LEGAL CONSIDERATIONS IN APPRAISAL

Prepared by:

A/y. Rhandell Alvin B. Matuloy PRC REB License No. 4236 PRC REA License No. 1641

Contact: 09273656591

REMINDERS

Approach: Academic, i.e., to pass the appraisal examinaKon

Ask quesKons only to clarify concepts or rules not to raise personal or hypotheKcal concerns that might consume valuable Kme

Read other perKnent laws and gain access to other materials during your free Kme

PROPERTY

all things which are, or may be the object of appropriaKon

Important Term:

Res nullius nobodys property

SAMPLE QUESTION

It is a kind of property that no one owns, like an island, the ocean or the moon.

a. Res ipsa b. Res nullius c. Res pago d. Res luna

CIVIL CODE OF THE PHILIPPINES CONCEPT OF IMMOVABLE PROPERTY 1. Real by nature it cannot be carried from place to

place (pars. 1 & 8, Art. 415, Civil Code) 2. Real by incorporaDon abached to an immovable in

a xed manner to be an integral part thereof (pars. 1-3 Art. 415, Civil Code) (N.B. xture-personal property transformed to real property)

3. Real by desDnaDon placed in a n immovable for the uKlity it gives to the acKvity carried thereon (pars. 4-7 and 9 Art. 415, Civil Code)

4. By analogy - it is so classied by express provision of law (par. 10, Art. 415, Civil Code)

CIVIL CODE OF THE PHILIPPINES

1. land, buildings, roads and construcKons of all kinds adhered to the soil;

2. trees, plants and growing fruits, while they are abached to the land or form an integral part of an immovable;

3. everything abached to an immovable in a xed manner in such a way that it cannot be separated therefrom without breaking the material or deterioraKon of the object;

CIVIL CODE OF THE PHILIPPINES (Republic Act 386, August 30, 1950)

4. statues, reliefs, painKngs or other objects for use or ornamentaKon, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intenKon to abach them permanently to the tenements;

5. machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works;

Requisites: a. made by owner b. industry or works carried on building or on land c. machines, etc must tend directly to meet needs of the industry or

works d. machines, etc. must be essenKal and principal elements of the

industry.

CIVIL CODE OF THE PHILIPPINES

6. animal houses, pigeon-houses, beehives, shponds or breeding places of similar nature, in case their owner has placed or preserved them, with the intenKon to have them permanently abached to the land, and forming a permanent part of it; the animals in those places are included;

7. ferKlizer actually used on a piece of land; 9. mines, quarries and slag dumps, while the maber thereof forms part of the bed, and waters either running or stagnant;

CIVIL CODE OF THE PHILIPPINES

10. docks and structures which, though oaKng, are intended by their nature and object to remain at a xed place on a river, lake or coast; and

11. contracts for public works, and servitudes and other real rights over immovable property

SAMPLE QUESTION

Which of the following terms applies to an item that originally was personally property but has become real property as a result of being abached to a building?

a. Real property

b. Fixture

c. Appendix

d. Chabel

Lands of Public Domain under SecDon 4 ArDcle XII of the 1987 ConsDtuDon

Agricultural (alienable) Forest or Kmber Mineral lands NaKonal parks

PROPERTY OF PUBLIC DOMINION

Concept: It is not owned by the state but pertains to the state, which, as territorial sovereign exercises certain juridical prerogaKves over such property. The ownership of such properKes is in the social group, whether naKonal, provincial or municipal.

Purpose: To serve the ciKzens and not the state as a juridical person.

KINDS

Those intended for public use Those which are not for public use but intended for public service

Those intended for the development of the naKonal wealth

DIFFERENCE

PUBLIC DOMAIN PUBLIC DOMINION

Owned by the State regardless if used or not

owned by a social group, whether naKonal, provincial or municipal Emphasis is on use and sovereignity

CHARACTERISTICS OF PROPERTY OF PUBLIC DOMINION

Outside the commerce of man Inalienable. But when no longer needed for public use or service, may be declared patrimonial property.

Cannot be acquired by prescripKon Not subject to abachment or execuKon Cannot be burdened with easements

PATRIMONIAL PROPERTY OF THE STATE

Property of the State owned by it in its private or proprietary capacity. The state has the same rights over this kind of property as a private individual in relaKon to his own private property

PROPERTY OF LOCAL GOVERNMENT UNITS

Property for public use consist of roads, streets, squares, fountains, public waters, promenades and public works for public service paid for by the LGUs

Patrimonial Property all other property possessed by LGUs without prejudice to provisions of special laws

RECLASSIFICATION VS. CONVERSION

RECLASSIFICATION CONVERSION

Primary classicaKon changed to secondary classicaKon, public dominion to residenKal

Manner of property uKlizaKon or use; residenKal zoning

PROPERTY OF PRIVATE OWNERSHIP

- refers to all property belonging to private persons either individually or collecKvely and those belonging to the State and any of its poliKcal subdivisions which are patrimonial in nature

Lands of Public Domain Open for Private Ownership; Public Land Act

(Commonwealth Act No. 141) Agricultural ResidenKal, commercial, industrial or similar producKve purposes

EducaKonal, charitable, or other similar purposes

ReservaKons for townsites and for public and quasi-public purposes

SAMPLE QUESTION

Whenever a river changing its course by natural courses opens a new bed through a private estate, this bed shall become:

a. Public Dominion b. ReclamaKon area c. Private Property d. Open property e. Acquired property

STATE POLICIES AND POWERS

POLICY UNDER THE 1987 CONSTITUTION

STEWARDSHIP PRINCIPLE

The use of property bears a social funcKon and that private property decision on the use of property are subject to the duty of the state to intervene when common good so demands (Art. XII Sec 6)

LaKn: Sic utere tuo ut alienum non laedas (so use your own so as not to injure others)

The State regulates the acquisiKon, ownership, use and disposiKon of property to promote the common good. (ArKcle XII SecKon 1)

FUNDAMENTAL/INHERENT POWERS OF THE STATE

Police Power - is the power of promoKng the public welfare by restraining and regulaKng the use of both liberty and property of all the people. It is considered to be the most all-encompassing of the three powers.

Eminent Domain - aects only property RIGHTS. It may be exercised by some private enKKes. The property forcibly taken under this power, upon payment of just compensaKon, is needed for conversion to public use or purpose.

TaxaDon - aects only property rights and may be exercised only by the government. The property taken under this power shall likewise be intended for a public use or purpose. It is used solely for the purpose of raising revenues, to protect the people and extend them benets in the form of public projects and services. Hence, it cannot be allowed to be conscatory, except if it is intended for destrucKon as an instrument/implement of police power.

SAMPLE QUESTION

The LGU of Boracay together with the DILG removed all structures which violated the 30 meter legal easement along the shores, what kind of inherent power of the state is exercised?

a. eminent domain b. police power c. taxaKon d. escheat

Right of condemnaKon are held by a a. State government agency

b. Local agency or authority represenKng the naKonal government agency

c. UKlity company

d. All of the above

LAND USE - it is the predominant acKvity on specic land area or

locaKon in a given Kme.

Land Use Plan - projects public and private land use in accordance

with the future spaKal dimension of economic and social acKviKes.

Comprehensive Land Use Plan (CLUP) - an ocial public document adopted by the Local

Government Unit as a guide to decisions about physical and socio-economic development of the community.

Government Agencies involved in Land Use Planning

Local Government Units (LGU) pursuant to the Local Government Code (RA 7160 of 1991) LGUs shall prepare their respecKve CLUP enacted through a zoning oridinance (ZO) which shall be the primary and dominant bases for the future use of land resources;

LGUs shall regulate acKviKes relaKve to the use of land, buildings and structures within the city/municipality in order to promote general welfare

ReclassicaDon of Lands under RA 7160:

(i) A city or municipality may, through an ordinance passed by the sanggunian aqer conducKng public hearings for the purpose, authorize the reclassicaKon of agricultural lands and provide for the manner of their uKlizaKon or disposiKon in the following cases: (1) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture or (2) where the land shall have substanKally greater economic value for residenKal, commercial, or industrial purposes, as determined by the sanggunian concerned: Provided, That such reclassicaKon shall be limited to the following percentage of the total agricultural land area at the Kme of the passage of the ordinance:

(1) For highly urbanized and independent component ciKes, qeen percent (15%);

(2) For component ciKes and rst to the third class municipaliKes, ten percent (10%); and

(3) For fourth to sixth class municipaliKes, ve percent (5%): Provided, further, That agricultural lands distributed to agrarian reform beneciaries pursuant to Republic Act Numbered Sixty-six hundred qy-seven (R.A. No. 6657). otherwise known as "The Comprehensive Agrarian Reform Law", shall not be aected by the said reclassicaKon and the conversion of such lands into other purposes shall be governed by SecKon 65 of said Act.

(ii) The President may, when public interest so requires and upon recommendaKon of the NaKonal Economic and Development Authority, authorize a city or municipality to reclassify lands in excess of the limits set in the next preceding paragraph.

(iii) The local government units shall, in conformity with exisKng laws, conKnue to prepare their respecKve comprehensive land use plans enacted through zoning ordinances which shall be the primary and dominant bases for the future use of land resources: Provided. That the requirements for food producKon, human seblements, and industrial expansion shall be taken into consideraKon in the preparaKon of such plans.

(iv) Where approval by a naKonal agency is required for reclassicaKon, such approval shall not be unreasonably withheld. Failure to act on a proper and complete applicaKon for reclassicaKon within three (3) months from receipt of the same shall be deemed as approval thereof.

Housing and Land Use Regulatory Board (HLURB)

promulgates zoning and other land use control standards and guidelines which shall govern the Land Use Plan and Zoning Ordinances of LGUs (ExecuKve Order 648)

-has power to review and approve the CLUPs of component ciKes and municipaliKes to ensure compliance with naKonal standards and guidelines (ExecuKve Order 72 Series of 1993)

ZONING divides the community into districts and imposes dierent land use controls on each district, specifying the allowed use of land and buildings, the intensity or density of such uses and the bulk of building on the land

found in enacted legislaKon known as zoning ordinance which includes a zoning map;

Zoning Map - shows the graphical designaKons, locaKon and boundaries of the dierent zones or districts into which the community is divided

Zoning Ordinance - regulaKons enacted by LGUs (Sangguniang Bayan/Panglungsod) showing:

how each zone will be used, what land use acKviKes are allowed without any condiKons are complied with

what acKviKes are not allowed - is the complete narraKve descripKon of the LUP

LAND USE PLAN VS. ZONING ORDINANCE

Land Use Plan Zoning Ordinance

a PROPOSAL for the future use of the land based on sound planning principles, and forms part of the official document known as the Comprehensive Development Plan

the translation of a Land Use Plan into a legally enforceable documents, complete with penal provisions and adopted by the Sangganuiang Bayan/Panglungsod in accordance with law

Zoning Regulates:

The convenKonal USE categories of land namely: residenKal, commercial, industrial and agricultural which are referred to as residenKal zone, commercial zone, agricultural zone and industrial zone.

O-street parking requirements to ensure that new or proposed development provides parking to prevent congesKon and trac.

Building bulk by requiring set-back provisions on the front, side and rear yards, limiKng building heights and the area that may be covered by buildings.

PopulaKon density by regulaKng the size of lots and limiKng the number of families per hectare or setng a minimum required lot area for each family

The ZO shall be implemented within six (6) months from raDcaDon of ZO by HLURB

ExisDng Non-Conforming Use

All land use which are exisKng at the Kme of the adopKon of the ZO which had become non-conforming use may be allowed to exist but:

shall not be enlarged or extended to occupy greater area nor moved in whole or in part, to any porKon of the land;

shall not be allowed to revive as non-conforming use once ceased to operate for more than a year;

idle/vacant structure may not be used for non-conforming acKvity; in case damaged, may be allowed to repair but 50% only of its

replacement costs, repair of structure will not be allowed except in conformity with ZO;

no conforming use maybe moved to displace any conforming use no non-conforming structure may be enlarged or altered in a way

which will increase its non-conformity, but may be altered to decrease its non-.conformity

SAMPLE QUESTION

In regard to zoning, which of the following statements is CORRECT?

a. Zoning ordinances are always more restricKve than deed restricKons

b. A non conrmaKon use and variance refer to the same thing

c. Zoning normally establish land-use districts and provided for a dierent restricKon within each district

d. Exclusive zoning and spot zoning refer to the same thing e. None of the above

. LAND ACQUISITION

1. Public grant - based on the Public Land Acts - obtained through issuance of Spanish Govt. of Royal

Grants and concessions to discoverers and seblers. 2. ReclamaDon - lling up of parts of the sea for conversion to land. 3. EmancipaDon patent or grant - e.g. P.D. No. 27 (CARP of 1972) - for the purpose of amelioraKng the sad plight of

farmers and of releasing them from the bondage of the soil.

4. Private grant or voluntary transfer 5. Adverse possession or prescripDon - Adverse possession actual possession of land in opposiKon to all other claimants.

- PrescripKon possession of land for required number of years and asserKon of ownership through an interrupted actual possession of property within the period of Kme prescribed by law.

6. AccreDon Requisites for accreKon: - deposiKon of soil or sediment (alluvion) be gradual and impercepKble;

- result of the acKon of waters of the river; - land where accreKon takes place is adjacent to bank of rivers or sea coast.

AccreKon does not automaKcally become registered. It needs new registraKon.

All legal rights such as riparian rights or easements, that go with the land, when Ktle to the lands is transferred are known as:

a. Seizings

b. Easements

c. Appurtenances

d. Encroachment

ExpropriaDon: REPUBLIC ACT NO. 8974

Sec. 4. Guidelines for ExpropriaKon Proceedings. - Whenever it is necessary to acquire real property for the right-of-way or locaKon for any naKonal government infrastructure project through expropriaKon, the appropriate implemenKng agency shall iniKate the expropriaKon proceedings before the proper court under the following guidelines:

(a) Upon the ling of the complaint, and aqer due noKce to the defendant, the implemenKng agency shall immediately pay the owner of the property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of the property based on the current relevant zonal valuaKon of the Bureau of Internal Revenue (BIR); and (2) the value of the improvements and/or structures as determined under SecKon 7 (implemenKng rules of DPWH) hereof;

(b) In provinces, ciKes, municipaliKes and other areas where there is no zonal valuaKon, the BIR is hereby mandated within the period of sixty (60) days from the date of the expropriaKon case, to come up with a zonal valuaKon for said area; and

(c) In case the compleKon of a government infrastructure project is of utmost urgency and importance, and there is no exisKng valuaKon of the area concerned, the implemenKng agency shall immediately pay the owner of the property its proered value taking into consideraKon the standards prescribed in SecKon 5 hereof. Upon compliance with the guidelines above-menKoned, the court shall immediately issue to the implemenKng agency an order to take possession of the property and start the implementaKon of the project.

Before the court can issue a writ of possession, the implemenKng agency shall present to the court a cerKcate of availability of funds from the proper ocial concerned.

In the event that the owner of the property contests the implemenKng agencys proered value, the court shall determine the just compensaKon to be paid the owner within sixty (60) days from the date of ling of the expropriaKon case. When the decision of the court becomes nal and executory, the implemenKng agency shall pay the owner the dierence between the amount already paid and the just compensaKon as determined by the court.

SAMPLE QUESTION

When appointed ocially by the trial courts to assist in the determinaKon of the just compensaKon in expropriaKon proceedings, the appraiser assumes the role of______________ the court.

a. Friend (amicus curiae)

b. Respondents/ plainKs witness

c. Commissioner

d. Technical analyst

IN A NUT SHELL

FILING OF COMPALINT AND DUE NOTICE

IMMEDIATELY PAY THE VALUE OF THE PROPERTY

AGENCY ISSUES A CERTIFICATION OF

AVAILABILITY OF FUNDS

COURT ORDER TO TAKE POSSESION AND IMPLEMENT

THE PPROJECT

IN CASE OWNER CONTESTS PROFERRED VALUE: COURT

DETERMINES JUST COMPENSATION WITHIN 60

DAYS FROM FILING OF EXPROPRIATION CASE

ASSESSMENT OF VALUE IN EXPROPRIATION (RA 8974)

Sec. 5. Standards for the Assessment of the Value of the Land Subject of ExpropriaKon Proceedings or NegoKated Sale. - In order to facilitate the determinaKon of just compensaKon, the court may consider, among other well-established factors, the following relevant standards:

(a) The classicaKon and use for which the property is suited;

(b) The developmental costs for improving the land; (c) The value declared by the owners;

(d) The current selling price of similar lands in the vicinity; (e) The reasonable disturbance compensaKon for the

removal and/or demoliKon of certain improvement on the land and for the value of improvements thereon;

(f) This size, shape or locaKon, tax declaraKon and zonal valuaKon of the land;

(g) The price of the land as manifested in the ocular ndings, oral as well as documentary evidence presented; and

(h) Such facts and events as to enable the aected property owners to have sucient funds to acquire similarly-situated lands of approximate areas as those required from them by the government, and thereby rehabilitate themselves as early as possible.

NEGOTIATED SALE

Sec. 6. Guidelines for NegoKated Sale. - Should the implemenKng agency and the owner of the property agree on a negoKated sale for the acquisiKon of right-of-way, site or locaKon for any naKonal government infrastructure project, the standards prescribed under SecKon 5 hereof shall be used to determine the fair market value of the property, subject to review and approval by the head of the agency or department concerned.

PerKnent DuKes of the Assessor:

Local Government Code: - Ensure that all laws and policies governing the appraisal and

assessment of real properKes for taxaKon purposes are properly executed;

- IniKate, review, and recommend changes in policies and objecKves, plans and programs, techniques, procedures and pracKces in the valuaKon and assessment of real properKes for taxaKon purposes;

- Establish a systemaKc method of real property assessment; - Exercise the funcKons of appraisal and assessment primarily for

taxaKon purposes of all real properKes in the local government unit concerned;

- Prepare a schedule of the fair market value for the dierent classes of real properKes, in accordance with Title Two under Book II of this Code;