Real Estate Service Act Philippines

Real Estate Professional Development Program
(RESProDep)

Understanding RESA
(Real Estate Service Act)
Republic Act 9646

Presented by:
Augusto Babula Agosto
Real Estate Broker
RESProDep Alumnae (Batch 7)
April 27, 2012

Flow of Presentation

1. Real Estate Service Act
2. PRBRES – Professional
Regulatory Board Real Estate
Service
3. Professional Practice
4. Penal Provisions

Milestone in the History of RESP
REAL Estate Brokerage as an organized calling or profession was
pioneered in the Philippines in the early 1920’s by Mr. Collin M.
Hoskins, an American serviceman who later turned into business,
and his founding of the first realty service organization on
November 7, 1938 which is the Manila Board of Realtors.
ACT No. 2728 BROKERAGE LAW (1960)
Ministry Order No. 39, series of 1985 was promulgated. It was
this Administrative Order implemented by the Ministry of Trade
and Industry (now the Department of Trade and Industry - DTI)
which expanded Real Estate Brokerage Practice under ACT No.
2728 to include the practice of real estate appraisal and real
estate consultancy.
In 1988 a bill professionalizing real estate practice was initiated
by then Congressman Rodolfo G. Valencia. It took twenty (20)
years before the law was passed

Real Estate Service Act of the
Philippines
R.A. No. 9646
- Signed 29 Jun ‘09
- Published 15 Jul ’09 (Philippine
Daily Inquirer)

PRC/PRBRES Res. # 2- Implementing Rules
and Regulations of RESA
Approved: 21 July 2010

Declaration of Policy
1. The State recognizes the vital role of real estate service
practitioners in the social political, economic development
and progress of the country by promoting the real estate
market, stimulating economic activity and enhancing
government income from real property-based transactions.
2. State shall develop and nurture through proper and
effective regulation and supervision a corps of technically
competent, responsible and respected professional real
estate service practitioners whose standards of practice
and service shall be globally competitive and will promote
the growth of the real estate industry.

Real Estate Service Practitioners
1. Real estate consultant - a duly registered and licensed -natural person who, for a
professional fee, compensation or other valuable consideration, offers or renders
professional advice and judgment on: (i) the acquisition, enhancement, preservation,
utilization or disposition of lands or improvements thereon; and (ii) the conception,
planning, management and development of real estate projects.
2. Real estate appraiser— a duly registered and licensed natural person who, for a
professional fee, compensation or other valuable consideration, performs or renders, or
offers to perform services in estimating and arriving at an opinion of or acts as an expert on
real estate values, such services of which shall be finally rendered by the preparation of the
report in acceptable written form.
3. Real estate assessor — a duly registered and licensed natural person who works in a local
government unit and performs appraisal and assessment of real properties, including
plants, equipment, and machineries, essentially for taxation purposes.
4. Real estate broker - a duly registered and licensed natural person who, for a professional
fee, commission or other valuable consideration, acts as an agent of a party in a real estate
transaction to offer, advertise, solicit, list, promote, mediate, negotiate or effect the
meeting of the minds on the sale, purchase, exchange, mortgage, lease or joint venture, or
other similar transactions on real estate or any interest therein.
5. Real estate salesperson - a duly accredited natural person who performs service for, and in
behalf of. a real estate broker who is registered and licensed by the Professional Regulatory
Board of Real Estate Service for or in expectation of a share in the commission, professional
fee, compensation or other valuable consideration.

PROFESSIONAL REGULATORY
BOARD OF REAL ESTATE SERVICE
Creation and Composition of the Board
under the supervision and administrative control of
the Professional Regulation Commission (PRC)

composed of a chairperson and four (4) members

shall be appointed by the President of the Philippines
from the three (3) recommendees chosen by the
Commission , two (2) of the members of the Board
shall represent the government assessors and
appraisers.
Removal of the Chairperson and Members of the Board

by the President of the Philippines, upon the recommendation of the Commission, for
neglect of duty; abuse of power; oppression; incompetence; unprofessional, unethical,
immoral or dishonorable conduct; commission or toleration of irregularities in the
conduct of examination or tampering of the grades therein, or for any final judgment or
conviction of any criminal offense involving moral turpitude.

Key Powers and Functions
(a) Provide
of the Board
comprehensive policy guidelines for the promotion and development of the real estate industry;
(b) Conduct licensure examinations for the practice of the real estate service profession and prescribe the
appropriate, syllabi of the subjects for examination;
(c) Issue, suspend, revoke or reinstate, after due notice and hearing, certificates of registration or professional
identification cards for the practice of real estate service;
(d) Monitor the conditions affecting the practice of real estate service and adopt such measures as may be proper
for the enhancement of the profession and/or the maintenance of high professional, ethical and technical standards;
(e) Adopt a national Code of Ethics and Responsibilities to be strictly observed by all licensed real estate service
practitioners;
(f) Hear or investigate any violation of this Act, its implementing rules and regulations, and the Code of Ethics and
Responsibilities for real estate service practitioners and issue subpoena and subpoena duces tecum to secure the
appearance of witnesses and the production of documents in connection therewith;
(g) Safeguard and protect legitimate and licensed real estate service practitioners and, in coordination with the
accredited and integrated professional organization of real estate service practitioners, monitor all forms of
advertisements, announcements, signboards, billboards, pamphlets, brochures and others of similar nature
concerning real estate and, where necessary, exercise its quasi-judicial and administrative powers to finally and
completely eradicate the pernicious practices of unauthorized or unlicensed individuals;
(h) Prescribe, in cooperation with the Commission on Higher Education (CHED) or the concerned state university or
college, the essential requirements as to the curricula and facilities of schools, colleges or universities seeking
permission to open academic courses or already offering such courses in real estate service, and to see to it that
these requirements, including the employment of qualified faculty members, are properly complied with;
.

LICENSURE EXAMINATION AND
REGISTRATION ARTICLE III

Qualification of Applicants
for Examinations (Sec.14)
a) A citizen of the Philippines;
(b) A holder of a relevant bachelor's degree from a state university or
college, or other educational institution duly recognized by the CHED:
Provided, That as soon as a course leading to a Bachelor's degree in
Real Estate Service is implemented by the CHED, the Board shall make
this course a requirement for taking the "licensure examination; and
(c) Of good moral character, and must not have been convicted of any
crime involving moral turpitude: Provided, That an applicant for the
licensure examination for real estate consultants must show proof that
he/she has at least ten (10) years experience as a licensed real estate
broker or an assessor, or as a bank or institutional appraiser or an
employed person performing real property valuation, or at least five
(5) years experience as a licensed real estate appraiser.

Certificate of Registration and
Professional Identification Card

Revocation or Suspension of the
Certificate of Registration and the
Professional Identification Card
a) Procurement of a certificate of registration and/or professional
identification card, or special/temporary permit by fraud or deceit;
(b) Allowing an unqualified person to advertise or to practice the
profession by using one's certificate of registration or professional
identification card, or special/temporary permit;
(c) Unprofessional or unethical conduct;
(d) Malpractice or violation of any of the provisions of this Act, its
implementing rules and regulations, and the Code of Ethics and
Responsibilities for real estate service practitioners; and
(e) Engaging in the practice of the profession during the period of
one's suspension.

Registration Without Examination
(a) Those who, on the date of the effectivity of this Act, are already licensed as
real estate brokers, real estate appraisers or real estate consultants by the
Department of Trade and Industry (DTI) by virtue of Ministry Order No. 39, as
amended: Provided, That they are in active practice as real estate brokers, real
estate appraisers and real estate consultants, and have undertaken relevant CPE
to the satisfaction of the Board;
(b) Assessors and appraisers who, on the date of the effectivity of this Act, hold
permanent appointments and are performing actual appraisal and assessment
functions for the last five (5) years, have passed the Real Property Assessing
Officer (RPAO) examination conducted and administered by the Civil Service
Commission (CSC) in coordination with the Department of Finance (DOF), and
have undertaken relevant CPE to the satisfaction of the Board; and
(c) Assessors and appraisers who, on the date of the effectivity of this Act, hold
permanent appointments and have at least ten (10) years actual experience in real
property appraisal or assessment and have completed at least one hundred
twenty (120) hours of accredited training on real property appraisal conducted by
national or international appraisal organizations or institutions/entities
recognized by the Board and relevant CPE to the satisfaction of the Board.

Foreign Practitioners
Sec. 23 Issuance of Special/Temporary Permit. - Upon application and
payment of the required fees and. subject to the approval of the
Commission, the Board may issue special/temporary permit to real
estate service practitioners from foreign countries whose services are
urgently needed in the absence or unavailability of local real estate
service^ practitioners for the purpose of promoting or enhancing the
practice of the profession in the Philippines.

SEC. 24. Foreign Reciprocity. - No foreign real estate service practitioner
shall be admitted to the licensure examination or be given a certificate
of registration or a professional identification card, or be entitled to any
of the privileges under this Act unless the country of which he/she is a
citizen specifically allows Filipino real estate service practitioners to
practice within its territorial limits on the same basis as citizens of such
foreign country.

PRACTICE OF REAL ESTATE SERVICE
SEC. 25. Oath. — All successful examinees qualified for registration and
all qualified applicants for registration without examination as well as
accredited salespersons shall be required to take an oath before any
member of the Board or any officer of the Commission duly authorized by
the Commission to administer oaths prior to entering into the practice of
real estate service in the Philippines.

SEC. 26. Professional Indemnity Insurance/Cash or Surety
Bond. — All real estate brokers and private real estate appraisers shall,
in addition to the oath referred to in the preceding section, be required to
post a professional indemnity insurance/cash or surety bond, renewable
every three (3) years, in an amount to be determined by the Board, which
in no case shall be less than Twenty thousand pesos (P20,000.00),
without prejudice to the additional requirement of the client.

Acts Constituting the Practice
of Real Estate Service

Any single act or transaction embraced
within the provisions of Section 3(g)
hereof, as performed by real estate service
practitioners, shall constitute an act of
engaging in the practice of real estate
service.

Exemptions from the Acts Constituting
the Practice of Real Estate Service
a) Any person, natural or juridical, who shall directly perform by
himself/herself the acts mentioned in Section 3 hereof with reference
to his/her or its own property, except real estate developers;
(b) Any receiver, trustee or assignee in bankruptcy or insolvency
proceedings;
(c) Any person acting pursuant to the order of any court of justice;
(d) Any person who is a duly constituted attorney-in-fact for purposes
of sale, mortgage, lease or exchange, or other similar contracts of
real estate, without requiring any form of compensation or
remuneration; and
(e) Public officers in the performance of their official duties and
functions, except government assessors and appraisers.

Prohibition Against the Unauthorized
Practice of Real Estate Service
No person shall practice or offer to practice real estate service in the
Philippines or offer himself/herself as real estate service practitioner, or
use the title, word, letter, figure or any sign tending to convey the
impression that one is a real estate service practitioner, or advertise or
indicate in any manner whatsoever that one is qualified to practice the
profession, or

be appointed as real property appraiser or assessor in any national
government entity or local government unit, unless he/she has
satisfactorily passed the licensure examination given by the Board, except
as otherwise provided in this Act, a holder of a valid certificate of
registration, and professional identification card or a valid
special/temporary permit duly issued to him/her by the Board and the
Commission, and in the case of real estate brokers and private appraisers,
they have paid the required bond as hereto provided.

Positions in Government Requiring the
Services of Registered and Licensed Real
Estate Service Practitioners
Within three (3) years from the effectivity of
this Act, all existing and new positions in the
national and local governments, whether
career, permanent, temporary or
contractual, and primarily requiring the
services of any real estate service
practitioner, shall be filled only by registered
and licensed real estate service practitioners.

Supervision of Real Estate
Salespersons
No examination shall be given, but they shall be accredited by the Board: Provided, That they have
completed at least two (2) years of college and have undergone training and seminars in real estate
brokerage, as may be required by the Board.

Real estate salespersons shall be under the direct supervision and accountability of a real estate broker.
As such, they cannot by themselves be signatories to a written agreement involving a real estate
transaction unless the real estate broker who has direct supervision and accountability over them is also a
signatory thereto.

No real estate salesperson, either directly or indirectly, can negotiate, mediate or transact any real estate
transaction for and in behalf of a real estate broker without first securing an authorized accreditation as
real estate salesperson for the real estate broker, as prescribed by the Board. A real estate broker shall be
guilty of violating this Act for employing or utilizing the services of a real estate salesperson when he/she
has not secured the required accreditation from the Board prior to such employment.

No salesperson shall be entitled to receive or demand a fee, commission or compensation of any kind
from any person, other than the duly licensed real estate broker who has direct control and supervision
over him, for any service rendered or work done by such salesperson in any real estate transaction.

No violation of this provision shall be a cause for revocation or suspension of the certificate of registration
of the real estate broker unless there was actual knowledge of such violation or the broker retains the
benefits, profits or proceeds of a transaction wrongfully negotiated by the salesperson.17

Corporate Practice
of the Real Estate Service
a) No partnership or corporation shall engage in the business of real
estate service unless it is duly registered with the Securities and
Exchange Commission (SEC), and the persons authorized to act for
the partnership or corporation are all duly registered and licensed
real estate brokers, appraisers or consultants, as the case may be.
The partnership or corporation shall regularly submit a list of its real
estate service practitioners to the Commission and to the SEC as part
of its annual reportorial requirements. There shall at least be one (1)
licensed real estate broker for every twenty (20) accredited
salespersons.
(b) Divisions or departments of partnerships and corporations
engaged in marketing or selling any real estate development project
in the regular course of business must be headed by full-time
registered and licensed real estate brokers.
(c) Branch offices of real estate brokers, appraisers or consultants
must be manned by a duly licensed real estate broker, appraiser or
consultant as the case may be.

Accreditation and Integration of Real
Estate Service Associations

PHILRES First National Election
PhilRES, the official accredited
AIPO under RA 9646, formally
publishes its First National
Election on June 09 2012 at
leading newspaper Manila
Bulletin.

Code of Ethics and Responsibilities
for Real Estate Service Practitioners

The Board shall adopt and promulgate
the Code of Ethics and Responsibilities
for real estate service practitioners
which shall be prescribed and issued by
the accredited and integrated
professional organization of real estate
service practitioners.

Continuing Professional Education
(CPE) Program

PENAL PROVISIONS
Penal Provisions, - Any violation of this Act, including violations of
implementing rules and regulations, shall be meted the penalty of a fine of not
less than One hundred thousand pesos (P100,000.00) or imprisonment of not
less than two (2) years, or both such fine and imprisonment upon the
discretion of the court. In case the violation is committed by an unlicensed real
estate service practitioner, the penalty shall be double the aforesaid fine and
imprisonment.

In case the violation is committed, by a partnership, corporation, association
or any other juridical person, the partner, president, director or manager who
has committed or consented to or knowingly tolerated such violation shall be
held directly liable and responsible for the acts as principal or as a co-principal
with the other participants, if any.

What Can We Do?

1. Information Dissemination
2. Deepening and broadening of
Understanding on RESA, the
industry and country
3. Unite and be an active member
of Aipo.

Real Estate Service Act Philippines

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