Land Due Diligence Checklist for Utility-Scale Solar Projects in the Philippines
A comprehensive legal guide for project developers, lenders, and advisors
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Always consult Philippine counsel experienced in energy, real estate, and environmental law when structuring or documenting a solar project.
1. Why Land Due Diligence Matters in Philippine Solar Development
Utility-scale solar farms (typically ≥ 5 MW) require large, contiguous tracts—often 5–10 hectares per MW—plus lay-down, substation, and transmission corridors. Because land in the Philippines is subject to unique constitutional, statutory, and customary restraints, comprehensive due diligence on land rights is the single biggest determinant of project bankability and construction schedule.
Key drivers:
| Driver | Relevance |
|---|---|
| Foreign-ownership cap | Only Filipino citizens or 60 % Filipino-owned entities may own land; foreigners typically use 25 + 25-year leases, usufructs, or build-operate-transfer arrangements. |
| Multiplicity of tenurial regimes | Torrens-titled private land, untitled “public domain” land, ancestral domains, and agrarian reform lands each follow different approval tracks. |
| Hard deadlines for DOE milestones | Delays in securing land tenure can trigger termination of the Renewable Energy Service Contract (RESC). |
| Lender & offtaker requirements | Banks and utilities demand “legal and physical right to access and use” the site for the term of the loan/PPA, free from uncurable defects. |
2. The Philippine Legal & Regulatory Framework (At a Glance)
| Law / Regulation | Core Land Impact |
|---|---|
| 1987 Constitution (Art. XII) | Land is “national patrimony”; alienable land ownership limited to Filipinos/60 % Filipino-owned corps; leases up to 25 years renewable once. |
| Renewable Energy Act of 2008 (RA 9513) | DOE grants the Renewable Energy Service/Operating Contract (RESC/REOC); requirement: demonstrable land rights. |
| Civil Code (Usufruct, Easements) | Alternative tenure instruments for foreign developers; governs right-of-way (ROW) for cables, access roads. |
| Property Registration Decree (PD 1529) | Torrens system; indefeasible title once registered but must trace chain and check for annotation defects. |
| Comprehensive Agrarian Reform Program (CARP, RA 6657) | Conversion or exemption approval needed for agricultural land > 5 ha or with Emancipation Patents/CLOAs. |
| Indigenous Peoples’ Rights Act (IPRA, RA 8371) | If site overlaps ancestral domain, requires Free, Prior and Informed Consent (FPIC) and a Memorandum of Agreement (MOA) with the community. |
| National Integrated Protected Areas System (NIPAS, RA 7586 as amended) | Solar within protected areas needs a Special Use Agreement in Protected Areas (SAPA) from DENR + Congressional concurrence. |
| Forestry Code (PD 705) & DAO 2004-59 | Solar on forest land requires a Special Land Use Permit (SLUP) or Forest Land Use Agreement for Renewable Energy (FLAgRE). |
| Local Government Code (RA 7160) | LGUs issue locational‐zoning clearances, mayor’s permits, and often require a barangay resolution supporting the project. |
| Environmental Impact Statement (EIS) System (PD 1586 & DAO 2017-15) | Projects ≥ 1 MW outside ECAs need an Initial Environmental Examination (IEE); ≥ 50 MW or within an Environmentally Critical Area need a full Environmental Impact Statement and Environmental Compliance Certificate (ECC). |
| ERC, NGCP & Grid Code | Easements and access for the generator lead line and interconnection facilities. |
| Real Property Tax Code (LGC + LGU ordinances) | Verify assessment, liens, and that host LGU granted relevant Renewable Energy (RE) local tax incentives, if any. |
3. Core Due Diligence Objectives
- Confirm ownership/tenure, boundaries, and area
- Identify legal impediments or competing claims
- Map regulatory approvals tied to land classification
- Quantify costs (acquisition, conversion, right-of-way, taxes)
- Mitigate risks by curative action or contractual allocation
4. Step-by-Step Checklist
4.1 Pre-Screening (Desktop)
| Task | Details |
|---|---|
| Acquire GIS shapefiles & topographic maps | Screen slope (< 5–10 °), flood risk, and distance to substation. |
| Overlay with cadastral & LC Maps | Confirm land is “alienable and disposable” (A&D) or identify forest/ancestral overlaps. |
| Check DOE Renewable Energy Resource Map | Ensure site falls within solar-viable zone to support Resource Assessment. |
| High-level permitting matrix | Chart whether ECC, CARP conversion, FPIC, or forestland permit likely required. |
4.2 Title & Documentary Examination
| Sub-Item | What to secure & examine | Red Flags |
|---|---|---|
| Transfer Certificate of Title (TCT) / Original Certificate of Title (OCT) | Obtain certified true copies (CTCs) from the Registry of Deeds (ROD). Trace back up to Mother Title. | Adverse annotations (lis pendens, adverse claim, mortgage, Sec. 4 Rule 74 affidavit), overlapping titles, technical description discrepancies. |
| Tax Declaration & Real Property Tax (RPT) clearances | Get from Municipal/City Assessor & Treasurer. | Unpaid RPT, erroneous classification (e.g., still agricultural). |
| Deed of Sale / Lease / Usufruct | Draft or review LOI, MOA, Option, and final instrument. | Anti-Dummy Law violations, corporate approvals absent, signatures not matched to SEC GIS. |
| Survey Plan (Approved by DENR/LMB) | Verify technical description matches TCT. Commission relocation survey if > 5 years old. | Encroachment on road right-of-way, river easement, or neighboring lots. |
| Zoning Certification & CLUP | Issued by Municipal/City Planning Office. | Site inside residential, tourism or critical slope zone. |
| Barangay Certification | Often prerequisite for LGU zoning. | Barangay opposition or unresolved boundary dispute. |
4.3 Physical & Legal Site Inspection
- Ocular visit: Confirm boundaries with GPS; check for occupants, crops, structures, cemeteries, or informal settlers.
- Interview adjacents/occupants: Unrecorded tenancy, pending agrarian petitions, or indigenous presence.
- Photodocumentation & drone survey: Evidences site conditions; helps lenders evaluate.
- Post-inspection affidavit: Engineer or surveyor certifies findings.
4.4 Regulatory & Tenurial Approvals Track
| Scenario | Governing Body | Key Permit / Action |
|---|---|---|
| Private, titled land (> 5 ha; currently agricultural) | Department of Agrarian Reform (DAR) | Application for Land Use Conversion → Conversion Order |
| CARP-covered land with CLOAs | DAR + Barangay Agrarian Reform Committee | VOS (voluntary offer to sell) or VLT (voluntary land transfer) + exemption/clearance |
| Forestland (unclassified, timberland) | DENR | FLAgRE / SLUP + special land use rental; CENRO & PENRO endorsements |
| Ancestral domain | NCIP | FPIC process (Field-Based Investigation, community assemblies, MOA, NCIP Resolution of Consent) |
| Protected area (NIPAS) | DENR-PAO + PAMB | SAPA + Congressional & Presidential approval |
| Reclaimed or foreshore land | DENR-LMS / Philippine Reclamation Authority | Foreshore Lease Application or Special Patent issuance |
4.5 Right-of-Way (ROW) for Transmission & Access
- NGCP point-of-interconnection (POI): Secure provisional assignment letter.
- ROW route survey: Titles, tax declarations, easement agreements.
- Easement contract: 3-meter min. for underground cables; 15-30 m corridor for 69–230 kV overhead lines.
- Expropriation backstop: LGU/DOE assistance if landholders refuse—but budget and timeline must assume amicable settlement.
4.6 Corporate & Contractual Documentation
| Document | Purpose | Typical Tenure |
|---|---|---|
| Option to Lease / Buy | Secures exclusive right during feasibility & permitting; usually 12–24 months. | n/a |
| Deed of Absolute Sale (DOAS) | Transfer of ownership (Filipino buyer) | Perpetual |
| Long-Term Lease | Foreign or mixed-ownership SPVs; registered with ROD as annotation. | ≤ 25 yrs + 25-yr renewal |
| Usufruct Agreement | Allows use/benefit without ownership; registrable with ROD. | Up to 50 yrs (good for lenders) |
| Easement Agreement | ROW for access or lines; registrable. | As long as needed |
| Mortgage / Real Estate Mortgage (REM) | Security for project finance; ensure lessor/owner consents. | Co-terminus with loan |
Key contractual protections:
- Representations & Warranties: No encumbrances, compliance with CARP, FPIC, etc.
- Conditions Precedent: Registration of lease, ECC issuance.
- Indemnity: Liability for hidden heirs, tenants, or indigenous claims.
- Force Majeure & Change in Law: Allocate risk of zoning changes or land re-classification.
5. Typical Red Flags & Curative Measures
| Red Flag | Consequence | Curative Action |
|---|---|---|
| Overlap with Certificate of Ancestral Domain Title (CADT) | FPIC mandatory; possible community opposition | Engage NCIP early; benefit-sharing MOA (1 % gross or community projects) |
| CLOA holders still in possession | CARP retention rights; conversion barred | Negotiate VOS/VLT and secure DAR exemption or retention waiver |
| Multiple heirs / pending estate | Clouded title; sale void without all signatures | File Extra-Judicial Settlement of Estate + issuance of new title |
| Tax delinquency > 5 years | Risk of public auction; buyer loses priority | Pay arrears + request certificate of no tax lien |
| Overlapping survey vs. actual possession | Encroachment claims | Commission relocation survey; amend title via LRC petition |
| Title derived from Free Patent < 5 years old | Five-year prohibition on sale (Sec. 118 Public Land Act) | Structure as Lease or Usufruct until 5-year lock-in lapses |
| Forestland erroneously titled | Title void ab initio | Shift to FLAgRE or identify alternate A&D site |
6. Lender & Investor Expectations (“Bankability Checklist”)
- Clean Site-Control Opinion: External counsel opines the SPV holds a registrable 50-year right (lease/usufruct/sale) free of adverse claims.
- Recorded Instrument: Original stamped, notarized, and annotated at the back of each TCT.
- Land Conversion / FPIC / FLAgRE final approvals: Issued and unappealed.
- ROW Agreements: Registered on servient estates.
- No Material Litigation: Certification from Regional Trial Courts & DAR adjudication board.
- Title Insurance / Indemnity Fund: Optional in PH, but some foreign lenders require.
- Insurance Cover: Political risk, sabotage & terrorism, and force majeure.
- Consents & Waivers: From lessors, tribal councils, mortgagees, or usufructuaries.
7. Best-Practice Timeline
| Month | Milestone |
|---|---|
| 0–1 | Site identification, desktop screening, LOI signing |
| 1–3 | Full title search, relocation survey, option contract |
| 3–6 | CARP conversion filing / FPIC commencement / FLAgRE application |
| 6–9 | DOE RESC execution (if greenfield) or approval of land swap |
| 9–12 | ECC issuance; finalize long-term lease/usufruct; register instruments |
| 12-15 | Financial close; mortgage annotation; notice-to-proceed to EPC |
| 15+ | Construction, ROW negotiation for transmission line, energization |
8. Practical Tips for Developers
- Bundle clusters: Aggregating multiple small parcels around a core site dilutes the impact of one delaying owner.
- Maintain GIS database: Track each parcel’s title status, CARP/FPIC stage, permits, and expiration dates.
- Community relations: Appoint a CSR officer early; community goodwill avoids stoppages.
- Notary & ROD familiarity: Use notaries and ROD staff versed in energy leases; incorrect acknowledgement forms can void registration.
- Escrow holdbacks: Retain 10-20 % of land payments until transfer and annotation complete.
- Align EPC layout with title blocks: Avoid placing arrays or trenches on parcels still under conversion.
- Monitor policy shifts: DAR conversion moratoria, DENR forestland pricing, NWRB water-use fees can swing project economics.
9. Conclusion
Land due diligence for Philippine solar projects is multidimensional—spanning property, agrarian, environmental, indigenous, and constitutional law. A robust checklist, executed by multidisciplinary specialists (surveyors, environmental consultants, agrarian lawyers, geotechnical engineers), is indispensable to reach financial close on time and avoid post-construction claims. Developers that front-load land work, budget for curative actions, and maintain transparent community engagement consistently achieve faster CODs and smoother exits.
Key takeaway: Secure the land, and the megawatts will follow. Skimp on land diligence, and even the sunniest irradiance cannot save the project.