Section 5. Rules on Negotiated Sale. – The implementing agency may offer to acquire, through negotiate sale, the right-of-way site or location for a national government infrastructure project, under the following rules.

1. 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.

   If the property owner does not accept the price offer, the implementing agency shall initiate expropriation proceedings pursuant to Section 6 hereof.

   The property owner is given thirty (30) days to decide whether or not to accept the offer as payment for his property. Upon refusal or failure of the property owner to accept such offer or fails anchor refuses to submit the documents necessary for payments, the implementing agency shall immediately initiate expropriation proceedings as provided in Section 6 herein.

2. Subparagraph (a)(2) of Section 5 hereof shall also apply to all owners of structures and improvements who do not have legally recognized rights to the land, and who meet all of the following criteria:

   1. Must be a Filipino citizen;

   2. Must not own any real property or any other housing facility, whether in an urban or rural area; and

   3. Must not be a professional squatter or a member of a squatting syndicate, as defined in Republic Act No. 7279, otherwise known as the “Urban Development and Housing Act of 1992”.

3. With regard to the taxes and fees relative to the transfer of title of the property to the Republic of the Philippines through negotiated sale, the implementing agency shall pay, for the account of the seller, the capital gains tax, as well as the documentary stamp tax, transfer tax and registration fees, while the owner shall pay any unpaid real property tax.

4. If requested by the property owner, the implementing agency shall remit to the LGU concerned the amount corresponding to any unpaid real property tax, subject to the deduction of this amount from the total negotiated price. Provided, however, That the said amount is not more than the negotiated price.

5. The property owner and the implementing agency shall execute a deed of absolute sale: Provided, That the property owner has submitted to the implementing agency the Transfer Certificate of Title, Tax Declaration, Real Property Tax Certificate, and other documents necessary to transfer the title to the Republic of the Philippines. The implementing agency shall cause the annotation of the deed of absolute sale on the Transfer Certificate of Title.

6. Upon the execution of a deed of sale, the implementing agency shall pay the property owner:

   1. Fifty percent (50%) of the negotiated price of the affected land, exclusive of taxes remitted to the LGU concerned under subparagraph (d) herein; and

   2. Seventy percent (70%) of the negotiated price of the affected structures, improvements, crops and trees, exclusive of unpaid taxes remitted to the LGU concerned under subparagraph (d) herein.

7. The implementing agency shall, at the times stated hereunder, pay the property owner the remaining fifty percent (50%) of the negotiated price of the affected land, and thirty percent (30%) of the affected structures, improvements, crops and trees, exclusive of unpaid taxes remitted to the LGU concerned under subparagraph (d) herein: Provided, That the land is already completely cleared of structures, improvements, crops and trees.

   1. 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

   2. At the time of the annotation of a deed of sale on the title, in cases where the land is partially affected.

The provisions of subparagraph (a) herein shall also apply to outstanding claims for right-of-way payments, except that the amount to be offered shall be the price at the time of taking of the property, including legal interest until fully paid.