Priority Rights in the Sale of Voluntary-Offer-to-Sell Agrarian-Reform Land in the Philippines (A comprehensive, practitioner-oriented guide — updated to June 28 2025)
1. Conceptual Overview
Under the Comprehensive Agrarian Reform Program (CARP) established by Republic Act No. 6657 (1988), the State may acquire private agricultural land either by Compulsory Acquisition (CA) or by Voluntary Offer to Sell (VOS). VOS is a landowner-initiated mode: the owner tenders the property to the Department of Agrarian Reform (DAR), the Land Bank of the Philippines (LBP) determines just compensation, the Republic takes title, and DAR awards the land to qualified agrarian-reform beneficiaries (ARBs).
Because VOS keeps the initiative with the landowner yet still serves social-justice ends, the law and its implementing rules impose priority rights at three critical moments:
| Stage | Whose priority? | Governing provision(s) |
|---|---|---|
| A. Acquisition – acceptance or rejection of the VOS | The Government (DAR/LBP) has the first right to purchase; the owner may not sell to private parties once the offer is filed. | RA 6657 §16; DAR Adm. Order (AO) No. 2-1996, §3 |
| B. Award/Distribution – selection of beneficiaries | Specific classes of farmers and farmworkers are ranked in the beneficiary priority list. | RA 6657 §22; DAR AO No. 7-2011 |
| C. Subsequent Sale/Transfer – during and after the prohibitory period | Heirs, co-owners, the Government (LBP/DAR), and fellow ARBs enjoy successive rights of pre-emption and redemption. | RA 6657 §27 (as amended by RA 9700); DAR AO No. 1-2009; DAR AO No. 8-2022 |
The rest of this article unpacks each layer, tracks key jurisprudence, and flags common pitfalls for counsel and land administrators.
2. Priority at the Acquisition Stage
Filing and Effect of the VOS Offer
- Within 30 days of filing a notarised VOS application (DAR Form VOS-L01), the landowner is barred from selling, leasing, or encumbering the land to anyone other than the Government.
- DAR screens for coverage (e.g., area exceeds 5-ha retention, land is agricultural in actual use, etc.).
Government’s Right of First Purchase
- If DAR/LBP accept, they issue a Notice of Land Valuation and Acquisition (NLVA); title vests in the Republic upon owner’s receipt of payment (usually an LBP bond + cash).
- If the Government rejects the offer (e.g., land is exempt, or budgetary constraints), the owner regains full liberty to dispose, but only after receiving a written Notice of Non-Acceptance.
- Attempted private conveyances before that notice are void ab initio and subject to reconveyance in favour of the State (see Heirs of Malate v. DAR, G.R. 229335, 11 Aug 2020).
3. Priority in the Selection of Agrarian-Reform Beneficiaries
The heart of “priority rights” in VOS lies in Section 22 of RA 6657, which sets the ranking of eligible awardees (mirrored in DAR AO 7-2011). Landowners cannot dictate who gets the land. The statutory order is:
- Agricultural lessees and share tenants actually tilling the land;
- Regular farmworkers (permanent, year-round);
- Seasonal farmworkers (e.g., sacada);
- Other farmworkers;
- Actual tillers or occupants of public lands;
- Collectives or cooperatives of the above;
- Others directly working on the land (including the landowner’s children who actually till, per §40);
- Qualified residents of the barangay, then of the municipality if slots remain.
Special preference rules:
| Rule | Source | Practical effect |
|---|---|---|
| Gender equity & primogeniture ban | RA 9700 §1; DAR AO 08-2014 | Husband and wife are co-owners of a CLOA; eldest-son preference is outlawed. |
| Elderly & differently abled | AO 07-2011 §12 | If similarly situated, senior or PWD farmer prevails. |
| Collective-to-individual parcelisation (PARCEx) | AO 03-2021 | In breaking up collective CLOAs, original worker-beneficiaries have first call on the parcel they cultivate. |
Contestation window: An excluded claimant may file a Petition for Inclusion/Exclusion within ten (10) days of the posting of the masterlist (AO 07-2011 §20).
4. Priority Rights Governing Transfer or Sale of Awarded Land
Awarded land is covered by a Certificate of Land Ownership Award (CLOA) bearing:
- A 10-year alienation ban (§27);
- A mortgage annotation in favour of LBP for the amortisation period (usually 30 yrs).
4.1 During the 10-Year Ban
A beneficiary may not sell, transfer, or convey except:
| Permitted transferee | Rationale |
|---|---|
| The Government – DAR or LBP | Allows reconsolidation when beneficiary defaults or voluntarily surrenders. |
| The Cooperative or Association the ARB belongs to | Facilitates collective production. |
| Legal heirs by succession | Maintains family tillage; no estate tax. |
Any other transfer is void and grounds for forfeiture (§73-A, as amended). The land reverts to the land bank of qualified applicants in the same barangay (DAR v. Spouses Abella, G.R. 201953, 12 Apr 2016).
4.2 After the 10-Year Ban but Before Full Payment
The ban lapses, but the CLOA remains encumbered to LBP. The beneficiary may sell or mortgage only with DAR clearance and subject to the right of pre-emption:
- Co-Owner spouse/heirs
- Adjacent ARB(s) tilling contiguous lots
- LBP/DAR (repurchase for landless applicants)
- Any other qualified person under §22
Pre-emption window: Sixty (60) days from notice of intention to sell (AO 01-2009 §15).
If pre-emption is not exercised and the buyer is a qualified beneficiary, DAR issues a Deed of Sale Under Oath; otherwise the conveyance is denied.
4.3 Post-Amortisation & Mortgage Release
Once LBP issues a Release of Real Estate Mortgage (RREM) and DAR cancels the lien, the land enters the free commercial market; however, it remains agricultural unless reclassified by LGU and approved by DAR (see Province of Camarines Norte v. Francisco, G.R. 232002, 10 Feb 2021).
5. Interplay with Landowner Retention and Retention-Sale Priority
Even under VOS, a landowner may retain up to five (5) hectares (§6). If the owner waives retention in the VOS application, retention is deemed extinguished. If the owner rescinds the waiver before DAR issues a Memorandum of Valuation, the retention area enjoys priority over ARB award (AO 02-2008). After acceptance, reacquisition is no longer possible except via repurchase at market price after forty (40) years (§22-B, added by RA 9700).
6. Jurisprudential Highlights
| Case | G.R. / Date | Doctrine on priority |
|---|---|---|
| Garrido v. DARAB | G.R. 151322, 15 Jan 2014 | Priority under §22 is absolute; DAR cannot “re-rank” to favour a more productive applicant. |
| Heirs of Malate v. DAR | G.R. 229335, 11 Aug 2020 | Owner’s private sale while VOS is pending is void; title already impressed with public interest. |
| Peñalosa v. Roales | G.R. 181913, 17 Mar 2021 | A void transfer during the 10-year ban is imprescriptible; DAR may void the title even after the period. |
| LBP v. Heirs of Domingo | G.R. 227987, 6 Dec 2022 | LBP’s mortgage subsists beyond 10-year ban; buyer in good faith takes subject to the lien. |
| DAR v. Spouses Abella | G.R. 201953, 12 Apr 2016 | Illegal transfer results in forfeiture and redistribution to next-in-priority residents of barangay. |
7. Special Situations & Practice Notes
| Scenario | Key rule / tip |
|---|---|
| Collective CLOA parcelisation | Follow AO 03-2021; original worker has right of first refusal on his actual tillage parcel. |
| Corporate farms under VOS | For estates with plantation workers, priority follows §22 but collective ownership (co-ops) is encouraged (AO 06-2010). |
| Indigenous Peoples (IPs) | If the land is within an ancestral domain and owner opts for VOS, DAR must coordinate with NCIP; IPs have top priority (IPRA §57; DAR-NCIP JAO 01-2012). |
| Urbanizing areas | Reclassification to non-agricultural does not erase CLOA restrictions unless approved by DAR & HLURB; ARBs still possess first refusal rights under §65. |
| Tax delinquency auction | CLOA land cannot be levied or auctioned while LBP lien subsists (NIRC §205 as harmonised with RA 6657). |
8. Enforcement, Penalties & Remedies
- Void transfers → DAR issues Notice of Cancellation; RD cancels TCT; land is redistributed.
- Administrative fines under §73-A: ₱50 000 – ₱100 000 per violation, plus criminal liability.
- Forfeiture of amortisation payments; buyer in bad faith has no reimbursement rights.
- Appeals: DARAB → Office of the President → Court of Appeals (Rule 43) → Supreme Court.
9. Checklist for Counsels & Land Administrators
- Intake: Verify if the land is under VOS and whether DAR has accepted the offer.
- Title review: Look for CLOA, emancipation patent (EP), or mother OCT with annotation “Republic of the Philippines” & “LBP mortgage”.
- Beneficiary diligence: Secure the approved Master List and posting certifications.
- Transfer intentions: Compute 10-year window; obtain DAR clearance; observe 60-day pre-emption notice.
- Tax & LGU matters: Check for reclassification ordinances; ensure DAR concurrence.
- Document drafting: Use DAR template Deed of Sale/Mortgage with DAR Provincial Agrarian Reform Officer (PARO) countersignature.
- Post-closing: File Deed with RD; secure new TCT with carried-over annotations; notify DAR Municipal Agrarian Reform Office (MARO) for monitoring.
10. Conclusion
Priority rights in VOS sales safeguard the twin aims of agrarian reform: social justice for landless tillers and equitable compensation for landowners. Mastery of these layered priorities—government’s right of first purchase, the statutory beneficiary hierarchy, and the tiered pre-emption/redemption rules for subsequent transfers—is essential for avoiding void transactions and for ensuring that land redistribution delivers sustainable rural development.
This article is intended for educational purposes only and does not constitute legal advice. For particular situations, consult the DAR regulations in force and the latest jurisprudence.