Land transactions that REQUIRE issuance of DAR Clearance in the Philippines

 

I. LEGAL FOUNDATION

The requirement for DAR Clearance stems from:

1. Republic Act No. 6657 (as amended by RA 9700)

• Section 27 – Prohibits transfer of awarded lands except in specific cases
• Section 65 – DAR regulates land use and conversion
• Establishes DAR jurisdiction over agricultural land transfers

2. Executive Order No. 129-A

• Vests DAR with primary authority to approve/disapprove land transfers

3. Joint DAR-LRA Memorandum Circular No. 20, s. 1996

• Registry of Deeds shall not register instruments involving agricultural land without DAR Clearance

4. DAR Administrative Issuances

• DAR AO No. 1, s. 2019
• DAR AO No. 04, s. 2021 (streamlining clearance procedures)

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II. TRANSACTIONS REQUIRING DAR CLEARANCE

1. Sale or Absolute Conveyance of Agricultural Land

Includes:

• Deed of Absolute Sale
• Conditional Sale
• Installment Sale

Legal Basis:

• RA 6657, Sec. 27
• Joint DAR-LRA MC No. 20, s. 1996

👉 Applies to:

• Private agricultural lands
• Lands already covered or subject to CARP

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2. Transfer of Ownership of Awarded Lands (CLOA/EP Lands)

Includes:

• Sale by agrarian reform beneficiaries (ARBs)
• Transfer to qualified beneficiaries
• Transfer to the government

Legal Basis:

• RA 6657, Sec. 27
• DAR AO No. 1, s. 2019

⚠️ Strictly regulated:

• Within 10-year prohibition period
• Buyer must be qualified beneficiary

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3. Donation of Agricultural Land

Includes:

• Donation inter vivos
• Transfers without consideration

Legal Basis:

• RA 6657 (DAR regulatory authority)
• Joint DAR-LRA MC No. 20, s. 1996

👉 Treated as a mode of ownership transfer → requires clearance

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4. Exchange (Barter) of Agricultural Lands

Legal Basis:

• Civil Code (contracts) + DAR regulatory authority
• Joint DAR-LRA MC No. 20, s. 1996

👉 Any change in ownership triggers DAR review

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5. Assignment or Transfer of Rights

Includes:

• Assignment of rights over agricultural land
• Transfer of possessory or usufruct rights (if ownership implications exist)

Legal Basis:

• DAR AO No. 1, s. 2019
• RA 6657 Sec. 27

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6. Subdivision of Agricultural Land for Transfer to Multiple Buyers

Includes:

• Sale of subdivided agricultural lots
• Development for distribution (non-conversion scenario)

Legal Basis:

• RA 6657 Sec. 65 (land use regulation)
• DAR administrative issuances

👉 DAR ensures:

• No circumvention of CARP
• Compliance with retention limits

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7. Transfer of Agricultural Lands Covered by Pending CARP Acquisition

Rule:

Even if not yet awarded, lands under CARP process cannot be transferred without DAR clearance

Legal Basis:

• RA 6657 Sec. 16 (acquisition process)
• DAR jurisdiction doctrine

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8. Lease with Transfer Features / Lease-to-Own Arrangements

Includes:

• Lease agreements that effectively transfer ownership
• Long-term arrangements with purchase options

Legal Basis:

• DAR regulatory power under EO 129-A
• Anti-circumvention principle of CARP

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9. Corporate Transfers Involving Agricultural Land Assets

Includes:

• Sale of shares where primary asset is agricultural land
• Mergers/acquisitions affecting land control

Legal Basis:

• DAR doctrine on substance over form
• RA 6657 policy against circumvention

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10. Foreclosed Agricultural Land (Upon Resale)

Rule:

• Bank acquisition → no clearance at foreclosure stage
• Resale to third party → requires DAR clearance

Legal Basis:

• DAR administrative practice
• Joint DAR-LRA MC No. 20, s. 1996

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III. KEY OPERATING RULE

👉 No DAR Clearance = No Registration

Under Joint DAR-LRA MC No. 20, s. 1996:

• Registry of Deeds must deny registration
• Applies to:
  • Transfer Certificate of Title (TCT) issuance
  • Annotation of deeds

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IV. TECHNICAL TRIGGERS FOR DAR CLEARANCE

A transaction requires DAR clearance if ALL are present:

1. Land is agricultural in classification or use
2. There is transfer/change of ownership or control
3. Land is within or potentially within CARP coverage

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V. FIELD-LEVEL GUIDANCE (DAR / LGU / ARBO USE)

Before processing any transaction, verify:

• Land classification (tax declaration + zoning)
• CARP status:
  • Covered
  • Under process
  • Awarded (CLOA/EP)
• Presence of:
  • Conversion Order
  • Exemption/Exclusion Order

👉 If uncertain → require DAR Clearance or Certification

Related article: Exemptions from DAR Clearance for transfer of agricultural lands in the Philippines

Exemptions from DAR Clearance for transfer of agricultural lands in the Philippines

 

I. GENERAL RULE

DAR Clearance is required for any transfer, sale, or conveyance of agricultural land.

Legal Bases:

• Republic Act No. 6657 (CARL), as amended by RA 9700
  • Sec. 27 – restrictions on transfer of awarded lands
  • Sec. 65 – DAR authority over land use and transfers
• Executive Order No. 129-A (1987) – DAR’s regulatory authority
• DAR Administrative Orders (e.g., AO No. 1, s. 2019; AO No. 04-2021)
• Joint DAR-LRA MC No. 20, s. 1996 – RD will not register transfers without DAR clearance

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II. EXEMPTIONS FROM DAR CLEARANCE

1. Transfers by Hereditary Succession

Rule:

Transfer of agricultural land through inheritance (testate or intestate) does not require DAR clearance as a prerequisite to transfer, although DAR may still require verification.

Legal Basis:

• RA 6657, Sec. 27 – allows transfer by hereditary succession
• Civil Code provisions on succession
• Recognized in DAR practice and jurisprudence

Notes:

• Still subject to retention limits (5 hectares per heir)
• DAR may issue certification instead of clearance

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2. Transfers to the Government or Government Entities

Rule:

Sales, donations, or conveyances to:

• National Government
• Local Government Units (LGUs)
• Government-Owned and Controlled Corporations (GOCCs)

→ Exempt from DAR clearance

Legal Basis:

• RA 6657, Sec. 27 – allows transfer to the government
• Public purpose doctrine (eminent domain, infrastructure)

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3. Lands Already Classified as Non-Agricultural

Rule:

If land is not agricultural, DAR has no jurisdiction, hence no clearance required.

Includes:

• Residential
• Commercial
• Industrial
• Institutional

Legal Bases:

• RA 6657, Sec. 3(c) – defines agricultural land
• DAR AO No. 06, s. 1994
• DOJ Opinion No. 44, s. 1990

👉 Key doctrine:

• Lands classified as non-agricultural before 15 June 1988 are outside CARP coverage

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4. Lands with Approved DAR Conversion

Rule:

If land has a valid DAR Conversion Order, it is no longer agricultural → no DAR clearance required for transfer

Legal Basis:

• RA 6657, Sec. 65 – land conversion authority
• DAR Administrative Orders on conversion (e.g., AO No. 1, s. 2002)

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5. Judicial Transfers (Court-Ordered)

Rule:

Transfers arising from:

• Court judgments
• Partition proceedings
• Execution sales

→ May proceed without prior DAR clearance, subject to court authority.

Legal Basis:

• Rules of Court
• Recognized exception in practice and administrative interpretation

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6. Lands Not Covered by CARP

Rule:

If land is outside CARP coverage, clearance is not required.

Examples:

• Lands with slope > 18%
• Lands classified as forest, mineral, or protected areas
• Lands proven to be non-agricultural in use/classification

Legal Bases:

• RA 6657, Sec. 10 – exclusions
• DAR issuances on coverage/exclusion

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7. Certain Small or De Minimis Transfers (Limited/Conditional)

Rule:

Some DAR issuances recognize limited exemptions for very small parcels or specific situations.

Legal Basis:

• DAR Administrative Orders (case-to-case application)

⚠️ Note:

• This is not automatic; usually requires DAR certification of exemption
• Registry of Deeds often still requires proof from DAR

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8. Temporary Acquisition by Banks (Foreclosure)

Rule:

Banks acquiring agricultural land via foreclosure may hold property without clearance.

Limitation:

• Resale to third parties requires DAR clearance

Legal Basis:

• Banking laws + DAR administrative practice

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III. IMPORTANT DISTINCTION

Even when exempt from DAR clearance, the following may still be required:

• DAR Certification of Non-Coverage / Exemption
• DAR Conversion Order (if applicable)
• Compliance with retention limits (5 hectares)

👉 The Registry of Deeds typically will not proceed without DAR confirmation, even for exempt cases. 

DAR intensifies its legal measures vs premature and illegal agricultural land conversions

Illegal land use conversion remains a significant concern in the Philippines, particularly regarding the unauthorized transformation of agricultural lands into non-agricultural uses without the necessary approvals.

Current Status and Challenges

Continued Unauthorized Conversions: Despite existing regulations, instances of illegal land conversions persist. These unauthorized activities often involve the premature development of agricultural lands for residential or commercial purposes without securing the required conversion orders from the Department of Agrarian Reform (DAR). Such practices threaten food security and undermine agrarian reform efforts.

Legislative Efforts: The proposed National Land Use Act (NLUA), aimed at harmonizing land use policies and providing a comprehensive framework for land use planning, remains pending in the Senate as of May 2025. The absence of this law contributes to inconsistencies in land use decisions and enforcement across different regions.

DAR's Enforcement Measures: The DAR has intensified its efforts to curb illegal land conversions by issuing cease and desist orders, conducting site inspections, and initiating legal actions against violators. For instance, in the Zamboanga Peninsula, the DAR has taken steps to prevent premature and unauthorized land conversions.

 

Legal Framework

Under the Comprehensive Agrarian Reform Law (Republic Act No. 6657), specifically Section 65, the conversion of agricultural lands to non-agricultural uses requires prior approval from the DAR. Unauthorized conversions are considered illegal and are penalized under Section 73 of the same law. The 2002 Comprehensive Rules on Land Use Conversion further define illegal conversion as the act of changing the current use of agricultural land into non-agricultural uses without the required order of conversion from the DAR.

The Department of Agrarian Reform (DAR) has implemented significant updates to its land use conversion policies through Administrative Order (AO) No. 03, Series of 2021, and its amendment AO No. 03-A. These revisions aim to streamline the conversion process, enhance transparency, and strengthen enforcement against unauthorized conversions.

🔑 Key Provisions of DAR AO No. 03 & 03-A (Series of 2021)

1. Streamlined Application Process

Digital Filing: Applicants can now submit land use conversion applications electronically, reducing the need for physical submissions and expediting the process.

Reduced Bureaucracy: The requirement for clearances from agencies like the Department of Agriculture (DA), National Irrigation Administration (NIA), and Department of Environment and Natural Resources (DENR) has been removed. DAR now solely evaluates conversion applications, significantly shortening processing times.

2. Enhanced Enforcement Against Illegal Conversions

Mandatory Conversion Order: Changing the use of agricultural land without a DAR-issued conversion order is explicitly prohibited. Unauthorized conversions are considered illegal and are subject to penalties under Section 73 of the Comprehensive Agrarian Reform Law (RA 6657).

Performance Bond Requirement: Applicants must post a performance bond to deter premature land development before obtaining official conversion approval.

Public Notice: Applicants are required to install visible billboards (4x8 feet) on the property, informing the public of the pending conversion application. This measure promotes transparency and allows for community feedback.

3. Protection of Agricultural Lands

Non-Negotiable Areas: Certain lands, such as those under the National Integrated Protected Areas System (NIPAS), mossy and virgin forests, riverbanks, and swamp forests, are strictly non-convertible to preserve ecological balance and food security.

Highly Restricted Areas: Lands with Notices of Land Valuation and Acquisition or those under Voluntary Land Transfer/Direct Payment Scheme agreements are highly restricted from conversion to protect the rights of agrarian reform beneficiaries.

4. Specific Rules for CLOA Lands

Five-Year Cultivation Rule: Agrarian reform beneficiaries must cultivate the land for at least five years before applying for conversion. Additionally, the land must be fully paid, and the area should have become urbanized or no longer economically viable for agriculture.

Ten-Year Alienation Restriction: Even after conversion, CLOA lands cannot be sold or transferred to non-qualified individuals within ten years from the registration date without DAR clearance.

These updated rules reflect DAR's commitment to balancing agricultural land preservation with the country's developmental needs. By streamlining procedures and enforcing stricter regulations against illegal conversions, the department aims to protect agrarian reform beneficiaries and ensure sustainable land use.

 

Implications

Illegal land use conversions have far-reaching implications, including the displacement of farmers, loss of agricultural productivity, and threats to food security. The continued vigilance of regulatory bodies, coupled with the enactment of comprehensive land use legislation, is crucial in addressing these challenges.

 

Sources:

[1] https://www.panaynews.net/dar-warns-against-premature-illegal-land-conversion-in-wv/?utm_source=chatgpt.com "DAR warns against premature, illegal land conversion in WV"

[2] https://www.lawyer-philippines.com/articles/land-use-conversion-for-cloa-title?utm_source=chatgpt.com "Land Use Conversion for CLOA Title - Respicio & Co."

[3] https://pia.gov.ph/dar-intensifies-legal-measures-vs-agricultural-land-conversion/?utm_source=chatgpt.com "DAR intensifies legal measures vs agricultural land conversion"

[4]: https://www.bworldonline.com/economy/2021/07/19/383521/dar-allows-digital-filing-of-land-conversion-applications/?utm_source=chatgpt.com "DAR allows digital filing of land conversion applications"

[5]: https://creba.ph/new-land-conversion-rules-to-boost-economic-recovery/?utm_source=chatgpt.com "New Land Conversion Rules to Boost Economic Recovery - CREBA"

[6]: https://media.dar.gov.ph/source/2021/07/06/ao-03-amending-certain-provisions-of-the-comprehensive-rules-on-land-use-conversion-under-dar-ao-no-1-series-of-2002-and-certain-provisions-on-dar-ao-no-1-series-of-2019-and-dar-ao-no-6-series-of-2019-to.pdf?utm_source=chatgpt.com "[PDF] administrative order no. 03 - Department of Agrarian Reform"

[7]: https://www.scribd.com/document/612805337/Partially-Revised-By-AO-3-s-2021-Comprehensive-Rules-on-Land-Use-Conversion-FINAL?utm_source=chatgpt.com "Partially Revised-By AO 3 S 2021 Comprehensive Rules On Land ..."

[8]: https://www.lawyer-philippines.com/articles/land-use-conversion-for-cloa-title?utm_source=chatgpt.com "Land Use Conversion for CLOA Title - Respicio & Co."