February 9, 1999

DAR OPINION NO. 05-99

MEMORANDUM

TO                :     DIR. DOMINADOR B. ANDRES
                           DAR Region VI
                           Balantang, Jaro, Iloilo City

SUBJECT     :    DAR Opinion No. 89, Series of 1998 Involving Landholdings with Areas of
                         Five (5) Hectares and Below

This refers to your opposition to DAR Opinion No. 89, Series of 1998 regarding lands with areas of 5 hectares and below, specifically, on the following issues: 1) whether or not a landowner with a landholding five (5) hectares and below needs to apply for retention; and 2) whether or not the PARO is authorized by law to issue DAR Clearance without the need for a Certificate of Retention.

It is your wel-considered view that the landowner who owns a landholding with an area of five (5) hectares and below shall file his petition for retention and a Certificate of Retention shall be issued by the Regional Director before the PARO could issue a DAR Clearance. Moreover, it is also your opinion that it is necessary that landholdings below five (5) hectares shall likewise be covered with Retention Order pursuant to A.O. No. 11, Series of 1990 consistent with your stand to protect the pre-emption/redemption rights of tenants as well as the tenants' rights to notice and due process, and that of the vendees and landowners in good faith.

At the outset, please be informed that this Office does not as a matter of policy entertain requests for reconsideration of its opinion. We wish to state, however, that while it is true that Administrative Order No. 11, Series of 1990 provides that a landowner who owns five (5) hectares or less may file an application for retention, we believe that the import of said provision in the filing thereof is only directory considering that the word "may" has been used. In other words, the implication of said provision is that the landowner has the option to file an application for retention before he can sell or dispose of the same provided it is established that he owns agricultural landholdings with an aggregate area of five (5) hectares and below. It goes without saying then that the Regional Director may still issue a Certificate or Order of Retention as regards lands of less than 5 hectares if the landowner opts to apply. This is so because retention right is a substantive right under the law and the Constitution. Thus, to mandatorily require all landowners actually owning less than five (5) hectares to apply for retention might constitute an undue limitation of their inherent right to dispose their lands.

As regards the issue on whether or not the PARO is authorized by law to issue DAR Clearance without the need for a Certificate of Retention, Section 70 of R.A. No. 6657 implies that Retention Order and/or Certificate of Retention are not mandatorily required before a retained area could be sold or alienated. It is enough that the total landholdings that shall be owned by the transferee thereof inclusive of the land to be acquired shall not exceed the landholding ceilings provided for by CARL. It is submitted that our PAROs are intelligent, capable and trustworthy enough to arrive at a fair and honest finding as to what constitute the retention area from which finding he must necessarily base his decision on whether or not to issue the mandatorily required DAR Clearance to prevent circumvention of the Program.

Based from the foregoing reasons, we are not in accord therefore with the opinion that landholdings below five (5) hectares shall likewise necessitate a Retention Order. We submit that what is mandatory as far as the sale/alienation of agricultural lands less than five (5) hectares are concerned is the DAR Clearance and not the Retention Certificate or Order. Anyway, as far as landowners who own more than five (5) hectares are concerned, the Regional Director is still the one authorized to issue the Certificate and/or Order of Retention. Accordingly, it is believed that the provisions of A.O. No. 11, S. of 1990 are not actually negated by DAR Opinion No. 89, Series of 1998.

Finally, it must be noted, however, that a DAR Clearance should be mandatorily required in order that a valid transaction (i.e., one not contrary to the provisions of R.A. No. 6657) may later be registered with the Register of Deeds. A DAR Clearance should never serve or be unduly construed as a validation of what is otherwise at the outset a null and void transaction (4 paragraph, Section 6 and Section 70 of R.A. No. 6657 and DAR Administrative Order No. 1, Series of 1989). Concomitant thereto, we are thus reiterating our previous statement in the penultimate paragraph of DAR Opinion No. 89, Series of 1998 that: "any intended sale or disposition of agricultural lands by landowners, whether they are allegedly owning more than or less than five (5) hectares, shall always be subject to DAR Clearance before the same could be validly registered with the Register of Deeds, to prevent possible circumvention of the provisions of R.A. No. 6657 and its related implementing guidelines."

We hope to have clarified the matter with you and please be guided accordingly.

(SGD.) DANILO T. LARA

Undersecretary for Legal Affairs, and Policy and Planning

Copy furnished:

PARO Teodolfo U. Abiera

DAR Provincial Office

Binirayan Hills, San Jose

Antique