I. Introduction

The Philippine legal system anchors agrarian relations on the constitutional mandate of social justice and equitable distribution of agricultural resources. Small agricultural lands—defined as private holdings not exceeding the five-hectare retention limit under Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 1988, as amended)—occupy a unique position. These lands remain with the landowner, yet tenants enjoy robust statutory protections that prevent arbitrary eviction and guarantee economic security. The interplay between tenant rights and the non-distribution of such small parcels forms the core of this legal regime, balancing landowner retention with the protection of actual tillers.

II. Constitutional and Historical Foundations

Article XIII, Section 4 of the 1987 Constitution declares: “The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof.” This provision expressly recognizes reasonable retention limits prescribed by Congress.

The legal evolution traces from Republic Act No. 3844 (Agricultural Land Reform Code of 1963), which abolished share tenancy and instituted the leasehold system, through Presidential Decree No. 27 (1972) that emancipated tenants on rice and corn lands, to Republic Act No. 6657 (CARL, 1988) and its amendment by Republic Act No. 9700 (CARPER, 2009). These statutes collectively govern tenant-landlord relations on small holdings.

III. Definition of Key Terms

Agricultural Land: Land devoted to agricultural production, including lands suitable for cultivation, pasture, or agro-forestry, regardless of title.
Small Agricultural Land: Any private agricultural holding whose aggregate area, after application of the retention limit, does not exceed five (5) hectares per landowner. Additional three (3) hectares may be retained for each qualified child who is at least fifteen (15) years old and actually tilling or managing the land.
Agricultural Lessee/Tenant: A person who, personally or with the aid of his immediate farm household, cultivates an agricultural land belonging to another with the latter’s consent for production purposes, for a price certain in money, produce, or both (Section 4, RA 3844).
Leasehold System: The replacement of share tenancy with a fixed rental arrangement, mandatory on all tenanted agricultural lands.

IV. Tenant Rights on Small Agricultural Lands

Even on retained small holdings, tenants possess the following statutory rights, which survive the non-distribution of the land:

Security of Tenure (Section 7, RA 3844; Section 12, RA 6657)
A tenant cannot be dispossessed of the land except upon court order and only for causes expressly provided by law: (a) failure to pay the agreed rental after due demand; (b) use of the land for purposes other than agreed; (c) substantial damage or destruction without just cause; (d) conviction for a crime involving moral turpitude; or (e) any other just cause. The burden of proving cause lies with the landowner.
Leasehold Contract Rights
The lease must be in writing, registered with the Department of Agrarian Reform (DAR), and renewable upon expiration unless the tenant opts otherwise. The rental shall not exceed twenty-five percent (25%) of the average gross harvest during the three (3) agricultural years immediately preceding the leasehold conversion (Section 34, RA 3844, as implemented by DAR).
Right to Just Rental and Prohibition of Exactions
Landowners may not demand additional fees, labor, or produce beyond the fixed rental. Any pre-existing share-tenancy arrangement is automatically converted to leasehold.
Right of Pre-emption and Redemption (Sections 11–12, RA 3844)
If the landowner decides to sell the small holding, the tenant has the preferential right to buy it at the same price and on the same terms offered to third persons. If the sale occurs without notice to the tenant, the tenant may redeem the land within one hundred eighty (180) days from knowledge of the sale.
Right to Improvements and Compensation
Tenants are entitled to compensation for permanent improvements they introduced with the landowner’s consent or acquiescence. Upon termination for cause, the tenant receives payment for the value of such improvements.
Succession Rights
Upon the tenant’s death or incapacity, the surviving spouse or any of the children who are actually cultivating the land may continue the tenancy under the same terms.
Protection Against Harassment and Constructive Eviction
Any act intended to force the tenant to abandon the land—such as cutting irrigation, denying access roads, or filing unfounded ejectment suits—is prohibited and punishable under Section 38 of RA 3844.
Right to Participate in Government Support Programs
Tenants on small lands remain eligible for irrigation, credit, extension services, and crop insurance, irrespective of ownership transfer.

V. Land Distribution Rules Applicable to Small Agricultural Lands

Small agricultural lands are generally exempt from compulsory acquisition under CARP because they fall within the landowner’s retention limit (Section 6, RA 6657). Consequently, compulsory acquisition and distribution do not apply. However, the following exceptions and special rules govern:

A. Rice and Corn Lands under PD 27
Regardless of size, all tenanted rice and corn lands are subject to Operation Land Transfer. Tenants are deemed owners as of October 21, 1972. The landowner receives just compensation from the Land Bank of the Philippines (LBP), while the tenant pays amortization over fifteen (15) years at six percent (6%) interest. Emancipation Patents (EP) or Certificates of Land Transfer (CLT) are issued. This rule overrides the five-hectare retention limit for rice and corn tenancies.

B. Non-Rice/Corn Tenanted Small Lands
The land remains with the owner. The tenancy relationship continues as a leasehold. The tenant does not acquire ownership through compulsory distribution. However, the landowner may voluntarily offer the land for sale or transfer under the Voluntary Land Transfer (VLT) or Voluntary Offer to Sell (VOS) schemes, in which case the tenant receives priority as beneficiary.

C. Retention Exercise
The landowner must file a retention application with the DAR within the prescribed period. Failure to exercise retention timely may result in waiver, but the five-hectare ceiling remains the default protection for small owners.

D. Qualified Beneficiaries on Small Lands
In voluntary transfers or when the landowner sells, the actual tenant or agricultural lessee receives first priority. The beneficiary must be Filipino, at least eighteen (18) years old, landless, and willing to cultivate the land personally.

E. Payment and Amortization
In voluntary transfers, the price is agreed upon by the parties, subject to DAR and LBP valuation guidelines. The beneficiary pays the LBP over thirty (30) years at six percent (6%) annual interest, with the first three (3) years grace period on principal.

VI. Exemptions and Non-Coverage

Small agricultural lands enjoy the following additional protections:

Lands already planted to permanent crops or used for livestock raising prior to CARP coverage may qualify for exemption upon proper application.
Retention of five hectares plus three hectares per qualified heir is absolute, provided the heirs meet the actual-tilling requirement.
Lands converted to non-agricultural use before June 15, 1988, with approved conversion orders, are removed from CARP coverage.

VII. Administrative and Judicial Mechanisms

The Department of Agrarian Reform (DAR) exercises primary jurisdiction over all agrarian disputes involving small agricultural lands. The DAR Adjudication Board (DARAB) hears and decides cases on tenancy, lease rental, ejectment, and redemption. Decisions are appealable to the Court of Appeals under Rule 43 of the Rules of Court.

Landowners and tenants may enter into mediation or conciliation before the Barangay Agrarian Reform Committee (BARC) or DAR provincial offices. Summary proceedings apply to simple ejectment and rental disputes to ensure speedy resolution.

VIII. Prohibited Acts and Penalties

Wilful prevention or obstruction of the exercise of tenant rights is punishable by imprisonment of not less than one (1) month nor more than three (3) years and a fine (Section 38, RA 3844).
Unauthorized conversion of small agricultural lands without DAR clearance subjects the landowner to cancellation of conversion and reversion to agrarian reform coverage.
Any contract that waives tenant security of tenure is null and void ab initio.

IX. Support Services and Post-Distribution (or Post-Retention) Obligations

Even on retained small lands, the State extends support services to tenants and small owner-cultivators: irrigation facilities, farm-to-market roads, credit through the LBP and cooperatives, and technical assistance from the Department of Agriculture and local government units. Small landowners who retain their lands are encouraged to form cooperatives to access these services.

X. Special Rules for Specific Situations

Inheritance and Partition: When a small agricultural land passes to heirs, the tenancy continues with the same tenant unless the heirs elect to cultivate personally under the retention rules.
Mortgage and Encumbrance: Tenants’ rights are superior to mortgagees who acquired interest after the tenancy began; foreclosure does not extinguish the leasehold.
Corporate-Owned Small Holdings: If a corporation owns five hectares or less and leases it to tenants, the leasehold protections apply fully; corporate retention is subject to stricter DAR scrutiny.
Indigenous Cultural Communities: Ancestral domains overlapping small agricultural lands are governed by Republic Act No. 8371 (Indigenous Peoples’ Rights Act), which may supersede ordinary agrarian rules where applicable.

XI. Enforcement and Monitoring

The DAR maintains a national registry of retained small agricultural lands and registered leasehold contracts. Periodic ocular inspections and tenant verification ensure compliance. Local government units, through their Municipal Agrarian Reform Officers, conduct community-level monitoring.

This comprehensive legal framework ensures that while small agricultural lands are protected from compulsory redistribution to preserve family-sized farms, the rights of tenants are elevated to near-ownership status through perpetual security of tenure, fixed rentals, and pre-emptive purchase rights. The system reflects the constitutional balance between social justice for tillers and the viability of small-scale landownership.