Dear Attorney,

I hope this message finds you well. I am reaching out to seek your guidance regarding a concern involving a parcel of land currently under a collective Certificate of Land Ownership Award (CLOA) and included in the Split Program of the Comprehensive Agrarian Reform Program (CARP). We wish to explore the legal avenues available for selling the said property under these conditions.

Could you kindly provide a detailed explanation of the legal framework, requirements, and possible challenges surrounding this matter? We would appreciate a comprehensive discussion of relevant laws, jurisprudence, and any practical steps we should take.

Thank you for your assistance in this matter.

Sincerely,
A Concerned Landowner

Legal Framework on Selling Land Under Collective CLOA in the CARP Split Program

The sale of land under a collective CLOA and its inclusion in the CARP Split Program presents a unique legal scenario under Philippine agrarian laws. This issue intersects with the provisions of the Comprehensive Agrarian Reform Law of 1988 (Republic Act No. 6657, as amended), subsequent administrative issuances by the Department of Agrarian Reform (DAR), and constitutional principles protecting agrarian reform beneficiaries (ARBs).

1. Nature of a CLOA and Restrictions on Sale

A Certificate of Land Ownership Award (CLOA) is a legal document issued under the CARP to farmers as evidence of land transfer and ownership. CLOAs are granted to qualified beneficiaries on the condition that the land will be utilized for agricultural purposes. There are two primary types of CLOA: individual and collective. A collective CLOA covers a group of beneficiaries who jointly own a specific parcel of land.

Legal Restrictions:

Ten-Year Prohibition on Sale: Section 27 of R.A. No. 6657 prohibits the transfer or sale of agrarian reform lands within ten years from the award. This limitation ensures that lands remain in the hands of ARBs, supporting agricultural development and social equity.
DAR Clearance Requirement: Even after the expiration of the ten-year period, the sale of CLOA-awarded land requires prior approval from the DAR. This clearance ensures that the buyer is also a qualified ARB.
Collective Ownership Limitations: For collective CLOAs, the approval of all co-beneficiaries is generally required. This collective decision-making process may lead to practical challenges, such as dissent among co-owners.

2. CARP’s Split Program and Its Impact

The CARP Split Program aims to subdivide collective CLOAs into individual titles. This initiative was undertaken to address operational difficulties associated with collective ownership, such as disputes among beneficiaries and lack of clarity in land use and obligations.

Effects on Land Transactions:

Pending Subdivision: If the land remains under collective CLOA status, beneficiaries are considered co-owners, and individual portions are not yet delineated. This status complicates the sale process, as ownership rights are collective and cannot be individually transferred.
Post-Split Titles: Once the subdivision is completed, individual beneficiaries receive their own titles, which they may transfer, subject to the restrictions under agrarian laws.
Delay in Split Process: If the land is under the CARP Split Program but not yet subdivided, the sale may be delayed until the program's processes are complete. This delay is a critical consideration in planning the sale.

3. Legal Procedures for Selling Collective CLOA Land

Step 1: Determine Eligibility to Sell

Verify if the ten-year prohibition period has lapsed.
Ensure all co-beneficiaries are in agreement to sell the land (for collective CLOAs).
Confirm that the buyer is a qualified ARB or that the sale is permissible under DAR’s guidelines.

Step 2: Secure DAR Clearance

Submit an application to the DAR, including documents such as the CLOA, proof of lapse of the ten-year prohibition, and the buyer’s qualifications.

Step 3: Subdivision and Titling (if applicable)

For collective CLOAs, subdivision into individual titles may be required to transfer ownership. Beneficiaries must participate in the subdivision process through the CARP Split Program or voluntary agreements.

Step 4: Execute a Deed of Sale

Draft a notarized Deed of Sale, ensuring compliance with legal and documentary requirements.

Step 5: Register the Transaction

4. Legal Challenges and Practical Considerations

Challenge 1: Consent Issues

Co-beneficiaries may disagree on the sale, delaying or preventing the transaction. Mediation may be required to resolve disputes.

Challenge 2: Buyer Qualifications

Only individuals or entities qualified under agrarian reform laws may acquire CLOA-awarded land. This restriction limits the pool of potential buyers.

Challenge 3: Compliance with Land Use

The land’s agricultural use must be maintained. Non-compliance with this requirement can void the transaction or result in penalties.

Challenge 4: CARP Split Program Delays

The subdivision process may take years, depending on administrative efficiency. This delay can affect the timing and feasibility of the sale.

5. Relevant Jurisprudence

Philippine courts have upheld the restrictions on CLOA-awarded lands in several cases:

Heirs of Arcadio Castro v. Lozada (G.R. No. 177131, 2013): The Supreme Court affirmed that CLOA-awarded lands must adhere to agrarian laws, emphasizing the importance of DAR clearance for land transactions.
Department of Agrarian Reform v. Delos Santos (G.R. No. 162325, 2009): This case highlighted the prohibition on selling agrarian reform lands within the prescribed period and the role of DAR in regulating transfers.

6. Recommendations for Sellers

Engage Legal Counsel Early: Given the complexities of CLOA transactions, legal assistance is essential to navigate restrictions and procedural requirements.
Coordinate with DAR: Proactively engage with DAR for guidance on compliance and expediting the CARP Split Program.
Facilitate Beneficiary Consensus: For collective CLOAs, securing the agreement of all co-owners minimizes delays and disputes.
Verify Buyer Eligibility: Ensure that potential buyers meet the qualifications under agrarian reform laws.
Prepare for Long-Term Planning: Be prepared for potential delays in processing and approval, especially under the CARP Split Program.

Conclusion

Selling land under a collective CLOA while it is under the CARP Split Program is a legally intricate process governed by agrarian reform laws and DAR policies. The transaction involves addressing both ownership and procedural issues, including obtaining DAR clearance, ensuring beneficiary consensus, and adhering to land use restrictions. Sellers must approach the process with a clear understanding of these legal requirements and the potential challenges they may encounter. Engaging experienced legal counsel and closely coordinating with the DAR are critical steps to ensure a successful and compliant transaction.