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February 24, 1986




SUBJECT    :     Policy Guidelines Governing the Disposition of Homelots and
                           Residential Lots in Settlement Areas to Qualified Non-Settlers



Through the years the pressure of population coupled with the progress in settlements has attracted more and more people to the agrarian reform resettlement areas. This has given rise to migration and the influx of persons who could no longer be allocated farmlots but are desirous to acquire a residential lot or homelot.   HIcTDE

In view of this situation, there is a need for a realistic policy to govern in the disposition of such lots to non-settlers.


In line with the national object to give equal opportunities and improve the quality of life of the less privileged sector of our society, it is now the policy of the MAR to sell and dispose residential lots and homelots in settlement projects to qualified non-settlers.


This policy shall govern the manner and mode of disposition of homelots and residential lots to non-settlers in settlement projects. Lots For residence purposes in the barrio sites shall be called homelots, while those in the townsites/homesites shall be called residential lots.


A.        Actual Occupant

1.         A Filipino, of legal age or head of a family;

2.         Has constructed a house on the lot and actually resident therein, or has introduced substantial improvements;

3.         Not an owner of residential lot within the Municipality where the settlement is located or adjoining municipalities; and

4.         Not a registered settler or beneficiary of any lot within agrarian reform areas.   cHDaEI

B.        Non-Occupant

1.         A Filipino of legal age or head of a family;

2.         Not an owner of residential lot in the municipality where the settlement is located or in its adjoining municipalities;

3.         If not a bona-fide resident of the settlement, one who, in six (6) months, will build a house or introduce improvements valued at an amount equivalent to the cost of the lots; and

4.         Not a registered settler or beneficiary of any lot within agrarian reform areas.


A.        Direct Sale to Actual Occupant

            The following lots shall be disposed of by direct sale:

1.         Occupied homelots in the barrios site; and

2.         Occupied residential lots in the townsites/homesites.

B.        Direct Sale Through Raffle to Non-Occupant

Vacant and undisposed homelot/residential lots shall be disposed by direct sale through raffle to non-occupant


1.         Occupied homelots shall be sold at not less than THREE PESOS (P3.00) per square meter;

2.         Occupied residential lots disposed of to qualified occupants shall be sold at not less than TEN PESOS (P10.00) per square meter, and

3.         Vacant homelots and residential lots shall be sold at their appraised/reappraised value as approved by the Minister but not less than the cost stated above.


1.         Twenty percent (20%) down payment upon issuance of Order of Award.

2.         Remaining balance on installment terms, payable within a period of five (5) years without interest;

3.         Any balance remaining unpaid after the 5-year period shall bear interest at the rate of six percentum (6%) per annum until paid; and   HDCTAc

4.         Only Official Receipt shall be issued for every payment made.


Before any homelots or residential lot is sold pursuant to these guidelines, the following conditions shall be completed, to wit:

A.        All approved settlers with farmlots must first be allocated their homelots or residential lots;

B.        Notices prohibiting squatting of lots should be posted in conspicuous places in the barangay site or townsite within THIRTY (30) DAYS from approval of these guidelines;

C.        Any person who shall occupy any lots after the notices have been posted shall be disqualified to acquire any lot under the agrarian reform program; and

D.        Any inventory of occupied and vacant homelots and residential lots should be made immediately upon issuance of these guidelines using BURE Forms Nos. 3A and 3B.


After complying with the conditions prescribed in the preceeding paragraph VIII, the applications of actual occupants shall be processed The Team Leader shall make a list of proposed Awardees which shall include, the name of the applicant, lot number, block number, subdivision plan number, area, location, and cost of improvements, and post it for THIRTY (30) DAYS on the Bulletin Board of the Settlement Team Office. Those found qualified to acquire homelots or residential lots shall be immediately issued orders of awards by the Regional Director concerned.

A.        Papers/Documents Required for the Issuance of Order of Awards

1.         Miscellaneous sales application (prescribed form) of the applicants;

2.         Investigation report;

3.         Sketch plan of the lot showing the nature and relative position of improvement of the lots and the owner thereof;

4.         Certificates of posting of lease of proposed awardees by the Team Leader, and

5.         Certification of the Team Leader and the regional legal division that the lots is free from adverse claim and/or court litigation.


Any awardee who has fully paid the cost of the lot shall subsequently be issued miscellaneous sales patent. However, an awardee who has paid fifty percent (50%) of the cost of the lot, may likewise be entitled for the issuance of land patent provided, that whatever unpaid balance incurred be annotated as first lien on the patent to be issued.

A.        Papers Required for the issuance of the Miscellaneous Sales Patent

1.         All the original copies of the papers required for the issuance of Order of Award;   cHCaIE

2.         A copy of the Order of Award issued;

3.         Certification from the Regional Legal Division that the lot is free from adverse claim or court litigation;

4.         Certification from the Regional Accountant or other authorized employee indicating the official receipt number and date thereon and the amount if total cost of the lot has been paid within a period of FIVE (5) YEARS from the date of the award. However, should full payment be made after five (5) years, sales memorandum and the statement of account shall be prepared and submitted in lieu of the certification; and

5.         Certification from the Team Leader or authorized representative that the awardee is still in possession of the lot.


A.        The lot shall not be sold or in any manner transferred or conveyed except through hereditary succession or in favor of the Government;

B.        The lot shall be used principally for residential purposes otherwise, the lot shall revert to the Government and all improvements constructed or existing thereon shall become the property of the Government, without any obligation on its part to reimburse the cost of the lot and improvements;

C.        The beneficiary or his heirs shall not subdivide, lease or otherwise encumber the lot, except with the prior written consent and approval of the Minister of Agrarian Reform and that a violation of any of the condition as herein provided shall cause the immediate annulment of the sale, with the forfeiture by the Government of the purchase price of the lot together with all the improvements thereon without right of reimbursement;

D.        The restrictions and limitations as herein provided shall be part of the Order of Award and shall be annotated on the patent to be issued; and

E.         The restrictions and limitations provided for by the Public Land Act and other applicable laws on servitudes, easements and encumbrances shall also apply.

F.         Penalties

The penal provisions of Commonwealth Act No. 141, as amended, and Republic Act 3844, as amended, are hereby adopted as part of this Circular.


All orders, memoranda circulars and rules and regulations which are inconsistent herewith are hereby revoked, superseded, amended and/or modified, as the case may be. Pertinent provisions of existing standard operating procedure, however, shall have supplementary effect.


This Circular shall take effect immediately.

Diliman, Quezon City, February 24, 1986.


Minister  HECTaA


Department of Agrarian Reform
Elliptical Road, Diliman
Quezon City, Philippines
Tel. No.: (632) 928-7031 to 39

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