Right of way

What happens when your property is literally in the way of the government’s plan to build roads, bridges or an airport?

I was fortunate to be the lawyer for contractors in the Secondary National Roads Project (SNRDP) in Samar province in 2012 involving the rehabilitation of 222 km. of roads connecting Eastern and Western Samar.

One Contract Package involved 64.58 km. of roads from San Julian in Sulat up to Balangkayan of the Llorente municipality of Eastern Samar worth P2.46 billion (US$ 566 million). The contract included the replacement of six bridges and reconstruction of 17 bridges as well. Another Contract Package was given to a client involving 63.68 km. road rehabilitation, rehabilitation of 20 bridges and reconstruction of five bridges worth P2.5 billion (US$ 575 million).

These kind of infrastructure projects improve the quality of life of people by providing access to employment, education, healthcare, and agriculture through improved transportation modes. The road to progress, however, involves government acquisition of property, from both the public and private sector, subject to the limits under the Constitution and existing laws.

The present administration seeks to accelerate infrastructure projects, develop related industries and create more job opportunities under the “Build, Build, Build” (BBB) Program. This means that the government may acquire private properties. Thus, Republic Act No. 10752 or the “Right-of-Way Act” (ROW Act) comes into play.

In my previous article about indigenous peoples, I mentioned the concept of the “Regalian Doctrine” or jura regalia. Again, the 1987 Constitution contains the concept of the Regalian Doctrine in Section 2 Article XII on “National Economy and Patrimony:”

“Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber wildlife, flora and fauna, and other natural resources are owned by the State…”

The State may take private property because it has the power of eminent domain. The Supreme Court defines eminent domain as “the ultimate right of the sovereign power to appropriate, not only the public but the private property of all citizens within the territorial sovereignty, to promote public welfare. It is an indispensable attribute of sovereignty; a power grounded in the primary duty of government to serve the common need and advance the general welfare. This power is not unlimited. The exercise of the power should be for 1) a particular public purpose; and 2) just compensation be paid to the property owner. The Court has ruled that these requirements partake the nature of implied conditions that should be complied with to enable the condemnor to keep the property expropriated. Expropriation is the procedure by which the government takes possession of private property.

Article III, Section 9 of the Constitution states that private property shall not be taken for public use without just compensation. The ROW Act aims to make the process efficient and fair to all affected.

The ROW Act provides other modes of acquiring real properties aside from expropriation. The law provides that the government may acquire real properties for infrastructure projects through donation, negotiated sale, expropriation or any other mode of acquisition as provided by law.

Article 725 of the Civil Code defines a donation as an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another. In this mode, the owner of the property willingly gives to the government his property or a portion thereof without any consideration.

If the property owner declines the offer, the implementing agency (IA) shall initiate expropriation proceedings as provided in Section 6 of the law. The property owner is given 30 days to decide whether or not to accept the offer as payment for his property. Refusal or failure to accept the offer shall cause the IA to initiate expropriation proceedings.

Taxes and fees relative to the transfer of title of the property to the government through negotiated sale shall be paid by the IA, for the account of the seller, which includes the capital gains tax, documentary stamp tax, transfer tax and registration fees. The owner shall pay any unpaid real property tax.

Upon execution of the deed of sale, the IA shall pay the property owner 50 percent of the negotiated price of the affected land, exclusive of taxes remitted to the local government concerned and seventy percent of the negotiated price of the affected structures, improvements, crops and trees, exclusive of unpaid taxes remitted to the LGU concerned.

The remaining fifty percent and thirty percent shall be paid at the time of the transfer of title in the name of the Republic of the Philippines, in cases where the land is wholly affected; or at the time of the annotation of a deed of sale on the title, in cases where the land is partially affected.

In case of expropriation, the IA shall be represented by the Office of the Solicitor General, the Office of the Government Corporate Counsel or their deputized government or private legal counsel in court.

Expropriation is in Rule 67 of the Rules of Court and now the ROW Act. The first phase of expropriation involves the determination of the propriety of the action, whether or not the taking is for a public purpose. The second phase involves the determination of the compensation to be paid to the property owner or determination of just compensation.

Eminent domain is the power, while expropriation is the procedure. The power of eminent domain is subject to judicial review. The courts may scrutinize the adequacy of the compensation, the necessity of the taking and the “public use” character of the purpose of taking.

Government has the duty to improve the lives of the people by all means available to it. Property owners however need not worry, the ROW Act ensures that you get compensated adequately for the sacrifice you will make for the greater good.

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Raymund may be reached by email at [email protected] or visit www.mblawofficesph.com.