Dear PAO,
My aunt was informed that her land in our province would be affected by a national infrastructure project. A certain price was offered for the property. However, my aunt thinks the price is too low because it has been their ancestral home for generations. Hence, she intends to negotiate a higher price because she cannot easily let go of the property due to sentimental reasons. Are there any standards for assessing the appropriate value of the property subject to expropriation by the national government?
Dan
Dear Dan,
Please be informed of Republic Act (RA) 10752, otherwise known as “The Right-of-Way Act.” Sections 4 and 5 of the said law provide:
“SECTION 4. Modes of Acquiring Real Property. – The government may acquire real property needed as a right-of-way site or location for any national government infrastructure project through donation, negotiated sale, expropriation, or any other mode of acquisition as provided by law xxx
“SECTION 5. Rules on Negotiated Sale. – The implementing agency may offer to acquire, through a negotiated sale, the right-of-way site or location for a national government infrastructure project, under the following rules.
“(a) The implementing agency shall offer to the property owner concerned, as compensation price, the sum of:
“(1) The current market value of the land,
“(2) The replacement cost of structures and improvements therein; and
“(3) The current market value of crops and trees therein.
“To determine the appropriate price offer, the implementing agency may engage the services of a government financial institution with adequate experience in property appraisal or an independent property appraiser accredited by the Bangko Sentral ng Pilipinas (BSP) or a professional association of appraisers recognized by the BSP to be procured by the implementing under the provisions of Republic Act No. 9184, otherwise known as the ‘Government Procurement Reform Act’ and its implementing rules and regulations pertaining to consulting services xxx”
The above-mentioned provisions of law show that the government has different modes of acquiring properties, one of which is through negotiated sale between the property owner and the implementing agency that intends to acquire the property.
Based on the facts you have narrated, it seems that you and the concerned agency are not seeing eye to eye on the purchase price. Thus, Section 7 of the same law is applicable in cases where there is a dispute regarding the value of the subject property, to wit:
“SECTION 7. Standards for the Assessment of the Value of the Property Subject to Negotiated Sale. – In order to facilitate the determination of the market value of the property, the following relevant standards shall be observed:
“(a) The classification and use for which the property is suited;
“(b) The development cost 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 compensation for the removal and demolition of certain improvements on the land and for the value of improvements thereon;
“(f) The size, shape or location, tax declaration and zonal valuation of the land;
“(g) The price of the land as manifested in the ocular findings, oral as well as documentary evidence presented; and
“(h) Such facts and events as to enable the affected property owners to have sufficient 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 xxx
“The implementing rules and regulations (IRR) to be prepared under Section 13 hereof shall include, among other things, the terms of reference, which shall be used by the government financial institutions and independent property appraisers in the determination of the market value of the land. The terms of reference shall define in detail the standards stated herein.”
In your case, you may look into the current market value of your property, as well as the replacement cost of the structures and improvements therein, if any, to determine if the price offered to you is indeed low. If, after making an objective assessment of the price offered, you find the offered price adequate, you may still negotiate for a higher price on account of sentimental value, which can be considered a standard for the assessment of the value of the property subject to a negotiated sale with the government under section 7 (c) of RA 10752. However, please note that in invoking sentimental value to negotiate for a higher price, your case must still rest on meritorious grounds.
We hope that we are able to answer your queries. This advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Thank you for your continued trust and support.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected]
