Letter to Attorney

Dear Attorney,

I am currently involved in a project that involves constructing a road. The road in question will be open to vehicular traffic and will serve as an access point for multiple vehicles. My primary concern is whether there are costs associated with securing the right of way for this road, given that it will be used not just by the project owners but also by the public. I would like to know what the law in the Philippines says about compensating landowners for the right of way and any legal obligations that may arise when this right of way is utilized for public purposes.

Your advice and insights on this matter would be greatly appreciated.

Sincerely,
A Concerned Project Developer

Legal Article: Cost of Right of Way for Roads Open to Vehicular Traffic Under Philippine Law

In the context of Philippine law, the concept of "right of way" (also referred to as "easement of right of way" or "servitude") pertains to the legal right granted to individuals or entities to pass through another person’s land for a specific purpose, such as constructing a road. The concern raised regarding whether there is any cost involved when securing a right of way for roads intended for public use is a common and critical issue in development projects.

This article will explore the legal framework governing rights of way in the Philippines, focusing on compensation issues, the application of eminent domain, and the obligations that arise when the right of way is for roads used by the public. We will also delve into the rules for both private and public right of way, how easements are established, and what compensation, if any, is due to the landowner.

Legal Basis: Right of Way Under the Civil Code of the Philippines

Under the Civil Code of the Philippines, the right of way is governed by several provisions. Articles 649 to 657 of the Civil Code outline the rules for establishing easements or servitudes, which include the easement of right of way.

Article 649: Requisites for Easement of Right of Way

The Civil Code stipulates that an easement of right of way may be demanded by the owner of an enclosed or landlocked estate, provided that the following requisites are met:

The claimant must be the owner of an estate or property that is surrounded by other estates without adequate access to a public road.
The easement must be absolutely necessary for the claimant to enter or exit their property.
The easement must be established in a manner that causes the least damage and inconvenience to the landowner burdened by the easement.
The right of way must be indemnified by payment of compensation to the owner of the servient estate (the estate that provides the right of way).

Compensation and Payment for Right of Way

The issue of payment for the right of way is a fundamental one, especially in cases where the land over which the easement is sought is owned by a private individual. The Civil Code is explicit in its requirement for indemnification or compensation when a right of way is established. This principle is grounded in the Constitution, which guarantees that private property cannot be taken for public use without just compensation.

In the context of roads that are open to vehicular traffic and will be used by the public, it is important to distinguish between a private easement and a public easement. Both involve some form of compensation to the landowner.

Private Easement of Right of Way: When a landowner seeks access through another's land to reach a public road for personal use, compensation must be paid to the owner of the land over which the right of way is established. The amount of compensation is typically determined by the value of the land affected by the easement and the extent of the burden imposed on the servient estate.
Public Easement of Right of Way: When a road is intended for public use (i.e., for use by the general public, including vehicles other than those owned by the claimant), the right of way becomes a public concern. In such cases, the process of expropriation (also known as eminent domain) may come into play. Under eminent domain, the government has the power to take private property for public use, provided that it compensates the landowner justly. This means that if the road in question is part of a public infrastructure project, the government may expropriate the land needed for the right of way, subject to the payment of fair compensation as required by the Constitution.

Eminent Domain: Just Compensation

When the right of way is for public use, such as the construction of a road that will be used by vehicular traffic, the principle of eminent domain comes into play. Eminent domain refers to the state’s authority to expropriate private property for public use upon payment of just compensation.

Under Article III, Section 9 of the 1987 Philippine Constitution, it is stated that:

“No private property shall be taken for public use without just compensation.”

In practical terms, if the road is to be used by the public, the government (or the developer acting in partnership with the government) must negotiate with the landowner for the acquisition of the land necessary to create the right of way. If the parties cannot agree on compensation, the matter can be brought to court, where the judiciary will determine the appropriate value of the land and order payment to the landowner.

Determining Just Compensation

The term just compensation is understood as the fair market value of the property at the time of expropriation. The fair market value is generally assessed based on factors such as:

The location of the land.
The current use of the land.
The potential use or future value of the land.
Any improvements made to the property (e.g., structures, utilities, etc.).

In determining just compensation, both the government and the landowner may present evidence regarding the value of the land, and an appraiser may be appointed by the court to help determine the appropriate amount.

Taxation Implications of Right of Way Compensation

In cases where compensation is provided for the acquisition of the right of way, the landowner receiving the payment may be subject to taxes on the amount received. This payment is typically treated as capital gain, and the corresponding capital gains tax or other applicable taxes (such as documentary stamp tax or value-added tax, depending on the circumstances) may apply.

Special Considerations for Private Roads Used by the Public

There are cases where a road constructed for private use may eventually be opened up to the public, either formally or informally. In such instances, the rights and obligations of the landowner who provided the right of way and the general public must be clarified.

Formal Conversion to Public Use: If the road is officially designated as a public road, the government may formally expropriate the land, and the landowner must be compensated accordingly.
Informal Public Use: In instances where the public uses a private road without any formal designation or agreement, the landowner may impose certain restrictions or claim compensation for any damages or additional burdens caused by the public use of the road. However, in such cases, legal issues may arise, and the landowner’s recourse will depend on the specific circumstances of the case.

The Role of LGUs and Government Agencies

When the right of way is required for a public road project, the local government unit (LGU) or relevant government agency (such as the Department of Public Works and Highways, or DPWH) may initiate the expropriation process. The LGU or agency is responsible for ensuring that the landowner is justly compensated, as well as overseeing the construction of the road.

For roads used for vehicular traffic, such projects are often covered by the Urban Development and Housing Act (Republic Act No. 7279), which provides guidelines for land acquisition, including the negotiation of compensation and the implementation of relocation plans for affected parties.

Conclusion: Legal and Financial Implications of Right of Way for Roads

In summary, when constructing a road that will be used by vehicular traffic, it is crucial to determine whether the right of way falls under the category of a private easement or a public right of way. If the road is for public use, the principle of eminent domain and the constitutional guarantee of just compensation will apply, ensuring that the landowner is adequately compensated for the use of their property. Whether the right of way is secured through negotiation or expropriation, the obligation to pay compensation remains, and the amount will depend on the value of the land and the extent of its use.

For private roads used by the public, the landowner’s rights must be respected, and any informal use of such roads should be addressed to avoid legal disputes. The role of government agencies in facilitating public infrastructure projects, including the acquisition of right of way, is essential in ensuring that public interest and private property rights are balanced.

Understanding the Cost of Right of Way for Roads Open to Public Use