DAR Retention Limits for Farmland Purchase in the Philippines
A comprehensive legal primer
1. Historical and Constitutional Roots
| Instrument | Key Provision | Effect on Retention |
|---|---|---|
| 1987 Constitution, Art. XIII §4 | Mandates just distribution of agricultural land, subject to reasonable retention by landowners. | Gives Congress power to fix a ceiling and conditions. |
| Republic Act (R.A.) 6657 – Comprehensive Agrarian Reform Law of 1988 (CARL) | §6 fixes the retention ceiling at 5 hectares (ha) for the landowner plus up to 3 ha for each qualified child. | Establishes June 15 1988 as the reckoning date for land size and ownership. |
| R.A. 9700 (CARPer, 2009) | Re‑affirms the 5‑ha ceiling and directs DAR to streamline retention processing. | Extends CARP funding and coverage period to 2014 but keeps the ceiling intact. |
The Supreme Court upheld the constitutionality of the 5‑ha limit in Association of Small Landowners v. Secretary of Agrarian Reform, G.R. Nos. 78742 et al. (31 July 1989), ruling that retention is a legislative grace, not a vested property right.
2. Basic Rules on How Much Land May Be Retained
| Stakeholder | Limit | Additional Notes |
|---|---|---|
| Natural‑person landowner | 5 ha | Land must have been registered (or possessed openly and continuously) as of 15 June 1988. |
| Children of the landowner | 3 ha each | Child must be (1) at least 15 years old and (2) actually tilling or directly managing the land. No statutory cap on the number of qualified children, but the DAR ordinarily processes up to three or four; any excess is scrutinized for possible circumvention. |
| Spouse | Shares in the 5‑ha owner’s limit unless property is conjugal and the spouses each owned separate parcels pre‑marriage. | |
| Juridical persons (corporations, cooperatives, partnerships) | 5 ha per individual stockholder/member, computed proportionately to equity. | |
| Homelots | Up to 1,000 m² outside the 5‑ha ceiling if occupied by the owner’s family residence prior to CARL. |
⚠️ No splitting or multiple titling: CARL §70 penalizes artificial subdivision intended to evade coverage; titles created after 15 June 1988 are disregarded when computing total holdings.
3. Step‑by‑Step Retention Procedure
File a Written Application
- Submit to the Municipal Agrarian Reform Office (MARO) within 60 days from notice of coverage (or within statutory periods fixed in DAR A.O. 02‑2003 and A.O. 07‑2011).
- Include: certified copy of the title, tax declarations, sketch plan, sworn list of children, and affidavit of aggregate landholdings.
Field Investigation
- MARO verifies ownership, actual land use, tenancy occupancy, and contiguity; prepares the Land Use Investigation Report (LUIR) and Field Investigation Report (FIR).
Selection of the Retained Area
- The landowner personally chooses a contiguous block that “is compact and shall include, as far as practicable, those areas nearest the homestead or house” (DAR A.O. 02‑2003, §11).
- Priority must be given to rice and corn lands already tilled by tenants.
Publication and Posting
- PARO posts the tentative sketch in the barangay hall, municipal building, and DAR offices for 15 days; affected tenants may object in writing.
DAR Provincial Approval
- Provincial Agrarian Reform Officer (PARO) issues an Order of Retention; within 15 days, aggrieved parties may appeal to the Regional Director and ultimately to the DAR Secretary and the Office of the President.
Leasehold Conversion of Tenancy
- Tenants on the retained area become leaseholders under R.A. 3844 §34, paying rent ≤ 25 % of average normal harvest.
Land Distribution of the Excess
- Lands beyond the retained block proceed to valuation by the Land Bank of the Philippines (LBP) and issuance of Certificates of Land Ownership Award (CLOAs) to farmer‑beneficiaries.
4. Rights and Restrictions After Retention
| Transaction | Allowed? | Conditions |
|---|---|---|
| Sale or donation of retained land | Yes, but no reconsolidation | Does not re‑open the seller’s right to claim a new 5 ha elsewhere. |
| Mortgage | Yes | Agrarian liens follow the property; foreclosure buyer takes subject to leasehold rights. |
| Conversion to non‑agricultural use | Requires DAR conversion clearance under A.O. 01‑2002 and HLURB/LGU zoning. | |
| Partition among heirs | Permitted only after DAR approval; each heir’s share must not exceed 5 ha unless exempt from CARP (e.g., land < 5 ha, poultry, livestock). | |
| Beneficiary transfer of awarded land | Prohibited for 10 years (CARL §27) and allowed only to (1) the State, (2) the LBP, or (3) co‑heirs by hereditary succession. | |
| Use of land as collateral by CARP beneficiaries | Allowed after full payment and lifting of liens; earlier mortgage requires DAR consent and LBP guarantee. |
Violations—such as false statements in sworn declarations, unlawful ejectment of tenants, or illegal sale within the ban period—are punishable under CARL §§73 & 74 (fine, imprisonment, or both).
5. Special Situations and Exemptions
- Fishponds, prawn farms, livestock and poultry are covered by separate rules (EO 228, EO 129‑A, DAR A.O. 03‑2011). Retention may still be invoked, but area computations follow commodity‑specific ceilings.
- Landholdings < 5 ha on 15 June 1988 are automatically exempt from CARP coverage; owners need only secure a DAR Certificate of Exclusion, not a retention order.
- Voluntary Land Transfer/Direct Payment Scheme (VLT/DPS): If parties opted into VLT before a retention claim, DAR will process the retention first; excess land already transferred may be voided if it cuts into the 5‑ha ceiling.
- Collective CLOA areas carved from a single estate: the original owner retains within the parent title; collective titles are later subdivided under A.O. 18‑2008, but the 5‑ha ceiling remains inviolate.
6. Landmark Supreme Court Decisions
| Case | G.R. No. / Date | Doctrine Relevant to Retention |
|---|---|---|
| Association of Small Landholders v. DAR | 78742, 31 Jul 1989 | 5‑ha ceiling is a valid exercise of police power; retention is not a property deprivation without due process. |
| Republic v. Court of Appeals & Santos | 106548, 16 Dec 1992 | Computation of aggregate landholdings includes all parcels titled to the owner anywhere in the Philippines. |
| Roxas & Co. v. CA | 127876, 4 Dec 2001 | Corporate landowners may not bypass the ceiling by issuing “qualified” shares; reckoning is total corporate land. |
| Heirs of Malate v. Gamboa | 179370, 19 Jun 2019 | DAR cannot automatically grant 3 ha to every child; factual proof of actual tillage/management is indispensable. |
| Sutton v. DAR | 190290, 29 Apr 2015 | When land is already distributed, DAR cannot later reinstate a belated retention claim absent compelling equitable reasons. |
| Spouses Angeles v. DARAB | 215028, 26 Feb 2020 | Orders of retention are subject to administrative due process; tenants must be heard. |
7. Practical Checklist for Buying Farmland Near Retention Limits
- Secure a DAR Clearance (
Certification as to Landholdings and CARP Status) from the PARO. - Examine the title history: look for post‑1988 subdivisions or transfers that might be void.
- Verify tenancy and leasehold registries at the barangay Agrarian Reform Council and Municipal Agrarian Office.
- Obtain a Land Bank valuation print‑out if the tract has a pending coverage; sale price cannot prejudice the State’s acquisition cost.
- Inspect the approved retention sketch to confirm the land you intend to buy is outside the 5‑ha block.
- Place warranties in the Deed of Sale that the seller has not exhausted the statutory ceiling and will defend against DAR takings.
- If buying from a CARP beneficiary, ensure:
- The 10‑year prohibitive period has lapsed;
- DAR has issued a Certificate of Full Payment and lifted the lien;
- Spousal and heirs’ consents are notarized.
Failure to observe these steps may result in annulment of the sale and forfeiture without compensation.
8. Common Issues in Practice
- Processing backlogs: Some PAROs still act on retention applications filed as early as the 1990s, creating uncertainty for purchasers.
- Conflict with local zoning: LGU re‑classification cannot override DAR jurisdiction; conversion clearance is mandatory.
- Fragmentation through inheritance: Successive intestate partitions often produce sub‑5‑ha slices that still fall under CARP if the original estate exceeded the ceiling.
- Overlap with indigenous peoples’ ancestral domains: Retention does not apply to lands inside Ancestral Domain Titles under R.A. 8371 (IPRA); NCIP consultation is required.
9. Key DAR Administrative Issuances (Quick Reference)
| A.O. / Memo Circular | Year | Subject |
|---|---|---|
| A.O. 02‑1993 | 1993 | Initial guidelines on retention implementation. |
| A.O. 02‑2003 | 2003 | Consolidated procedure, documentary requirements, and prioritization. |
| A.O. 07‑2011 | 2011 | Clarified children’s 3‑ha entitlement, proof of tillage, and deadline for filing. |
| Mem. Cir. 04‑2014 | 2014 | One‑stop processing timetable (60‑90 days). |
| A.O. 03‑2020 | 2020 | Digital submission of retention applications and e‑tracking. |
Always consult the latest A.O. before filing, as DAR periodically amends cut‑off dates and checklists.
10. Conclusion
The 5‑hectare retention ceiling—with its carefully defined exceptions, procedures, and jurisprudential refinements—sits at the heart of the Philippine agrarian‑reform balance between social justice and respect for private property. Whether you are a landowner safeguarding a family farm, a farmer‑beneficiary protecting security of tenure, or an investor purchasing agricultural land, a thorough grasp of DAR retention rules is indispensable.
Due diligence with DAR, LBP, and registry offices, coupled with awareness of evolving administrative issuances and Supreme Court rulings, is the surest way to avoid costly land disputes and secure a legally defensible transaction.