REPUBLIC OF THE PHILIPPINESMINISTRY OF PUBLIC WORKS AND HIGHWAYS

OFFICE OF THE MINISTER

MANILA i

October 6, 1983/

MINISTRY 'ORDER)

NO.~ lSeries of 1983)

SUBJECT: Revised Guidelines on theacquisition and p~ent ofright-of-wa: for pu lieworks and h~ghways projects

In order to standardize system and procedures in the acqui-sition of right-of-way to preclude possible delays in theprosecution of our infrastructure and other capital outlayprojects with a view of expediting the payment of right-of-wayclaims, particularly those of small lot owners, the followingguidelines are hereby promulgated:

I - Funding of Right-Of-WayIt is hereby made a policy of this Ministry

that in the listing of projects and their estimatedcosts for purposes of inclusion in all capitaloutlay programs (both General Appropriations andPublic Works Acts-funded) the cost of acquisitionof needed right-of-way shall be included in saidestimates, and programs of work, to assureavailabi~ity of funds for payment thereof.

Funds to cover the preparation of parcellaryplan and related works thereto shall be appropriatedand made available immediately after the Ministryhas decided to implement the project.

- ACquisition of Right-of-way before BiddingNo project shall be advertised for bids unless

the necessary right-of-way for the project had beenacquired. However, where the project is of suchmagnitude that it would take more than one (1) yearto complete, advertisement and bidding of the samemay be allowed if at least fifty percent (50%) ofthe required right-of-way had been acquired on thedate of bidding, or the corresponding complaintsfor expropriation of the needed right-of-way had aalready been filed with the proper courts, anddeposit had been made with the PNB, or corres-ponding permit to enter premises and use lot,issued by the lot owners, for at least fifty percent(50%) of the areas needed for right-of-way issecured.

II

~~..••..••......

~I

t ;J", •..

l~

These requirements shall be certified to have'been complied with by the Senior Legal Officer orthe Right-of-way Engineer of the Office concerned.

To avoid unnecessary complaints and/or'courtlitigations, no affected lot shall be occupied ortraversed unless the necessary complaints forexpropriation had already been filed with theproper courts or corresponding permit to enterpremises issued by the lot owners is secured.

2

III - Modes of ACquiring Real Properties or Rights thereonfor l:-'ublicuse

Under our existing laws, there are different modesof acquiring title to, and ownership of, privateproperty particularly real estate property, as well asmodes of acquiring right to use the private propertyof another person. The most common methods are asfollows: (1) donation; (2) purchase; (3) easement;(4) quit claim; (5) exchange or barter; and (6)condemnation proc~edings.A - DONATION

Donation, as defined under Art. 2725 of the CivilCode, 'is an act of liberality whereby a person disposegratuitously of a thing or right in favor of anotherwho accepts it."

A donation to be valid, must be made in a publicinstrument and must be accepted by the donee during thelifetime of both the donor and the donee. Pursuant toOpinion No. 145, Series of 1962 of the Secretary ofJustice, donation can be accepted by the Secretary ofPublic Works, Transportation and Communication (nowMinister of Public works and Highways). However,acceptance of donations of real property to be usedby MF'WH Offices in the region was delegated to theRegional Directors and maybe redelegated, in writing,to District or Uity bngineers as the exigency of theservice may require (Ministry Order No. 65, seriesof 1982).

The deed of donation to be acceptable to thegovernment, should be pure and simple and not conditionalor onerous. A clause to the effect, that such donationis being made by the donor not to defraud his creditorsand that the donor had reserved for himself enoughproperty for his and his family's subsistence should beincorporated.

The deed of donation should be registered with theRegister of Deeds for the purpose of either having itannotated at the back of the title of the whole propertyin cases where only a portion was donated or forsecuring a separate or a new title in favor of thegovernment if the whole lot has been donated.B - PURCHASE

When the owner of property needed for public useis not willing to donate his property to the government,then the government shall acquire his property and payhim just compensation. A contract of sale shall beexecuted between the property owner, otherwise known asvendor, and the government known as vendee.

Purchases made by the government are governedby existing and special laws, particularly withrespect to:

- 3 -

1. Price or considerationa) For lots and improvements acquired before thepromulgation of PoD. 76, just compensation thereof shallbe determined by the Appraisal Committee, using allavailable informations and records of sale at the timeof taking, but in no case shall such price exceed themarket value as determined by the Assessor pursuantto P.D. 76.b) For lots and improvements acquired between 1974 and1978, the basis shall be the price determined by theAssessor, as appearing in the tax declaration issuedpursuant to P.D. 76, or the current market price asstated in the sworn'statement filed by the owner on orbefore October 31, 1973 pursuant to P.D. 76, whicheveris lower.c) For properties acquired between 1979 and 1981, thebasis shall be the current market value as appearing inthe tax declaration issued by the Assessor for the year1979 or the current market value as declared by theowner in a sworn statement filed on or before August15, 1977 pursuant to P.D. 464, whichever is lower.d) For properties acquired between 1982 and 1984, thebasis shall be the current market value as appearing inthe tax declaration issued by the Assessor in 1982 or thecurrent market value declared by the owner in a swornstatement filed on or before June 30, 1980 pursuant tothe provisions of P.D. 1621, whichever is lower.e) In cases where the owners failed to file a swornstatement, a certification of non-filing should be securedfrom the Assessor concerned in addition to the Affidavitexecuted by the owner to attest his failure to file suchsworn statement.In compliance to P.D. 1533 dated June 11, 1978, when a

project is already approved for implementation during a specifiedcalendar year, the officials charged with the acquisition ofright-of-way shall immediately gather all tax declarationsand the corresponding sworn statements of owners relative toall lots affected by such construction, including the improve-ments thereon. Thereafter, the owners of the above-mentionedproperty shall be notified in writing, and the just compensationto be paid for these affected properties shall be based on thetax declaration or the sworn statement filed and existing atthe time notice was given and not at the time actual constructionof the project shall commence.

2. Effectivity of the SaleThe mere signing of the deed of sale by the owner of

the property, the District Engineer/Project Manager and/orthe Regional Director does not ipso facto perfect thedeed of sale. The deed of sale has still to be approvedby the proper department head (now Minister) as providedunder Sec. 568 of the Revised Administrative Code, asamended or by officials delegated with authority toapprove same pursuant to IV1inistryOrder No. 65, S. 1982,in order that such deed of sale shall be deemed perfected.

- 4 -Accordingly, said deed of sale should be duly registeredwith the Register of Deeds of the province/city where theproperty is located, for the purpose of having the sameannotated at the back of the title of the property incase only a portion thereof was purchase or for thepurpose of having the old title cancelled and a newtitle in favor of the government be issued if the wholelot has been purchased.3. In the preparation of deeds of sale, the followingrequirements and conditions should be observed and compliedwith:

a) Where the subject property is registered ortitled, the vendor must be the registered ownerthereof and must possess a clear and cleantitle thereto under the Torrens System free ofany lien and encumbrances whatsoever. A xeroxcopy of the title, with all the pages thereofincluded therein, must form integral part ofthe deed.

b) Where the sUbject property is unregistered oruntitled. the vendor must submit a certified truecopy of the tax declaration and an indemnity bond,which must either be a surety bond or propertybond. Surety bond shall be issued by a suretycompany duly authorized to act as surety underAct 536, as amended, and certified to be in goodstanding by the Insurance Commissioner. PropertyBond shall specify sufficient property of thebondsman with assessed values of not less than thepurchase price for the subject property. In eithercase, the bond shall remain in force until thegovernment obtained the corresponding title to theSUbject property.

c) A deed of conveyance or sale must be executed inthe proper form by the parties concerned, specificallydescribing the property to be sold. The maritalconsent of the spouse of the owner-vendor shouldgenerally be indicated in the Deed.

d) If the owner of the property is a corporation, acertified copy of the resolution of the governingboard of such corporation or partnership authorizingany of its officers to execute the deed shall beattached to the deed. In the case of partnershipthe managing partner should execute the deed.

e) If the owner is already deceased, the heirs must firstconsolidate their ownership of the property eitherthru court proceedings or thru an extra-judicialsettlement, SUbject to the provisions of Rule 74 ofthe New Rules of Court.

f) If the property is under guardianship or adminis-tratorship, approval by the proper court of the deedof sale executed by the guardian or administrator/executor must first be secured. The correspondingLetters of Administratorship and/or Guardianshipshould be submitted as an integral part of the Deedo

- 5 -g) If the property being sold was acquired under the ~ublic

Land Act, the government shall be entitled to a twenty(20) meters strip free under Sec. 112 of CA 141, orSixty (60) meters strip under P.D. 635. (January 7, 1975).

h) If it appears that the property is subject to theprovisions of Section 4 Rule 74 of the New hules ofCourt and the period of two (2) years from the registrationof the consolidation or settlement has not yet ex~ired,an indemnity bond (either surety or property bond),conditioned for the paYment of any adverse claim againstthe property filed within the said period of two, (2)years, should be posted.

i) If the vendor is represented by an Attorney-In-Fact, thecorresponding special power of Attorney should be attachedto and made an integral part of the deed of sale. If thevendor is presently residing abroad, such special powerof attorney should be duly attested by the PhilippineConsulate of the country where the vendor reside.

j) Where the subject property is mortgaged, the consent ofthe mortgagee to the sale thereof or release of themortgage must first be secured.

k) All Real Estate taxes due on the property must have beenpaid as evidenced by a tax clearance certificate issuedby the proper authority.

1) The Deed of conveyances should be witnessed by at leasttwo persons and if the vendor affixed his signature bythumbmark, same should be witnessed by two additionalpersons.

m) The accountant concerned should also witness the contract,and his signature shall be ,considered as constituting acertification that funds for the purpose is available(1101 968).

n) A certificate as to the availability of funds in theproper form, duly verified by the Auditor concerned,indicating the particular source and nature of the fundsto be used in payment of the consideration of the sale,must be secured and attached to the Deed. (Sec. 607Revised Administrative Code and Sec. 86 of P.D. 1445~.

0) The Right-of-Way Engineer, in addition to verifying theownership of the lot to be purchased, as well as anyencumbrance to which such lot may have been subjected to,should likewise verify and inspect the actual lot to bepurchased to determine whether the classification madeby the Assessor is in accordance with the actual use ofthe property (Sec. 19 P.D. 464). A certification tothis effect should be issued by the Right-of-way Engineer.

p) The papers and documents submitted in support of theclaim in every case should be carefully verified as totheir authenticity and genuineness in order to forestallfraud.

- 6 -4. P~yment of Claims

a) Payment for lots should be effected only after thecorresponding deed of sale had already beenregistered with the Register of Deeds concernedand Torrens Title to the subject lot is alreadyvested in the name of the government. :Biorparcelof lands partially affected, payments should beeffected ohly after the corresponding deed of salehad already been annotated at the back of thetitle of the sUbject lot.

b) If the Deed of Conveyance was not signed by theowner but was signed by his duly and legallyconstituted agent, the owner should also benotified in writing of the amount due him aspayment of his property. Accordingly, the treasurywarrant or check for the payment of said propertyshould be drawn in favor of the registered owner.

c) Officials or employees responsible for releasingchecks or warrants should require positiveidentification of the payee before releasingthese checks or warrants.

d) To implement the Presidential policy/directive ofexpediting payment of right-of-way claims (LOI1037), the District/City and Regional Officesas well as Project Management Offices shall acton all claim within forty eight hours from receiptthereof. Should there be no sufficient funds topay all claims presented with complete documentsand ready for payment, the smaller claims shouldbe given priority in payment; and in case theamount of claim are equal, priority of paymentshall be based on the period/date the property(lot) were taken by the government.

C. EASEMENT OF ROAD RIGHT-OF-WAYThis mode of acquiring property, or the right to use

private property for public use is done thru a road right-of-way agreement executed by the owner of the propertygranting an easement for right-of-way. This method isresorted to if the value of lot involved is very nominalfor the reason that expenses of surveying or segregatingthe affected portion from the main lot would be very muchmore than the value of lot being acquired. While thegovernment is actually paying the value of the privateproperty, it only acquires a right of easement for right-of-way, but the owner still retains ownership of the lottraversed by the road.

In order to protect the interest of the governmentwhenever this mode is used to acquire the right to use privateproperty, the Auditor General (Now Commission on Audit) hadrecommended the following conditions, which were approvedby the President, to be incorporated in the road right-of-wayagreement:

1. In case of change of alignment of the road,the government shall be allowed by the ownerof the lot to enjoy the easement of right-of-way in another portion of his property, thatmay be traversed by the realigned road,equal in area to that previously paid andwithout additional compensation;

- 7 -2. That in the event the government should

abandon the road at some future date, thearea occupied by the abandoned road mayrevert to the owner upon payment of aprice agreed upon between the governmentand such owner, which in no case shallbe less than what the government hadpreviously paid him;

3. That this mode should be utilized only whenthe value of the lot involved is less than~5,000.00;

As in the case of donation or deed of sale,the road right-of-way agreement should beregistered immediately with the Register ofDeeds concerned.

D. QUIT CLAIMThis mode is applicable to private property or land

acquired under the provisions of Special Laws, like Common-wealth Act 141, known as the Public Land Act. Under theprovisions of this law, especially Sec. 112 thereof, astrip of twenty (20) meters of the property acquired undersuch law is reserved by the government for pUblic use withdamages to improvements only. The twenty (20) meters striphad SUbsequently been increased to sixty (60) meters underP.D. 635, which took effect on January 7, 1975, amendingSec. 112, C.A. 141.

Sec. 112 of C A 141 was further amended (P.D. 1361,April 26, 1978) to widen the scope of works covered, notonly for pUblic highways, railroads, irrigation ditchesaqueducts, telegraph and telephone lines but includingairport runways, sites necessary for terminal buildingsand other government structures needed for full operationof the airport, as well as areas and sites for governmentbuildings for Resident and/or Project Bngineers needed inthe prosecution of government - infrastructure projectsand similar works.

P.D. 1361 also authorize government officials chargedwith the prosecution of the aforementioned projects or theirrepresentatives to take immediate possession of the portionof the property subject of the lien as soon as the needarises and after due notice to the owners. It is, however,understood that ownership over said properties shallimmediately revert to the title holders should the airportbe abandoned or when the infrastructure projects are completedand buildings used by project engineers are abandoned ordismantled, but subject to the same lien for future improve-ments.

A quit claim is also availed of in cases when privateparties had already occupied or are already occupying atract of land by virtue of an application under the PublicLand Law for the grant of public lands to said applicants.Such applicant should be requested to execute a quit claiminstrument for the area or portion of the lot applied for,which is needed by the government for public use. Suchquit claim instrument duly executed by the applicant shouldbe immediately transmitted, thru the District Land Officer,

- 8 -

to the Director of Lands in Manila so that the affectedarea could be segregated from the total area c~ppliedand/o~ occupied by the applicant in the eventualissuance of his free patent.E. EXCHANGL OR BARTER

There are instances where the owner of a propertyneeded for road right-of-way would request the governmentto exchange an old abandoned road or government lot nearthe project instead of being paid the money value of hislot. This request ma~rbe favorably considered especiallyif the lot being taken from the owner is his only lot.When this mode is availed of by the government, thefollowing conditions should be taken into considerations:

1. The areas of the lots proposed to be exchanged,as well as the corresponding market value ofeach of them should first be determined. Theexchange should be based not only on thecorresponding area involved but also on theprice it commoolds.

2. If the area (abandoned road) proposed to beexchanged was acquired through donation, the termsand conditions stipulated in the Deed of Donationmust first be verified to justify disposal thereof.If through sale the former owner/s of the land(abandoned road) shall have the first priority tore-acquire such land, or fr not interested inrepurchasing same, he shall waive his right thereto.

3. Whether there will be lot owners abutting theabandoned road to be deprived of an access(egress or ingress) to the new highway.

The mere signing of the deed of exchange by the owner andthe representative of the agency concerned does not result in avalid exchange. The approval of the Office of the President isstill necessary to perfect the deed and make it valid pursuant tothe provisions of Sec. 567 of the Revised Administrative Code.Such deed should be registered with the Register of Deedsconcerned in order that the old Certificate of Title may becancelled and a new Certificate of Title be issued to each of theparties concerned.F'. COND:t1'Il'JAfrIONPROCEEDINGS

When the owner of a private lot needed by the governmentdoes not agree to convey his property to the government by anyof the foregoing modes of acquiring and/or transferring ownershipto the property, then the government will have to exercise itsright of eminent domain. It will file a complaint for theexpropriation of the private property it needs for pUblic use,pursuant to provisions of Sec. 64 (h) of the Revised AdministrativeCode. 'I'h i s was supplemented by a Memorandum issued by theExecutive Secretary, by Authority of the President, dated October17, 1972 which authorized the Solicitor General to file expro-priation proceedings for properties needed by the governmentfor the construction of roads. Said Memorandum further leaves tothe Secretary of Public Works, Transportation and Communications(now Minister of Public Works and Highways) the determinationof the propriety of filing expropriation proceedinF1:s.

--'I

Under P.D. 1533, upon the filing of the complaint forexpropriation and the deposit in the Philippine National Bankat its main office or any of its branches of an amount equi-valent to ten percent (10%) of the amount of compensationprovided'in Section 1 hereon, the government or its authorizedinstrumentality, agency or entity shall be entitled toimmediate possession, control and disposition of the realproperty and the improvement thereon, including the power ofdemolition if necessary, notwithstanding the pendency of theissues before the courts.

In order to enable the Office of the Solicitor Generalto file the necessary complaint for expropriation, theDistrict/City Engineer and/or Project Manager concerned shallfurnish the Ministry (MFvffi) the following pertinent documentsand/or informations:

1. The Certificate of Title of the lots to becondemned;

2. The technical description of each and everyparcel sought to be expropriated;

3. The residence, age, civil status and otherpersonal circumstances of the owner. Ifany of the owner is minor, state whetherhe or she has a duly appointed guardian.If the owner is dead, then the name/s andresidence of the surviving heirs;

4. Encumbrances on the property, if any, thenature and amount of encumbrance; to whom,and date of the contract creating suchencumbrance;

5. Sketch plan showing the parcels of land to beeKpropriated, including the correspondingname of owners, area affected and the improve-ments thereon;

6. Certified true copy of the tax declaration ofthe lot involved, with the correspondingsworn statement of the owner, both valid andeffective at the time the owner was notifiedof the project.

rv - RbMOVA.L OR DEI"IOLJifION OF I1"IPROVEMENTS OR BUILDINGS

If the owner of an improvement is willing to remove andtransfer the building to another lot, tih en an agreement todemolish or remove the improvements should be executed at aconsideration to be determined pursuant to PoD. 76 as amended.As regards fruit bearing trees and other.similar improvementswhich have not been included in the tax declaration, the valueof such improvements should be paid in accordance with theschedule of values approved by the Ministry of .Finance.

PaYment of improvements shall always be covered by anAgreement to Demolish and Remove Improvements to be signed byboth parties and approved by an official ~f this hinistrypursuant to Ministry Order No. 65, series of 1982.

- 10 -

'I'hef oLl.ow i.nv documents should be made a..YJ. integralpart of the claim.

1. Certified true copy of tax '.., ..c e ct ar am.on ,

2. Certified true copy of sworn statement or acertification issued by the Assessorconcerned attesting the failure of the ownerto file such statement aside from the affidavitexecuted by the owner attesting the failureto file such sworn statement. -

3. 'r ax Clearance from the Nu..Ylici·pal/CityTreasurer (Real Estate Taxes)~

4. Picture or pictures of the improvements tobe duly certified by the ~roject ~ngineer.

5. Inspection report duly signed by the ProjectEngineer and the Auditor's renresentative(Sec. 14, eOA Memorandum No. 80 - 39).

6. In case the improvements were introduced bythe claimant on the land of another, thelatter must execute a <{,uit Claim or.'iaiverof Claim to Improvements.

For purposes of consolidating all records relevant toacquisition of real state properties, all regional and-Gngineering District Offices are directed to submit to theOffice of the Assistant Minister for Legal Affairs, thisMinistry, copies of Deeds of Sale and Agreements (forimprovements), including other supporting papers.Likewise, the corresponding title of said properties inthe name of the government should be submitted whi ch inturn will be transmitted to the RecoL'ds l\'IanagementandArchives Office for safekeepinp;. ..

All instructions, directives, orders, rules andregulations previously issued by this flinistry whichin conflict with the provisions of these guidelineshereby amended or modified or repealed accordingly.

areare

irhis Order shall take

REPUBLIC OF THE PHILIPPINESDEPARTMENT OF ?UBLIC WORKS AND HIGHWAYS

OFFICE OF THE SECRETARYMANILA

10 Ju1v 1989

DEPAl\TMEN'~E ..R.lNO, 6+ 1h.1

Ser ie s 0 [ 1989 J~/j,

~/[n order to protect the interest o[ the government with

respect to pr iv a to property (lots) acquired for road right- ofT"layor other public purposes,' it is desired that all concernedstrictly adhere to, and comply with, the provisions of Depart-ment Order No. 65, sor ie s of 1983, particularly w i th respectto the safekeeping of the certificates of titlf' of priv a t.oproperty acqui red ,

SUBJECT: H EITERATING COMPL LANCE WITH TIlEPROVISIONS OF DEPARTMENT ORDERNO, 65, S. 1983, ON SAFEKEEPINGOF CERTIFICATES OF TITLE OFLOTS ACQUIRED BY THE COVFRNMENT

F'0 r t h p i. r i n f 0 rill a t i()n ;:, n d g u i c1::111C e, q 110 ted 11ere u n cle r 1 S

the pertinent provision of the said De par t.me n t Order:

"For purposes of consolidating all records rele-vant to acquisition of real eslate properties, allregional and Engineering District Offices aredirected to submit to the Office of the As s i s t a ruMinister for Legal Affairs (now Assistant SecretaryLor Legal Service) x x x the corresponding titles ofsaid properties in the name of the government x x xwhich i[} turn will be transmitted to the RecordsManagement and Archives Office [or safekeeping."

Strict compliance with this ordo r is desired. /-

<:: /'Y--,~ - \;1

F 1O{ELI b ~...~ ESnli\~Se ()(any'--.---/ .