ADMINISTRATIVE ORDER NO.

5
S-2016
REVISED RULES & REGULATIONS
GOVERNING LEASE RENTAL
PAYMENTS WHICH THE LANDOWNER-
LESSOR REFUSES TO ACCEPT OR FAILS
TO RECEIVE
 PREFATORY STATEMENT
• Section 5 of RA No. 3844
• Agricultural leasehold relation shall be established by operation of
law in accordance with Section 4 of this Code either orally or in
writing, expressly or impliedly
• Section 7 of the same Code, likewise provides, that the agricultural
leasehold relation once established shall confer upon the agricultural
lessee the right to continue working on the landholding until such
leasehold regulation is extinguished. The lessee shall be entitled to
security of tenure on his landholding and cannot be ejected therefrom
unless authorized by the Court for causes herein provided.
• Section 12 of RA No. 6657 (as amended)
• Mandates the DAR to determine and fix
immediately the lease rentals within retained areas
and areas not yet acquired for agrarian reform in
accordance with Section 34 of RA No. 3844.
• AO No. 2, S-2006
• Provides an effective mechanism to implement
leasehold & improve the method of determining and
fixing lease rentals, as well as deal with external factors
such as the prevailing practice & stance of LO’s to deny
the existence of tenancy relations whenever possible.
• AO No. 2, S-2006
• Section IV.17 of the same AO provides that “If the LO
refuses to accept the Provisional Lease Rental (PLR), the
lessee shall deposit the contested lease rental with the
nearest Land Bank of the Philippines Office”. The same
rule shall apply to landholdings covered by leasehold
contracts where the landowner refuses to accept or fails to
receive the lease rental payments.
 SECTION 1. COVERAGE
1.1 Non-litigated landholdings under leasehold
operations
• Involve situations wherein the agricultural-lessor
refuses to accept or fails to receive the lease rental
payments of the agricultural-lessees on lands covered
by agricultural leasehold contract or Provisional Lease
Rental (PLR), and there is no pending case or no case
is filed with the proper Adjudicator/Board.
1.2 Litigated landholdings under leasehold operations
• Involve situations wherein the agricultural-lessor
refuses to accept or fails to receive the lease rental
payments of the agricultural-lessees on lands covered
by agricultural leasehold contract or Provisional Lease
Rental (PLR), and there is a pending case or
resolution of the case before the
PARAD/RARAD/DARAB, such as, among others,
fixing of lease rental, ejectment of agricultural lessee,
and supervision of harvest.
SECTION 3. POLICY STATEMENTS

3.1 Under agricultural leasehold operations, it is the

obligation of the agricultural-lessee to pay the lease
rental to the agricultural-lessor when it falls due as
embodied in the agricultural leasehold contract/PLR
pursuant-to RA No. 3844 and DAR existing
guidelines.
 SECTION 3. POLICY STATEMENTS
3.2 However, if the agricultural-lessor refuses to accept or fails to
receive the lease rental payments from the tenant-lessee, the DAR,
through its effort, shall provide an effective mechanism to facilitate
the collection and deposit of lease rental payments, and
withdrawals therefrom in a Checkless IBCA in the name of the
agricultural-lessor by: (Name of agricultural-lessee) as specified in
the Order to open the account issued by the PARPO in cases of
non-litigated landholdings. For litigated landholdings, the account
shall be opened under the name of the litigant of the case or case
number as contained in the order of the proper Adjudicator/Board
or regular court.
SECTION 3. POLICY STATEMENTS
• 3.3 Exclusively for DAR Lease Rental, as approved by the LBP, the features
of the IBCA are:
• no required initial deposit and maintaining balance;
• to earn interest of 0.25% per annum (subject to 20% withholding tax)
if the average daily balance of the account is PhP20,000.00 and above;
• not subject to inter-branch charges:
• NON-DRAWING account. Withdrawal shall be subject to presentation
of Order from DAR-PARPO/Adjudicator/Board or regular court,
whichever is applicable; and
• Not subject to dormancy fee or automatic closure.
These features may change subject to LBP guidelines.
3.4 Upon order of the PARPO or proper Adjudicator/Board
or regular Court, the LBP, as the financial intermediary for
the Comprehensive Agrarian Reform Program(CARP),
shall be authorized to accept/receive lease rental payments
made by the agricultural-lessee for deposit to the checkless
lBCA, maintain the account in favor of the agricultural-
lessor, and to facilitate/allow withdrawals therefrom.
SECTION 4. DUTIES AND
RESPONSIBILITIES
4.1 Responsibilities of DARPO/DARMO
4.1.1Validate the information that the agricultural-
lessor refused to accept or failed to receive the lease rental
payments from the agricultural-lessee/s and, if warranted,
prepare and send notice to the agricultural-lessor on the
payment of lease rental.
SECTION 4. DUTIES AND
RESPONSIBILITIES
4.1 Responsibilities of DARPO/DARMO
4.1.2 Issue an Order (LTl-Lease Rent Form No.4) duly signed
by the PARPO for the opening of a checkless interest bearing current
account (IBCA) for lease rental payment with the nearest LBP
branch in the locality or LBP branch, convenient to the agricultural-
lessee in the name of the agricultural-lessor for non-litigated
landholdings as specified in the said order, indicating the authorized
signatories to the account and their limits of authority, if any.
• 4.1.3 Provide the LBP branch in the locality or
LBP branch convenient to the agricultural-lessee,
with the pertinent identification requirements and
specimen signatures of the PARPO for the
transaction of lease rental payments in accordance
with Section 3.2 hereof.
• 4.1.4 Issue an Order duly signed by the PARPO to
allow withdrawal of lease rental payments or close
the checkless IBCA with the LBP branch in favor
of the agricultural-lessor or return the said amount
to the agricultural-lessee as the circumstances so
provide.
• 4.1.5 Request the LBP branch to provide a copy of
quarterly balance run-up of all active lease rental
payment account (for both litigated and non-
litigated landholdings) for monitoring and
reference.
4.2 Responsibilities of the DARAB/RARAD/PARAD
4.2.1 Issue an Order (LTI-Lease Rent Form No.4)
duly signed by the proper Adjudicator/Board through the
DARAB Executive Director for the opening of a
checkless Interest Bearing Current Account (IBCA), for
lease rental payment with the nearest LBP branch in
the locality or LBP branch convenient to the agricultural-
lessee in the name of the litigant of the case/case number
for litigated landholdings.
4.2 Responsibilities of the DARAB/RARAD/PARAD
4.2.2 Issue an Order through the DARAB Executive
Director to allow withdrawal of lease rental payments or
close the IBCA with the LBP branch in favor of the
litigant of the case/case number or return the said amount
to the agricultural-lessee upon resolution of the same, as
the case may be.
• 4.2.3 Provide the LBP branch in the locality or LBP
branch convenient to the agricultural-lessee with
the pertinent identification requirements and
specimen signatures of the proper
Adjudicator/Board for the transaction of lease rental
payments in accordance with Section 32 hereof.
4.3 Responsibilities of LBP Branch
4.3.1 Upon receipt of the Order duly signed by the
PARPO/proper Adjudicator/Board, the LBP, as the financial
intermediary for the CARP, shall be authorized to
accept/receive lease rental payment made by the tenant-
lessee for deposit to the checkless lBCA and maintain the
account in favor of the landowner-lessor as well as
facilitate/allow withdrawals therefrom.
 4.3.2 Verify the signature of the PARPO based on thee
specimen signature card/s submitted by the DARPO
pursuant to Sec. 4.1.3 hereof and the signature of the proper
Adjudicator/Board through the DARAB Executive Director
based on the specimen signature cards submitted by the
Board/Regional or Provincial Adjudicator Office under
4.2.3 hereof.
 4.3.3 Open a checkless IBCA as provided for under
3.2 hereof.

4.3.4 Accept/Receive the lease rental payments and

provide a duplicate copy of the deposit slip to the
depositor/agricultural lessee.
 4.3.5 Provide copies of a quarterly balance run-
up of Checkless IBCA lease rental payment accounts
opened under the jurisdiction of the requesting PARPO
or proper Adjudicator/Board. Two (2) copies shall be
provided to DARAB Secretariat and BLTI, for
distribution to concerned regional offices.
 The quarterly report shall be submitted to the PARPO or proper
Adjudicator/Board every 10th of the month preceding the quarter. The
format shall be as follows:

Servicing Account Date of Last Outstanding

Account No. Date Opened Deposit
Branch Name Balance
SECTION 5. OPERATING PROCEDURES
5.1 For Non-Litigated Landholdings under Leasehold
Operations
5.1.1DARMO
• Upon receipt of the information that the agricultural-
lessor refused to accept or failed to receive the lease
rental payments from the agricultural-lessee/s, validate
the said information and, if warranted, prepare the Notice
to the Agricultural-Lessor on the Payment of Lease Rental
(LTI-Lease Rent Form No. 1) within seven (7) days upon
validation of the information.
• Coordinate with the agricultural-lessee concerned to
'assist' the DARMO/Designated Personnel in
sending the Notice to the Agricultural-Lessor on the
Payment of Lease Rental (LTI­Lease Rent Form No.
1)through the following modes:
• Personal Service. Under this mode of service, the
Notice shall be positively acknowledged or
received by the agricultural-lessor concerned or
his/her representative (LTl-Lease Rent Form
No.2).
• However, in case the agricultural-lessor receives the
Notice but refuses to sign, fill-out/accomplish LTI-
Lease Rent Form No. 2.A.
• In case the agricultural-lessor refuses to receive/accept
the notice, ill-out LTI-Lease Rent Form No. 2.B
• Registered mail with return card with markings,
“deliver to addressee only”.
• If no reply/action is taken by the agricultural-lessor
within fifteen (15)days upon receipt of the Notice on the
payment of lease rental (LTl-Lease Rent Form No.3),
prepare and forward a request with concomitant
recommendation to the DAR Provincial Office
(DARPO), duly signed by the MARPO/Designated
Personnel, on the opening of a checkless Interest Bearing
Current Account (IBCA) with the nearest LBP branch or
LBP branch convenient to the agricultural-lessee for
lease rental payment (LTI Lease Rent Form No. 4).
5.1.2 DARPO
• Receive, record and evaluate the duly signed
request and recommendation submitted by the
DARMO on the opening of a checkless lBCA for
lease rental-payment with the nearest LBP
branch or LBP branch convenient to the
agricultural-lessee (LTl-Lease Rent Form No. 4).
• Approve the above-cited request and issue an
Order duly signed by the PARPO to open a
checkless lBCA for lease-rental payment with
the nearest LBP branch or LBP branch
convenient to the agricultural-lessee(copy
furnished the agricultural-lessor) (LTI Lease
Rent Form No. 5). Otherwise, inform the
DARMO on the lacking data/information for
appropriate action.
• Issue Order to the LBP for the
withdrawal/release of the fund deposited in the
account name of agricultural-lessor and/or the
closing of the said account (copy furnished the
agricultural- lessor).
5.1.3 AGRICULTURAL-LESSEE
• Upon receipt of the duly signed Order of the PARPO
to open a checkless IBCA for lease rental payment,
open a checkless account in the name of the
agricultural-lessor with the nearest LBP branch in the
locality or LBP branch convenient to him/her and
submit the said Order together with a government
issued identification (ID), with the assistance of the
MARPO, if necessary.
5.1.4 LBP BRANCH
• Based on the Order of the PARPO or proper
Adjudicator, open a checkless lBCA in the
name of the concerned
agricultural-lessor/litigant of the case or case
number. Perform the responsibilities
enumerated under sub-sections of Section 4.3
of this AO.
5.2 For Litigated Landholdings under Leasehold
Operations
• 5.2.1 In cases where the agricultural-lessor refuses to
accept the lease rental payments from the agricultural-
lessee due to the pendency or non-finality of the case
pertaining to leasehold operations filed before
Adjudicator, the proper Adjudicator/Board, shall,
pursuant to pertinent provisions of the DARAB rules:
• Issue to the agricultural-lessee/s an Order to open a
checkless interest bearing current account (IBCA) for lease
rental payment with the nearest LBP branch in the locality
or LBP branch convenient to agricultural-lessee (copy
furnished the agricultural- lessor).
• Should the case be finally resolved or by Order of the
proper Adjudicator, issue Order to the LBP for the release
of funds deposited in the account name of the agricultural-
lessor (copy furnished the agricultural-lessor).
5.2.2 The agricultural-lessee shall:
• Open a checkless IBCA in the name of
agricultural-lessor/litigant of the case or case
number with the nearest LBP branch in the
locality or LBP branch convenient to him/her
and submit the Order of the Adjudicator
together with a government 'issued identification
(ID).
SECTION 6. TRANSITORY PROVISION
Board Members, Regional Agrarian Reform Adjudicators
(RARADs) and Provincial Agrarian Reform Adjudicators
(PARADs) shall conduct an inventory of all pending cases before
their respective office with issued interlocutory (given
provisionally during the course of a legal action) order requiring
deposit in custodia legis (the taking, seizing or holding of
something by lawful authority) of agricultural lease-rentals, and
other money deposits, within a period of sixty (60) days from the
effectivity of this Administrative Order.
SECTION 7. REPEALING
CLAUSE
All orders, circulars, rules and regulations inconsistent
herewith are hereby revoked, amended, or modified
accordingly.

SECTION 8. EFFECTIVITY
This Administrative Order shall take effect ten (10) days
after its publication in two (2) newspapers of general
circulation pursuant to Section 49 of RA No. 6657, as
amended.
THANK YOU!!!