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AR Republic of the Philippines DEPARTMENT of AGRARIAN REFORM “ELLIPTICAL ROAD, DILIMAN, QUEZON CITY “TELS, 928-7031 TO 39) ADMINISTRATIVE ORDER NO. O6 Series of 2016 SUBJECT: GUIDELINES ON THE ISSUANCE OF THE DAR CLEARANCE TO. AUTHORIZE THE TRANSFER OF OWNERSHIP OF AGRICULTURAL LANDS PREFATORY STATEMENT Agricultural lands refer to lands devoted to agricultural activity and not classified as mineral, forest, residential, commercial or industrial land as of 15 June 1988. ‘Agricultural landholdings which are covered by the Comprehensive Agrarian Reform Program (CARP) are awarded to qualified farmer-beneficiaries through the issuance of a Certificate of Land Ownership Award (CLOA), Prior to CARP, a tenant-farmer who fully complied with the requirements for the grant of title under P.D. No. 27 is issued an Emancipation Patent (EP) which represents absolute ownership over the land transferred to the tiller. ‘There are certain resttictions imposed by laws on the transfer of ownership of agricultural lands ‘whether or not the landholding is covered under P.D. No. 27 or CARP. ARTICLE GENERAL PROVISIONS Section 1. Coverage. — This Administrative Order (A.O.) governs the transfer to a private person of (@) all agricultural lands through hereditary succession; ©) all awarded lands through sale, intervivos donation, or other forms" of voluntary transfer after the holding period; (© all transferred awarded lands; and @ _ alother private agricultural lands not, or yet to be, acquired for distribution under the agrarian reform programs of the State ‘Pursuant to the reasons provided in Section 6 hereof, this A.O. shall also govern the mortgaging of Awarded Lands. ‘The transfer of awarded lands through sale, intervivos donation, or other forms of voluntary transfer during the holding period shall be covered by a subsequent A.O. * Other forms of voluntary wansfess include, among others, the eansfer/asignment of rights by an heit to another person during settlement proceedings. ‘The transfer is made berween the hes, as trinsferor, and the assignee, a8 transfetes. As such, the sod transfer/assigameat of rights, for purposes ofthis A.O. shall not be deemed asa transfer through hereditary succession, ‘The transfer of rights under a Certificate of Land Transfer (CLT) through hereditary succession is covered by Memorandum Circular No. 19, Series of 1978. Such sights may only be transferred to another private person via hereditary succession. ‘The transfer of ownership of agricultural lands to any government entity does not need any prior clearance from the DAR. Such government entity, however, must inform the DAR Provincial and Regional Office of such transfer, in writing, for information and record purposes. “A waiver by an ARB or any other person of his/her ownership sights over an agricultural and in favor of another person shall hereby be deemed as a transfer and shall be subject to these rules, including the prohibitions hereto, Section 2. Definition of Terms. follows: For purposes of this A.O., the following terms are defined as 2, Agrarian reform cooperative — refers to an agrarian reform cooperative as defined and governed by R.A. No. 6938? 22 Awarded Land — refers to an agricultural land distributed through an agrarian reform progeam of the State. This includes landholdings covered. by Certificates of Landownership Award (CLOAs) and Emancipation Patents (EPs). However, agricultural lands with a CLT but without 2 registered EP yet, are not considered as Awarded Land under this A.O. 23. Holding Period — refers to the period of time commencing from the date of registration of the EP, CLOA, or other Title issued pursuant to an agrasian reform program of the State tuatil the lapse of ten (10) calendar years AND the payment of the amortization’ thereof, ‘whichever comes later." 24, Transferred Awarded Lands (IAL) — refers to those Awarded Lands which have already been transferred, pursuant to these Rules, after the holding period. 25. Other Agricultural Land (OAL) — sefers to agricultural lands that were not distributed pursuant to an agrarian reform progam of the state. ‘This may include, among others, retained areas and lands yet to be acquired and disteibuted under CARP. ARTICLE 1 RESTRICTIONS Section 3. General Restrictions to Transfers of Ownership of Agricultural Lands. — As a general rule, the transfer of ownership of all agricultural lands to a private person whose total ‘ownership of agricultural lands after the transaction shall exceed five (5) hectares is prohibited. In addition, no Awarded Land may be transferred during the iter 2 The cooperative is defined by Article 89 of RA. No, 6938. 9 As intended by Section 26 of RA. No. 6657. ‘These ae concutingtequirements. Therefore, the holding perio is terminated after the lapse ofthe ten-year peo lone or upon the Sill payment of the amoetizaon aloe Section-4, Exceptions to the General Restrictions to Transfers. ~The following transfers-are not covered by the abovementioned general restrictions: @ Transfer via intestate succession; @ Transfer of legitimes to compulsory heis; and Gi) The consolidation of ownership to a mortgagee bank after the redemption period expires after its foreclosure, Provided, ‘That the property agricultural land acquired is intended to be under the starus of “Real and Other Properties Acquired” (ROPA)® Asset of the bank. Furthermore, the aggregate agricultural land ownership ceiling of an agrarian reform cooperative, instead of five (5) hectares, shall be the number of members multiplied by five (5) hectares. Transfers to Agratian reform cooperative will be prohibited if it will exceed the aggregate agricultural land ownership under this special rule.’ Such special ceiling shall not apply to other forms of cooperatives and other jusidical entities Section 5. Restriction Regarding Landholdings Covered by Notices of Coverage or Case. =Lands covered by Notices of Coverage ot an agratian case covered by Section 30 of R.A: No. 9700 may not be transferred except through intestate succession ot testate succession of legitimes to compulsory heirs, Section 6. Restrictions to Real Estate Mortgage. — As a general rule, there is no restriction under agrarian reform in mostgaging agricultural lands since such act does not entail the transfer of ownership. It is only upon the foreclosure of the morgage and the subsequent consolidation of the property after the redemption period that ownership is transferred and, hence, this act of consolidation of the property is regulated pursuant to this A.O. and the provisions under Sections and 5 (6) hereof applies. ‘The abovementioned notwithstanding, pursuant to DOJ Opinion No. 59, Series of 2015, n0 Awarded Land may be mortgaged prior to the termination of the holding period. Due to this, the mortgaging of Awarded Lands after the termination of the holding period shall require a Transfer Clearance. In addition thereto, the subsequent consolidation of the property after the redemption petiod, should the property be foreclosed, shall require 2 new Transfer Clearance since the DAR ‘will have to look at how the restrictions under Sections 4 and 5 will apply to the transferee. ARTICLE UL ‘EFFECTS OF TRANSFERS Section 7. Effects of Transfers as to Definition of Land under this A.O. — Awarded Lands validly transferred (after the holding period) pursuant to sale, intervivos donation, or other forms of voluntary transfer (other than hereditary succession) shall henceforth be considered as TAL. S ROPA refers to real and other properties, other than those used purposes or held for investment, scquited by the bank in stdlement of loans through foreclosure or Aida in payment and/or for other reasons, ‘whose carrying amount will be recovered principally through 2 sale «xfhsafion 6 As defined by R.A. No. 6938. 7 This rule applies in the concept of the agrarian reform coopera ‘misconstrued as to amend the provisions of A.O. No. 3, Series of 2016. See footnote 1. ssa teansferee. This rule should aot be 3