Agrarian Reform RULES ON LAND USE CONVERSION

RULES ON LAND USE CONVERSION

DAR Administrative Order No. 1, Series of 2002

Basis:

RA 6657 — Comprehensive Agrarian Reform Law

RA 8435 — Agriculture and Fisheries Modernization Act

EO 45 — Prescribing Time Periods for Issuance of Housing-Related Certifications, Clearances and Permits, and Imposing Sanctions for Failure to Observe the Same, October 24, 2001

Terms:

Illegal Conversion is the conversion by any landowner of his agricultural land into any non-agricultural use with intent to avoid the application of RA 6657 to his landholding and to dispossess his tenant farmers of the land tilled by them; or the change of nature of lands outside urban centers and city limits either in whole or in part after the effectivity of RA 6657,

Land Use Conversion refers to the act or process of changing the current physical use of a piece of agricultural land into some other use or for another agricultural use other than the cultivation of the soil, planting of crops, growing of trees, including harvesting of produce therefrom, as approved by DAR.

National Integrated Protected Areas System (NIPAS) refers to the classification and administration of all designated protected areas to maintain essential ecological processes and life support systems, to preserve genetic diversity, to ensure sustainable use of resources found therein, and to maintain their natural conditions to the greatest extent possible.

Network of Protected Areas for Agricultural and Agro-Industrial Development(NPAAAD) refers to agricultural areas identified by the Department of Agriculture (DA) through the Bureau of Soils and Water Management

Premature Conversion of Agricultural Land refers to the undertaking of any development activity, the result of which may modify or alter the physical characteristics of the agricultural land as would render it suitable for non-agricultural purposes without an approved Conversion Order from the DAR.

Strategic Agriculture and Fisheries Development Zone (SAFDZ) refer to the areas within the NPAAAD identified for production, agro-processing and marketing activities to help develop and modernize, with the support of the government, the agriculture and fisheries sectors in an environmentally and socio-culturally sound manner.

Unauthorized Conversion is the act of changing the current use of the land from agricultural (e.g. riceland) to another agricultural use, the effect of which is to exclude the land from CARP coverage (e.g. livestock) without a Conversion Order from the DAR, or changing the use of the land other than that allowed under the Conversion Order issued by the DAR.

v  Areas Covered:

        1.     Agricultural lands to be converted to non-agricultural uses

        2.     Agricultural lands to be devoted to other types of agricultural activities such as livestock, poultry & fishpond

        3.     Agricultural lands to be converted to non-agricultural uses other than that previously authorized

        4.      Agricultural lands reclassified to non-agricultural uses by the LGU after June 15, 1988

v  What are the Areas Non-negotiable for Conversion?

         1.       Agricultural lands under NIPAS

         2.       Mossy and virgin forests

         3.       Riverbanks

         4.       Swamp forests or marshlands

         5.       All irrigated lands

         6.       All irrigable lands covered by firm funding project commitments

         7.       All agricultural lands with irrigation facilities

v  Priority Development Areas and Projects

         1.     Specific sites in RAIC/RIC identified by DTI and DA

         2.     Tourism development areas

         3.     Areas intended for eco-zone projects, endorsed by PEZA

         4.     Government-owned lands to be converted for projects of national interest

v  Effect of the Approval of Conversion

The approval of conversion shall have, but shall not be limited to, the following effect:

         a.     It shall be limited to the specific use of the land authorized in the Conversion Order

         b.    It shall be subject to the schedule indicated in the detailed site development, work and financial plans and shall not extend beyond 5 years from issuance of the Conversion Order.

         c.     The condition thereof shall be binding upon successors-in-interest of the property

         d.    The applicant shall allow duly authorized representative of DAR free and unhampered access to the property subject of the Conversion Order to monitor compliance with the terms and conditions thereof.

         e.     The use authorized in the conversion order shall be annotated on the title of the subject property

         f.     It shall be without prejudice to the ancestral domain claims of indigenous people

v  Criteria for Conversion. — The following criteria shall guide the resolution of application for conversion:

1.      Conversion may be allowed if the land subject of application is not among those considered non-negotiable for conversion

2.      Conversion may be allowed, in accordance with Section 65 of RA 6657, when the land has ceased to be economically feasible and sound for agricultural purposes or the locality has become urbanized and the land will have a greater economic value for residential, commercial, industrial, or other non-agricultural purposes.

           3.      Conversion of lands within SAFDZ,

                                  3.1.      All irrigated lands, irrigable lands already covered by irrigation projects with firm funding commitments, and lands with existing or having the potential for growing high-value crops included within the SAFDZ shall be subject to a conversion moratorium for a period of five (5) years from 10 February 1998 to 9 February 2003.

                                  3.2.      During the effectivity of the moratorium, conversion may be allowed with respect to only five percent (5%) of said lands within SAFDZ upon compliance with existing laws, rules and regulations.

                                  3.3.      The maximum of five percent (5%) of land(s) eligible for conversion to non-agricultural use from the total SAFDZ area shall be jointly determined by the DA and the DAR, upon the recommendation of the Regional and National SAFDZ Committees pursuant to Rule 9.5.2 of DA-AO-6-1998, or the implementing rules and regulations of RA 8435.

                                  3.4.      After the expiration of the conversion moratorium, conversion may be allowed on a case-to-case basis, subject to existing laws, rules and regulations on land use conversion.

v  Where to Secure Application Forms

•           CLUPPI (Center for Land Use Policy, Planning and Implementation)

•           RCLUPPI (Regional Center for Land Use Policy Planning and Implementation)

•           PARO (Provincial Agrarian Reform Officer)

v  Where to File Application for Land Use Conversion

CLUPPI	RCLUPPI
Above 5 hectares	5 hectares and below

v  Filing Fee/Inspection Cost

5 hectares & below	Filling Fee	Inspection Fee
Within same Island or that of the Office of the DAR Regional Director	1,000.00	10,000.00
Not within same island or that of the Office of the DAR Regional Director		15,000.00

Above 5 hectares
Major island of Luzon (except Bicol peninsula)	P2,000.00	P10,000.00
Region I - IV                                                                  (outside the main island of Luzon)		P15,000.00
Visayas Group of Island (including Bicol peninsula)		P15,000.00
Mindanao Group of Island		P20,000.00

                                                                                       

v  Approving Authority

Secretary	Areas above 5 hectares	Total land applied. Land is adjacent to area previously granted conversion.  Single project with different owners within same barangay or within 2 or more adjacent barangays.
Regional Director	Areas involving 5 hectares and below.

v  Standard Documentary Requirements

•           Proof of payment of necessary fees & posting of bonds

•           Notarized Application

•           Copy of OCT or TCT

•           If untitled, DENR Certification on Alienable & Disposable status of land

                                 1. Certification from the DENR Community Environment and Natural Resources Officer (CENRO) that the landholding has been classified as alienable and disposable; and

                                 2. Certification from the DENR CENRO (for administrative confirmation of imperfect title) or the Clerk of Court (for judicial confirmation of imperfect title) that the titling process/proceedings has commenced and there are no adverse claimants;

•           DENR/Court Certification that titling has begun; and absence of adverse claimants

•           True Copy of TCTs/OCTs of all subject land as of 15 June 1998, and all successor titles until present

•           True Copy of current Tax Declaration

•           Project Feasibility Study

•           Joint Venture Agreement or Business arrangement on the use of land between the landowner (or EP/CLOA holders) and developer

•           Narrative description of development plan with detailed activities, program components, phasing, work schedule and financial plan duly certified by a licensed engineer, architect or land use planner

•           Proof of financial & organizational capability of the developer to develop land

•           Socio-economic benefit-cost study of the proposed project

•           Recent 5R photos of the property

•           SPA or Board Resolution

•           Concurrence letter of the mortgagee; if land is encumbered

•           Certification from the MARO

                         1)        Status of CARP coverage on & around the subject land

                         2)        Condition of the posting of billboards

                         3)        Presence of  farmers, agricultural lessee, etc.

                         4)        Posting of notices of application in conspicuous places

•           Affidavit/Undertaking of the applicant stating:

                             1)        list of tenants, farmworkers, bonafide occupants to be affected by conversion

                             2)        payment of or shall pay disturbance compensation

                             3)        required billboard has been erected

                             4)        not to undertake premature development

                             5)        authorizing DAR to forfeit bond in case of premature development

                             6)        has not commenced any action or filed any claim involving the same land in any court

v  Certifications from:

•           Housing and Land Use Regulatory Board (HLURB)

•           Department of Agriculture (DA)

•           Department of Environment and Natural Resources (DENR)

v  Public Notice

          1.         4 Feet by 8 feet billboard made of strong weather-resistant material.

          2.           One billboard for every 20 hectares

          3.           Located on visible points within the landholding applied, preferably along the road

          4.           Written in local dialect

•           Information includes:

-        Statement that the applicant is proposing to convert the subject landholding from agricultural to non-agricultural use

-        Name of the landowner representative and developer

-        Area and location

-        Filing date

-        Date of posting of billboard

-        Schedule of ocular inspection

-        Deadline for filing protest

-        Address of the CLUPPI and RCUPPI and PARO where oppositors may formally file their protest

-        Address of the approving authority

-        Date of approval or denial of the application

v  Bond to Guarantee Against Premature Conversion

-        Cash or Manager's/Cashier's Check (2.5% of zonal value)

-        Surety Bond issued by the GSIS (15% of zonal value)

Conditions at the minimum:

1.         The bond is callable on demand;

                                                2.         The DAR shall forfeit the bond in favor of the Agrarian Reform Fund when it finds the applicant carrying out any premature conversion activity; and

                                                3.         The validity of the bond shall be for a period of one (1) year, renewable by not more than one (1) year when necessary.

-        Posted upon filing of application

-        Guarantee against premature conversion

-        Refundable or convertible into performance bond

-        Forfeited in favor of ARF

When the applicant, or any person acting in his behalf, carries out any actual conversion activity on the land prior to the application's approval. Forfeiture shall be without prejudice to the filing of criminal charges against those responsible for premature conversion.

-        Applicant carry out

After faithful compliance with the terms and conditions of the bond, the applicant may opt to refund or convert the same into a performance bond after issuance of the Conversion Order.

-        Premature development

v  Exemption from Bond to Guarantee against Premature Conversion

•           Socialized housing projects (HLURB)

•           Resettlement projects for families displaced by development of government projects (NHA)

•           Community Mortgage Program projects (NHMFC)

When the application involves a mixed use of socialized and non-socialized housing projects, the application shall not enjoy any bond exemption for socialized housing unless at least eighty (80) percent of the land applied for conversion shall be used directly and exclusively for socialized housing.

v  Performance Bond-  within 5 days from receipt of a copy of the Conversion Order shall post performance bod in the form of either of the following:

•           Cash or manager's/cashier's check (2.5% of total zonal value)

•           GSIS surety bond (15% of total zonal value)

1.         The bond is callable on demand;

                                    2.         A photocopy of the approved Conversion Order is attached and forms part of the bond;

                                    3.         The DAR shall forfeit the bond in favor of the Agrarian Reform Fund when it finds the applicant in default of his obligation to complete development of the land and/or comply with any of the conditions in the Conversion Order; and

                                    4.         The validity of the bond shall be equivalent to the prescribed period of development of the area under the Conversion Order.

•           Posted within 5 days from receipt of copy of conversion order

•           Ensure faithful compliance with the conditions of conversion Order

•           Refundable upon completion of the project

•           Forfeited upon default in development of land and/or non-compliance with conditions in the Order

-when the applicant, or any person acting in his behalf, carries out any actual conversion activity on the land prior to the application's approval. Forfeiture shall be without prejudice to the filing of criminal charges against those responsible for premature conversion.

v  LAND USE CONVERSION PROCEDURES

File application                        Maximum Processing Period:
                                                   Regular                   - 130 days
                                                   Priority areas          - 110 days
Conduct of filed                            Housing                  - 70 days
Investigation (10 days)

Committee deliberation/                             Issue Order of
Recommendation (30 days)                       Conversion (30 days)

v  EFFECT OF PROTEST
Interrupt running for processing

v  DAR may impose any or all of the following sanctions after determining, in an appropriate administrative proceeding, that a violation of the Rules on Land Use Conversion has been committed:

                1.   Revocation or withdrawal of the authorization for land use conversion;

                2.   Blacklisting of the applicant, developer or representative;

                3.   Automatic disapproval of pending and subsequent conversion applications that the offender may file with the DAR;

                4.   Issuance of cease and desist order by the Secretary or Regional Director, as the case may be, upon verified reports that premature, illegal or unauthorized conversion activities are being undertaken; or

                 5.   Forfeiture of cash bond or performance bond.

v  Disturbance Compensation. —

1.   The applicant and/or landowner and/or developer shall pay disturbance compensation in cash or kind or combination of cash and kind to the farmers, agricultural lessees, share tenants, farmworkers, actual tillers, and/or occupants affected by the conversion, in such amounts or under such terms as the parties may mutually agree upon.

2.   The amount of disturbance compensation shall not be less than five (5) times the average of the gross harvests on the target landholding during the last five (5) preceding calendar years, pursuant to Section 36 of RA 3844, as amended by Section 7 of RA 6389.

3.   Compensation in kind may consist of some or all or mixture of housing, homelots, employment, and/or other benefits.

 The DAR shall approve the terms of any agreement for the payment of disturbance compensation and monitor compliance therewith.

 In no case shall compliance with the terms and conditions thereof extend beyond sixty (60) days from the date of approval of the application for conversion.

4.   If the parties fail to agree on the amount of disturbance compensation, or raise an issue questioning the lease or tenancy relationship or any other prejudicial issue that tends to justify non-payment of disturbance compensation, either or both parties may refer the issue to the Provincial Agrarian Reform Adjudicator (PARAD) for resolution.

While the case is pending before the Adjudicating Authority, the landowner(s)/applicant(s) may not evict said farmers, agricultural lessees, share tenants, farmworkers, actual tillers, or occupants, until such time when the Adjudicating Authority resolves the prejudicial issue(s) with finality.

5.   The applicant shall furnish the RCLUPPI/CLUPPI with proof of payment of disturbance compensation within five (5) days from receipt of payment.

v  Conditions of Conversion Order. — The approval of the application for conversion shall be subject to the following conditions:

1.   The applicant shall not undertake any development until all the applicable permits and clearances from the other concerned government agencies have been granted.

2.   Within fifteen (15) days from receipt of the Conversion Order, the landowner shall post a performance bond

3.   Within thirty (30) days from receipt of the Conversion Order, the landowner shall request the Register of Deeds to annotate on the property's title the land use allowed under the Conversion Order.

4.   Within sixty (60) days from receipt of the Conversion Order, the landowner shall return to the CLUPPI or RCLUPPI a certified true copy of the title that already contains the annotation indicating the land use allowed under the Conversion Order.

5.   Within sixty (60) days from receipt of the Conversion Order, the landowner, solidarity with his co-owner(s) and developer(s), shall pay disturbance compensation to the affected farmers, agricultural lessees, share tenants, farmworkers, actual tillers, or occupants, in such amounts or kinds as the parties may mutually agree upon, subject to the approval of the DAR.

6.   Within one (1) year from issuance of the Conversion Order, the landowner and/or developer shall commence development on the property approved for conversion, and shall complete development not later than the deadline(s) set forth in its site development plan schedule, but in no case shall development extend beyond five (5) years from issuance of the Conversion Order.

7.   For housing projects, the landowner shall secure an ECC, if applicable, prior to undertaking any development therein.

8.   The landowner and his representatives shall allow DAR officials free and unhampered access into the property approved for conversion for the purpose of monitoring compliance with the terms and conditions thereof.

9.   The landowner and future landowner(s) of the property approved for conversion shall not change its use to another use not authorized under the Conversion Order without prior consent from the DAR. This prohibition extends to changes in housing standards, changes in selling schemes, changes from social housing to open market housing or vice-versa, and all other similar changes.

10. The landowner and/or developer shall submit quarterly reports on the status of development to the MARO, PARO, and DAR Regional Office covering the subject property.

11. The grant of a Conversion Order alone shall not be a ground for eviction. Any person who desires to evict occupants on the basis of the Conversion Order shall invoke other meritorious grounds and file the proper action.

12. The DAR reserves the right to revoke the Conversion Order upon valid grounds and after proper investigation.

Source: www.DAR.gov.ph

Note: I have used this as my reference during my Agrarian Reform subject and it was very helpful.  So i thought might as well share it. Credit to the owner.