I. What a CLOA Is, and Why It Matters in Buying Land

A Certificate of Land Ownership Award (CLOA) is a title or ownership instrument issued under the Comprehensive Agrarian Reform Program (CARP) to agrarian reform beneficiaries (ARBs) over land awarded for agricultural purposes. CLOA-covered land is not treated like ordinary private property in the open market. It is burdened with statutory restrictions designed to prevent speculation, keep the land in the hands of qualified farmers, ensure it remains agricultural and productive, and protect the ARB from losing the award through premature sale, pressure, or debt.

Because of these restrictions, the answer to “Can you buy CLOA land?” is: sometimes, but only in very limited, regulated ways—and many attempted purchases are void. The legality depends on (1) the status of the CLOA (still under restriction period or not), (2) whether the land is fully paid to the Land Bank (if financed), (3) whether the transfer is among the allowed transferees, (4) whether DAR approval and required processes are followed, and (5) whether the transaction is a true transfer or a disguised prohibited sale (e.g., “mortgage,” “lease,” “right to repurchase,” “SPA + blank deed,” “waiver,” “extra-judicial settlement,” “assumption,” etc.).

II. Core Legal Framework (High-Level)

In Philippine law, CLOA restrictions come primarily from:

Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 1988), as amended
Republic Act No. 9700 (CARPER amendments)
DAR administrative issuances governing transfers, approvals, and documentation
Jurisprudence interpreting prohibited transfers and the consequences of noncompliance

The rules are strict because agrarian reform is treated as a social justice program, and CLOAs are awarded on conditions.

III. The General Rule: CLOA Land Is Not Freely Saleable

A. Prohibition during the restriction period

As a baseline, CLOA land is typically subject to a holding/transfer restriction period where it cannot be sold, transferred, or conveyed except in ways the law allows. This is often discussed as a 10-year prohibition (depending on the legal circumstance and the applicable regime), but in practice the inquiry is more precise:

Even after time passes, there may be continuing restrictions depending on unpaid amortizations, program conditions, the nature of the award, or if the transaction is not among authorized modes or parties.
A “sale” in substance may be void even if dressed as another contract.

B. Policy reason

CLOA restrictions prevent:

Land consolidation by non-farmers
“Dummy” ARBs who sell immediately
Usurious or coercive transfers
Re-creation of landlessness

IV. Who May Receive CLOA Land: Allowed Transferees (Common Statutory Pattern)

Even where transfer is allowed, transfers are commonly limited to:

Heirs of the ARB (succession)
The Government (including DAR, or other authorized government acquisition)
The Land Bank of the Philippines (LBP) (especially in foreclosure or financing contexts)
Other qualified agrarian reform beneficiaries (or qualified farmers), often with DAR screening/approval
The original landowner may appear in certain scenarios recognized by agrarian rules (highly fact-specific, and not a blanket permission)

Buying as an ordinary private individual who is not qualified is where many deals collapse. If the buyer is not a qualified transferee, the transaction can be treated as a prohibited transfer even if money changed hands and possession was delivered.

V. The Most Common “Buyer” Scenarios and Their Legal Risks

Scenario 1: Direct Deed of Absolute Sale to a non-ARB buyer

High risk / commonly void if within restriction period or outside allowable transferees.
Even if notarized, even if taxes are paid, even if buyer has possessed for years, the transfer can still be attacked as prohibited.

Scenario 2: “Waiver,” “Quitclaim,” “Kasunduan,” “Deed of Assignment,” or “Rights” sale

Often used to avoid the word “sale.”
If the intent is to transfer beneficial ownership for consideration, it is treated as a sale in substance and can be invalid.

Scenario 3: Lease with option to buy / long-term lease that functions like a sale

If it effectively transfers control and enjoyment permanently or for an excessive period, it can be treated as a prohibited circumvention.
Long-term leases over CLOA land can be regulated and may require compliance or approval depending on the facts.

Scenario 4: Mortgage/utang with “pacto de retro,” “sangla,” or conditional sale

Many CLOA lands are informally “pawned.”
If it operates to transfer ownership or deprive the ARB of the land contrary to CARP rules, it can be void and expose parties to administrative and even criminal complications depending on the circumstance.

Scenario 5: Sale after “ten years” but without DAR processes and eligibility

Time alone is not always a safe harbor.
Transfers may require DAR clearance/approval, and transferee qualification is often a continuing issue.

Scenario 6: Transfer through inheritance

Succession is commonly permitted, but heirs must still contend with:
- Partition issues
- Continuing agricultural use obligations
- Potential DAR/LBP annotations and amortization obligations
- If heirs sell onward, they may face the same transfer restrictions

VI. Amortization and Land Bank: Why “Fully Paid” Matters

Many awarded lands are subject to amortization payments to LBP. If amortizations are unpaid, the title/CLOA often carries annotations restricting transfers and encumbrances. As a practical legal obstacle:

Register of Deeds typically will not register prohibited transfers because the restriction is annotated.
Even if the Register of Deeds registers it due to error, the transaction can still be challenged.

If there is default, LBP remedies may include enforcement consistent with agrarian rules. Buyers who “assume amortization” informally without DAR/LBP-approved transfer can be left paying for land they never legally acquired.

VII. Required Approvals, Clearances, and the DAR’s Role

A lawful transfer of CLOA land—when allowed—commonly requires compliance with DAR rules such as:

DAR clearance/approval for transfer
Verification that the land remains agricultural and covered by agrarian rules
Verification that the transferee is a qualified beneficiary/farmer (or otherwise authorized)
Compliance with documentation requirements, including the proper deed, affidavits, undertakings, and proof of eligibility
Coordination with the Register of Deeds and, where applicable, LBP for obligations/annotations

Without these, parties often end up with:

A deed that cannot be registered
A “buyer” stuck with possession but no title
Exposure to cancellation or re-award proceedings

VIII. Consequences of Illegal or Prohibited Transfers

A. Civil consequences: void or unenforceable transfers

A prohibited transfer can be treated as void (no legal effect). Outcomes can include:

Reversion of rights back to the beneficiary or to the agrarian reform program
Inability to register a title in the buyer’s name
Loss of the purchase price (especially when the seller is insolvent or disappears)

B. Administrative consequences: cancellation and reallocation

DAR may institute proceedings that can result in:

Cancellation of the CLOA or beneficiary’s award due to prohibited alienation
Disqualification of the beneficiary
Re-award of the land to other qualified ARBs

C. Possession disputes and ejectment complications

Even if the buyer is in possession, they may be vulnerable to:

Actions to recover possession
Administrative proceedings affecting their claimed rights

D. Potential criminal exposure (case-dependent)

Certain acts related to circumvention of agrarian reform restrictions can carry criminal implications under agrarian statutes and related laws, depending on the factual pattern (e.g., fraud, falsification, simulation, coercion, or prohibited acts under agrarian laws). This is highly fact-specific and depends on what exactly was done, what documents were executed, and whether public officers were involved.

IX. How to Tell if a Property Is CLOA-Covered (Due Diligence Checklist)

A buyer must confirm status before any money changes hands:

Certified True Copy of Title / CLOA from the Registry of Deeds
- Look for annotations: CARP coverage, transfer prohibition, LBP mortgage/amortization, restrictions on encumbrances
DAR records verification
- Confirm if the land is indeed under CARP, the identity/status of ARB(s), whether there are pending cases, whether it is collective CLOA, etc.
Type of CLOA
- Individual CLOA vs Collective CLOA
  - Collective CLOA lands often have additional complexities and transfer limitations because the award is to a group/cooperative with shared rights and governance issues.
LBP status
- Is there an outstanding amortization? Any default? Any mortgage annotation?
Actual land use and classification
- Whether it remains agricultural, any conversion issues, zoning, and any DAR conversion orders (if any)
Possession and occupancy
- Who is farming? Are there tenants, farmworkers, or competing claimants?
Existing disputes
- Barangay disputes, court cases, DARAB cases, re-award petitions

X. Common Red Flags in “CLOA Land for Sale” Offers

Seller says: “It’s okay, deed is notarized, just don’t register yet.”
Seller offers: “We’ll do a SPA and you can process later.”
Seller proposes: “Rights only,” “waiver,” “kasunduan,” “transfer of improvements,” “bili ng ani,” “farm management” but the price equals land value.
Seller says: “Ten years already, no need DAR.”
Seller says: “Pay amortization to LBP, that’s enough.”
Seller refuses to show:
- Certified title/CLOA copy
- DAR status documents
- LBP statement of account
Seller insists on cash and personal assurance only.

These structures commonly lead to an unenforceable deal.

XI. If Transfer Is Allowed, What a Lawful Path Typically Looks Like

When a transfer is permissible, a compliant transfer usually includes:

Confirm eligibility of transferee
- If rules require transferee to be qualified, ensure documentation supports qualification
Secure DAR clearance/approval
- Follow the DAR process specific to the land type and transaction type
Address LBP obligations
- Clearance/consent as needed if there is an annotation or remaining amortization
Execute proper deed
- Notarized, accurate, and consistent with the approved transaction
Register with the Register of Deeds
- Transfer must be registrable; otherwise, buyer remains unsecured

XII. Special Topics

A. Collective CLOAs

Collective CLOAs can involve:

Membership rules
Cooperative or association governance
Allocation issues and internal disputes
Restrictions on individual members selling what is not individually titled

A “purchase” from one member may not convey any legally recognized parcel if the award is not individualized and no proper subdivision/individual CLOA issuance has occurred.

B. Conversion and reclassification

Even if land is later reclassified by LGU zoning, DAR conversion authority can still be required for lands under agrarian reform coverage. A buyer cannot assume that reclassification alone removes agrarian restrictions.

C. Transfer of “improvements” vs transfer of land

Sometimes parties attempt to sell only:

a house
crops
improvements

But if the transaction effectively includes land control and beneficial ownership, it can be treated as a prohibited land transfer.

D. Death of the ARB and heirs

If the ARB dies, heirs may succeed, but:

The land’s agrarian character and restrictions can persist
Heirs must respect agrarian rules in later transfers
Partition may be constrained by agrarian policy and land-use requirements

XIII. Practical Bottom Line

Yes, buying CLOA land can be legally possible only in narrow, regulated situations, typically involving authorized transferees and DAR-supervised processes.
Most open-market purchases from an ARB to a private buyer are legally risky and often void, especially when structured to evade restrictions.
Registration and DAR/LBP compliance are not mere formalities—they are often the dividing line between an enforceable transfer and a worthless paper deal.
Possession is not ownership, and years of farming or occupying do not automatically cure a prohibited transfer.

XIV. Key Takeaways for Buyers and Sellers

Never rely on verbal assurances about “ten years” or “rights sale.”
Do not pay without verifying: title/CLOA annotations, DAR status, and LBP amortization.
If the transfer cannot be registered and cannot be DAR-cleared, treat it as a high probability loss.
In CLOA transactions, the safest assumption is that restrictions apply unless proven otherwise through official records and proper approvals.