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AGRARIAN LAW

by
Barte

INTRODUCTION

A. DEFINITIONS AND TERMS

Reform – presupposes that something is defective, hence, needs reformation


and correction.

Land Reform – denotes a broad concept of conventional and revolutionary


measures intended to correct certain defects in the relationship between
landowner and tiller regarding their rights and obligations in the cultivation and
management of landholding.

Agrarian Reform – refers not only to land reform but also embraces a full range
of measures designed to improve the relationship between landowner and tiller,
employer and employee, corporate management and stockholders, cooperatives
and members, and other farmers’ organizations including their economic, social
and political relations with the community and the government.

Comments:

Under the Comprehensive Agrarian Reform Law of 1998 (R.A. No. 6657),
Agrarian Reform is defined as the redistribution of lands, regardless of crops or
fruits produced, to farmers and regular farmworkers who are landless,
irrespective of tenurial arrangement.

AGRARIAN STRUCTURE

Refers to that complex set of relationships within the agricultural sector between
tenure structure, production structure and structure for supporting
services.
1. Land Tenure Structure – is a concept that connotes one or more types of
land tenure system regulating the rights to ownership and control and usages of
land and the duties accompanying such rights.

a. Agricultural Tenancy – refers to the manner of holding agricultural lands.


b. Share Tenancy – under this system of landholding, tillers work the land
as sharecroppers entitled to share in the produce of the land.
c. Leasehold Tenancy – is a tenurial system which was instituted by R.A.
No. 3844 (Code of Agrarian Reforms) characterized by lessor and lessee
relationship which is created either by written or oral agreement between
the parties or impliedly by acceptance of benefits by the landowner, or by
an act of cultivation thru the toleration of the owner.

Comments:

Leasehold relationship abolished the share tenancy system under the Rice Share
Tenancy Act of 1933 as amended, P.D. No. 27 was issued by then President
Ferdinand Marcos which aside from upholding the leasehold relationship,
likewise ordained the emancipation of tenant-farmers from the bondage of the
soil, and considered them ipso facto owners of the lands they till primarily
devoted to rice and corn.

P.D. No. 27 (Tenants Emancipation Decree) likewise fixed the retention limit for
the landowner an area not exceeding seven (7) hectares, provided, that such
landowner is cultivating or will now cultivate the land, and furthermore, that he
does not own other agricultural lands of more than seven (7) hectares.

d. Amortizing Owner – a tenant-farmer whose status had been raised


automatically by operation of law from leasehold tenant to that of
amortizing owner, who makes repayments of the purchase price of the
land he tills to the Land Bank.

e. Full Owner or Owner-Cultivator – is an amortizing owner (tenant-farmer)


who has completed full payment of his amortization to the Land Bank of
the Philippines, and is therefore entitled to a certificate of title under the
Torrens System.

Comments:

Under R.A. No. 3844, as amended by R.A. No. 6389, there are three shifts in the
conversion of the tenurial status of tenant-farmer to full owner, namely: share
tenant to leaseholder to amortizing owner, and from amortizing owner to full
owner (owner-cultivator).

An amortizing owner by operation of law (P.D. No. 27) is entitled to an


Emancipation Patent which serves as a farmholder’s provisional title of
ownership to the land upon completion of his amortization repayments to the
Land Bank, or to the Landowner in cases of farmers who have been amortizing
their lands with the landowner.

f. Owner-Cultivator – is the term applied to a tenant – farmer who has


attained the status of full owner and qualified beneficiary under the
Agrarian Reform Law of the Philippines.

2. Production Structure – is a concept that refers to the use of the land, nature
and method of farm operation, and the process of production.

3. Structure for Supporting Services – is an agrarian reform measure


designed to help the tenant – tiller in the availment of credit facilities, marketing
of his products, supplying of seeds, insecticides, fertilizers, irrigation, storage,
processing and other technical assistance / services in direct bearing to reforms
of tenure and production structures.

HISTORICAL BACKGROUND

Even before the Spaniard came into these Island, the idea of private ownership
of land was not prevalent. Land was commonly owned by the community or
barangay, cultivated communally or individually by members of the barangay.

When the Spaniard came in 1521, common ownership of land slowly took the
backseat, and private property became dominant, paving the way to Encomienda
system.

The encomienda was a vehicle used to collect taxes from Filipinos, who tilled the
land and surrendered part of their produce to the encomendero as tribute in the
form of agricultural crops, poultry, woven mats, etc. Towards the end of the 18 th
century, there was a mad scramble for wealth thru world trade. Thus,
encomienda were replaced by haciendas.

CONSTITUTIONAL MANDATES ON AGRARIAN REFORM

The state shall promote a just and dynamic social order that will free the people
from poverty through policies adequate social services, promote full employment,
a rising standard of living, and an improve quality of life for all.

The state shall promote a comprehensive rural development and agrarian reform.
The State shall, by law, undertake an agrarian reform program founded on the
right of the farmers and regular farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other farmworkers, to receive a
just share of the fruits thereof. (Art. XIII, Social Justice and Human Rights, Sec.
4).

CONTEMPORANEOUS PRECEPTS AND MEASURES

In order to implement the 1987 Constitution, Congress passed the


Comprehensive Agrarian Reform Law of 1988. (R.A. NO. 6657) which was
signed into law by the President of the Phillippines on June 10, 1988, and took
effect on June 15, 1988. This is the main law on agrarian reform in the
Philippines today. The CARL provides that all other laws on agrarian reform not
contrary or inconsistent with the provisions of this Act shall have suppletory
effect.

LAND REFORM MEASURES RETRACED

Treaty of Paris (1898) – the confiscation of friar lands and distributed among
peasants by the independent government of Malolos during the Philippine
Revolution.

Philippine Bill (1902) – Limited private individual landholdings to 16 hectares,


and corporate landholdings to 1,024 hectares.

Land Registrations Act (1902) – Landowners were required to register their


landholdings and acquire Torrens titles to land properties.

Friar Land Act – Instituted transfer of friar lands to the tenants to diffuse the
peasant unrest.

Rice Share Tenancy Act (Public Act No. 4054) - which provided for a 50-50
sharing of the crop, an interest rte ceiling of 10 percent per crop year, and
safeguards against arbitrary dismissal of tenants by landlords.

Commonwealth Act.No. 278 of 1938 – to buy farms and large estates for
subletting to bonafide occupants with an option to buy, thru the National Land
Settlement Administration (NLSA).

Sugar Cane Tenancy Contracts Act. (Act. No. 4113) – makes it a duty of the
sugar central to exhibit to the tenant the receipts of the number of tons milled by
the landowner thereat.
Commonwealth Act. No. 103 – created the Court of Industrial Relations (CIR)
which exercised jurisdiction over disputes arising from relationship between
agricultural workers and landowners.

Commonwealth Act. No. 213 – deals with the right to form legitimate labor
organizations and to enter into collective bargaining agreements between
management and labor.

Commonwealth Act No. 178 – which improved the provision of Act No. 4054
the Rice Share Tenancy Act, giving more teeth and protection to the rights of
tenants of agricultural lands.

Republic Act. No. 34 – amended certain Sections of the Rice Share Tenancy
Act providing for a 70 – 30 crop – sharing method.

Republic Act No. 1160 – established the National Resettlement and


Rehabilitation Administration (NARRA) of landless dissidents and other landless
farmers.

Republic Act No. 1199 (Agricultural Tenancy Act) – infused an added boost to
the tenurial rights of tenant – tiller.

Land Reform Act (R.A. No. 1400, 1955) - guaranteed the expropriation of all
tenanted landed estates. It set a retention limit of 300 hectares for individually –
owned estates, and 600 hectares for corporate – owned estates.

Republic Act. No. 1267 – An Act Creating the Court of Agrarian Relations to try
and decide all matters arising from the relationship of persons in the cultivation
and use of agricultural lands.

Republic Act. No. 3844 – marked the abolition of share tenancy and / or the
system of share – cropping between landowner and tenant, and the automatic
conversion of share tenants into leaseholders.

Republic Act No. 6389 (Code of Agrarian Reforms) – an improvement of R.A.


No. 3844, this amendatory Act featured the creation of the Department of
Agrarian Reforms (DAR).

Agrarian Reform Special Fund Act (Rep. Act. No. 6390) – provided for a
special account and financial support for the Agrarian Reform Program of the
government.

Presidential Decree No. 2 – declaring the entire nation as a land reform area.

Presidential Decree No. 27 – decreeing the emancipation of the tenants,


transferring to them the ownership of the land they till.
Proclamation No. 131 – Instituting a comprehensive agrarian reform program
which covers, all public and private agricultural lands as provided in the
Constitution.

Executive Order No. 228 – Declaring full landownership to qualified


beneficiaries covered by Presidential Decree No. 27.

Executive Order No. 229 – Providing for the mechanisms for the implementation
of the comprehensive agrarian reform program, creating the Presidential
Agrarian Reform Council (PARC).

Executive Order No. 129-A – Modifying Executive Order No. 129, reorganizing
and strengthening the Department of Agrarian Reform.

Republic Act No. 6657 - As primary agrarian land reform measure in the
country today, its operation covers all public and private agricultural lands,
including other lands of the public domain suitable for agriculture.
CHAPTER I
AGRICULTURAL LEASEHOLD CONCEPT

A. AGRICULTURAL LAND REFORM CODE (Rep. Act. No. 3844)

REPUBLIC ACT No. 3844 August 8, 1963


AN ACT TO ORDAIN THE AGRICULTURAL LAND REFORM CODE AND TO
INSTITUTE LAND REFORMS IN THE PHILIPPINES...

REPUBLIC ACT No. 3844

AN ACT TO ORDAIN THE AGRICULTURAL LAND REFORM CODE AND TO


INSTITUTE LAND REFORMS IN THE PHILIPPINES, INCLUDING THE
ABOLITION OF TENANCY AND THE CHANNELING OF CAPITAL INTO
INDUSTRY, PROVIDE FOR THE NECESSARY IMPLEMENTING AGENCIES,
APPROPRIATE FUNDS THEREFOR AND FOR OTHER PURPOSES

Section 1. Title - This Act shall be known as the Agricultural Land Reform
Code.

1. PREFATORY STATEMENTS

The thrust of this legislation is the drastic abolition of share tenancy system. It
provided for the automatic conversion of the sharecropper to the status of an
agricultural lessee, governed by the system of agricultural leasehold which is
established either:

a. by agreement of the parties, whether oral or written, or


b. by operation of law.

The Agricultural Land Reform Code still finds application to the following:

a. areas which have not come within the operation and implementation of
P.D. No. 27;
b. agricultural laborers subject to the provisions of the Labor Code;
c. organization and operation of the Land Bank;
d. provisions on resettlements of farmers;
e. right to pre-emption and redemption, with respect to land-owner’s retained
area, should such landowner decide to sell his tenanted / leased retained
area, the tenant has the preferential right to purchase and / or redeem the
same in case the land is sold to a third person without the tenant’s
knowledge;
f. right of the tenant / lessee to 75% share from the standing crops;

Three shifts in the mode of acquisition

a. The automatic conversion of the status of share tenant to leaseholder


characterized by payment of fixed rentals;
b. The second shift which is the conversion of the leaseholder to amortizing
owner, characterized by the Land Bank purchase of the property with a
concomitant obligation imposed on the tenant-lessee to pay Land Bank
on amortization basis the purchase price of the farmholding;
c. The third shift which converts the status of an amortizaing owner into full
owner or owner-cultivator upon full payment of the remaining balance of
the amortization.

Section 3. Composition of Code -

1. An agricultural leasehold system to replace all existing share tenancy


systems in agriculture;
2. A system of crediting rental as amortization payment on purchase price;
3. A declaration of rights for agricultural labor;
4. A machinery for the acquisition and equitable distribution of agricultural
land;
5. An institution to finance the acquisition and distribution of agricultural land;
6. A machinery to extend credit and similar assistance to agricultural
lessees, amortizing owners-cultivators, owners-cultivator and
cooperatives;
7. A machinery to provide marketing, management and other technical
assistance and / or services to agricultural lessees, amortizing owners-
cultivators, owner-cultivator, cooperatives;
8. A machinery for cooperative development;
9. A department for formulating and implementing projects of agrarian
reform;
10. An expanded program of land
11. A judicial system to decide issues arising under this Code.
12. A machinery to provide legal assistance to agricultural lessees, amortizing
owners-cultivator, and owners-cultivator.

Repayment Scheme and Credit Assistance


Jurisdiction on Agrarian Disputes
All agrarian disputes are now under the cognizance of the Department of
Agrarian Reform thru the Agrarian Reform Adjudication Board.

The Department of Agrarian Reform Adjudication Board (DARAB) in turn


delegates its functions to the respective Regional and Provincial Adjudicators of
the DAR. Any decision, order, award or ruling of the DAR on any agrarian
dispute, may be brought to the Court of Appeals on certiorari.

Special Agrarian Courts

Under the present law (R.A. No. 6657) all controversies involving the
determination of just compensation and prosecution of all criminal offenses
arising from violations of the provisions of this Act, fall under the original and
exclusive jurisdiction of Special Agrarian Courts.

Bureau of Agrarian Legal Assistance

They shall be responsible for the development of plans and programs for the
extension of legal information to farmers; extension of legal services to them.

DEFINITION OF TERMS

Agricultural land – means land devoted to any growth, including but not limited
to crop lands, saltbeds, fishponds, idle land and abandoned land.

Agricultural lessee – means a person who by himself and with the aid available
from within his immediate farm household, cultivates the land belonging to, or
possessed by, another with the latter’s consent.

Agricultural lessor – means a person, lets or grants to another the cultivation


and use of his land for a price certain.

Agricultural year – means the period of time required for raising a particular
agricultural product.

Farm implements – means hand tools or machineries in a farm enterprise.

Immediate farm household - means the members of the family of the lessee or
lessor and other persons who are dependent upon him for support.

Proven farm practices – means sound farming practices.

Personal cultivation – means cultivation by the lessee or lessor in person.


Work animals – means animals ordinarily employed in a farm enterprise.

Agrarian dispute – means any controversy relating to terms, tenure or condition


of employment, or concerning an association or representation of persons in
negotiating, maintaining, changing or seeking to arrange terms on conditions of
employment.

Agricultural owner-cultivator – means any person who, personally cultivates


his own land.

Fair rental value – means the value not in excess of allowable depreciation plus
6% interest per annum.

Incapacity – means any cause or circumstance which prevents the lessee from
fulfilling his contractual and other obligations under the Code.

Modes of Land Tenure Allowed under R.A. No. 3844

1. Leasehold system – characterized by a tenant – farmer personally and


actually cultivating the farmholding under a leasehold relationship whereby
the lessee pays a fixed amount of rental whether in cash or in kind to the
lessor.

2. Share tenancy

3. Owner-cultivatorship

4. Cooperative-cultivatorship – which is a form of agrarian relationship


among members of a cooperative who work and live on the land as tillers
in common.

5. Labor administration – which employs laborers and workers on a daily


wage basis, and engaged in a large scale plantation farming of permanent
crops by their respective managers.

How Leasehold Relation is Established

1. by agreement of the parties


2. by operation of law – implementation of R.A. No. 3844 providing for
the abolition of share tenancy.

Parties to Leasehold Relation

1. the landholder
2. the person who personally cultivates the land.
ESSENCE OF LEASEHOLD RELATION

1. It is essentially personal, in the sense that it cannot be exercised by third


persons other than the lessor himself, and the lessee who personally
cultivates the land;

2. It has the nature of an in rem or real relationship, because it imposes a


burden upon the land subject of the landholding and continues to exist
even by the death or incapacity of either party, or the expiration of the
agreement.

Tenurial Arrangement of Leasehold

It makes it a penal offense to eject a tenant illegally from his holding except upon
approval of the court.

Doctrine on security of land tenure

Security of land tenure “the agricultural leasehold relation under this Code, shall
not be extinguished by mere expiration of the term or period in the leasehold
contract, in case the agricultural lessor sells, alienates of transfers the legal
possession of the landholding, the purchaser or transferee thereof shall be
subrogated to the rights and substituted to the obligations of the agricultural
lessor.”

In order to possess the status of a de jure tenant, the following essential


requisites must concur, to wit:

1. the parties are the landowner and the tenant;


2. the subject is agricultural land;
3. there is consent;
4. the purpose is agricultural production;
5. there is personal cultivation;
6. there is sharing of harvests.

The absence of one does not make an occupant of a parcel of land or a cultivator
thereof, a de jure tenant, hence cannot invoke the defense of security of tenure.

What then constitutes as family-size farm so as to give rise to tenancy


relationship?

Family-size farm – an area of farmland that permits efficient use of labor and
capital resources of the farm family and will produce an income sufficient to
provide a modest standard of living to meet a farm family’s needs for food,
clothing, shelter, and education with possible allowance for payment of yearly
installments on the land, and reasonable reserves to absorb yearly fluctuations in
income.

What now is the effect of the law to cultivator-tiller of a less than family-size
farms?

Such landholder-tiller or tiller-sharer, is at most considered as a mere caretaker


before the eyes of the law who is not entitled to the security of tenure.

Should the landholding be sold or alienated to a new owner, what happens


to the rights and obligations of the transferee and his heirs?

The transferee and his heirs are subrogated to the rights and obligations of the
former landowner. However, the change of landowner cannot be allowed to raise
the status of a mere caretaker or tiller – sharer to that of an agricultural tenant
and leaseholder.

Causes for Extinguishment of Leasehold Relation

1. Abandonment of the landholding;


2. Voluntary surrender of the landholding;
3. Absence of successor or qualified heir, in case of death or permanent
incapacity of the lessee;
4. Judicial ejectment of the lessee;
5. Acquisition by the lessee of the landholding;
6. Termination of the leasehold under Sec. 28;
7. Mutual consent of the parties;
8. Conversion of the landholding for non-agricultural purposes.

Obligations of the Lessees

1. To cultivate and take care of the farm as a good father of a family


2. To inform the agricultural lessor any trespass committed by third persons
upon the farm;
3. To take reasonable care of the work animals and farm implements
delivered to him by the agricultural lessor, he shall be held responsible
and made answerable therefore to the extent of the value of the work
animals and / or farm implements at the time of the loss, death or
destruction;
4. To keep his farm and growing crops attended to during the work season.
In case of unjustified abandonment all of the expected produce, any upon
order of the court be forfeited in favor of the agricultural lessor.
5. To notify the agricultural lessor at least three (3) days before the date of
harvesting;
6. To pay the lease rental to the agricultural lessor when it falls due.
Section 26, R.A. No. 3844, empowers the lessee to take direct action against any
trespasser to the landholding without waiting for the response from the lessor.

Prohibitions to Agricultural Lessee

a. To contract to work additional lanholdings belonging to a different


agricultural lessor;
b. To acquire and personally cultivate a family-size farm without knowledge
and consent of the agricultural lesor;
c. To employ a sub-lessee.

Termination of Leasehold by the Lessee

1. Cruel, inhuman or offensive treatment of the agricultural lessee by the


agricultural lessor;
2. Non-compliance on the part of the agricultural lessor with any of the
obligations imposed;
3. Compulsion of the agricultural lessee by the agricultural lessor to do any
work not in any way connected with farm work;
4. Commission of a crime by the agricultural lessor against the agricultural
lessee
5. Voluntary surrender due to circumstances more advantageous to him
and his family.

Rights of the Agricultural Lessor

1. To inspect and observe the extent of compliance of their contract and the
provision of this Chapter;
2. To propose a change in the use of the landholding to other agricultural
purposes. In case of disagreement, the same shall be settled by the
Court (Now Adjudication Board);
3. To acquire the agricultural lessee, to adopt in his proven farm practices
necessary to the conservation of the land, improvement of its fertility and
increase its productivity: That in case of disagreement as to what proven
farm practice the lessee shall adopt, the same shall be settled by the
court (now the DARAB);
4. To mortgage expected rentals.

Obligations of the Lessor

1. To keep the lessee in peaceful possession and cultivation of his


landholding;
2. To keep intact the permanent useful improvements existing on the
landholding.
The lessee may seek relief from the nearest Regional Agrarian Reform
Adjudicators (RARAD) or the Provincial Agrarian Reform Adjudicators (PARAD)
to compel the agricultural lessor to comply with this obligation in case of refusal,
neglect or resistance on the part of the lessor.

Prohibition to the Agricultural Lessor

1. To dispossess the agricultural lessee of his landholding except upon


authorization by the court under Section 36.
2. To require the agricultural lessee to assume, the payment of the taxes
on the landholding;
3. To require the agricultural lessee to assume, any part of the rent, to pay
to third persons for the use of the land;
4. To deal with millers or processors without written authorization of the
lessee;
5. To discourage, the formation, maintenance or growth of unions or
organizations of agricultural lessees in his landholding.

Ground for Disposition of Agricultural Lessee

1. When the landholding is declared by the Department Head to be suited for


residential, commercial, industrial or some other urban purposes;
2. Failure to comply with any of the of the terms and conditions of the
contract of lease;
3. Planting of crops or used the landholding for a purpose other than what
had been previously agreed upon;
4. Failure to adopt proven farm practices as determined under paragraph 3
of Section twenty-nine;
5. When through fault or negligence of the lessee, the land or other
substantial permanent improvement thereon is substantially damaged or
destroyed or has reasonably deteriorated;
6. Failure to pay the lease rental when it falls due;
7. Employment of a sub-lessee.

The above causes are grounds for ejectment of an agricultural lessee only after
observance of due process.

Lessee’s Right of Pre-emption and Redemption

In case the agricultural lessor decide to sell the landholding, the agricultural
lessee shall have the preferential right to buy the same under reasonable terms
and conditions: each shall be entitled to said preferential right only to the extent
of the area actually cultivated by him. The right of pre-emption may be exercised
within one hundred eighty (180) days from notice in writing, which shall be served
by the owner on all lessees affected and the Department of Agrarian Reform.
He must either tender payment of, or present a certificate from the Land Bank
that it shall make payment pursuant to Sec. 80 of this Code. If the latter refuses
to accept such tender or presentment, he may consign it with the Court.

Any dispute as to reasonableness of the terms and conditions, may be brought


by the lessee or by the Department of Agrarian Reform to the proper Court of
Agrarian Relations.

Comments:

The right of pre-emption as distinguished from redemption, is the right to


purchase the property from the agricultural lessor by the lessees which is
exercised before it is sold to a third person other than the lessee.

The lessee may consign the purchase money with the Department of Agrarian
Reform.

Lessee’s Right of Redemption

In case the landholding is sold to a third person without the knowledge of the
agricultural lessee, the latter shall have the right to redeem the same at a
reasonable price and consideration: where there are two or more agricultural
lessees, each shall be entitled to said right of redemption only to the extent of the
area actually cultivated by him. The right of redemption under this Section may
be exercised within one hundred and eighty days from notice in writing.

Upon the filing of the petition, the said period o one hundred and eighty days
shall cease to run.

Any petition shall be resolved within sixty days.

The Department of Agrarian Reform shall initiate, while the Land Bank shall
finance, said redemption as in the case of pre-emption.

Right to Self-organization

The farmworkers shall have the right to self-organization and form, join or assist
farmworkers’ organizations of their own choosing for the purpose of collective
bargaining through representatives of their own choosing.

Bill of Rights for Agricultural Labor:

1. Right to self – organization;


2. Right to engage in concerted activities.
3. Right to minimum wage;
4. Right to work for not more than eight hours;
5. Right to claim for damages for death or injuries sustained while at work;
6. Right to compensation for personal injuries; death or illness;
7. Right against suspension or lay-off.

Comments:

The right to self – organization includes the right to strike and hold picket in order
to compel the management in the case of large scale plantations and
multinational corporations to meet the demands of the farm workers for wage
increase and better working conditions.

Irrigation Facilities

Permanent irrigation system may be constructed at the expense of the lessor:

1. Should the lessor refuse to bear the expenses, he should not be entitled
to the increase in rental and shall upon the termination of the leasehold
relationship pay the lessee or his their the reasonable value of the
improvements at the time of the termination;
2. Should the lessor bear expenses he shall be entitled to an increase in the
rental proportionate to the resultant increase in production.

Management of Irrigation System

1. When constructed and operated by the government. Lessees either as


individuals or groups shall allocate not more than 25% of their rental
collection to the government.
2. Irrigation systems installed and / or constructed at expense of landowner
or agricultural lessor – acquisition of these irrigation system shall be
initiated by the DAR to be financed by the Land Bank.

Lease of Ricelands and Lands Devoted to Other Crops

1. 25% of the average normal harvest – shall be the amount of rental for
ricelands or estimated normal harvest during the three (3) agricultural
years immediately preceding the establishment of the leasehold after
deducting the expenses for seeds, cost of harvesting, threshing, loading,
hauling and processing;
2. Average normal harvest for three (3) preceding years.
3. No agreement as to rental – the court (now DAR) shall fix a provisional
rental until fixed rental is determined within (30) days from submission of
the case for decision.

Amortization Payment for Land under Leasehold:


The rentals paid by the lessee to the lessor at the place agreed upon by the
parties shall be credited as amortization payments for the purchase price of the
landholding titled by the leasee:

a) When the landholding is expropriated by the government;


b) When it is redeemed.

Whatever balance remaining after crediting as amortization the rental paid, the
same may be finances by the Land Bank in the same ratio and mode of payment
provided under Section 80 of the Code.

Default on the Part of the Lessee: Should the lessee incur default in the payment
of at least three (3) installments on the loan, the lender shall immediately notify
the Land Bank and the DAR so that appropriate steps shall be taken by these
agencies:

a) to answer for the default in case the failure is due to fortuitous event
b) to take over the ownership and administration of the landholding.

Where the case of the default is attributable to the lessee, the DAR shall
endeavor to substitute the defaulting amortization owner. In case the default is
due to fortuitous event, the Land Bank shall assume the payment of the balance
and the farmer shall be released from his obligation.

Period of Prescription

An action to enforce any cause of action accruing under this Code (R.A. No.
3844) shall be brought within the period of three (3) years.