Proclaiming Urban Land Reform In The Philippines And Providing For The Implementing Machinery Thereof

Case Overview and Summary

Summary of Presidential Decree No. 1517 (Urban Land Reform Act)

Declaration of Policy (Section 2):
- Liberate human communities from blight, congestion, and hazards, and promote their development and modernization.
- Optimize the use of land as a national resource for public welfare, not as a commodity for trade.
- Provide equitable access and opportunity to the use and enjoyment of land.
- Acquire lands necessary to prevent speculative buying for public welfare.
- Maintain and support a vigorous private enterprise system responsive to community requirements in urban land use and development.

Definitions (Section 3):
- Development Rights: The right to use and/or develop land and improvements, including more intensive use, conversion, increasing density, etc.
- Land Assembly: Acquisition of lots of varying ownership through expropriation or negotiated purchase for planning and development.
- Land Banking: Acquisition of land in advance of actual need to acquire at existing use value and dispose of in a manner that influences land price formation and promotes planned development.
- Land Exchange: Bartering land for another piece of land and/or shares of stock of equal value in a government or quasi-government corporation.
- Joint Ventures: Commitment of funds, land resources, facilities, and services by two or more legally separate interests for their mutual benefit.
- Tenant: The rightful occupant of land and structures, excluding those whose presence is merely tolerated, entered by force or deceit, or under litigation.
- Urban Lands: Lands with a population density of at least 1,000 persons per square kilometer and where at least 50% of the economically active population are engaged in non-agricultural activities, or barangays with a population size of at least 1,000 and where at least 50% of the economically active population are engaged in non-agricultural activities.
- Urbanizable Lands: Sites and land areas with a high probability of becoming urban lands within 5 to 10 years.

Proclamation of Urban Land Reform Zones (Section 4):
- The President shall proclaim specific parcels of urban and urbanizable lands as Urban Land Reform Zones (Urban Zones).
- The Ministry of Human Settlements shall prepare development and zoning plans, and enforcement and implementing guidelines for the Urban Zones, which shall be enforced upon approval by the President.
- No urban land can be disposed of or used unless it conforms with the Ministry's development and zoning plans, and approved guidelines.

Urban Land Reform Coordinating Council (Section 5):
- An interagency body, the Urban Land Reform Coordinating Council, is constituted to formulate general policies, guidelines, and rules and regulations for the Urban Land Reform Program, subject to the President's approval.

Land Tenancy in Urban Land Reform Areas (Section 6):
- Legitimate tenants who have resided on the land for 10 years or more, built their homes, and legally occupied the lands by contract continuously for the last 10 years, shall not be dispossessed and shall have the right of first refusal to purchase the land at reasonable prices and terms.

Acquisition of Residential Lands for Existing Tenants and Residents (Section 7):
- If tenants and residents are unable to purchase the lands, the Government shall acquire the land and/or improvements by expropriation or other land acquisition techniques.
- Upon filing the expropriation petition and depositing 10% of the 1975 declared assessment value, the Government shall immediately have possession, control, and disposition of the real property and improvements, with the power of demolition if necessary, even pending resolution of issues.

Urban Zone Expropriation and Land Management Committee (Section 8):
- The Ministry is vested with the power of eminent domain and shall create an Urban Zone Expropriation and Land Management Committee to assist in exercising this power.
- The Committee shall formulate programs and projects specific to the Urban Zones, including the operative procedure for land acquisition and its phasing, and recommend the appropriate mode of disposition and other related aspects of land management.

Compulsory Declaration of Sale and Pre-emptive Rights (Section 9):
- Upon proclamation of an Urban Land Reform Zone, all landowners, tenants, and residents are required to declare to the Ministry any proposal to sell, lease, or encumber lands and improvements, including the proposed price, rent, or value of encumbrances, and secure approval.
- The Ministry shall have the pre-emptive right to acquire the lands and improvements, including lands occupied by tenants.

Innovative Land Acquisition Techniques (Section 10):
- The Ministry and/or its appropriate attached agency is authorized to utilize innovative land acquisition techniques as an alternative to land purchase and expropriation, including land assembly, land banking, land exchange, land consolidation and readjustment, and joint venture arrangements.

Land Valuation (Section 11):
- The Ministry of Finance shall develop and utilize new valuation techniques and assessment classification levels appropriate to the innovative acquisition techniques and tax system provided for in this Decree.

Official Development Registry (Section 12):
- The Ministry, through the Human Settlements Regulatory Commission, shall undertake on a continuing basis in every proclaimed Urban Zone, registration of existing land rights and interests, and development proposals of public and private entities through the establishment of an Official Development Registry.
- The Registry shall contain information on detailed boundaries, land titles, and intent to acquire and/or develop specific parcels of land.

Role of the Bureau of Lands and the Land Registration Commission (Section 13):
- The Bureau of Lands and the Land Registration Commission shall provide the Ministry with cadastral maps and other information entered into the Development Registry.
- The Land Registration Commission shall secure clearance from the Ministry prior to registration of any transactions affecting properties in the Urban Zones.

Land Disposition (Section 14):
- The Government shall adopt a combination of land disposition techniques within the Urban Land Reform Zones, including neighborhood ownership, residential freeholds subject to improvement conditions and the reservation of development rights, and tenure in improvements separate from tenure in land.
- The Human Settlements Development Corporation is authorized to dispose of lands in any of the manners provided for in this Section.
- The Ministry, in consultation with the Coordinating Council, shall determine the appropriate land disposition schemes for each Urban Zone.

Development Use Permit System for Urban Land Reform Areas (Section 15):
- A comprehensive development use permit system is established in proclaimed Urban Zones and/or Bagong Lipunan sites, which shall govern the development of lands within said areas.
- No development of lands, including its use, alteration, and construction, shall take place without the corresponding Development Use Permit being issued by the Ministry through the Human Settlements Regulatory Commission.

Taxation (Section 16):
- Within designated Urban Zones and/or Bagong Lipunan sites, the government shall implement a taxation system in support of the basic policies underlying the urban land reform program.
- The Ministry of Natural Resources and the Ministry of Finance shall conduct an inventory and assessment of idle lands throughout the Philippines, with priority given to Urban Zones.

Land Development Financing (Section 17):
- To ensure and encourage private participation in land development and management activities, the Ministry, with appropriate public and private agencies, shall develop and recommend programs to mobilize land development funds from private individual group sources, government financial institutions, joint public-private ventures, and private financial institutions.

Land Development Accounting (Section 18):
- The Ministry shall, where deemed necessary, institute a Land Development Accounting System for Urban Zones and designated Bagong Lipunan sites, which shall constitute a record of market transactions and revenues related to Government land acquisition, development, and management activities.

Public Hearings (Section 19):
- The Ministry, through the Human Settlements Regulatory Commission, shall conduct public hearings upon proclamation of Urban Zones to allow affected persons to present their views, grievances, and recommendations.

Administrative Fines (Section 20):
- Any violation of any provisions of this Decree or any of the rules or regulations issued thereunder shall be subject to fines not exceeding ten thousand pesos (P10,000) to be imposed by the Ministry through the Human Settlements Regulatory Commission.

Penal Provisions (Section 21):
- Any person, firm, or corporation who shall violate the provisions of this Decree and/or any rules or regulations issued thereunder shall, upon conviction, be punished by a fine of not more than twenty thousand pesos (P20,000) and/or imprisonment of not more than ten years, or both, at the discretion of the court.
- In the case of a corporation, firm, partnership, or association, the penalty shall be imposed upon its officials for such violation.
- If the guilty party is an alien, he shall immediately be deported after payment of the fine and serving the imprisonment.
- Every day that the violation is carried on or permitted to be carried on shall be considered a separate offense.

Repealing Clause (Section 22):
- All laws, decrees, executive orders, rules, and regulations inconsistent with this Decree are hereby repealed, amended, or modified accordingly.

Separability Clause (Section 23):
- If any section or provision of the Decree is declared unconstitutional or invalid, the other provisions not affected shall continue in full force and effect.

Effectivity (Section 24):
- This Decree shall take effect immediately.