Owner of land has two options against builder in good faith

Construction on your land by builder in good faith? What to do?

The facts are governed by Article 448 of the New Civil Code of the Philippines, which provides that:

"The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof."

The aforecited law was explained by the high court in the case entitled Spouses Espinoza v. Spouses Mayandoc, GR 211170, July 3, 2017, where the Supreme Court, through Chief Justice Diosdado Peralta, stated:

"As such, Article 448 of the Civil Code must be applied. It applies when the builder believes that he is the owner of the land or that by some title he has the right to build thereon, or that, at least, he has a claim of title thereto. In Tuatzs v. Spouses Escol et al., this Court ruled that the seller (the owner of the land) has two options under Article 448:

(1) he may appropriate the improvements for himself after reimbursing the buyer (the builder in good faith) the necessary and useful expenses under Articles 546 and 548 of the Civil Code; or

(2) he may sell the land to the buyer, unless its value is considerably more than that of the improvements, in which case, the buyer shall pay reasonable rent, thus:

"The rule that the choice under Article 448 of the Civil Code belongs to the owner of the land is in accord with the principle of accession, i.e., that the accessory follows the principal and not the other way around. Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. The landowner cannot refuse to exercise either option and compel instead the owner of the building to remove it from the land.

"The raison d'etre for this provision has been enunciated thus: Where the builder, planter or sower has acted in good faith, a conflict of rights arises between the owners, and it becomes necessary to protect the owner of the improvements without causing injustice to the owner of the land. In view of the impracticability of creating a state of forced co-ownership, the law has provided a just solution by giving the owner of the land the option to acquire the improvements after payment of the proper indemnity or to oblige the builder or planter to pay for the land and the sower the proper rent. He cannot refuse to exercise either option. It is the owner of the land who is authorized to exercise the option because his right is older and because, by the principle of accession, he is entitled to the ownership of the accessory thing."

So, as a land owner, you have two options as provided under Article 448 of the New Civil Code, and these are: acquire the improvements after payment of proper indemnity, or oblige your neighbor to pay for the land.

However, one cannot compel the builder to buy the occupied portion, so he/she may pay instead a reasonable rent.

Source: Manila Times

Can tax declaration be proof of possession?

What are the requirements for land registration, and what other evidence can one present to comply with the required years of possession?

The new requirements for land registration are now governed by Section 6 of Republic Act (RA) 11573 or An Act Improving the Confirmation Process for Imperfect Land Titles, Amending for the Purpose Commonwealth Act 141, as amended, otherwise known as The Public Land Act, and Presidential Decree 1529, as amended, otherwise known as the Property Registration Decree:

"Section 6. Section 14 of Presidential Decree No. 1529 is hereby amended to read as follows:

"SECTION 14. Who may apply. The following persons may file at any time, in the proper Regional Trial Court in the province where the land is located, an application for registration of title to land, not exceeding twelve (12) hectares, whether personally or through their duly authorized representatives:

"(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain not covered by existing certificates of title or patents under a bona fide claim of ownership for at least twenty (20) years immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. They shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under this section.

"(2) Those who have acquired ownership of private lands or abandoned riverbeds by right of accession or accretion under the provisions of existing laws.

"(3) Those who have acquired ownership of land in any other manner provided for by law. xxx"

Generally, tax declarations are proofs of payment of real property tax, but they are also indications of possession. This was reiterated in the case of Republic of the Philippines vs. Spouses Tan, GR 232778, Aug. 23, 2023, where Associate Justice Samuel Gaerlan said that:

"Although tax declarations and realty tax payment of property are not conclusive evidence of ownership, nevertheless, they are good indicia of the possession in the concept of owner for no one in his right mind would be paying taxes for a property that is not in his actual or at least constructive possession. They constitute al least proof that the holder has a claim of title over the property. The voluntary declaration of a piece of property for taxation purposes manifests not only one's sincere and honest desire to obtain title to the property and announces his adverse claim against the State and all other interested parties, but also the intention to contribute needed revenues to the government. Such an act strengthens one's bonafide claim of acquisition of ownership."

In Arlo Aluminum Co., Inc. vs. Republic of the Philippines, GR 254433, April 17, 2024, the Supreme Court, speaking through Associate Justice Ramon Paul Hernando, also stated that:

"In addition, Arlo may present other competent witnesses or documentary or object evidence to prove overt acts of possession and occupation by them and their predecessors-in-interest as held in the case of Spouses Tan:

"Accordingly, respondents may present anew other competent witnesses or other documentary or object evidence that show the overt acts of possession and occupation by their predecessors-in-interest, such as duly authenticated photographs of structures on the subject property built or erected by the said predecessors-in-interest predating March 11, 1989, but to speculate or suggest further would be to preempt the action of the CA in its reception and consideration of future evidence that may come before as a result of the remand of the instant petition."

Thus, the tax declarations may be used as additional proof of possession, but one must still present competent witnesses or other documentary or object evidence to show overt acts of possession through the predecessor-in-interest so as to comply with the 20-year occupation requirement as provided under Section 6 of RA 11573.

Source: Manila Times

Land use act hinges on local collaboration

Local government units (LGUs) are crucial partners in enacting and implementing the National Land Use Act (NaLUA). NaLUA’s passage would foster cooperation and address land-use challenges, ultimately benefiting all stakeholders – national and local.

This was emphasized by Philippine Institute for Development Studies (PIDS) Senior Research Fellow Adoracion Navarro who presented findings and recommendations from her study, “The Need for a National Land Use Act in the Philippines”, at a recent Socioeconomic Research Portal for the Philippines (SERP-P) knowledge-sharing forum. The study highlights the importance of comprehensive collaboration and integration among stakeholders to effectively address land use challenges and proposes the enactment of NaLUA.

“LGUs have a crucial role in managing land use, but they often lack the necessary guidance and support to address the complexities of conflicting land uses and overlapping claims. By promoting sustainable land use planning and governance, the NALUA seeks to minimize negative externalities and disamenities, ensuring the long-term ecological balance and socio-economic development of the country,” she explained.  The NALUA can provide the framework and standards needed to empower LGUs for effective land use planning and governance.

The author acknowledged existing land use management mechanisms but also revealed a critical gap. “Over half (55 percent) of comprehensive land use plans (CLUPs) are outdated as of July 2023, and four percent of municipalities or cities lack CLUPs altogether. Similarly, 57 percent of provincial development and physical framework plans (PDFPs) are outdated, with 10 percent of provinces missing PDFPs entirely”.  

This affects optimal land zoning, land reclassification, and land use conflict resolution at the local government level. It results in some LGUs becoming unresponsive to the demand for shelter, infrastructure, agricultural production, environmental protection, and industrial development.

Furthermore, data between 2015 and 2020 suggests a sub-optimal utilization of land. This means that the way land is being used in the country is not the most effective or beneficial for various purposes. Barren lands increased significantly over the years, while land used for annual crops, perennial crops, and fishponds declined.

The LGUs’ level of capacity and understanding of land use planning will directly impact the success of NaLUA’s implementation, should it be finally enacted.  “LGU powers need not be diminished and the NaLUA can, in fact, do the reverse. The presence of sanctions and penalties in the proposed legislation is not meant to disempower LGUs, while the benefits are meant for all stakeholders”. Navarro suggested laying down a proposal for upgrading the technical capacity of LGUs in formulating, updating, and implementing CLUPs and PDFPs.

A transdisciplinary approach is needed to strengthen advocacy for the NaLUA. This approach involves incorporating knowledge and perspectives from various disciplines. “We need other disciplines’ languages so that other people can understand us better and be part of our policy advocacy,” she said.

Navarro concluded that there is an urgent need for a comprehensive national land use governance framework to ensure the sustainable and equitable use of this vital resource. “If the Philippines has a national level legislation on the use of water through the Water Code of 1976 and in the governance of air as a resource through the Clean Air Act of 1999, then why not also for land?”.

The Need for a National Land Use Act

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Source: PIDS