION RIGHTS

Pursuant to Presidential Decree (PD) No. 27, Section 6 of Republic Act (RA) No. 6657, and in view of the Supreme Court's ruling in Association of Small Landowners in the Philippines Incorporated versus Secretary of Agrarian Reform (G.R. No. 78742 [14 July 1989]), the rules and procedures governing the exercise of retention rights under PD 27 and RA 6657 by landowners are hereby revised as follows:

ARTICLE I
Preliminary Provisions

SECTION 1. Coverage. - These rules and procedures shall apply to all applications for retention under PD 27 and RA 6657.

SECTION 2. Statement of Policies. - The exercise of retention right by landowners shall be governed by the following policies:

2.1.	The landowner has the right to choose the area to be retained by him which shall be compact and contiguous, and which shall be least prejudicial to the entire landholding and the majority of the farmers therein.

2.2.	The landowner shall exercise the right to retain by signifying his intention to retain within sixty (60) days from receipt of notice of coverage. Failure to do so within the period shall constitute a waiver of the right to retain any area.

2.3.	Upon manifestation of the landowner's intention to retain, he shall indicate the exact location thereof within thirty (30) days from manifestation date. Failure to do so shall authorize the Municipal Agrarian Reform Officer (MARO) to choose said retention area.

2.4.	The landowner has the obligation to cultivate the land directly or thru labor administration and thereby make the area he retains productive.

2.5.	In all cases, all rights previously acquired by the tenant farmers under PD 27 and the security of tenure of the farmers or farmworkers on the land prior to the approval of RA 6657 shall be respected. Furthermore, actual tenant farmers in the landholdings shall not be ejected or removed therefrom.

2.6.	The sale, disposition, lease or transfer of private lands by the original landowner in violation of RA 6657 shall be null and void. Transactions executed prior to RA 6657 shall be valid only when registered with the Register of Deeds within a period of three (3) months after 15 June 1988 in accordance with Section 6 of RA 6657.

ARTICLE II
Exercise Of Retention Right

SECTION 3. Who May Apply for Retention

3.1.	Any person, natural or juridical, who owns agricultural lands with an aggregate area of more than five (5) hectares may apply for retention area. However, a landowner who exercised his right of retention under PD 27 may no longer exercise the same right under RA 6657. Should he opt to retain five (5) hectares in his other agricultural lands, the seven (7) hectares previously retained by him shall be immediately placed under CARP coverage.

3.2.	A landowner who owns five (5) hectares or less, of land which are not yet subject of coverage based on the schedule of implementation provided in Section 7 of RA 6657, may also file an application for retention and a Certification of Retention shall be issued in his favor.

3.3.	The right of retention of a deceased landowner may be exercised by his heirs provided that the heirs must first show proof that the decedent landowner had manifested during his lifetime his intention to exercise his right of retention prior to 23 August 1990 (finality of the Supreme Court ruling in the case of Association of Small Landowners in the Philippines Incorporated versus the Honorable Secretary of Agrarian Reform).

SECTION 4. Period to Exercise Right of Retention under RA 6657

4.1.	The landowner may exercise his right of retention at any time before receipt of notice of coverage.

4.2.	Under the Compulsory Acquisition (CA) scheme, the landowner shall exercise his right of retention within sixty (60) days from receipt of notice of coverage.

4.3.	Under the Voluntary Offer to Sell (VOS) and the Voluntary Land Transfer (VLT)/Direct Payment Scheme (DPS), the landowner shall exercise his right of retention simultaneously at the time of offer for sale or transfer.

SECTION 5. Where to File Application. - Any duly completed application for retention may be filed with the office of the Regional Director or the Provincial Agrarian Reform Officer (PARO). The receiving office shall forward the application to the MARO with jurisdiction over the landholding after assigning a docket number.

SECTION 6. Waiver of the Right of Retention. - The landowner waives his right to retain by committing any of the following act or omission:

6.1.	Failure to manifest an intention to exercise his right to retain within sixty (60) calendar days from receipt of notice of CARP coverage.

6.2.	Failure to state such intention upon offer to sell or application under the VLT/DPS scheme.

6.3.	Execution of any document stating that he expressly waives his right to retain. The MARO and/or PARO and/or Regional Director shall attest to the due execution of such document.

6.4.	Execution of a Landowner Tenant Production Agreement and Farmer's Undertaking (LTPA-FU) or Application to Purchase and Farmer's Undertaking (APFU) covering subject property.

6.5.	Entering into a VLT/DPS or VOS but failing to manifest an intention to exercise his right to retain upon filing of the application for VLT/DPS or VOS.

6.6.	Execution and submission of any document indicating that he is consenting to the CARP coverage of his entire landholding.

6.7.	Performing any act constituting estoppel by laches which is the failure or neglect for an unreasonable length of time to do that which he may have done earlier by exercising due diligence, warranting a presumption that he abandoned his right or declined to assert it.

ARTICLE III
Award Of Retention Area

SECTION 7. Criteria/Requirements for Award of Retention - The following are the criteria in the grant of retention area to landowners:

7.1.	The land is private agricultural land;

7.2.	The area chosen for retention shall be compact and contiguous and shall be least prejudicial to the entire landholding and the majority of the farmers therein;

7.3.	The landowner must execute an affidavit as to the aggregate area of his landholding in the entire Philippines; and

7.4.	The landowner must submit a list of his children who are fifteen (15) years old or over as of 15 June 1988 and who have been actually cultivating or directly managing the farm since 15 June 1988 for identification as preferred beneficiaries, as well as evidence of such.

7.5.	The landowner must execute an affidavit stating the names of all farmers, agricultural lessees and share tenants, regular farmworkers, seasonal farmworkers, other farmworkers, actual tillers or occupants, and/or other persons directly working on the land; if there are no such persons, a sworn statement attesting to such fact.

SECTION 8. Retention Area - The area allowed to be retained by the landowner shall be as follows:

8.1.	Landowners covered by PD 27 are entitled to retain seven (7) hectares, except those whose entire tenanted rice and corn lands are subject of acquisition and distribution under Operation Land Transfer (OLT). An owner of tenanted rice and corn lands may not retain those lands under the following cases:

	8.1.1.	If he, as of 21 October 1972, owned more than twenty-four (24) hectares of tenanted rice and corn lands; or
	8.1.2.	By virtue of Letter of Instruction (LOI) No. 474, if he, as of 21 October 1972, owned less than twenty-four (24) hectares of tenanted rice and corn lands but additionally owned the following:

		8.1.2.1.	other agricultural lands of more than seven (7) hectares, whether tenanted or not, whether cultivated or not, and regardless of the income derived therefrom; or
		8.1.2.2.	lands used for residential, commercial, industrial or other urban purposes from which he derives adequate income to support himself and his family.

8.2.	Landowners affected by PD 27 who filed their applications for retention before 27 August 1985, the deadline set by the DAR AO No. 1, Series of 1985, may retain not more than seven (7) hectares of their landholdings regardless of whether or not they complied with LOI 41, 45, and 52.

8.3.	Also entitled to such seven (7) hectare retention area under PD 27 are landowners who filed their application after 27 August 1985 but complied with LOI 41, 45, and 52, which provide for the submission of sworn statements containing the following information:

	8.3.1.	List of agricultural lands owned by him throughout the country, indicating therein the area and location of each parcel; :
	8.3.2.	Principal crops to which each parcel of land is devoted. For those areas devoted primarily to rice and/or corn, the landowners shall indicate

		8.3.2.1.	the portions actually cultivated by tenants; 8.3.2.2. the names of such tenants; and
		8.3.2.3.	the area tilled by each tenant as of 21 October 1972;

	8.3.3.	The average gross harvest of each tenant (on a parcel of rice/corn land) during the three (3) crop years immediately preceding 21 October 1972; and
	8.3.4.	Liens and/or encumbrances, if any, the amounts thereof, and the names and addresses of the parties who have liens and/or encumbrances over such properties as of 21 October 1972.

8.4.	Landowners who filed their applications after the 27 August 1985 deadline and did not comply with LOI 41, 45, and 52 shall be entitled only to a maximum of five (5) hectares as retention area.

8.5.	Landowners who failed to apply for retention under PD 27, and who did not comply with the 27 August 1985 deadline, shall be allowed to retain a maximum of five (5) hectares in accordance with RA 6657 except those who under PD 27 are disqualified to retain:

	8.5.1.	If he, as of 21 October 1972, owned more than twenty-four (24) hectares of tenanted rice and corn lands; or
	8.5.2.	By virtue of Letter of Instruction (LOI) No. 474, if he, as of 21 October 1972, owned less than twenty-four (24) hectares of tenanted rice and corn lands but additionally owned the following:

		8.5.2.1.	other agricultural lands of more than seven (7) hectares, whether tenanted or not, whether cultivated or not, and regardless of the income derived therefrom; or
		8.5.2.2.	lands used for residential, commercial, industrial or other urban purposes from which he derives adequate income to support himself and his family.

8.6	A landowner whose landholdings are covered under CARP may retain an area of not more than five (5) hectares thereof. In addition, each of his children, whether legitimate, illegitimate, or legally adopted, may be awarded an area of not more than three (3) hectares as preferred beneficiary, provided that the child is at least fifteen (15) years old as of 15 June 1988 and that he is actually tilling the land or directly managing the farmholding from 15 June 1988 up to the filing of the application for retention and/or the time of the acquisition of the landholding under CARP.

8.7.	The original homestead grantees or their direct compulsory heirs who still own the original homestead at the time of the approval of RA 6657 may retain the same area as long as they continue to cultivate the said homestead.

8.8.	For marriages covered by the New Civil Code, in the absence of the 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 respective rights (capital and/or 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.

8.9.	For marriages covered by the Family Code, which took effect on 3 August 1988, a husband owning capital property and/or a wife owning a paraphernal property may retain not more than five (5) hectares each, provided they executed a judicial separation of properties prior to entering into such 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 relationship is one, and, therefore, only a total of five (5) hectares may be retained.

ARTICLE IV
Effects Of The Exercise Of Retention Right

SECTION 9. When Retained Area is tenanted

9.1.	In case the area selected by the landowner or awarded for retention by the DAR is tenanted, the tenant shall have the option to choose whether to remain therein as lessee or be a beneficiary in the same or another agricultural land with similar or comparable features.

9.2.	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 in such amount as may be agreed between the parties taking into consideration the improvements made on the land. However, in no case shall the agreed amount be less than five (5) times the average gross harvest on their landholding during the last five (5) preceding calendar years pursuant to Section 36 of RA 3844, as amended by Section 7 of RA 6389. If the parties fail to agree on the amount of disturbance compensation, either party may file a petition for fixing disturbance compensation with the appropriate Provincial Agrarian Adjudicator (PARAD). In the latter case, the petitioner must show proof that earnest efforts were exerted by the parties to fix the amount of disturbance compensation, which efforts proved unsuccessful, before the same was filed with the PARAD. The tenant shall not be dispossessed or ejected from the landholding, unless disturbance compensation is paid and proof thereof is submitted to the MARO.

9.3.	The tenant must exercise his option within one (1) year from the time 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.

9.4.	In case the tenant chooses to remain in the retained area, he shall be considered a leaseholder and shall lose his right to be an Agrarian Reform Beneficiary (ARB) under CARP. In this case, the required lease agreement shall be executed in accordance with relevant issuances on the matter.

9.5.	The provisions on preemption and redemption under RA 3844, as amended, shall apply to the lessee.

ARTICLE V
Operating Procedures

SECTION 10. Responsibilities of the MARO - In the processing of applications for retention, the MARO shall have the following responsibilities:

10.1.	Determine whether or not the original homestead grantees or their direct compulsory heirs still own and actually cultivate the homestead land, when applicable.

10.2.	Conduct field verification and investigation, together with the landowner or his authorized representative, to determine the following:

	10.2.1.	Landholding of the landowner in relation to his application for retention;
	10.2.2.	Qualifications of the applicant and their children as their compulsory heirs;
	10.2.3.	Tenants, farmworkers and/or actual occupants within subject landholding; and
	10.2.4.	Other factors relevant to the application for retention.

10.3.	Notify all tenants, farmworkers and/or actual occupants of the schedule of all conferences/dialogues regarding said application for retention.

10.4.	Identify and facilitate the necessary land transfer for tenants opting to be beneficiaries in another landholding of the same landowner with similar or comparable features.

10.5.	Identify the tenants opting to be leaseholders and facilitate the execution of the corresponding leasehold contracts.

10.6.	Preside over the negotiations between the tenant/beneficiaries in the determination of disturbance compensation should the tenants/beneficiaries opt to accept the same from the landowner.

10.7.	Prepare a sketch plan of the area to be retained by the landowner in coordination with the Department of Environment and Natural Resources (DENR).

10.8.	Prepare a Retention Folder indicating therein his findings and recommendations and submit the same to the PARO.

10.9.	Identify prime agricultural areas owned by landowners who waived their right to choose which area to retain or those who waived their right to exercise the right of retention using the following factors:

	10.9.1.	Commodity produced;
	10.9.2.	Terrain;
	10.9.3.	Infrastructure available; and
	10.9.4.	Soil fertility.

10.10.	Notify the landowner, through personal service with proof of receipt or by registered mail with return card, the portion selected as his retention area upon failure of the landowner to exercise his right of retention within the period specified in these Rules.

SECTION 11. Responsibilities of the PARO - The PARO, on the other hand, shall have the following responsibilities:

11.1.	Review and evaluate the report and recommendations submitted by the MARO.

11.2.	If the Retention Folder is in order, forward the same, together with his findings and recommendations, to the Regional Director for appropriate action. Otherwise, return the same to the MARO for appropriate action. The PARO may conduct his own field investigation and conferences/dialogues.

11.3.	Upon receipt of the Retention Folder and the Order of Approval from the Regional Director, the PARO shall segregate the appropriate retained area in coordination with the DENR. The DENR shall furnish the Regional Director four (4) copies for distribution to the PARO, MARO, Register of Deeds, landowner and other concerned parties.

11.4.	Conduct the final survey of the area and draft a Certificate of Retention. 11.5. On the basis of the owner's duplicate copy of title, approved segregation plan, and technical description, request the Register of Deeds to prepare two (2) separate titles:

	(1)	Landowner's title for the landholding covered by compulsory acquisition, voluntary offer to sell or voluntary land transfer/direct payment scheme, as the case may be; and
	(2)	Landowner's title for the retained area;

	and request the Register of Deeds to prepare another title in the name of the Republic of the Philippines for lands covered by CA and VOS.

SECTION 12. Responsibilities of the Regional Director - The Regional Director shall have the following responsibilities:

12.1.	Review and evaluate the documents submitted by the PARO. If the documents are in order, issue an Order of Approval attaching the sketch plan of the retained area. The Order of Approval shall specify that the retained area is subject to a final survey to be conducted by the PARO. Otherwise, issue an Order of Denial; and

12.2.	Forward the Order of Approval or Denial, as the case may be to the PARO for distribution to the concerned parties.

12.3.	Forward copies of all orders of approvals or denials to the BLAD for the purpose of creating a database on all lands subject of retention and landowners who already exercised retention rights. The Bureau of Land Acquisition and Distribution (BLAD) shall also periodically monitor if any person had applied for or been granted retention more than once in any other region in the Philippines based on its records.

12.4.	Issue a Certificate of Retention.

SECTION 13. Decision of the Regional Director - The decision of the Regional Director approving or disapproving the application for retention shall become final after fifteen (15) days from receipt of the decision, unless duly appealed to the DAR Secretary pursuant to the Rules of Procedure for Agrarian Law Implementation (ALI) cases.

ARTICLE VI
Final Provisions

SECTION 14. Transitory Provision - All pending applications for retention shall be processed in accordance with the procedures provided herein. Within ninety (90) days from effectivity of this Order, all Regional Offices shall submit an inventory of all past and present pending cases involving retention in accordance with the format to be prepared by the BLAD within fifteen (15) days from the date of this Order.

SECTION 15. Repealing Clause - This Order modifies or repeals DAR Administrative Order No. 11, Series of 1990, Administrative Order No. 4, Series of 1991, Administrative Order No. 5, Series of 2000, and all other administrative issuances inconsistent herewith.

SECTION 16. Separability Clause - In the event that any of the provisions of this Order is declared unconstitutional or illegal, the validity of the other provisions shall not be affected by said declaration.

SECTION 17. Effectivity - This Order shall take effect ten (10) days after its publication in two (2) national newspapers of general circulation.

Adopted: 16 January 2003

(SGD.) HERNANI A. BRAGANZA
Secretary