MBR Real Estate Manual 2013

5.2 Subdivision Development

By Engr. Wilfredo L. Segovia
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What is a subdivision?
In general, a subdivision is a large tract of land that is subdivided into smaller parcels for a specific use.
Subdivisions can either be –
 A simple subdivision – one in which a parcel of land is divided into smaller parcels but there
are no provisions for streets or open spaces. Example, a lot of 600 sqm is subdivided into 3
smaller lots to be distributed among siblings.
 A complex subdivision – one in which the entire tract is carefully planned and divided into
smaller lots served by streets and open spaces. Usually, a complex subdivision is undertaken
by a subdivision developer and this becomes a “subdivision project.”

Common types of subdivision projects:

1. Residential subdivision – the most common form, found in almost all major cities and
municipalities. The project could be “Lots Only” or “House and Lot” or a combination.

2. Industrial subdivision – devoted primarily for factories and manufacturing plants; many are found
in Cavite. Includes those that were created into special economic zones (EPZA) for export
industries.

3. Agricultural subdivision – larger lots (minimum 750 sqm) in which the buildable area is restricted
to 25% so that remaining space can be used for small-scale farming.

4. Planned unit development – large tracts of land that is master-planned to become a mixed-use
neighborhood with spaces allocated for commercial, residential, office and other uses; as well as
amenities and open spaces.

Several other special projects which also planning and complex subdivision of land but these doe not
usually result in separate titles.

1. Golf courses – an 18-hole golf course requires at least 50 hectares. Land is planned as a series of
landscaped areas called fairways that lead to a target area called the green. On the green is a hole.
Golf course ownership is sold in the form of membership shares. The Philippines is well-known as
a country of many golf course, although the golf share market is no longer upbeat.

2. Memorial parks – are tracts of land which are carefully planned to offer burial plots for sale.
Besides burial plots, spaces for mausoleums (small privately owned structures containing crypts)
are also sold. Memorial plots are not title under the Torrens system but buyer/owners hold
certificates.

Process of Planning a Subdivision

1. Identification of the property and its potential.
It is rare to find undeveloped large tracts of land near an urbanized city or municipality. Thus
developers look for them at the outskirts. As new subdivisions are built at the said fringes of a city

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MBR Real Estate Manual 2013. (5.1) Subdivisions.
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or municipality, they become “urbanizable areas” thus contributing to urbanization and expanding
the boundaries of an urban community. This is how cities grow.

In the Philippines, the main source of land for subdivision projects are agricultural lands. However,
much of the large tracts of agricultural lands have been “subdivided” due to agrarian reform.
Likewise, lands awarded to tenants are restricted and can not be sold to developers for 10 years.
Thus, one reason for the large housing backlog is the difficulty of finding land.

One of the unique real estate practices in our country is known as “land consolidation.” Developers
engage agents to scour the fringes of urban centers, to find the landowners of adjoining properties,
and to transact their purchase or suitable JV agreements. In many cases, most of these small lot
owners are beneficiaries and heirs of patents and agrarian reform awards who no longer care to till
the land. They are eager to sell. Also in many cases, such pieces of property have been delinquent
in paying realty taxes because they have been unproductive for years. These type of properties are
suitable for development.

2. Feasibility Study.
A feasibility study is a comprehensive set of studies to determine if the subdivision project is
feasible. It can include studies in the following areas –

 Market analysis – demand and supply, pricing, promotion

 Technical feasibility -- engineering and construction concerns
 Financial Feasibility – sources of funds, projected costs, return
 Legal feasibility – issues concerning land sue conversion, zoning, permitting

3. Conversion.
Since most land is agricultural, the developer must apply for conversion of its use to residential.
This effort entails a lot of bureaucracy, red tape and corruption. It requires dealing with numerous
government agencies both at the national level and the local government level.

4. Surveys.
The entire tract which may be composed of numerous small parcels will be consolidated and re-
planned into a subdivision. This will require relocation and boundary definition surveys. Likewise,
the terrain and its natural features must be identified. This will require topographic surveys.

5. Planning and Engineering and Permitting.

Even while the bureaucratic processes for land use conversion is being undertaken, the planners and
engineers simultaneously prepare site development surveys and construction documents. Permits
and clearances must be obtained from the DAR, DENR, LGU, HLURB and other agencies before
construction can begin.

6. Construction.
Construction involves –
 Perimeter fencing and entrance gates
 Site grading
 Storm drainage
 Paved streets and sidewalks
 Sewer system

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 Water system
 Electrical and telecom system, and
 Community facilities – clubhouse, schools, parks and playground, etc..

7. Marketing and sales.

Marketing is undertaken even before the start of construction. Many developers do pre-selling but
some build first before selling.

Government Agencies involved for permits and clearances

1) Department of Agrarian Reform (DAR) – conversion permits
2) Local Government Unit (LGU) – zoning clearance, development and building permits,
3) HLURB – technical approvals, registration and license to sell
4) DENR – environmental compliance and clearances
5) Department of Agriculture – certification that land is no longer best used for agriculture
6) Land Management Bureau - review of surveys and approval of subdivision plan
7) Land Registration Authority/Register of Deeds – issuance of lot tiles
8) Laguna Lake Development Authority (LLDA) – clearance for discharges

Governing Laws and Regulations

1) PD 957 and IRR – registration, license to sell, technical guidelines
2) PD 1216 – open spaces, areas for parks and playgrounds
3) BP 220 and IRR – lowered design standards for economic and socialized projects
4) HLURB regulations – registration, license to sell
5) PD 1096 – National Building Code of the Philippines and 2004 IRR

Some technical terms associated with subdivisions.

 “Gridiron” or “Square” planning – lots and streets arrayed into rectangular forms;
 “Contour” planning – lots and streets could be trapezoidal, curvilinear to adapt to terrain;
 “Cul-de-sac” – dead-end street which ends in a circular space for turn-around

Types of Lots –
 Interior lot – usually a lot with a single frontage, all other sides bounded by neighboring lots.
 Corner lot – a lot with two sides fronting a street.
 Through lot – a lot where the front and rear are fronting the streets
 Corner-Through lot – a lot with 3 sides fronting a street
 Flag lot – an inner lot accessed only through a narrow driveway. No street frontage.
 Key lot – any kind of lot prescribed to be of higher value because of its location.
 T-lot – “Tumbok” (pinoy definition)
 Chaplan – the curvilinear boundary at the corner of a lot. Purpose: better visual at intersection.

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MBR Real Estate Manual 2013. (5.1) Subdivisions.
Prepared by SG Academy for MBR. Rights reserved.