When it comes to land awarded under the Comprehensive Agrarian Reform Program (CARP), the rules are far from simple. If you’re a Certificate of Land Ownership Award (CLOA) holder—or someone eyeing a purchase—you need to know that you cannot just sell, mortgage, or transfer this land the way you would a regular property. CLOA lands carry strict legal restrictions designed to uphold the goals of agrarian reform, and failure to comply can lead to penalties, cancellation of the award, or worse, criminal liability.

This guide breaks down everything you need to know—from the 10-year ban on sales, inheritance rules, and DAR’s approval requirements, to the real risks of unauthorized transfers.

What Exactly Is CLOA Land?

A Certificate of Land Ownership Award (CLOA) is the document issued under CARP that transfers agricultural land ownership to qualified agrarian reform beneficiaries (ARBs). Unlike ordinary land titles, a CLOA comes with built-in restrictions. These conditions prevent beneficiaries from immediately selling or transferring the land, ensuring it remains with small farmers rather than slipping back into the hands of wealthy landowners or speculators.

Owning a CLOA means you are not just holding land—you are holding a responsibility to use it for agricultural purposes and to keep it within the framework of agrarian reform.

The 10-Year Transfer Prohibition

Perhaps the most critical restriction under Republic Act No. 6657 is the 10-year ban on selling or transferring CLOA land. For a full decade from the date of award, you are prohibited from selling, mortgaging, or donating the land unless you secure prior clearance from the Department of Agrarian Reform (DAR).

This rule exists for two main reasons:

1. To prevent land speculation – ensuring farmers don’t immediately sell the land for profit.
2. To protect beneficiaries – giving them time to develop and benefit directly from the land awarded to them.

If you sell the land within this restricted period without DAR approval, the sale is void and carries heavy consequences for both seller and buyer.

Can You Sell CLOA Land After 10 Years?

Yes—but not automatically. Once the 10-year prohibition lapses, CLOA holders may sell or transfer their land, but only after going through DAR’s process of conversion. This means applying for the issuance of a regular land title, which removes the agrarian restrictions.

Even then, DAR continues to regulate transactions to ensure:

• The buyer is a qualified agrarian reform beneficiary or farmer.
• The price and process comply with agrarian laws.
• Required documents are filed and approved with the Register of Deeds.

Skipping this step risks nullifying the sale entirely.

Inheritance Rules: What Happens When a CLOA Holder Dies?

Inheritance is an exception to the 10-year ban, but the rules remain strict. When a CLOA holder dies, the land may pass on to the legal heirs (such as spouse, children, or parents). However:

• The land cannot be sold by the heirs within the remaining restricted period.
• Heirs step into the shoes of the original holder and are bound by the same agrarian obligations.
• The land must remain devoted to agricultural use and stay within the agrarian reform framework.

This means heirs cannot immediately dispose of the land—even through inheritance, agrarian reform rules remain in full force.

The Legal Steps to Sell CLOA Land

If you are qualified to sell your CLOA land (either after 10 years or through permitted exceptions), you must strictly follow DAR’s procedures. These include:

1. Securing a Conversion Order – to convert your CLOA into a standard land title.
2. Obtaining a Certificate of Agrarian Status (CAS) – DAR issues this to certify compliance with agrarian laws.
3. Submitting Papers to the Register of Deeds – for proper title registration.
4. Disclosing Encumbrances – ensuring the buyer is fully informed of the land’s history and restrictions.

Skipping any of these steps risks making the transaction void.

The Consequences of Unauthorized Sales

Selling CLOA land without DAR approval—or before the 10-year restriction lapses—comes with serious penalties:

• Nullification of the sale – the buyer acquires no rights, and the transaction is void.
• Cancellation of CLOA – the DAR may revoke the award and reallocate the land.
• Fines and criminal liability – violators may face financial penalties and imprisonment.

In short: unauthorized transfers are not just risky, they’re illegal.

What Buyers Should Know Before Acquiring CLOA Land

If you’re planning to buy CLOA-awarded property, you must proceed with caution. Always:

• Verify the land’s status with DAR.
• Check if the 10-year prohibition has expired.
• Ensure the seller has complied with DAR procedures.
• Confirm the buyer qualifications (you may need to be a qualified agrarian reform beneficiary).

Skipping due diligence can cost you your investment since void transactions leave you with no enforceable rights over the land.

The Legal Backbone: CARP and Its Amendments

The Comprehensive Agrarian Reform Program (CARP) governs CLOA distribution and transfers. Two key laws shape its framework:

• Republic Act No. 6657 (1988) – the original CARP law, establishing CLOAs and the 10-year prohibition on transfers.
• Republic Act No. 9700 (2009) – extended CARP implementation and reinforced the restrictions, ensuring land stays with farmers until at least 2014.

Both laws cement the idea that CLOA lands are not just assets—they are part of a social justice program to uplift rural communities.

Key Takeaways

• CLOA land is not like ordinary property—it carries agrarian restrictions under CARP.
• For 10 years, you cannot sell, mortgage, or transfer your CLOA land without DAR approval.
• After the 10-year period, you may sell the land, but only after conversion to a regular title and with DAR oversight.
• Heirs who inherit CLOA land remain bound by agrarian rules.
• Unauthorized transfers are void and punishable with penalties, including cancellation of the CLOA.
• Buyers must do thorough due diligence to avoid void transactions.

Final Thoughts

Selling CLOA land is possible, but only when you respect the rules of CARP and the oversight of the Department of Agrarian Reform. The restrictions are not meant to burden farmers but to ensure that agrarian reform succeeds in its mission: keeping agricultural land in the hands of those who cultivate it.

If you’re a CLOA holder, follow the steps carefully before selling, you can refer to the official DAR Administrative Order No. 1, series of 2011 for detailed rules on land transactions.. If you’re a buyer, do your homework before committing to a deal. In both cases, compliance is the only way to protect your rights, your investment, and the integrity of agrarian reform.