Land Reclassification and Zoning Ordinances Prevail Over CARP Coverage

The Comprehensive Agrarian Reform Program (CARP) is a cornerstone of Philippine social justice legislation, but not every piece of land falls within its reach. In Tañon v. Asia United Bank (G.R. No. 226852, June 30, 2021), the Supreme Court clarified when a local government's zoning ordinance and land reclassification—ratified by the Housing and Land Use Regulatory Board (HLURB) before June 15, 1988—can remove a property from CARP coverage. The ruling is a practical guide for landowners, farmer-occupants, and buyers navigating the boundary between agrarian reform and local land-use regulation.

The Facts of the Case

Asia Trust Development Bank (now Asia United Bank) owned a two-hectare property in Barangay Makiling, Calamba, Laguna, covered by Transfer Certificates of Title Nos. T-657053 and T-657052. In 2007, the bank applied to the Department of Agrarian Reform (DAR) for an exemption from CARP coverage, submitting a February 21, 2007 HLURB Certification stating that the property was "classified as [within the] industrial zone" under Sangguniang Bayan Resolution No. 63, Series of 1980, ratified by the HLURB under Resolution No. 28 dated October 27, 1981.

A joint ocular inspection found the property vacant and idle, with no crops and no occupants at the time. The DAR regional director granted the exemption, finding the land within a non-agricultural zone prior to June 15, 1988. Renato Tañon and Pio Candelaria, who claimed to be tenants, protested. Their protest was denied, and the DAR, the Office of the President, and the Court of Appeals all affirmed the exemption. The petitioners then elevated the case to the Supreme Court.

The Issue

The central question was whether the property was exempt from CARP coverage because of its pre-1988 reclassification as industrial land, and whether the alleged tenant-occupants had vested rights that should prevail over that reclassification.

The Ruling: Zoning Ordinances Prevail

The Supreme Court denied the petition and affirmed the exemption. Under Section 4 of Republic Act No. 6657 (the Comprehensive Agrarian Reform Law), CARP covers all public and private agricultural lands. However, an "agricultural land" is defined as property devoted to agricultural activity and not classified as mineral, forest, residential, commercial, or industrial land.

Citing Heirs of Luna v. Afable, the Court explained that a land is outside CARP coverage when two conditions concur: (1) the land has been classified in town plans and zoning ordinances as residential, commercial, or industrial; and (2) the town plan and zoning ordinance have been approved by the HLURB or its predecessor agency prior to June 15, 1988. Local governments exercise police power when they reclassify land through zoning ordinances, and such reclassification automatically covers agricultural lands within the zone for non-agricultural use.

The Court gave evidentiary weight to the HLURB Certification, which enjoys the presumption of regularity. Since the property had been classified as industrial as early as October 27, 1981—well before the June 15, 1988 effectivity of RA 6657—it was exempt from CARP coverage. The petitioners' bare allegations did not overcome this presumption.

No Vested Tenancy Rights

The petitioners claimed they were tenants with vested rights. The Court rejected this. To establish agricultural tenancy, six elements must concur: landowner-tenant relationship, agricultural land as subject matter, consent, agricultural production as purpose, personal cultivation, and sharing of harvests. All must be proven by substantial evidence, and tenancy cannot be presumed.

The petitioners presented no evidence of these elements. Their only proof was a memorandum from the municipal agrarian reform officer, which did not show they had been tilling the land before its 1981 reclassification. The Court noted that a zoning ordinance is given prospective effect and should not divest rights vested prior to its enactment—but in this case, there was no proof of any vested right before 1981. The issuance of a Notice of Coverage in 2007 did not alter the land's classification, and that notice was later recalled.

Practical Takeaways

• Pre-1988 reclassification is decisive. If a local government unit reclassified land as residential, commercial, or industrial before June 15, 1988, and the HLURB (or its predecessor) ratified that classification, the land is generally exempt from CARP coverage.
• HLURB certifications carry weight. A certification from the HLURB attesting to a land's zoning classification enjoys the presumption of regularity. To challenge it, a party must present clear and convincing evidence to the contrary.
• Tenancy must be proven, not assumed. Occupants claiming vested tenancy rights must prove all elements of agricultural tenancy with substantial evidence, including that they cultivated the land before the zoning ordinance took effect.
• A Notice of Coverage is not conclusive. The issuance of a Notice of Coverage does not determine a property's classification. It is a due process requirement that informs the landowner of the proceedings, and it may be recalled if the land is found exempt.
• Applications for exemption are non-adversarial. Occupants are not automatically entitled to notice of a pending exemption application, though they may challenge the grant through available remedies.

For landowners, this case confirms that a valid pre-1988 zoning reclassification is a powerful shield against CARP coverage. For farmer-occupants, it underscores the importance of documenting and proving tenancy rights early—before a zoning ordinance changes the character of the land.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.