August 9, 1995
BLGF MEMORANDUM CIRCULAR NO. 16-95
TO : ALL BUREAU OFFICIALS AND PERSONNEL; REGIONAL DIRECTORS FOR LOCAL GOVERNMENT FINANCE; PROVINCIAL, CITY AND MUNICIPAL TREASURERS, PROVINCIAL, CITY AND MUNICIPAL ASSESSORS; AND OTHERS CONCERNED.
SUBJECT : RULES AND PROCEDURES GOVERNING THE REGISTRATION OF AGRICULTURAL LEASEHOLD CONTRACTS AND THE COLLECTION OF REAL PROPERTY TAXES DUE ON LEASED AGRICULTURAL LANDS
For the information and guidance of all concerned, attached is a copy of Joint DAR-DOF Memorandum Circular No. 1-95, dated June 20, 1995, of the Department of Agrarian Reform and the Department of Finance prescribing rules and procedures on the registration of agricultural leasehold contracts which takes effect July 24, 1995, the tenth (10th) day after its publication on July 14, 1995. These rules cover agricultural leasehold contracts in the retained areas of tenanted landholding and lands not yet acquired for distribution.
In connection therewith, quoted below are its policy statements in the registration of agricultural leasehold contracts and collection of real property taxes:
"1. The Municipal/City Treasurer concerned are mandated to register the Agricultural Leasehold Contracts entered into by and between the lessors and the lessees. The intent of said registration is to protect the rights and obligations of the parties concern, particularly the agricultural lessees, pursuant to Section 18 of R.A. No. 3844, as amended. Section 19 of the same Act provides that no registration fees or documentary stamp shall be required in the registration of said contracts or of any subsequent acts relative thereto.
"2. The agricultural lessor is required to pay regularly the real property taxes (Basic and Special Education Fund) due on the property, pursuant to Section 31 (2) of R.A. No. 3844. This obligation shall be stipulated in the Agricultural Leasehold Contract.
"3. The collection of the real property tax with interest thereon and related expenses, and the enforcement of the remedies, shall be the responsibility of the Municipal or City Treasurer concerned. However, Provincial Treasurers and duly deputized barangay treasurers may also collect, or receive payments of, said real property taxes.
"4. In case of tax delinquencies by the lessor, the real property may be subjected to remedies pursuant to the provisions of R.A. No. 7160; Provided, that in case of public auction of the property, and there is a tie in the price offered by the lessee and the prospective buyer thereof, the lessee shall have priority to buy the subject land. However, if the lessee fails or refuses to buy the land, such failure or refusal shall not be a ground for his/her ejectment therefrom.
Likewise, the procedures for the Municipal/City Treasurer relative thereto are quoted hereunder:
"a) Upon receipt of his copy of the contract, require the agricultural lessee and agricultural lessor to present their respective copies of the contract and cause the annotation thereon of the date, time and place of registration as well as its entry or registration number (Sec. 18, R. A. 3844, as amended);
"b) Keep a record of all such contracts drawn and executed within his jurisdiction to be known as `Registry of Agricultural Leasehold Contract. He/she shall keep this registry together with a copy of each contract and make annotation on said registry of all subsequent acts relative to each contract, such as renewal, novation, cancellation, etc. No registration fees or documentary stamps shall be required in the registration of said contracts or of any subsequent acts relative thereto. (Sec. 19, R.A. 3844, as amended);
"c) Submit to the DAR Provincial Agrarian Reform Officer (PARO) an updated list of registered Agricultural Leasehold Contracts by landholding and location within five (5) days after the end of every quarter, copy furnished the MARO;
"d) Collect from the lessor real property tax with interest thereon and related expenses, and the enforcement of remedies pursuant to Title II, Book II of RA 7160; and
"e) Failure of the Municipal/City Treasurers concerned to impose the collection of real property taxes and penalties, shall make them liable to administrative/criminal action pursuant to Section s 259 and 517 of S. A. 7160."
Strict observance and compliance with the provisions of said Joint DAR-DOF Memorandum Circular No. 1-95 are hereby enjoined.
All Provincial Treasurers and Assessors are hereby instructed to disseminate the contents of this Circular, including the attachments, to the Municipal Treasurers and Assessors within their respective jurisdictions.
ANGELINA M. MAGSINO
(Deputy Executive Director)
Officer-in-Charge
ANNEX
JOINT DAR-DOF MEMORANDUM CIRCULAR NO. 1-95
SUBJECT : RULES AND PROCEDURES GOVERNING THE REGISTRATION OF AGRICULTURAL LEASEHOLD CONTRACTS AND THE COLLECTION OF REAL PROPERTY TAXES DUE ON LEASED AGRICULTURAL LANDS
TO : The Regional Directors and Provincial/Municipal Agrarian Reform Officers, DAR; The Regional Directors for Local Government Finance, Department of Finance; and Provincial/City/Municipal Treasurers; and Others Concerned
A. LEGAL BASIS
1. Under Section 12 of R. A. No. 6657, the Department of Agrarian Reform is mandated to determine and immediately fix the lease rentals of tenanted lands under the retention limit and lands not yet acquired, pursuant to Section 34 of R. A. No. 3844, as amended.
2. Section 18 of R. A. No. 3844 also mandates that leasehold contracts shall, upon execution by and between the contracting parties, immediately be registered with the City or Municipal Treasurer of the city or municipality where the land is located.
3. Pursuant to Section 247 of R. A. No. 7160, the Local Government code of 1991, City/Municipal Treasurers are responsible for collecting real property taxes together with interest (penalty) that may be due and related expenses, as well as the enforcement of the remedies provided for under Chapter 6, Title II, Book II of the Code.
4. Under Article 338 of the Implementing Rules and Regulations (IRR) of the Code, Property owners, at their option or convenience, may also pay their real property taxes to the Provincial Treasurer of the province to which the municipality where the subject property is located, belongs.
5. Pursuant also to Article 338 aforementioned, City and Municipal Treasurers may deputize Barangay Treasurers to collect real property taxes due on properties located within their respective barangays.
B. POLICY STATEMENT
1. The Municipal/City Treasurers concerned are mandated to register the Agricultural Leasehold Contracts entered into by and between the lessors and the lessees. The intent of said registration is to protect the rights and obligations of the parties concerned, particularly the agricultural lessees, pursuant to Section 18 of R. A. No. 3844, as amended. Section 19 of the same Act provides that no registration fees or documentary stamp shall be required in the registration of said contracts or of any subsequent acts relative thereto.
2. The agricultural lessor is required to pay regularly the real property taxes (Basic and Special Education Fund) due on the property, pursuant to Section 31 (2) of R. A. No. 3844. This obligation shall be stipulated in the Agricultural Leasehold Contract.
3. The collection of the real property tax with interest thereon and related expenses, and the enforcement of the remedies, shall be the responsibility of the Municipal or City Treasurer concerned. However, Provincial Treasurers and duly deputized barangay treasurers may also collect, or receive payments of, said real property taxes.
4. In case of tax delinquencies by the lessor, the real property may be subjected to remedies pursuant to the provisions of R. A. No. 7160; Provided, that in case of public auction of the property, and there is a tie in the price offered by the lessee and the prospective buyer thereof, the lessee shall have priority to buy the subject land. However, if the lessee fails or refuses to buy the land, such failure or refusal shall not be a ground for his/her ejectment therefrom.
C. COVERAGE
These rules cover Agricultural Leasehold Contracts in the retained areas of tenanted landholdings and lands not yet acquired for distribution.
D. PROCEDURES
1. For the DAR (MARO)
a) Determine/compute the lease rentals and prepare leasehold contracts pursuant to Administrative Order No. 5, Series of 1993;
b) Furnish periodically the Office of the Municipal/City Treasurer concerned an updated list of agricultural lessors by landholdings; and
c) Assist the contracting parties to acknowledge the execution of the contract before the Municipal Trial Court Judge/duly authorized DAR Lawyer.
2. For the Municipal Trial Court Judge/DAR Lawyer
a) Cause the third copy of the contract to be delivered to the Municipality/City Treasurer; and
b) Provide each of the contracting parties a copy of the contract. (Sec. 17, RA 3844, as amended).
3. For the Municipal/City Treasurer
a) Upon receipt of his copy of the contract, require the agricultural lessee and agricultural lessor to present their respective copies of the contract and cause the annotation thereon of the date, time and place of registration as well as its entry or registration number. (Sec. 18, R. A. 3844, as amended);
b) Keep a record of all such contracts drawn and executed within his jurisdiction to be known as "Registry of Agricultural Leasehold Contract". He/she shall keep this registry together with a copy of each contract and make annotations on said registry of all subsequent acts relative to each contract, such as renewal, novation, cancellation, etc. No registration fees or documentary stamps shall be required in the registration of said contracts or of any subsequent acts relative thereto. (Sec. 19, R. A. 3844, as amended);
c) Submit to the DAR Provincial Agrarian Reform Officer (PARO) an updated list of registered Agricultural Leasehold Contracts by landholding and location within five (5) days after the end of every quarter, copy furnished the MARO;
d) Collect from the lessor real property tax with interest thereon and related expenses, and the enforcement of remedies pursuant to Title II, Book II of RA 7160; and
e) Failure of the Municipal/City Treasurers concerned to impose the collection of real property taxes and penalties, shall make them liable to administrative/criminal action pursuant to Sections 259 and 517 of R. A. 7160.
E. EFFECTIVITY
This Joint Memorandum Circular shall take effect ten (10) days after its publication in two (2) newspapers of general circulation pursuant to Section 49 of R. A. 6657. All orders, circulars, and/or memoranda which are contrary to, or are inconsistent herewith, are hereby amended, modified, or revoked accordingly.
Strict compliance herewith is hereby enjoined.
The Regional Directors of the Department of Agrarian Reform and The Department of Finance are hereby instructed to reproduce and distribute copies hereof to the Provincial/Municipal Agrarian Reform Officers and Provincial/City/Municipal Treasurers under their respective jurisdictions.
Done this 20th day of June, 1995.
ROBERTO F. DE OCAMPO ERNESTO D. GARILAO
Secretary Secretary
Department of Finance Department of Agrarian Reform