The right of first refusal (ROFR), also known as the right of pre-emption and, in certain circumstances, the right of redemption, is a statutory protection granted to agricultural tenant-farmers (lessees) when the owner of the land they till decides to sell it. This right ensures that the tenant is given the first opportunity to purchase the landholding at the same price, terms, and conditions offered to any third party. Its primary objectives are to secure the tenant’s livelihood, prevent arbitrary eviction or displacement through sale, promote equitable land distribution, and advance the constitutional policy of agrarian reform and social justice under Article XIII, Section 4 of the 1987 Philippine Constitution.

The ROFR is not a mere contractual privilege but a mandatory legal safeguard that attaches to the tenancy relationship itself. It applies irrespective of whether the tenancy is leasehold or, in residual cases, share tenancy. Violation of the right renders the sale to a third party defective and subject to annulment or redemption at the instance of the aggrieved tenant.

Historical Evolution

Philippine agrarian tenancy laws trace their roots to the early 20th century. The Rice Share Tenancy Act (Act No. 4054, 1933) first recognized basic tenant protections. This was followed by Republic Act No. 1199 (Agricultural Tenancy Act of 1954), which established the agricultural tenancy system and introduced rudimentary pre-emptive rights. Republic Act No. 3844 (Agricultural Land Reform Code of 1963), as amended by Republic Act No. 6389 (Code of Agrarian Reforms of 1971), codified and strengthened the ROFR. Presidential Decree No. 27 (1972) emancipated rice and corn tenants, converting them into owners through Operation Land Transfer. Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 1988), as amended by Republic Act No. 9700 (Comprehensive Agrarian Reform Program Extension with Reforms of 2009), integrated and expanded these protections within the broader CARP framework.

Even after the shift to compulsory acquisition and voluntary offer-to-sell under CARP, the ROFR continues to govern private sales of lands that remain under leasehold tenancy and have not yet been acquired and distributed by the Department of Agrarian Reform (DAR).

Statutory Legal Basis

The core provisions are found in the following statutes:

Republic Act No. 3844, Section 11 – Lessee’s Right of Pre-emption
“In case the agricultural lessor decides to sell the landholding, the agricultural lessee shall have the preferential right to buy the same under reasonable terms and conditions.”
Republic Act No. 3844, Section 12 – Right of Redemption
Where the landholding is sold to a third person without the agricultural lessee’s knowledge, the lessee may redeem the property within one hundred eighty (180) days from written notice or from actual knowledge of the sale, by paying the purchase price plus interest and incidental expenses.
Republic Act No. 6657 (CARL), Sections 2, 3, and 6 – These sections reinforce the policy that tenancy relationships must be respected until the land is actually acquired and distributed. Private sales of tenanted agricultural lands are subject to DAR clearance and must comply with the ROFR before any transfer can be registered.
Republic Act No. 1199 – Provides foundational definitions of “agricultural lessee” and “landholder” that are still used to determine who may invoke the right.
Presidential Decree No. 27 and Executive Order No. 228 – For rice and corn lands already covered by emancipation patents or certificates of land ownership award (CLOAs), the ROFR no longer applies because the tenant has become the owner. However, the right remains fully operative for lands still under leasehold tenancy or for other crops not covered by PD 27.

Scope and Applicability

Who may exercise the right?
Any agricultural lessee who cultivates the land personally or through immediate family members, pays lease rentals or shares, and holds a valid tenancy relationship recognized by law or by DAR. The right is personal and non-transferable except to the lessee’s heirs or successors-in-interest who continue the tenancy.

What lands are covered?
All private agricultural lands devoted to agricultural production (rice, corn, coconut, sugar, vegetables, fruits, livestock, etc.) that are still under leasehold tenancy. The right does not apply to:

Lands already distributed under CARP with issued CLOAs or emancipation patents;
Lands exempted under CARL retention limits (5 hectares plus 3 hectares per heir) if actually retained and cultivated by the owner;
Lands converted to non-agricultural use with DAR approval;
Public domain lands or those owned by the government.

Triggering event
The landowner’s decision to sell, whether by absolute deed of sale, conditional sale, or any other onerous title transfer. Mere mortgage or lease to a third party does not trigger the right.

Procedure for Exercise

Pre-emption (before sale)

The landowner must give the tenant written notice of the intention to sell, stating the price, terms, and conditions.
The tenant has a reasonable period—jurisprudence generally accepts thirty (30) days from receipt of notice—to manifest acceptance.
If the tenant accepts, the sale to the tenant proceeds at the stated price. DAR may assist through the Land Bank of the Philippines for financing.
If the tenant declines or fails to respond within the period, the landowner may sell to a third party at the same or higher price. A lower price offered to the third party revives the tenant’s right.

Redemption (after sale without notice)

The tenant must be notified in writing of the consummated sale.
The tenant may redeem within one hundred eighty (180) days from receipt of written notice or from actual knowledge.
Payment must cover the purchase price, interest at legal rate, and necessary expenses.
Upon redemption, the tenant steps into the shoes of the buyer; the original sale is cancelled as against the tenant.

Failure to give the required notice renders the sale voidable at the tenant’s option. The DAR Adjudication Board (DARAB) or the Provincial Agrarian Reform Adjudicator (PARAD) has primary jurisdiction over disputes.

Rights and Obligations

Tenant’s rights

To be offered the land first at identical terms;
To redeem even if the sale is already registered, provided the period has not lapsed;
To seek DAR assistance for valuation and financing;
To continue in possession during the pendency of any dispute (security of tenure under RA 3844, Section 10);
To damages and attorney’s fees if the right is violated.

Landowner’s obligations

To notify the tenant in writing before any sale;
Not to sell at a lower price to third parties without first offering the same to the tenant;
To obtain DAR clearance for the transaction if the land is tenanted;
To respect the tenancy until ownership is lawfully transferred.

Administrative and Judicial Remedies

Agrarian disputes involving ROFR are cognizable by the DARAB under Republic Act No. 6657 and Executive Order No. 129-A. The process is summary and pro-tenant. Decisions may be appealed to the DAR Secretary, then to the Court of Appeals via Rule 43, and ultimately to the Supreme Court. Courts have consistently ruled that the ROFR is a social justice measure that must be liberally construed in favor of the tenant.

Penalties for circumvention (e.g., simulated sales, fictitious mortgages, or sales disguised as donations) include nullification of the transaction, administrative sanctions against the landowner, and possible criminal liability under the Anti-Carnapping or other relevant laws if violence is used to dispossess the tenant.

Key Jurisprudential Principles

The Supreme Court has repeatedly emphasized that:

The ROFR attaches the moment the landowner manifests intent to sell, even before an actual buyer appears.
Actual knowledge of the sale by the tenant starts the redemption period only if written notice is absent; otherwise, the 180-day period runs from written notice.
The right survives the death of the tenant and may be exercised by qualified heirs who continue cultivation.
A buyer in good faith who registers the sale without verifying tenancy status still takes the land subject to the tenant’s redemption right.
Leasehold conversion under RA 3844 does not extinguish the ROFR; it strengthens it.

Interaction with CARP and Post-Distribution Rules

Once land is placed under CARP compulsory acquisition or voluntary offer-to-sell and a CLOA is issued, the former tenant becomes the owner and the ROFR ceases. However, CLOA holders are prohibited from selling, transferring, or encumbering the land for ten (10) years except by hereditary succession or to the government or Land Bank (RA 6657, Section 27). Any premature sale is void.

For lands retained by the landowner under the five-hectare limit, the ROFR continues to protect any remaining tenants.

Practical Considerations and Compliance Checklist for Landowners

Issue written notice to the tenant (personal service or registered mail with return card).
Secure a notarized waiver or affidavit of non-exercise from the tenant if the tenant declines.
Apply for DAR clearance (Form DAR-LC-1 or equivalent) before executing the deed of sale.
Register the sale with the Registry of Deeds only after DAR clearance is obtained.
Retain proof of notice and tenant’s response for at least ten years.

Failure to comply with any step exposes the transaction to annulment and exposes the parties to liability.

The right of first refusal for tenant farmers remains one of the most potent tools of Philippine agrarian justice. It balances the landowner’s right to dispose of property with the tenant’s constitutional entitlement to security of tenure and eventual ownership. Strict adherence to notice requirements, reasonable pricing, and DAR oversight is mandatory. Any attempt to circumvent the right through technicalities or bad-faith transactions has been, and continues to be, struck down by administrative and judicial authorities to uphold the State’s policy of genuine land reform.