Posted on 09:27 PM, December 27, 2009 [ BusinessWorld Online ]
CONGESS HAS ratified a measure providing a less-tedious and cheaper option to titling residential lands, and is awaiting the President’s signature for enactment into law.
The reconciled version of House Bill 5618 and Senate Bill 3429 or the proposed "Act Authorizing the Issuance of Free Patents to Residential Lands" ratified by the Senate and House of Representatives before Congress went on Christmas break last Dec. 19, allows the Land Management Bureau (LMB) under the Department of Environment and Natural Resources to issue free patents to residential lands, expanding its authority from agricultural lands.
The patent is then submitted to the Registry of Deeds for the issuance of a title.
The proposed law allows applications for titling if the tenant has occupied the property for 10 years from the current 30 years under the Public Land Act.
The title’s coverage should not exceed 200 square meters (m2) in highly urbanized cities; 500 m2 in other cities; 750 m2 in first and second class municipalities; and 1,000 m2 in all other municipalities.
The LMB currently issues patents for alienable and disposable lands only for agricultural purposes. It has estimated that the law would cover 7.8 million hectares of residential lands nationwide, mostly in Cebu, Davao and Baguio cities.
Residential patents could either be coursed through the Bureau of Internal Revenue (BIR) or through the courts with the accompanying fees. Under the proposed law, residential patents can be issued for free with certain documentary requirements.
Explaining the BIR process, Jaime V. Santiago, assistant commissioner and officer-in-charge of the taxpayer assistance service, said the BIR issues a certificate that would authorize the titling provided the following are submitted: a deed of sale or a will and testament to validate rights to the land, tax declarations, and pay a capital gains tax or 6% of the fair market value of the property and a documentary stamp tax of 1.5% of the fair market value.
Allan V. Barcena, LMB assistant director and head of policy development, said in an interview that the new law would only require the submission of tax declarations and affidavits from barangay officials and two witnesses other than their relatives which state that the applicant has stayed in the area for 10 years.
In cases of two or more claimants, Mr. Barcena said that the LMB central office would resolve the dispute but its decision is appealable in court.
He said they expected to have finished drafting the bill’s implementing rules and regulations by March.
"We are targeting that by January, the Office of the President has already signed this and then we can start implementing the guidelines. We expect to finish within three months," he said in a telephone interview.
"We expect that there would be a surge of application for patent [of residential land] because this soon to be made law is providing an easier way to get land titles. Right now it’s not attractive to go through this process because applicants would either pay to the BIR or go to the courts. With this [bill], many would be encouraged to get land titles."
Mr. Barcena said it may take the same period to issue a residential patent compared to the agriculture patent -- six months, but noted they may hire and train new personnel since it would be the first time that the LMB would handle residential patents.
Meanwhile, Suzanne L. Felix, executive director of the Chamber of Thrift Banks, said the new law would encourage economic activity.
"Land titles can be used as collateral to borrow from banks so if the land titling process is hastened, banks would also benefit because there would be added market activity with the increase in land title holders," she said in a separate telephone interview.
Claro G. Cordero, Jr., head of research and consultancy at Jones Lang LaSalle Leechiu said conflicts may arise from illegal settlers.
"On the negative side, there would arise a problem of determining which lands are eligible to this [measure]. There are lots of government lands that have yet to be accounted for like residential areas which are on major highway roads that are sometimes illegally occupied," he said in another telephone interview.
The measure amends Commonwealth Act 141 or the Public Land Act. House committee on special land use and Zamboanga del Sur Rep. Antonio H. Cerilles (2nd district) said that the bill will be enrolled in Malacañang before the month ends. -- JFSV
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