Right-of-Way Compensation for Road Lots in CARP-Covered Lands (Philippine Legal Perspective)
1. Conceptual Overview
| Term | Meaning in Philippine law | Key Sources |
|---|---|---|
| Right-of-Way (ROW) | The legal right to pass through the property of another. May arise by easement (Civil Code), donation, voluntary sale, or expropriation. | 1987 Const. art. III §9; Civil Code arts. 612-657; R.A. 10752 & R.A. 8974 |
| Road Lot | A parcel permanently segregated from a mother title to serve as a public or private road. Ownership (full title) rather than mere passage is usually transferred to the State or LGU. | P.D. 1529 (Property Registration Decree); DPWH & LGU subdivision regulations |
| CARP Land | Agricultural land compulsorily or voluntarily acquired under Republic Act 6657 (Comprehensive Agrarian Reform Law), as amended by R.A. 7881, 9700 & 11593. | R.A. 6657, DAR AOs & M.C.s |
Road lots are carved out of agricultural estates for subdivision roads, feeder roads, or national infrastructure. Once the land has passed through the CARP process and Certificates of Land Ownership Award (CLOAs) are issued, any subsequent ROW acquisition must harmonise agrarian-reform rules with mainstream expropriation statutes.
2. Constitutional & Statutory Backbone
1987 Constitution
- Art. III §9 – No private property shall be taken for public use without just compensation.
- Art. XII §§4-6 – Mandate for agrarian reform.
Republic Act No. 6657 (CARP Law)
- §4 – Scope (all public & private agricultural lands).
- §16 – DAR-LBP acquisition procedure and judicial determination of compensation.
- §30 & §37 – Exemptions / retained areas & DAR rule-making power.
- §§26-28 – Modes & terms of payment (cash-bond mix; revised by R.A. 9700).
Republic Act No. 10752 (Expanded National Integrated and Efficient ROW Act, 2016)
- Applies to national government infrastructure projects (DPWH, DOTr, etc.).
- Provides negotiated sale as default; expropriation if negotiation fails.
- Defines replacement cost (FMV + transaction costs + salvage value + taxes).
- Exempts transfer from capital-gains, donor’s, DST & registration fees (§8).
Republic Act No. 8974 (2000) – Earlier ROW law still used for ODA-funded and some LGU projects absent R.A. 10752 applicability; jurisprudence treats R.A. 10752 as superseding for national projects begun after 2016.
Civil Code arts. 649-657 – Compulsory legal easements when land is surrounded and has no adequate outlet. For CARP, this easement route is a low-cost alternative if mere passage (not ownership) suffices.
Local Government Code (R.A. 7160) §§17, 19 – LGU power of eminent domain, subject to an ordinance and payment of just compensation.
3. DAR Issuances on CARP Road Rights-of-Way
| DAR Instrument | Salient Points |
|---|---|
| A.O. No. 2-1993 “Retention & ROW” | Road strips needed for economic viability may be segregated prior to CLOA generation; area deducted from the landowner’s retention limit, hence no separate compensation. |
| A.O. No. 7-2011 | Inventory & valuation of perimeter areas, buffer zones, greenbelts & ROWs after CLOA award. Requires: (a) barangay consultation, (b) PARCCOM concurrence, (c) LBP valuation if acquisition is necessary, (d) annotation on CLOA & derivative titles. |
| M.C. No. 7-2014 (Implementation guide) | Clarifies that if the road lot is for public use and was already indicated in the subdivision plan approved by the DENR-LMS, the CLOA holders are not entitled to additional compensation. |
| A.O. No. 5-2018 (Revised Valuation Guidelines) | Establishes the CNI-CS-MV formula still used for CARP compensation: |
| $**Land Value = (0.70 × CNI) + (0.30 × CS)$ **if CNI & CS are available, otherwise MV prevails. |
Key take-away: If the planned road strip was reserved in the approved survey before CARP award, it is deemed part of the government’s retained control and no fresh “taking” occurs; ergo, no ROW compensation. The moment a CLOA already covers the strip, later segregation constitutes a separate “taking” requiring full just compensation.
4. Procedural Tracks for Acquiring a Road Lot on CARP-Covered Land
Pre-Award Segregation 1.1 DAR, in coordination with DPWH/DENR-LMS, indicates the road lot in the land acquisition & distribution (LAD) survey. 1.2 The mother title is subdivided; the road lot is titled in the name of the Republic or the LGU. 1.3 The area is deducted from compensable hectarage when LBP computes landowner compensation.
Post-Award Segregation (CLOA already issued)
Stage Responsible office Timeline (work-days) a. Project identification & DAR Certification DPWH/LGU requests DAR–Provincial Office to certify agrarian-reform status. 5 b. Consultation & Consent Building Meetings with ARBs, LGU, Barangay; DARAB mediation if consent contested. 30 c. Survey & Appraisal DPWH/LGU funds survey; LBP appraises using R.A. 10752 or DAR AO 5-2018 method, whichever is higher (per DAR-DPWH Joint Memo 2018-01). 20 d. Offer & Negotiated Sale CLOA holders sign deed of sale; proceeds paid through LBP cash (at least 50 %) and government ROW bonds (balance). 30 e. Expropriation (if no agreement) Complaint filed in the proper RTC, sitting as Special Agrarian Court (SAC) under §57 R.A. 6657. – Practical tip: SAC jurisdiction attaches because the land is still “agricultural”; thus even DPWH must sue in a SAC, not an ordinary RTC branch.
5. Valuation & Compensation Rules
| Scenario | Governing formula | Payment medium |
|---|---|---|
| Land pre-CARP (still with original landowner) | DAR AO 5-2018 (CNI/CS/MV) | 25 % cash + 75 % LBP bonds (≤₱500 k); 30 % cash + 70 % bonds (₱500 k–₱1.5 M); 40/60 for >₱1.5 M (R.A. 9700 §8) |
| Land under CLOA | Higher of AO 5-2018 vs R.A. 10752 replacement cost | ≥ 50 % cash + balance ROW bonds (DPWH DO 96 s. 2016) |
| Legal easement only (farmers retain ownership) | Disturbance compensation (≤ 5 years average harvest) | 100 % cash |
Elements of “replacement cost” under R.A. 10752:
- Current zonal‐or‐appraised market value of raw land.
- Plant/Tree compensation (Productivity or replacement approach).
- Structures (replacement cost new, less depreciation).
- Cropping disruption (1 yr net harvest for two crop cycles).
- Taxes, documentary fees & relocation reimbursed to owner.
6. Jurisprudence Guideposts
| Case | G.R. No. / Date | Ratio (abridged) |
|---|---|---|
| Land Bank v. Heirs of Maximo Orilla | 215346, 22 Jun 2016 | Even after CARP taking, separate taking occurs for public roads not contemplated in original acquisition; SAC to fix new compensation. |
| Land Bank v. Heirs of Trinidad | 166521, 13 Mar 2013 | LBP bonds are legal tender for CARP compensation; cannot insist on all-cash unless statute so provides. |
| Republic v. Spouses Castro | 207119, 06 Jul 2022 | R.A. 10752 valuation applies prospectively; older projects follow R.A. 8974. |
| Land Bank v. Heirs of Domingo Abuda | 190759, 31 Jan 2018 | SAC may piggy-back on DAR AO formulae as one of many valuation factors, but must still weigh evidence of market value. |
| DPWH v. Spouses Malit | 202040, 16 Sept 2020 | While DPWH is exempt from registration fees by R.A. 10752, LGUs are not, unless a similar local ordinance exists. |
7. Tax & Fee Treatment
| Levy | Pre-CARP Owner | CLOA Holder | Statutory Basis |
|---|---|---|---|
| Capital Gains Tax / Creditable Withholding | Exempt if R.A. 10752 or R.A. 6657 pathway | Same | R.A. 10752 §8; BIR RR 14-99 |
| Documentary Stamp Tax | Exempt | Exempt | ibid. |
| Transfer & Registration Fees | Exempt for national projects; LGU projects depend on ordinance | Exempt for national projects | LRA Circ. 19-2017 |
| Real Property Tax arrears | Must be settled out of proceeds unless condoned by LGU | Same | Local Gov’t Code §253 |
8. Practical Issues & Tips
- Survey Accuracy – Overlaps between road strip and awarded lots lead to endless “zero lot” anomalies. Require joint DENR-LMS & DPWH ground validation.
- Substitution & Relocation – DAR may swap an equivalent non-road parcel in the same barangay for a willing ARB instead of cash payout, to preserve productive landholdings.
- Collective CLOAs – Where land is under a collective title, DAR must first parcelise before individual compensation can be paid; otherwise funds are escrowed with LBP.
- Indigenous Claims – If the road passes through Certificate of Ancestral Domain Title (CADT) areas that were erroneously CARP-covered, prior Free and Prior Informed Consent (FPIC) under IPRA (R.A. 8371) is mandatory and compensation flows to the Council of Elders.
- SAC vs. RTC Confusion – File expropriation in the SAC whenever the land is still classified “agricultural”, regardless of whether it is privately titled or CLOA land; the SAC has exclusive jurisdiction per R.A. 6657 §57.
9. Step-by-Step Checklist for Practitioners
- Confirm Land Status – Ask DAR for CARP Coverage Certification.
- Identify Applicable Law – R.A. 10752 (national), R.A. 8974 (ODA), or LGC §19 (LGU)?
- Choose Mode – Negotiated sale > Easement (if practical) > Expropriation.
- Compute Offer – Apply higher of AO 5-2018 or R.A. 10752 formula.
- Secure Funding – DPWH ROW Fund / LGU appropriation / National-ARF for CARP easements.
- Execute Deed & Pay – Through LBP; follow cash-bond split.
- Register & Segregate – New title for the Republic/LGU; annotate residual CLOA.
10. Conclusion
Right-of-way acquisition on CARP-covered land sits at the intersection of agrarian-reform policy and the State’s eminent-domain power. The decisive questions are when the road was planned, who owns the strip at the moment of taking, and what law governs valuation. Compliance with DAR administrative issuances, early stakeholder engagement, and fidelity to the constitutional command of just compensation minimize the litigation that so often delays public-infrastructure delivery while safeguarding the hard-won land rights of agrarian-reform beneficiaries.