1. Overview: Why DAR Clearance Matters

Any corporate acquisition of agricultural land in the Philippines—especially post–Comprehensive Agrarian Reform Program (CARP)—is never just a simple sale.

For a 5.5-hectare agricultural land:

The transaction will almost always trigger review by the Department of Agrarian Reform (DAR).
The Register of Deeds (RD) and often the BIR will require some form of DAR clearance / DAR certification before they:
- Issue the Certificate Authorizing Registration (CAR) (BIR), and
- Register the transfer and issue a new title (RD).

DAR’s concern is not just who owns the land but how the transfer affects agrarian reform beneficiaries, land size limits, and land use.

2. Legal Framework

2.1 Constitution and corporate land ownership

Key points under Philippine law:

Only Filipino citizens and corporations at least 60% Filipino-owned may own private lands.
Foreign corporations cannot directly own private agricultural land (they may lease within legal limits, or own up to 40% of a Filipino corporation that owns land).
For private land, the Constitution does not set a strict hectare cap per corporation, but CARP/CARL and DAR issuances control how much agricultural land can be retained, acquired, or transferred, and under what conditions.

So a corporate buyer must first be legally qualified to own land at all.

2.2 CARP and CARL (RA 6657, as amended)

The Comprehensive Agrarian Reform Law (CARL):

Covers all public and private agricultural lands, regardless of tenurial arrangement and commodity.
Sets retention limits (generally 5 hectares per landowner, with some exceptions).
Protects agrarian reform beneficiaries (ARBs) from losing lands granted to them.
Regulates transfers of agricultural land, especially those:
- Already covered or targeted for coverage under CARP, or
- Tenanted or occupied by potential ARBs.

2.3 DAR’s role

DAR issues various certifications, clearances, and approvals, commonly (names can vary slightly):

DAR Clearance / Certification for Registration of Transfer (sometimes called CARP clearance, DAR Certification, etc.)
DAR Exemption / Exclusion Certifications (e.g., non-agricultural, reclassified before CARP effectivity)
Order of Land Use Conversion, when the buyer wants to use the land for non-agricultural purposes

The specific form and label may differ by time and locality, but the underlying idea: No transfer of agricultural land should undermine agrarian reform.

3. When is DAR Clearance Required?

As a rule of thumb, for a corporate buyer of 5.5 hectares of land that is still classified as agricultural:

The transfer cannot be registered without DAR participation in some form.
Register of Deeds typically requires:
- DAR certification/clearance that:
  - The land is either not covered by CARP, or
  - If covered, that the transfer is allowed under agrarian reform laws.

BIR may also require a DAR Certification (to verify land classification and coverage) before issuing its CAR.

In practice, any transfer of agricultural land, especially to a corporation, will trigger DAR review.

4. Core Questions DAR Looks At

For a corporate purchase of 5.5 hectares, DAR will focus on:

What is the current legal status of the land?
- Still agricultural per zoning?
- Already reclassified to non-agricultural by the LGU before 15 June 1988?
- Already covered by:
  - Notice of Coverage
  - EP (Emancipation Patent) or CLOA
  - Other agrarian titles?
Who is on the land?
- Are there tenants or farmworkers?
- Are they potential or actual ARBs?
- Are there existing agrarian cases?
What is the effect of the sale on landowner retention and CARP coverage?
- Is the seller a big landowner from whom more land should be covered by CARP?
- Is the transaction an attempt to evade CARP by slicing land into chunks (e.g., transfers to corporations or dummies)?
Who is the buyer and what will it do with the land?
- Is it a Filipino corporation (≥60% Filipino-owned)?
- Is its purpose agricultural or non-agricultural (subdivision, industrial, commercial)?
- If non-agri, is land use conversion required?
Is the land subject to restrictions on transfer?
- Is it awarded land to an ARB (EP or CLOA)?
- Has the 10-year prohibition on sale (and other conditions) expired?
- Even beyond 10 years, transfer is usually restricted to:
  - The government,
  - The Land Bank,
  - Other qualified beneficiaries, or
  - In certain cases, back to the original landowner.
- Direct corporate purchase of CARP-awarded land is, in many cases, prohibited or tightly controlled.

5. Typical DAR Clearance Requirements for Corporate Buyer

Exact lists and forms change by issuance and local practice, but for a corporate purchase of 5.5 hectares of agricultural land, you can expect DAR to require something like the following.

5.1 Applications and basic land documents

Accomplished DAR application form for clearance / certification
Certified true copy of the title (OCT/TCT) and previous titles, if needed
Current tax declaration(s) for the land
Real property tax clearance and latest RPT receipts
Lot plan and vicinity map, showing the land and surrounding areas
Zoning / land use certification from the LGU, stating the land is still agricultural (unless applying for exemption or conversion)

5.2 Agrarian status documentation

Certification from MARO / PARO indicating:
- Whether the land is covered, scheduled for coverage, or not covered under CARP
- Whether there are tenants / occupants / farmworkers and their names
- Any existing agrarian cases involving the property
If there are tenants/occupants:
- List of affected farmers / farmworkers
- Evidence of tenurial arrangements (leasehold, share tenancy, etc.)
- In some processes, affidavits or sworn statements by parties

DAR is highly sensitive to tenancy—the presence of tenants can change the entire complexion of the transaction.

5.3 Seller’s documentation

Proof the seller is the registered owner (title, IDs, corporate docs if seller is also a corporation)
Statement or affidavit regarding:
- Total landholdings, particularly agricultural lands
- Retention (i.e., confirmation that CARP retention rules are not violated)
For individuals:
- Personal IDs, marital status, etc.
For corporations as sellers:
- SEC registration, Articles/By-laws
- Board Resolution authorizing sale
- List of stockholders (sometimes required for landholding analysis)

5.4 Buyer’s corporate documentation

The corporate buyer will normally need to submit:

SEC Certificate of Incorporation / Registration
Articles of Incorporation and By-laws
Latest General Information Sheet (GIS) showing:
- List of stockholders
- Nationalities and shareholdings
- Board of directors
Board Resolution:
- Authorizing the purchase of the specific property
- Designating signatory/ies
Sworn statement confirming:
- That the corporation is at least 60% Filipino-owned (if it will own private land)
- Its primary purpose (e.g., agriculture, agro-industry, etc.)
- Its existing landholdings, if any, to help DAR see the total agricultural area under the corporation

5.5 Undertakings and special declarations

DAR often requires undertakings from the corporate buyer, for example:

To respect existing tenurial rights of tenants or farmworkers
To comply with agrarian reform laws and regulations
Not to convert the land to non-agricultural use without prior DAR approval
In some cases, to submit development plans if the project involves agricultural enterprises affecting ARBs

6. Procedural Flow (Typical)

Exact steps can differ per region and depending on whether you are dealing with:

Simple transfer of agricultural land
Exemption / exclusion
Land use conversion

But in a standard transfer clearance scenario, you can expect something like:

Filing the application
- Corporate buyer or seller (or both through a representative) submits application and documents to the DAR Provincial Office or relevant office.
Initial evaluation
- DAR staff checks completeness and may request clarifications or additional documents.
Field investigation / ocular inspection
- MARO or a DAR team conducts an on-site inspection:
  - Verifies land classification and actual use
  - Confirms presence of tenants / occupants
  - Checks for structures, crops, etc.
Posting / notice
- In some processes, DAR posts notices at the barangay or municipal hall or otherwise notifies affected parties to give them a chance to oppose or comment.
Report and recommendation
- MARO/PARO submits a report and recommendation based on field findings and documents.
Decision / issuance of clearance
- The Regional Director or authorized approving official evaluates and issues:
  - DAR Clearance / Certification (allowing registration of transfer), or
  - Denial, or
  - An order requiring additional compliance.
Use of clearance for BIR and RD
- The DAR Clearance is presented to:
  - BIR for processing of tax clearance and CAR,
  - Register of Deeds for registration of the Deed of Sale and issuance of a new title in the corporation’s name.

7. The 5.5-Hectare Twist: Why Size Matters

The 5-hectare figure is so important in agrarian law that a 5.5-hectare purchase deserves special attention.

7.1 Retention logic

Under CARL:

A landowner’s retention limit is generally 5 hectares, with some allowance for children of the landowner (subject to conditions).
For corporate and other juridical landowners, DAR uses guidelines to compute equivalent retention and coverage—but the 5-hectare benchmark still matters in evaluating how much land should be subject to CARP.

In a 5.5-hectare acquisition, DAR may want to see:

From the seller’s side:
- Whether the seller’s post-sale landholdings still comply with retention rules.
- Whether the land sold should have been subject to CARP coverage rather than transferred.
From the buyer’s side (corporation):
- Whether the corporation is:
  - Genuinely engaged in a legitimate activity (e.g., agriculture), not being used as a dummy to park lands beyond retention.
  - Not acquiring land in a pattern that evades agrarian reform (e.g., staggered purchases to avoid coverage).

7.2 Tenancy implications at this size

5.5 hectares is large enough that:

It could be tenanted, or
Could reasonably constitute a landholding with ARBs or potential ARBs.

DAR will be very alert to any signs that:

Tenants are being displaced without just cause, or
The corporate buyer intends to circumvent ARBs’ rights.

8. Conversion, Exemption, and Corporate Projects

Many corporate buyers don’t intend to farm—they want to build:

Subdivisions
Industrial estates
Resorts or commercial developments

If the land is still classified as agricultural, then:

8.1 DAR Exemption / Exclusion

If the land:

Was reclassified as non-agricultural by the LGU before 15 June 1988,
Or falls within certain non-CARP categories,

the buyer may apply for a DAR Exemption / Exclusion Certificate, rather than conversion per se.

This usually involves:

Proving the reclassification date and validity,
Showing consistency with national and local land use plans.

8.2 Land Use Conversion

If the land is:

Still agricultural, and
Reclassification (if any) came after CARP took effect, and
The buyer wants to use it for non-agricultural purposes,

then the corporation needs a DAR Conversion Order.

That is a separate, often more complex process, with:

Environmental and social safeguards
Compensation / disturbance pay to affected farmers
Compliance with land use plans and zoning
Often more intense opposition / scrutiny

In many practical scenarios, corporate buyers sequence their steps:

Secure DAR clearance for transfer (if possible); or
In some cases, pursue conversion while still under the original owner with the corporate buyer as project proponent.

The safer legal sequencing depends on the facts and DAR’s current regulations.

9. What Happens if You Skip DAR Clearance?

If a corporate buyer purchases 5.5 hectares of agricultural land and:

Registers the sale without DAR clearance (or via some irregular route), or
Ignores agrarian law requirements,

then several risks arise:

Refusal by the Register of Deeds
- Most RDs simply will not register the Deed of Sale or issue a new title without DAR clearance or certification.
Subsequent cancellation of title
- Even if a title is issued, DAR may later:
  - Declare the transfer void under agrarian law,
  - Recommend cancellation of the title, and
  - Place or keep the land under CARP coverage.
Administrative liability
- Buyers, sellers, notaries, and even public officials can face administrative sanctions for transactions that circumvent CARP.
Criminal liability in some cases
- Certain acts that frustrate agrarian reform or illegally convert land may be subject to criminal penalties.
Business risk
- For the corporation:
  - Projects may be stopped or delayed
  - Financing may be jeopardized (banks dislike titles with agrarian problems)
  - Litigation and political issues may arise, especially if farmers or ARBs are involved.

10. Practical Due Diligence for Corporate Buyers

Before committing to buy 5.5 hectares of agricultural land, a corporation should:

Check land status thoroughly
- Secure certified copies of title and tax declarations
- Obtain DAR certifications (coverage, tenancy status) early
- Verify zoning with the LGU and comprehensive land use plan (CLUP)
Investigate on the ground
- Visit the property
- Speak with occupants, neighbors, barangay officials
- Watch for indications of tenancy or ARB presence
Review seller’s agrarian reform history
- Ask about CARP coverage, past Notices of Coverage, and other DAR actions
- Verify if any agrarian cases are pending
Coordinate early with DAR offices
- MARO, PARO, and DAR Provincial Office can give guidance on:
  - Documentation
  - Likely issues or red flags
  - Proper sequencing of clearance, exemption, or conversion
Engage counsel
- Agrarian law is technical; one mis-step can be costly
- A lawyer familiar with DAR procedures and local practice is invaluable

11. Summary

For a corporate buyer of 5.5 hectares of agricultural land in the Philippines:

DAR clearance (or certification) is a practical necessity for the registration of the transfer.
The key legal concerns revolve around:
- CARP coverage and retention limits
- Tenancy and ARB rights
- Corporate qualification to own agricultural land
- Proposed land use (whether agricultural or requires conversion)
Documentary requirements usually include:
- Land titles, tax documents, zoning certificates
- DAR/MARO certifications on coverage and tenancy
- Corporate documents (SEC, GIS, board resolutions)
- Sworn undertakings to comply with agrarian laws
The 5.5-hectare size interacts with the 5-hectare retention concept, prompting DAR to scrutinize:
- Whether the transfer improperly circumvents CARP
- Whether tenants/ARBs are being prejudiced
Skipping DAR clearance exposes the corporation to:
- Non-registration or cancellation of title
- Administrative and possible criminal liability
- Serious business and project risks

This is a general legal discussion based on prevailing principles and typical practice; specific requirements and procedures can change through new issuances or local implementation. For any actual transaction, especially involving millions in land value and potential projects, it is crucial for the corporate buyer and seller to work closely with a Philippine lawyer and the appropriate DAR offices to ensure full compliance.