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QUESTION: Is there an instance by which an LGU could CONVERT a

land, not just exercise the power of reclassification?

Answer: YES, in turned-over subdivision open spaces. Example, the

Dona Imelda case in QC

JUST-IN-TIME TECHNICAL ASSISTANCE (LEGAL)

For Doña Imelda Land Conversion Issue

Background:

In the final version of the just-in-time report of the

Bank to Social Housing Finance Corporation (SHFC), we
said that:

“No coherent framework for land use conversion and disposition

Legal mechanism for donation and tax incentives

The Dona Imelda project is an example of lack of coherence

regarding land conversion and disposition. During the
consultations with the community and other key players (i.e.,
Quezon City government and Landowner), several lengthy debates
and meetings have been held regarding disposition of the land,
ownership/usufruct rights, informal settlements’ clearance,
reclassification of the land from park lots to residential (specifically
for socialized housing of Dona Imelda community) and land tax
payments.

Although the landowners attest to the land donation to the Quezon

City government, there are no legal mechanisms or clearance on
the issue of real estate tax exemptions or incentives for landowners.
This donation of land would be an alternative subsidy for
communities to acquire private properties.”

DOÑA IMELDA MAIN LEGAL CONCERNS:

1. Deed of Donation of Land (Park Lots 2,3 and 4 Psd-38199);

2. Reclassification of the subject donated land;
3. Registration of the community as HOA
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STATUS:

1. Donation of the subject 1.9 hectares was consummated on

Nov.8, 1966, in favour of the LGU;
2. QC requesting Araneta to surrender the TCT covering the
subject land;
3. QC Council is in the process of reclassifying the land. QC is
willing to reclassify the subject 1.9 hectares lot (Park Lots
2,3, and 4, Psd 38-199) from park lot to residential,
specifically for socialized housing of the Dona Imelda
community. According to the LGU, the reclassification of the
(est) 1.9 hectares will run independently of Araneta’s request
for the reclassification of the adjacent lot.
4. SHFC provided the community a list of requirements and
process flow on how to register as HOA with the HLURB.
Community agreed to divide themselves into 7 HOAs
representing the 7 buildings to be constructed.

GAPS/ISSUES:
1. There is an allegation that Araneta might not surrender to QC
the original TCT;
2. Araneta attached a condition to the donation – that the whole
4.2 hectares be reclassified from park lots to residential/
commercial. LGU claims ownership over the donated (est)
1.9 hectares as evidenced by the Deed of Donation. The
adjacent 2.3 hectare lot is also classified as a park lot. To
reclassify it as residential (commercial) is a violation of the
UDHA law.
3. Presidential Decree No. 1216 seems to prohibit the
conversion of the park lots to residential use.

RECOMMENDATIONS (FOR LAND CONVERSION

ISSUE ONLY):

1. In case Araneta refuses to surrender the original owner’s copy

of the TCT to LGU, the remedy is to file a case for specific
performance as main demand, joining in the same case the
Register of Deeds of Quezon City as nominal party, with the
subordinated request to the Court for issuance of new owner’s
copy of the title.
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2. QC Council to conclude the reclassification/conversion of

Park Lots 2, 3 and 4 Psd 38199 covering the subject (est) 1.9
hectares to socialized housing, specifically for the Dona
Imelda beneficiaries

DISCUSSION:

This paper aims to limit resolution on the issue of

conversion of the park lots as the City Council hearing the
measure is clarifying the legality of such conversion at the
LGU level.

Reference is made to two documents (see attached)

that refer to lots similarly situated as Doña Imelda insofar as
they were open spaces converted by Quezon City LGU to
socialized housing purposes, with quite different results:

1. Letter of Atty. Cesar A. Manuel, HLURB Director for Legal

Services dated January 13, 2011;
2. Decision of the Regional Trial Court of Quezon City, Branch
222, dated May 25, 2006. (Note: For purposes of this paper,
this Decision is assumed to have attained finality in the
absence of any information that an appeal was made to
higher court/s. Otherwise, and if a higher court has reversed
that Decision, this paper should not be considered as
reference)

These two documents articulate the opposing views on

whether or not the City Council should proceed in converting
the park lots into socialized housing site for Doña Imelda.

The points raised in the HLURB letter are:

1. The City Government’s conversion of a designated open

space into a government housing project violates the
Republic Act 440, the Subdivisions Regulation of the City,
Presidential Decree No. 957, and Presidential Decree
1216.
2. The new owner (LGU) cannot change the purpose or use
of the donated property from its intended usage. It seems
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that this position is based on the following provision of PD

1216 (Section 2):

“These areas reserved for parks, playgrounds and recreational use

shall be non-alienable public lands, and non-buildable. The plans
of the subdivision project shall include tree planting on such parts
of the subdivision as may be designated by the Authority.

Upon their completion certified to by the Authority, the roads,

alleys, sidewalks and playgrounds shall be donated by the owner or
developer to the city or municipality and it shall be mandatory for
the local governments to accept provided, however, that the parks
and playgrounds maybe donated to the Homeowners Association of
the project with the consent of the city or municipality concerned.
No portion of the parks and playgrounds donated thereafter shall
be converted to any other purpose or purposes.”

But the HLURB letter refers to a lot converted by the LGU

before 1992 which was the subject of a case decided by the
HLURB in 1992, before the Local Government Code of 1991
was fully implemented. At that time, HLURB’s decision did
not take into account the LGC.

On the other hand, the 2006 Decision of the Regional

Trial Court decided on a similar issue of conversion of an
open space into socialized housing years after the Local
Government Code took effect. The Decision essentially says:

1. Regardless of the conditions imposed in the deed of donation,

the donee (LGU) is allowed to permanently close the park
(open space) and not devote the same for recreational
purposes and instead convert it for purposes more useful
reasons where there is any change in the land use.

2. The Court discussed that local governments may close

permanently a park where there is any change in the status of
the land. PD 2016 and RA 7279 declared urban areas
occupied by informal settlers as areas of priority development
and calling local government units the same in cases where
the purposes for which the land was originally intended, such
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as parks in this case, ceased to exist. The once open and clear
land became the habitation of the common mass. A property
permanently withdrawn from public use may be used or
disposed of just like any other property of the LGU.

3. The Court favoured the justification put up by the Quezon

City LGU that the City Council has the authority to convert
any road or park for other purposes especially so where there
is a compelling reason or sufficient justification in the change
in land use under Section 21 of the Local Government Code.

The Court’s 2006 decision is the principal authority for the

conversion of the Doña Imelda lot by the City Council, the
latter to pass an Ordinance permanently closing the park lots
(open spaces) and declaring it suitable for socialized housing,
following the procedure laid down under the Local
Government Code. The Decision binds HLURB, not only
because the case and issues decided upon were of later date
than the 1992 case cited by HLURB as basis for denial of
conversion, but also because under Philippine law, courts
have the final say on legal issues, their decisions become the
law after they become final. Any opinion contrary to the
Court’s ruling becomes immaterial.

Strengthening the reasons already stated in the Court’s

decision is the provision under Section 7 of RA 7279 that
LGUs must regularly submit inventory of lands and update it
every three years, indicating the type of land use and the
degree of land utilization. This recognizes the authority of the
LGU to determine the best uses of the land within its
territory, HLURB being mentioned in the law only as a
subsidiary coordinator.

Section 458 of the Local Government Code clarifies the

authority of the City Council to change the land use of all
lands within its territory:

(vii) Adopt a comprehensive land use plan for the city: xxx;
(viii) Reclassify land within the jurisdiction of the city xxx;
(ix) Enact integrated zoning ordinances in consonance with
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the approved comprehensive land use plan xxx;

(x) xxx process and approve subdivision plans for residential,
commercial, or industrial purposes and other development
purposes xxx;

NEXT STEPS:

The City Council should proceed in passing an

ORDINANCE closing the open space as such, under Section
21 of the Local Government Code, and at the same time
declaring that the Doña Imelda lot shall be devoted to
socialized housing for the Doña Imelda informal settler
residents.

Prepared by:

ATTY. ANGEL R. OJASTRO III

Consultant, World Bank

QUESTION:
Does the LGU need DAR approval for conversion of agricultural lands to
residential, especially those for socialized housing sites acquired by way of
expropriation or negotiated sale? Apparently, those expropriated for socialized
housing carry the inherent reclassification by the Sanggunian.

The answer is NO MORE NEED FOR DAR CONVERSION APPROVAL:

February 16, 2009

Hon. Jesse M. Robredo

City Mayor

Sir,

Exemption from DAR conversion of lands for socialized housing

Per information from the Urban Poor Affairs Office, there were several
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socialized housing projects of the City that are suspended even when the City
already has the ownership or rightful possession simply because they are still
classified as agricultural lands, hampered by the traditional notion that a
conversion order is still needed before development of those areas could be
started.

After carefully evaluating the relevant laws and jurisprudence on the matter, we
are of the opinion that the City does not need anymore to seek a land
conversion order from DAR, because:

 In the case of Province of Camarines Sur vs. Court of Appeals (G.R. No.
103125 May 17, 1993), the Supreme Court ruled that,

“xxx there is no provision in the Comprehensive Agrarian Reform Law

which expressly subjects the expropriation of agricultural lands by
local government units to the control of the Department of Agrarian
Reform. The closest provision of law that the Court of Appeals could cite
to justify the intervention of the Department of Agrarian Reform in
expropriation matters is Section 65 of the Comprehensive Agrarian Reform
Law, which reads:

Sec. 65. Conversion of Lands. — After the lapse of five (5) years from its
award, when the land ceases to be economically feasible and sound for,
agricultural purposes, or the locality has become urbanized and the land will
have a greater economic value for residential, commercial or industrial
purposes, the DAR, upon application of the beneficiary or the landowner, with
due notice to the affected parties, and subject to existing laws, may authorize
the reclassification or conversion of the land and its disposition: Provided,
That the beneficiary shall have fully paid his obligation.”

“The opening, adverbial phrase of the provision sends signals that it applies
to lands previously placed under the agrarian reform program as it speaks of
"the lapse of five (5) years from its award."

“The rules on conversion of agricultural lands found in Section 4 (k) and 5

(1) of Executive Order No. 129-A, Series of 1987, cannot be the source of
the authority of the Department of Agrarian Reform to determine the
suitability of a parcel of agricultural land for the purpose to which it would
be devoted by the expropriating authority. While those rules vest on the
Department of Agrarian Reform the exclusive authority to approve or
disapprove conversions of agricultural lands for residential, commercial or
industrial uses, such authority is limited to the applications for
reclassification submitted by the land owners or tenant beneficiaries.”

 In the case of Fortich vs. Corona and DAR (G.R. No. 131457 November 17,
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1998), the ruling in the Camarines Sur case was reiterated by the
Supreme Court, long after the advent of the Local Government Code of
1991, thus:

“Specifically, the issue of whether or not the power of the local government
units to reclassify lands is subject to the approval of the DAR is no longer
novel, this having been decided by this Court in the case of Province of
Camarines Sur, et al. vs. Court of Appeals 5 wherein we held that local
government units need not obtain the approval of the DAR to convert
or reclassify lands from agricultural to non-agricuultural use.”

 The above-mentioned cases, and all other cases thereafter, now follow
the flexible definition of expropriation and the meaning of “public use” as
justification for exemption from DAR conversion rules. In Phillippine
Columbian Association vs. Panis, et al. (G.R. No. L-106528 December 21,
1993), the Supreme Court said, that:

“Through the years, the public use requirement in eminent domain has
evolved into a flexible concept, influenced by changing conditions
(Sumulong v. Guerrero, supra; Manotok v. National Housing Authority,
150 SCRA 89 [1987]; Heirs of Juancho Ardona v. Reyes, 125 SCRA 220
[1983]). Public use now includes the broader notion of indirect public
benefit or advantage, including in particular, urban land reform and
housing.”

This concept is specifically recognized in the 1987 Constitution which

provides that:
xxx xxx xxx
The state shall, by law, and for the common good, undertake, in cooperation
with the private sector, a continuing program of urban land reform and
housing which will make available at affordable cost decent housing and
basic services to underprivileged and homeless citizens in urban centers and
resettlement areas. It shall also promote adequate employment opportunities
to such citizens. In the implementation of such program the State shall respect
the rights of small property owners (Art. XIII, Sec. 9; Emphasis supplied).

 Because of this Constitutional obligation, Congress enacted RA 7279,

or the"Urban Development and Housing Act of 1992." The law
specifically provided for its coverage, and says that it “xxx cover all lands
in urban and urbanizable areas, including existing areas for priority
development sites, and in other areas that may be identified by the local
government units as suitable for socialized housing.” The law did not
distinguish what kind of land, so it certainly included lands of all
classification, whether agricultural, residential, industrial or commercial,
as within the power of the local government unit to develop for
socialized housing programs. The rule on statutory construction must
apply that when the law does not distinguish, no one, not even courts,
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should distinguish.

 In Sumulong, et al. vs. Guerrero and NHA (G.R. No. L-48685 September 30,
1987, En Banc), it was declared by the Supreme Court that:

“Specifically, urban renewal or redevelopment and the construction of low-

cost housing is recognized as a public purpose, not only because of the
expanded concept of public use but also because of specific provisions in
the Constitution. Xxx xxx.”

Xxx xxx

“Housing is a basic human need. Shortage in housing is a matter of state

concern since it directly and significantly affects public health, safety, the
environment and in sum, the general welfare. The public character of
housing measures does not change because units in housing projects cannot
be occupied by all but only by those who satisfy prescribed qualifications.
A beginning has to be made, for it is not possible to provide housing for all
who need it, all at once.”

“Population growth, the migration to urban areas and the mushrooming of

crowded makeshift dwellings is a worldwide development particularly in
developing countries. So basic and urgent are housing problems that the
United Nations General Assembly proclaimed 1987 as the "International
Year of Shelter for the Homeless" "to focus the attention of the international
community on those problems". The General Assembly is seriously
concerned that, despite the efforts of Governments at the national and local
levels and of international organizations, the driving conditions of the
majority of the people in slums and squatter areas and rural settlements,
especially in developing countries, continue to deteriorate in both relative
and absolute terms." [G.A. Res. 37/221, Yearbook of the United Nations
1982, Vol. 36, p. 1043-4]

In the light of the foregoing, this Court is satisfied that "socialized

housing" falls within the confines of "public use".

 Under RA 7279, the concept of “taking” for the public purpose of

socialized housing has not been limited to expropriation, as it extended
to other modes of acquisition by the local government unit. Thus:

“Section 10. Modes of Land Acquisition. — The modes of acquiring lands

for purposes of this Act shall include, among others, community mortgage,
land swapping, land assembly or consolidation, land banking, donation to
the Government, joint-venture agreement, negotiated purchase, and
expropriation xxx.”
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So, whether local government units, in pursuing socialized housing programs,

acquire land through community mortgage, land swapping, land assembly,
donation, joint venture, negotiated purchase, or expropriation, they are not
covered by DAR rules on conversion.

This issue on exemption of socialized housing from the DAR coverage may be
a first, perhaps in the entire Bicol region, and could set the stage for all local
government units to fast track all pending programs that will uplift the lives of
the people.

Very truly yours,

ATTY. ANGEL R. OJASTRO III

City Legal Officer

Cc
Mr. Rolly Campillos
UPAO

Mr. Willie Prilles

CPDO

Committee on Land Use

Sangguniang Panlungsod