I. Overview: Why DAR “clearance” matters for CLOA lands

In the Philippines, lands awarded under agrarian reform are not ordinary private property. They are subject to special restrictions designed to: (1) keep awarded land in the hands of qualified farmer-beneficiaries; (2) prevent speculation, land grabbing, and premature conversion; and (3) ensure the land continues to serve its agrarian reform purpose.

Because of these policy goals, transactions involving agrarian reform awards—especially lands covered by a Certificate of Land Ownership Award (CLOA)—often require Department of Agrarian Reform (DAR) clearance or DAR approval, depending on the transaction and the land’s status.

“DAR clearance” is commonly used as an umbrella term for several distinct DAR-issued certifications/approvals encountered in practice, including:

Authority/Approval for sale/transfer of CLOA/EP land after the legally restricted period;
Clearance/Certification that a property is not covered by agrarian reform (often requested for titling/registration or conveyancing);
Clearance for registration or annotation of restrictions and compliance requirements; and
Certification regarding beneficiary status, retention/coverage, or case status.

For CLOA land sales, the key point is this: even if a CLOA is “titled,” it carries statutory restrictions that can render a sale void, voidable, or unregistrable if the restrictions are ignored.

II. Key legal framework in Philippine agrarian reform

A. Comprehensive Agrarian Reform Law (CARL) and related rules

Agrarian reform awards and transfers are governed primarily by:

Republic Act No. 6657 (CARL), as amended (notably by RA 9700), and its implementing rules;
DAR Administrative Orders and related issuances (which define procedures for transfers, exemptions/clearances, and documentary requirements);
Registration rules under the Property Registration Decree (PD 1529) and land registration practice, insofar as they are consistent with agrarian laws; and
Jurisprudence recognizing agrarian reform policy as a strong public interest that justifies restrictions on land disposition.

B. CLOA as an agrarian reform award instrument

A CLOA is issued to a farmer-beneficiary (or a group/collective) as evidence of ownership or award under CARP, subject to:

Payment obligations (amortization) where applicable;
Prohibitions and restrictions on transfer/disposition; and
Continued qualification and use requirements consistent with agrarian reform goals.

CLOAs may be issued:

Individually (to a single beneficiary); or
Collectively (to a group, cooperative, association, or collective CLOA), with additional complexity for partition, individualization, and transfer.

III. Core restrictions on sale/transfer of CLOA lands

A. The statutory prohibition on transfer within the restricted period

As a general rule, CLOA lands cannot be sold/transferred for a prescribed period from award/issuance, except in narrowly defined cases.

Policy rationale The restriction prevents beneficiaries from being used as “dummies,” discourages distress sales, and ensures land stays devoted to agricultural production.
Typical effect Transfers made within the prohibited period, or in violation of allowed modes/approved buyers, can be:

Prohibited and treated as invalid under agrarian law;
Refused registration by the Register of Deeds due to statutory annotations; and/or
A basis for beneficiary disqualification and cancellation/reversion proceedings.

B. Who may acquire CLOA land when transfer is allowed

Even after the restricted period, transfers are not simply “open market” sales. CARP policy favors acquisitions by:

Qualified heirs (through succession) in appropriate cases;
The government (or LBP/DAR mechanisms);
Other qualified agrarian reform beneficiaries; and
In some contexts, acquisition by the landowner may be barred or heavily restricted (depending on the mode and period), consistent with anti-circumvention policy.

DAR practice generally scrutinizes:

Whether the buyer is qualified under agrarian reform rules;
Whether the transaction results in re-concentration of land in disqualified hands; and
Whether the transfer defeats agrarian reform objectives.

C. Prohibited circumvention schemes (high-risk in practice)

Certain transactions are often used to bypass restrictions but are legally risky and commonly challenged:

Deeds of sale disguised as “rights” transfers (assignment of rights) during the prohibited period;
Simulated deeds with side agreements, conditional sales, or “lease-with-option-to-buy” that effectively transfers ownership/control;
Mortgage/loan arrangements designed to end in foreclosure to transfer ownership;
Long-term leases that effectively deprive the beneficiary of beneficial ownership and control;
Unregistered deeds intended to be registered later “after the period,” but executed earlier.

Even when parties treat these as “private arrangements,” DAR and courts may view them as invalid schemes that undermine agrarian reform.

IV. Transfers that are generally recognized, and how DAR clearance fits

A. Transfer by succession (inheritance)

Inheritance is commonly treated differently from a voluntary sale because it is a mode of acquisition by operation of law. However, inheritance of CLOA land still raises issues:

Partition among heirs may require DAR clearance/approval depending on whether partition changes the structure of award, compliance with agrarian rules, and whether individualization is allowed/feasible.
Heirs must typically be qualified or at least must not defeat agrarian reform policy (depending on DAR’s interpretation and the status of the land).

Documentation typically includes:

Death certificate of the beneficiary;
Proof of heirs (birth/marriage certificates);
Extrajudicial settlement/judicial settlement documents;
DAR certification/clearance regarding award status and allowable transfer; and
Updated tax declarations and clearances for registration.

B. Voluntary sale after the restricted period

After the restricted period, sales may be allowed but usually require DAR approval/clearance and strict compliance with:

Proof that the restricted period has lapsed;
Proof of beneficiary’s compliance and good standing (no pending disqualification/cancellation case);
Confirmation that the buyer is eligible (or that the sale is to an allowable entity);
Payment of required fees/taxes; and
Registration steps with the Register of Deeds, with DAR annotations.

C. Sale to government / Land Bank mechanisms

Some modes prioritize returning land into agrarian reform channels—e.g., acquisition by government/financing institutions—subject to the agrarian rules and valuation mechanisms. These pathways tend to be more structured and often less vulnerable to nullity challenges than open-market attempts.

D. Mortgages and encumbrances

Encumbering CLOA lands (mortgage, lien, etc.) is often restricted and may require DAR/LBP involvement or consent, especially because the policy discourages loss of awarded land through foreclosure. Unauthorized mortgages can trigger:

Cancellation/disqualification proceedings;
Refusal of registration; or
Reversion processes under agrarian rules.

V. “DAR Clearance” in practice: common types affecting land sales

The term “DAR clearance” is frequently used to mean one or more of the following, depending on context:

A. DAR approval/authority for transfer of awarded land

This is the most relevant for CLOA sales. It is the DAR’s confirmation that:

Transfer is allowed under law (timing and conditions);
Parties are qualified as required; and
The transaction aligns with agrarian reform policy.

B. DAR certification that the land is not covered / has no agrarian issues

Buyers, banks, and registries frequently require a DAR certification that:

The property is not covered by CARP, or
It has been cleared/exempted/excluded, or
The particular transaction does not violate agrarian restrictions.

For CLOA land, this is usually not “non-coverage,” but rather certification on status, restrictions, and compliance.

C. DAR clearance for conversion (distinct from sale clearance)

Where parties intend to convert agricultural land to non-agricultural use, DAR conversion clearance is a separate regime. Selling CLOA land for development without conversion clearance is a major red flag and can lead to enforcement actions.

D. DAR certification for registration/annotation and case status

Registries often need DAR papers to annotate:

Restrictions;
Compliance; and
DAR approvals.

They may also require confirmation that there is no pending agrarian case affecting the land.

VI. Transaction requirements: typical documentary checklist for CLOA land sales

Exact requirements vary by DAR office and by the land’s status (individual vs collective, paid vs unpaid, encumbered vs unencumbered), but commonly include:

A. Identity and capacity documents

Valid government IDs of seller (beneficiary) and buyer;
Proof of marital status; spouse consent where required;
Special power of attorney if someone acts as representative (often scrutinized heavily).

B. Title/award and land status documents

Original/Certified true copy of CLOA (or EP, if applicable);
Certified true copy of the title (if registered CLOA title exists);
Tax declaration, tax clearance, and updated real property tax receipts;
Cadastral/location plan, technical description, and lot verification documents, as needed;
Proof of award date/issuance date to determine restricted period compliance.

C. Agrarian compliance documents

DAR certification of award status and compliance (no disqualification/cancellation case);
Certification of non-tenancy issues or occupancy/use status when required;
If collective CLOA: documentation of authority from the group/cooperative and compliance with rules on disposition.

D. Transaction documents

Draft/Executed deed of sale (often submitted for review before final acceptance);
Deed of undertaking/affidavits as required (e.g., compliance with restrictions, buyer’s qualification, no circumvention);
Valuation/consideration details; sometimes DAR reviews whether consideration appears exploitative (policy concern).

E. Clearance/approval documents

DAR-issued authority/clearance/approval for the transfer (the crucial output);
Endorsements from municipal/provincial agrarian offices where applicable.

F. Registration and tax documents

BIR requirements for deed registration (e.g., capital gains or creditable withholding tax, documentary stamp tax), subject to how the transaction is classified;
Transfer tax (LGU), registration fees, and other standard conveyancing requirements;
Annotation of restrictions and issuance of new title when permissible.

VII. Collective CLOAs: special restrictions and practical barriers to sale

Collective CLOAs are particularly sensitive because:

The award is to a group, not an individual parcel owner;
Individual sale may be impossible without prior individualization/partition approved under agrarian rules; and
Governance issues (authority to sign, member consent, and internal disputes) can invalidate transactions.

Common requirements/considerations include:

Proof of the association/cooperative’s legal personality and authority;
Member resolutions approving the transaction (often with strict quorum/voting rules);
DAR approval for partition/individualization before any individual sale is entertained; and
Strong scrutiny against “quiet consolidation” by outsiders.

In many cases, what parties call a “sale” is legally treated as an invalid transfer of rights if the underlying collective award has not been properly individualized.

VIII. Conversion, reclassification, and development: interaction with CLOA sales

A. Reclassification vs conversion

LGU reclassification (through zoning ordinances) does not automatically authorize changing actual agricultural use of agrarian reform land.
DAR conversion is required for lawful change of use where applicable.

Attempting to sell CLOA land for subdivision, industrial, or commercial development without addressing conversion requirements can expose parties to:

Denial of DAR clearance;
Cancellation proceedings;
Administrative and criminal exposure under agrarian-related prohibitions in extreme cases; and
Clouded title and investor/bank rejection.

B. Due diligence red flags in development-driven purchases

Buyer insists on “rights purchase” rather than registrable sale;
Seller is a beneficiary within restricted period;
“Backdated” documents;
Immediate fencing, displacement, or construction without conversion.

IX. Consequences of non-compliance

A. Registration problems and clouded title

Even if parties execute a deed, the Register of Deeds may refuse registration due to:

Annotations on CLOA titles restricting transfer;
Lack of DAR authority; or
Apparent violation of agrarian restrictions.

An unregistrable deed leaves the buyer with weak protection, often limited to personal claims against the seller—while the land remains burdened by agrarian restrictions.

B. Nullity/invalidity risks

Transactions violating agrarian restrictions can be treated as invalid. The practical outcomes include:

Loss of buyer’s investment;
Litigation and administrative disputes; and
Possible cancellation of the CLOA award for the beneficiary due to prohibited disposition.

C. Beneficiary disqualification and cancellation/reversion

If a beneficiary is found to have violated restrictions—e.g., illegal sale, abandonment, misuse—DAR can initiate proceedings that may lead to:

Cancellation of the CLOA;
Disqualification of the beneficiary; and
Re-award to qualified beneficiaries under agrarian processes.

D. Exposure for intermediaries and organizers

Actors who structure circumvention schemes (dummy arrangements, coercive purchases, systematic aggregation of CLOA lands) face heightened enforcement risk under agrarian regulatory powers, including administrative sanctions and referral for prosecution where warranted by specific violations.

X. Practical guidance for legally compliant CLOA transactions (Philippine conveyancing perspective)

A. Determine the land’s exact agrarian status

Before any negotiation:

Confirm whether the land is CLOA/EP and identify whether it is individual or collective.
Confirm award date and whether the restricted period has lapsed.
Check for annotations, encumbrances, and agrarian cases.

B. Treat DAR clearance as a gating requirement, not a formality

In compliant transactions, the sequence is typically:

Status verification and pre-evaluation with DAR;
Buyer qualification review (where required);
Preparation of deed and agrarian undertakings;
Issuance of DAR authority/clearance; then
Registration and tax compliance.

C. Avoid “rights purchase” as a substitute for lawful transfer

If a transaction is structured to avoid DAR review—especially during restricted periods—the risk of later invalidation is high.

D. For heirs: normalize the succession pathway

If the beneficiary has died, formalize settlement and seek DAR guidance early; avoid informal “heir waivers” used as disguised sales.

XI. Common misconceptions clarified

“It’s titled, so it’s like any other land.” CLOA titles are registrable, but they carry agrarian reform restrictions that materially limit transfer.
“We can sign now and register later after the period.” Execution during the prohibited period is itself a problem, and later registration does not necessarily cure illegality.
“A long lease is safer than a sale.” Long leases can still be treated as circumvention if they effectively transfer control and benefits contrary to agrarian policy.
“If the beneficiary agrees, it’s valid.” Agrarian restrictions are matters of public policy; private consent does not override statutory limits.

XII. Conclusion: the compliance core

The compliance center of CLOA land sales is consistent across scenarios:

Check the restricted period and award conditions;
Verify buyer eligibility and transaction permissibility under agrarian rules;
Secure the correct DAR authority/clearance (not merely a generic certification);
Ensure registrability with the Register of Deeds and proper tax compliance; and
Avoid circumvention structures that undermine agrarian reform policy.

CLOA land conveyancing is therefore not merely a civil law sale; it is a regulated disposition where DAR clearance/approval is often the decisive legal hinge that determines whether a transaction becomes a secure, registrable transfer—or a costly, unstable arrangement vulnerable to nullity and enforcement.