G.R. No. 183409; June 18, 2010
CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA), petitioner, vs. THE SECRETARY OF AGRARIAN REFORM, Respondent.

FACTS

The petitioner, Chamber of Real Estate and Builders Associations, Inc. (CREBA), filed a Petition for Certiorari and Prohibition seeking to nullify Department of Agrarian Reform (DAR) Administrative Order (AO) No. 01-02, as amended, and DAR Memorandum No. 88. CREBA argued these issuances were issued with grave abuse of discretion. The contested AO No. 01-02 applied DAR’s conversion rules to agricultural lands reclassified by Local Government Units (LGUs) to residential, commercial, or industrial uses after June 15, 1988. Memorandum No. 88 imposed a temporary suspension on processing all land use conversion applications. CREBA asserted that these regulations caused a slowdown in housing projects, exacerbating housing shortages and unemployment.
CREBA’s core contention was that once an LGU validly reclassifies land through a zoning ordinance, it ceases to be “agricultural” under the Comprehensive Agrarian Reform Law (CARL). Therefore, the DAR Secretary allegedly exceeded his jurisdiction by asserting authority over these reclassified lands. CREBA argued this encroached on the constitutionally guaranteed local autonomy of LGUs and violated due process and equal protection.

ISSUE

The principal issue was whether the DAR Secretary acted with grave abuse of discretion, amounting to lack or excess of jurisdiction, in issuing AO No. 01-02 (as amended) and Memorandum No. 88, particularly by asserting jurisdiction over lands already reclassified by LGUs to non-agricultural uses after June 15, 1988.

RULING

The Supreme Court dismissed the petition, upholding the authority of the DAR Secretary. The Court clarified that the power of LGUs to reclassify lands under the Local Government Code is not absolute. Reclassification does not automatically exempt land from CARP coverage. The DAR retains the authority to approve or disapprove the conversion of agricultural lands, which is a separate administrative process from reclassification. Conversion refers to changing the current use of the land, which requires DAR clearance to ensure the change is consistent with agrarian reform objectives and national land use policy.
The legal logic is grounded in the hierarchy of laws and the state’s police power. The CARL, a special law enacted to implement a constitutional mandate, governs the disposition and utilization of agricultural lands. The DAR’s regulatory power over conversion is a necessary adjunct to prevent the circumvention of agrarian reform. The Court ruled that LGU reclassification alone does not ipso facto convert the land; it merely authorizes its new use. The actual change in land use still requires DAR approval. This dual requirement harmonizes the LGU’s zoning authority with the national agrarian reform program. Memorandum No. 88 was also upheld as a valid exercise of police power, a temporary measure to address the exigent problem of unabated conversion of prime agricultural lands.