A comprehensive legal article for agricultural tenants/lessees, landowners, buyers, and counsel

1) Snapshot

When a landowner sells agricultural land that has been validly retained under agrarian reform, the tenant’s/lessee’s rights do not disappear. Philippine statutes convert all share-tenancy into agricultural leasehold, guarantee security of tenure, and give the sitting lessee preferential rights when the land is sold. The buyer merely steps into the shoes of the lessor; the sale does not by itself justify ejectment.

2) Legal framework (core pillars)

Agricultural Land Reform Code (RA 3844, as amended)
- Abolishes share tenancy and establishes agricultural leasehold.
- Grants lessees security of tenure, limits rent, recognizes pre-emption and redemption rights when land is sold, lists exclusive grounds for ejectment, and provides disturbance compensation in certain cases.
Comprehensive Agrarian Reform Law (RA 6657, as amended by RA 9700, RA 7881, etc.)
- Creates the landowner retention regime (generally up to 5 hectares of the landowner’s choice, with additional retention for qualified children).
- For retained lands, the farmer in place becomes an agricultural lessee with all rights under RA 3844.
- Sale of retained land is generally permitted (often with DAR clearance/compliance), subject to existing leasehold.
P.D. 27 and allied issuances (rice and corn lands)
- Where applicable, tenants became owner-cultivators or leaseholders depending on coverage; retention rules historically existed but today, for retained portions, leasehold norms likewise apply.
Civil Code / Property law
- Sale or transfer does not prejudice real rights or legal encumbrances known to law; a buyer of retention land takes it subject to the agricultural lease.

3) What “retention agricultural land” means for tenants

Retention is the portion a landowner is allowed to keep under CARP.
If a tenant was validly in place on the retained area, that tenant is not a beneficiary-transferee of that retained parcel, but becomes/continues as an agricultural lessee.
Leasehold is not a mere contract at will; it is a statutory status that runs with the land.

4) Core tenant rights that survive a sale

A) Security of tenure

A lessee may be ejected only on grounds enumerated by law (e.g., substantial/season-to-season nonpayment of lawful rent without justification; serious or repeated violations like subletting without consent; abandonment; unauthorized land-use conversion duly approved by DAR; personal cultivation under stringent statutory conditions; other specific causes).
Sale alone is not a ground. The vendee becomes the new lessor by operation of law.

B) Right of pre-emption (first option to buy)

If the landowner intends to sell the retention land to a third party, the lessee has a preferential right to purchase at a reasonable price and on terms no less favorable than those offered to others.
The lessee’s right is triggered by written notice of the owner’s decision to sell and the price/terms. Statutes give a limited period (counted from receipt of notice) to exercise pre-emption; failure to notify properly can keep the right alive.

C) Right of redemption (buy-back after sale)

If the land is sold without offering it first to the lessee, or on different terms, the lessee may redeem the land within a statutory period (measured from registration or actual notice of the sale), by paying the price and costs as provided by law.

Note: The law recognizes exceptions (e.g., transfers to the State by expropriation, certain transfers inter vivos to heirs or within restricted degrees, or sales to co-owners). Whether the lessee’s pre-emption/redemption applies will depend on the exact type of transfer.

D) Continuity of the lease

All terms and annotations of the leasehold bind the buyer. Any unexpired lease period, the regulated rental, and the lessee’s rights to homelot and farm improvements remain effective.

5) Rent, increases, and payment rules after a sale

Ceiling and basis. Rent is limited by RA 3844’s formula (historically not more than 25% of the average normal harvest after specified deductible costs for the principal crop), subject to updated administrative formulas where applicable.
Mode. Payment is in cash (unless the parties validly agree otherwise); in-kind arrangements must respect statutory valuation.
Increases. Any increase must conform to law and, in practice, to DAR-issued guidelines; a mere change of landowner does not authorize unilateral hikes.

6) Improvements, homelot, and reimbursement

Lessee-made improvements (e.g., clearing, irrigation, permanent plantings) belong to the lessee subject to rules on reimbursement and right of removal where compatible.
Homelot rights (a residential portion within or adjacent to the farm) are recognized; a sale cannot oust the lessee from the homelot without a lawful ground and disturbance compensation where applicable.

7) Ejectment standards (what a buyer may and may not do)

Not valid grounds:

“We bought the land and want it cleared.”
“We plan to develop it later” without a DAR Conversion Order.
“We prefer a new tenant.”

Potentially valid (strictly construed):

Nonpayment of lawful rent without lawful cause (after due notice and opportunity to cure, and with proof of the proper rent).
Violation of essential lease terms (e.g., subleasing; material breach).
Abandonment or permanent failure to cultivate through the tenant’s fault.
Authorized land-use conversion (DAR-approved), subject to disturbance compensation and relocation benefits where the law provides.
Personal cultivation (rarely available today on CARP-covered lands and tightly regulated; requires bona fide intent, capacity, and compliance with statutory conditions, including notice and, in some contexts, disturbance compensation).

Even when a ground exists, removal must pass through lawful process (conciliation/mediation and, if unresolved, adjudication before the proper agrarian forum). Self-help eviction is unlawful.

8) Pre-emption and redemption: mechanics and pitfalls

Triggering notice (pre-emption). The owner should serve written notice to the tenant stating the price and terms offered to a third party. Silence or vague notice can render later sales vulnerable to redemption.
Timelines. The law fixes short windows (traditionally measured in days, not years) for exercising pre-emption (from owner’s notice) and redemption (from registration/actual notice of sale). Tenants should act promptly and in writing.
Tender/payment. A valid exercise requires unequivocal written acceptance and tender of payment or a judicial consignation if the owner refuses.
Price disputes. Courts or agrarian fora may examine whether the stated price was bona fide. Inflated or sham pricing to defeat tenant rights can be struck down.

9) Sales, encumbrances, and DAR compliance

DAR clearance/notification. Although the parcel is a retained area, many jurisdictions require DAR compliance/clearance to ensure the sale respects leasehold and does not circumvent CARP.
Due diligence for buyers. Buyers must (i) identify sitting lessees, (ii) review lease terms and rentals, (iii) confirm no standing agrarian cases, and (iv) understand potential pre-emption/redemption exposure.

10) Disturbance compensation (when removal is lawful)

If a lessee is lawfully displaced (e.g., due to approved conversion or other statutory cause), the lessee may be entitled to disturbance compensation under RA 3844 and implementing issuances. Commonly referenced standards include multiples of the average gross harvest for a defined period (plus relocation, livelihood assistance where specific programs apply). No compensation is due where there is valid cause attributable to the lessee (e.g., abandonment).

11) Heirs and succession

The lessee’s status is heritable: qualified heirs who actually cultivate may succeed to the lease.
Sale of the land does not reset this rule; buyers take subject to the heirs’ succession rights if the lessee dies.

12) Interaction with mortgages and foreclosure

A mortgage or foreclosure sale does not wipe out leasehold; the purchaser at auction becomes the new lessor, still bound by the lease and the lessee’s statutory rights, including pre-emption/redemption (subject to the distinct rules governing judicial sales).

13) Practical playbooks

For tenants/lessees

Document your status: copies of lease receipts, rental computations, certifications from the barangay/municipality, and any DAR/municipal agrarian documents.
Monitor the landowner’s sale efforts: demand written notice of intended sale; when notice arrives, compute the deadline and reply in writing.
Exercise pre-emption/redemption within the statutory period; if refused, consign payment and file before the proper agrarian forum/court.
Pay lawful rent on time; keep receipts to avoid ejectment claims.
Resist self-help eviction; seek assistance from agrarian authorities when threatened.

For landowners/sellers

Honor leasehold; ensure the buyer understands that the sale is subject to lease.
Serve proper written notice (price/terms) to the lessee and respect the decision window.
Avoid sham pricing; offer on good-faith commercial terms.
Secure DAR compliance/clearance as required in your locality; disclose lease and tenant details to the buyer.
Never forcibly eject; use lawful process if a statutory ground exists.

For buyers/investors

Due diligence: verify tenant status, rentals, improvements, homelot, and any agrarian cases.
Budget for the possibility of pre-emption/redemption and disturbance compensation in authorized conversion scenarios.
Engage the lessee early—coexistence, lease renegotiation, or lessee purchase may be the most efficient route.

14) Common misconceptions

“A sale ends the tenancy.” ✗ False. The tenancy/leasehold survives; the buyer is bound.
“Tenants can be removed after title transfer.” ✗ Not without a statutory ground and process.
“Pre-emption/redemption is optional courtesy.” ✗ It’s a right. Ignoring it invites rescission or redemption.
“Rent can be reset by the new owner.” ✗ No. Rent remains regulated; changes must follow law.
“Conversion is just a municipal zoning matter.” ✗ Wrong. It requires DAR Conversion Order; without it, agricultural use and leasehold continue.

15) Checklists & timelines (concise)

Tenant—pre-emption:

Receive written notice of sale with price/terms
Calendar deadline (statutory window)
Send written acceptance + tender (or bank proof)
If refused → consign and file action promptly

Tenant—redemption:

Track registration/actual notice of sale
Compute deadline (statutory window)
Tender full price + allowable costs; if refused, consign and file

Buyer/Owner:

Serve proper notice to tenant (pre-emption)
Obtain DAR compliance/clearance where required
Reflect leasehold in contract and price
Prepare for assignment of lessor obligations to buyer

16) Bottom line

For retention agricultural land, the law protects the sitting farmer: leasehold stays, ejectment is tightly circumscribed, and the tenant enjoys pre-emption and redemption if the land is sold. Owners and buyers must plan transactions around these rights, and tenants should assert them promptly and in writing. Done right, sales can proceed without violating agrarian protections—and sometimes by having the lessee become the buyer under pre-emption/redemption, to everyone’s benefit.

This article provides general legal information for the Philippine setting and is not a substitute for tailored advice on a specific farm, contract, or dispute.