What is an Area for Priority Development and Why it is part of Due Diligence ?

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land use picasa resizeSeveral years ago a Seller in a Metro Manila was going through a Bank’s requirement for a commercial property loan and just when the loan was approved, a status on the property showed up which required clearance from the Housing and Land Use Regulatory Board ( HLURB ) as the site was listed as an Area for Priority Development ( APD ).

Due diligence has been done from the Register of Deeds ( clean title ) and Assessor’s Office ( real estate taxes paid ) which has been the normal procedure.   The property is zoned commercial so the assumption was a commercial building can be built.  In addition, a clearance from the Barangay was secured for the proposed building.  With this new provision taking effect, consider the zoning division as part of your “due diligence” as the it would be disadvantageous for the buyer to be stuck with a property that the government may expropriate or limit development on !

So again, is this is another “INFORMATION” that is the burden  of the SELLER to know ?  Why can’t information be properly given by the governing agency to the property owner who is a taxpayer anyway ?

Bottom line, the Seller now needs to secure a clearance from HLURB for the loan proceeds to be released and for the deal to be finalized.   Prior to checking with HLURB, it would be best to check with the zoning division of the City where the property is located.

What is an AREA FOR PRIORITY DEVELOPMENT ( APD ) ?

The term Areas for Priority Development (APDs) was used in the pertinent decrees and proclamations interchangeably or alternatively with the term Urban Land Reform Zones (ULRZs). From all indications they have the same meaning. They refer to the 244 areas in Metro Manila specifically described and identified in Proclamation 1967, and other sites later identified and proclaimed.

What is the Urban Land Reform Program ?

Presidential Decree No. 1517 issued on June 11, 1978 is what is known as the Urban Land Reform Law. It was a piece of legislation that instituted the Urban Land Reform Program of the government. Briefly, this program aims to rationalize — with due process and through equitable means — the existing pattern of land use and ownership in urban and urbanizable areas. As such, it involves the imposition of certain limitations on the use by the owner of his property.

Take note of the the following laws listed below :

Laws that ensure rational land use and sustainable urban and regional development

  • Executive Order No. 72 – providing for the preparation and implementation of the Comprehensive Land Use Plans (CLUPs) of Local Government Units pursuant to the Local Government Code of 1991 and other pertinent laws.
  • Memorandum Circular No. 54 – prescribing the guidelines of Sec. 20, R.A. 7160, authorizing cities/municipalities to reclassify lands into non-agricultural uses.
  • Executive Order No. 124 – establishing priorities and procedures in evaluating areas for land conversion in regional agricultural/industrial centers, tourism development areas and sites for socialized housing.
  • Presidential Decree 1517 – protects the rights of tenants and occupants of lands within Urban Land Reform Zones / Areas for Priority Development (ULRZ /APD)

Now parallel to the above article, here’s a portion of an article taken from Philstar’s correspondent, Czeriza Valencia :

Take note of the recent moratorium proposed by Department of Agrarian Reform ( DAR )  – for which a draft executive order has already been prepared – to prevent the conversion of agricultural lands into subdivisions. If implemented, this would be applied to land awarded under RA 6657, PD 27 and other agrarian reform laws.

“The problem here is the ban on land conversion will have an adverse impact on housing because many areas are not really suited for agriculture but they are better suited for housing. We have a 5.5-million deficit in housing (units), we need more lands for construction. Most of this backlog is for the poor. It’s actually going to be anti-poor, this two- year ban,” Pernia  told reporters Friday.

The proposed ban would also delay, and to some extent, prevent the construction of vital infrastructure for which right-of-way have to be secured.

“There would also be a problem with infrastructure projects because right-of-way will be a problem. Many infrastructure projects would need right of way and if there is no land conversion, roads cannot we widened, or new roads cannot be constructed, railways cannot be constructed because inevitably, these projects can infringe on certain housing areas,” Pernia said.

He said NEDA’s position paper has already been circulated to the departments of Finance, Trade, and Budget and Management.

“The purpose of that is to get them to sign so that there would be gravitas as far as the position paper is concerned. And so it would carry more for the rest of the Cabinet to sign it. I think there is already a draft EO for the ban and I think it is being held in abeyance  now and that will give us time to get this position paper read by the other members of the Cabinet,” Pernia said.

The Finance and Budget departments, he said, have already expressed support for NEDA’s position.

Among the other proposals contained in the position paper is the stronger enforcement of the land use policy and the taxation of idle lands to force owners to put it into productive use.

“So what we propose instead is enforcing our land use policy. Also also taxing the idle lands so the owners will be forced to put them to appropriate use,” Pernia said.

With the recent economic state visits and agreement concluded by President Rodrigo Duterte during a state visit to China and Dubai

“We’re developing 130,000 hectares of land. Now, there’s this moratorium on conversion of land…If that is going to take effect, development in the countryside is going to be impacted because a lot of these properties are still in the middle of conversion and it’s going to be really unfortunate, if we are not going to make this happen,” he said.

Socioeconomic Planning Secretary Ernesto Pernia is optimistic the President would reconsider his earlier approval of the proposed ban.

“It is a very strong position paper and I think he (President Duterte) will hear out the arguments because it is signed by all the economic managers and the vice president,” he said.

President Duterte approved on Sept. 12 the proposal of the Department of Agrarian Reform (DAR) to impose a two-year moratorium on land conversion which disallows the use of agricultural lands for non-agricultural uses. An executive order putting the moratorium in effect has already been drafted.

The move is intended to support the country’s food security program.

“While we are one with DAR in finding means to address the country’s food security concern, food security has to be met through some other means,” the position paper stated.

Economic managers nonetheless support DAR’s proposal to create a task force that would assess the status of land conversion in the country and seek support from implementing agencies as needed.

In lieu of implementing a land conversion ban, they called for stricter implementation of laws pertaining to land use and the enactment of a National Land Use Law.

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Thank you.

Visit www.robertgsarmiento.org for blogs, news, case studies and property listings which you may find informative.

Subscribe to my daily postings by filling in your email address at the SUBSCRIBE section located at the mid right hand portion of the webpage of www.robertgsarmiento.org

View properties you are looking for by using the SEARCH engine ( highlighted in Green on the right hand corner of the webpage ).

Finally, should you have a property for SALE or LEASE, let me know if our office could be of assistance.

Thank you.

robert
Robert G. Sarmiento Properties
Professional Affiliation :
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Member, City of Taguig Real Estate Board 2016
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