Buying Land Under a CLOA Title Before the 10-Year Maturity in the Philippines

This is a practical, law-grounded explainer for buyers, sellers, and practitioners. It focuses on Certificates of Land Ownership Award (CLOAs) issued under the Comprehensive Agrarian Reform Program (CARP). It is not legal advice; when in doubt, consult the Department of Agrarian Reform (DAR), the Land Bank of the Philippines (LBP), the Register of Deeds (ROD), and a Philippine lawyer.

Quick answer (so you don’t miss the plot)

Buying a CLOA land within the first 10 years from title issuance/registration is generally prohibited.
Any private sale during the ban is void (a legal nullity). You can lose your money and fail to get ownership or a valid title transfer.
Narrow exceptions exist (e.g., transfer to the Government/LBP or to another qualified agrarian reform beneficiary (ARB) through DAR), but not to ordinary buyers.
Even after the 10 years, free sale typically requires that the land is fully paid (or condoned, per newer legislation’s rules) and you still need DAR transfer clearance, standard taxes, and ROD processing.

Key concepts and legal bases

CLOA (Certificate of Land Ownership Award): The title issued to an agrarian reform beneficiary (ARB) under the Comprehensive Agrarian Reform Program (CARP), principally under Republic Act (RA) 6657, as amended (often called CARP/CARPER).
10-year non-transferability rule: Under RA 6657 (as amended), beneficiaries may not sell, transfer, or convey their awarded land for 10 years from issuance/registration of the CLOA, except:
1. Hereditary succession (upon the ARB’s death);
2. Transfer to the Government or LBP;
3. Transfer to another qualified ARB through the DAR (not via a private deed alone).
Two locks before free disposition:
1. Time lock: the 10-year ban must have expired; and
2. Payment lock: the ARB’s amortizations must be fully settled (LBP certificate of full payment or as otherwise dealt with by law). Only when both are satisfied may a sale to non-ARB buyers proceed—still subject to DAR rules, land ownership limits, and standard conveyancing requirements.
Continuing agrarian policy guardrails: Even beyond 10 years, transfers remain policed by DAR (e.g., DAR Transfer Clearance), and buyers must comply with the Constitution/Civil Code (e.g., foreigners cannot own land; corporations must be 60% Filipino-owned, etc.).

What exactly is prohibited within the 10-year period?

Sale, donation, barter, or any conveyance to a private person or entity that is not the Government/LBP or a DAR-approved qualified ARB transferee.
Mortgages/encumbrances to private lenders are typically disallowed; LBP (and, in some cases, specified GFIs) may be permitted for production credit pursuant to DAR/LBP rules.
Simulated deeds (e.g., antedated “absolute sale” or “waiver of rights”), side letters, or long-term “aryendo” arrangements designed to sidestep the prohibition are invalid and can trigger administrative/criminal liability.

Practical translation: If you’re a non-ARB private buyer, there’s no lawful way to buy the land from the ARB before the 10 years—unless the DAR itself re-allocates it to you because you are another qualified ARB and the transfer strictly follows DAR’s process.

Consequences of violating the 10-year ban

The sale is void. A void sale transfers no ownership; the ROD will not lawfully recognize a transfer based on it.
Buyer risks: Loss of purchase money, inability to register/inscribe ownership, exposure to litigation/eviction when DAR enforces the law.
ARB risks: Administrative sanctions (including cancellation of beneficiary status and reallocation of the land), and possible criminal/penal consequences under CARP’s prohibited acts provisions.
Possession ≠ ownership. Even if a buyer takes physical possession, the law can unwind it.

The few things you can legally do within 10 years

Hereditary succession: If the ARB dies, heirs (spouse/children/compulsory heirs) may succeed, subject to DAR rules.
Transfer to Government/LBP: E.g., voluntary return or transfer handled through DAR and LBP.
DAR-approved transfer to another qualified ARB: A regulated process (DAR evaluates qualifications, land size ceilings, tenancy, actual tillage, etc.). Private “buy-out” deals on the side are not recognized.

After the 10 years: when can you buy?

You need to check all of the following:

Has the 10-year period expired?
- Count from the date of issuance/registration of the CLOA (as shown on the title/annotations).
Is the land fully paid?
- Secure an LBP Certificate of Full Payment (or verify if the obligation has been lawfully condoned/remedied by subsequent legislation and implementing rules).
Is the buyer legally qualified to own Philippine agricultural land?
- Citizenship rules, anti-dummy laws, and corporate equity thresholds apply.
Is the buyer within agrarian policy limits?
- DAR may still deny transfer clearance if it frustrates agrarian policy (e.g., busting ceilings, re-concentration, qualified ARB displacement).
Does DAR issue a Transfer Clearance?
- This is typically required for agricultural land transfers to ensure CARP compliance.
Have you complied with taxes and registration?
- BIR (Capital Gains Tax/creditable withholding, Documentary Stamp Tax, eCAR), LGU transfer tax, and ROD registration with cancellation of restrictive annotations (where applicable).

Due diligence checklist (for buyers)

Get a certified true copy of the CLOA title from the ROD. Read the memoranda/encumbrances (the 10-year clause is normally annotated).
Confirm the 10-year computation from the title’s issuance/registration date.
Ask LBP for the status of amortizations; obtain/verify the Certificate of Full Payment (or other official proof of extinguishment).
Secure DAR’s written guidance on whether a DAR Transfer Clearance is needed and the exact documentary requirements in your region.
Check for pending agrarian cases (e.g., cancellation of CLOA, reallocation, boundary disputes, parcelization/collectivization issues).
Verify land use/zoning and conversion status:
- Agricultural land cannot be used as residential/commercial without a DAR Conversion Order.
- LGU zoning is not enough if the land remains agricultural under national law.
Confirm tenancy/occupancy on the ground. Existing occupants or farmworkers may have rights.
If the ARB is married, secure spousal consent and check the regime (conjugal/ACP).
Walk away from red flags: “side agreements,” “lease-to-own” during the 10-year ban, antedated deeds, “waiver of rights,” or advice to “just register later.”

Special situations

1) Collective CLOAs and parcelization

Many CLOAs were issued collectively (co-ownership). Selling a “portion” is complex or impossible until the land is properly parcelized and individual titles are issued. DAR runs parcelization programs; expect additional steps and time.

2) Mortgages and production loans

Within the 10-year period, mortgage/encumbrance options are narrowly confined, usually to LBP (and sometimes designated government financial institutions) for production credit, and often require DAR involvement. Private mortgages during the ban are not recognized.

3) “Aryendo” (lease-out) schemes

Long-term lease-outs that effectively divest the ARB of control are treated as illegal circumventions. DAR has repeatedly moved against these arrangements. If you are offered an “aryendo” that smells like a disguised sale, don’t.

4) Death of the ARB within 10 years

The land can pass to heirs by succession. Heirs step into the ARB’s shoes subject to the same restrictions for the remainder of the 10 years and payment obligations.

5) Condonation of ARB amortizations

Recent reforms have condoned many ARB debts. Important: condonation may address the payment lock but does not shorten the 10-year time lock. Continue to verify with DAR/LBP how condonation is reflected on the title and in transfer clearances.

How a lawful post-maturity sale typically flows

Verify: 10-year ban has expired and payment lock is cleared (LBP certificate or lawful condonation).
DAR step: Apply for DAR Transfer Clearance (forms, affidavits, proof of qualifications, maps, tax declarations, LBP certificate, etc.).
Taxes: Process BIR taxes and obtain the eCAR.
ROD: Submit deed of sale + DAR clearance + BIR eCAR + tax clearances + owner’s duplicate title. ROD cancels the encumbrance annotation(s) and issues the new title to the buyer.

FAQs and myths

“I’ll buy now and register after 10 years.” Still void. You cannot cure an illegal deed by waiting out the clock.
“But we’re calling it a lease/waiver.” If it functions like a sale/transfer during the ban, it’s illegal, label aside.
“I’m a Filipino farmer—can I buy during the 10 years?” Only if DAR processes the transfer to you as a qualified ARB under its rules. A private deed alone will not work.
“Once 10 years lapses, I can skip DAR.” No. DAR clearance is typically required to police CARP compliance even after the ban.
“Foreigners can buy after 10 years.” No. Philippine land ownership is reserved to Filipinos and to corporations at least 60% Filipino-owned. Foreigners may explore long-term leases under other laws, not ownership.

Buyer’s risk-management plan (one-page)

Treat any sub-10-year offer as no-go unless you are proceeding through DAR as a qualified ARB.
For matured CLOAs: (a) independent title & encumbrance check, (b) LBP status & certificate, (c) DAR Transfer Clearance, (d) BIR/ROD compliance.
Put all payments in escrow until DAR/BIR/ROD conditions are verifiably satisfied.
Insist on on-title names (seller = titled ARB or duly adjudicated heirs); avoid “caretaker” or “nominee” sellers.
Keep a paper trail: official receipts, certified copies, DAR/LBP letters.
If the land’s use is non-agricultural in practice, secure a DAR Conversion Order (or documentary proof it’s outside CARP coverage) before closing.

Bottom line

Before 10 years: you cannot legally buy a CLOA land via a private sale (void). Only narrow, DAR-controlled transfers are possible, typically to qualified ARBs or the Government/LBP.
After 10 years + payment cleared: a sale is possible with DAR clearance and full compliance.
Skipping these rules is a recipe for lost money, no title, and legal trouble.

If you want, tell me your exact scenario (dates on the title, payment status, marital facts, possession, and what the seller is proposing). I’ll map your next lawful steps and draft a due-diligence checklist tailored to that situation.