CLOA or Certificate of Land Ownership Award is a kind of title issued to qualified beneficiaries under the Comprehensive Agrarian Reform Program (CARP) and is subject to specific restrictions, including a prohibition on transfer within a certain period.

Please note that this post is not a substitute for legal advice. Consult a lawyer to consider all the facts of your situation.

What is a CLOA

A CLOA is a document issued by the Department of Agrarian Reform (DAR) under the Comprehensive Agrarian Reform Program (CARP). It serves as evidence of ownership of agricultural land granted to qualified agrarian reform beneficiaries (ARBs). The CLOA contains restrictions and conditions tied to the grant, such as limitations on land use and transferability (usually after 10 years).

A CLOA confirms the right of the ARB to possess and own the land awarded under CARP. It is an attribute of ownership, but the land must remain within the boundaries and conditions specified in the CLOA. It “enjoys the same respect accorded to those issued through other modes of acquisition of title.” [Dalit vs. Balagtas, 2019]

A CLOA is a critical instrument in agrarian reform, ensuring the transfer of agricultural land to ARBs while adhering to legal processes and conditions.

Purpose of CLOA and Agrarian Reform

The purpose of CLOA and agrarian reform in the Philippines is rooted in the principles of social justice and equitable land distribution. It ensures that landless farmers and farmworkers gain ownership of the lands they till.

Agrarian reform upholds the aspiration of the 1987 Constitution to redistribute agricultural lands to landless farmers and farmworkers to promote social justice and improve their economic status. It includes land redistribution and support services such as credit facilities, infrastructure, and training to ensure the productivity and sustainability of the awarded lands. The overarching goal is to empower farmers and provide them with control over the lands they till. [Diamond Farms vs. Diamond Farm Workers, 2012]

Key Steps in Transferring a CLOA Title:

1. Check the Prohibition Period: CLOA titles typically include a restriction prohibiting transfer or sale within ten (10) years from issuance, except to the Land Bank of the Philippines or other qualified beneficiaries. [Dela Cruz vs. Cruz, GR 162890, 2005]
   • One exception is a “matured CLOA” which refers to one that has reached its “matured value,” meaning the obligations or conditions tied thereto, such as payment of dues or compliance with agrarian reform requirements, have been fulfilled.
   • Violations of the restrictions on CLOA transfers may render the transaction void. [Lebrudo vs. Loyola, 2011]
2. Determine Buyer Eligibility: The buyer must be a qualified agrarian reform beneficiary (ARB). Transfers to non-ARBs are generally prohibited under agrarian reform laws, with certain exceptions. [Lebrudo vs. Loyola, 2011]
3. Verification of Restrictions: As stated, CLOAs often come with restrictions, such as prohibitions on transfer or sale within a specific period. These restrictions must be lifted before the title can be considered “clean.” 
   • As of 2023, there is a condonation of unpaid amortization under the “New Agrarian Emancipation Act.” Section 2: Upon the effectivity of this Act, the individual loans of ARBs, including interests, penalties and surcharges, secured under the Comprehensive Agrarian Reform Program (CARP) or from other agrarian reform programs or laws, are hereby condoned and written off by the Government, thereby relieving them from the burden of payment thereof:
4. Secure DAR Approval: Any transfer of a CLOA title requires prior approval from the Department of Agrarian Reform (DAR). This ensures compliance with agrarian reform laws and prevents circumvention of restrictions.
5. Execute a Deed of Sale: Once DAR approval is obtained, the parties may execute a Deed of Sale. The document must be public and comply with legal formalities.
6. Pay Taxes and Fees: The seller and buyer must settle applicable taxes, such as capital gains tax, documentary stamp tax, and transfer tax, with the Bureau of Internal Revenue (BIR) and the local government unit.
7. Register the Transfer: Submit the approved Deed of Sale, tax clearances, and other required documents to the Register of Deeds for the issuance of a new title in the buyer’s name.
8. Disputes or issues related to CLOA transfers may fall under the jurisdiction of the DAR Secretary or the DARAB. [Landicho vs. Limqueco, 2016]

Failure to comply with legal requirements may result in the nullification of the transfer or legal penalties. It is advisable to consult with the DAR or a legal expert specializing in agrarian reform for guidance.

Converting CLOA to “Clean Title”

Take note the difference between transferring CLOA title to another eligible transferee versus converting a “matured” CLOA to a “clean title.”

1. Compliance with Agrarian Reform Laws. Ensure that the land covered by the CLOA has met all conditions imposed under agrarian reform laws, such as the Comprehensive Agrarian Reform Program (CARP).
2. Ensure Lifting of Restrictions. CLOAs often come with restrictions, such as prohibitions on transfer or sale within a specific period (e.g. 10 years). These restrictions must be lifted or complied with before the title can be considered “clean.” 

FAQ

Conditions before CLOA title is issued to beneficiaries

Before a CLOA is issued, the land must first be acquired by the State, and just compensation must be paid to the original landowner. The CLOA is only valid if these legal requirements are met. [Roxas vs. Court of Appeals, 1999]

• In compulsory land acquisition, the DAR identifies the land, owner, and beneficiaries, then issues a Notice of Acquisition. The owner has 30 days to accept or reject the offer. Acceptance leads to a deed of transfer and payment by LBP. Rejection prompts proceedings to determine just compensation. Compensation is paid or deposited, and the land is transferred to the government, redistributed to farmers, with disputes resolved in court if necessary. [Roxas vs. CA, 1999]

Where can I find the CLOA restrictions?

If any restrictions remain, such as those related to land use or transfer, these will be annotated on the new title. However, if all conditions have been satisfied, the title will be issued without annotations, making it a “clean” title.

The new title without restrictions must be registered with the appropriate Registry of Deeds. The Registry of Deeds is mandated to register agrarian reform titles within 60 days of issuance. [RA 11953, 2023]