With real estate holding the spotlight for flourishing industries, the government sees the need to regulate the activities to ensure public order and economical benefits.
In the same year that the REIT Law was first passed, the RESA Law (Republic Act No. 9646) also took into effect as a guideline for lawful real estate practices and their corresponding qualifications. These protect the rights of the professionals and the consumers from those who may violate this law.
I’m sure you already have an idea about what real estate professionals do, so what is this all about?
By enumerating everything that counts in the real estate profession and what doesn’t, barriers are being established. This is why the following year, the implementing rules and regulations (IRR) were released for the public.
Here’s the abridged version of how they defined real estate as a service and profession:
REAL ESTATE SERVICE
- Any transactions that fall within the description of a real estate practitioner, will be considered as a real estate service.
- Rendering real estate services of a consultant, appraiser, assessor, broker and salesperson also falls under the practice.
Notable examples of real estate services before the age of social media were agents tasked to man-on-site (a.k.a. tenting), leafleting or flyering at commercial areas, trippings for clients and telemarketing. However, there are a lot of other professions in real estate.
TYPES OF REAL ESTATE PROFESSIONALS
According to the IRR, all practitioners are registered and licensed by PRC (Professional Regulation Commission):
- Consultants give professional advice and judgment for buyers who plan to invest in properties for positive financial returns; they also facilitate development projects.
- Appraisers assess properties in order to render an estimate of its value;
- Assessors also perform like appraisers but mostly for the purpose of taxation.
- Brokers are the middlemen between the seller of a property and the buyer. They’re in charge of marketing and selling real estate.
- Agents or Salespersons work for brokers and are tasked to facilitate all the transactions involved in marketing and selling properties.
For agents, they are not required to be registered and licensed because accreditation is enough.
After defining services and professions, you might be wondering, how would you know that you’re qualified to render real estate services and call yourself a professional?
This very question sums up the reason why the RESA Law was passed.
BRIEF HISTORY OF THE REAL ESTATE PROFESSION
Before 2009, the Department of Trade and Industry (DTI) was in charge of licensing real estate professionals, and licensing was only necessary if they were planning to start a brokerage firm.
No one took real estate seriously back then!
It was considered part of the informal sector because most agents worked part-time on commission and only pursued a full-time career if business was good. Real estate professionals were defined by whether they passed the Real Property Assessing Officer Exam by the Civil Service Commission, completed at least 120 hours of accredited training and have at least 5-10 years of experience in their practice. So in an effort to professionalize the real estate industry, they created this legal clause that subject all practitioners to its IRR, and for enhancing government income through taxation.
Those who fall into the category of real estate professionals before its implementation, as mentioned above, they can be issued a certificate and professional ID without taking the prescribed exam required by the RESA Law for agents and brokers today who need licensure and registration.
What about the rest of you who came after?
Well, as long as you meet the qualifications on their list that we’ll share with you, then you can secure your registration and license in real estate.
QUALIFICATIONS AND EXEMPTIONS
- Filipino citizens, not stated whether naturalized or natural-born.
- Completed a College Degree (or 2 years of tertiary education for salespersons). For brokers, only graduates of the course BS Real Estate Management will be allowed to undergo the licensure examinations.
- Must pass the licensure examination. Even so, applicant must be:
- Not convicted by a court of law for any criminal offense
- Not found guilty of immoral or dishonorable conduct by the PRC
- Psychologically fit for the profession
- For specific real estate occupations, they must show proof of experience and:
- Consultants – at least 10 years as a broker, assessor or appraiser with a property evaluating employee license
- Assessors/Appraisers – at least 5 years of holding a license
- Corporations and partnerships that are registered with the Securities and Exchange Commission (SEC). And their officers must be licensed brokers, appraisers or consultants.
- Other exemptions include:
- Foreigners under the “foreign reciprocity.” For applicants whose country of origin allows Filipinos in the real estate service industry to practice within its territory as its own citizens would.
- (Private) Owners of real property are not required to have a license, except for real estate developers who are regulated by the Housing and Land Use Regulatory Board (HLURB).
- Dealers who buy and sell properties do not need a license but they may get a broker to accredit them as a Real Estate Salesperson or Agent.
- In cases of bankruptcy and foreclosure of properties, trustees are also exempted. These include pursuer of court orders, attorneys-in-fact without any compensation on real estate transactions, and public officers (except for government assessors).
WHAT’S IN IT FOR AGENTS AND BROKERS?
New Governing Bodies
The RESA Law resulted in the formation of the Professional Regulatory Board of Real Estate Service (PRBRES) under the jurisdiction and administration of the Professional Regulation Commission (PRC). They are in charge of creating policies, administering licensure examinations, promulgation and enforcing the IRR.
Undergoing Formal Education
Due to the provisions last 2016, aspiring brokers may only take the licensure examinations if they are graduates of the BS Real Estate Management course, introduced as a new college curriculum by the Commission on Higher Education. The major subjects are about accounting, marketing, economics and finance, centralizing on the legal, ethical, ecological, planning and development aspects of the real estate industry. There are no updates whether non-BS REM and failed applicants will be allowed to take/retake the exam in the future.
The Issue With Developers
Real Estate developers are being challenged for being prohibited from practicing real estate services without hiring licensed brokers and agents to do it for them. In 2017, CREBA requested for an exemption on the provisions on behalf of developers to allow them to perform real estate services on their own, or at least exempt them from licensure examinations.
From An Agent To A Broker
For salespeople who wish to become brokers, or brokers looking to get licensed, the licensure examination comprises of thirteen real estate-related topics, subject to change as the Professional Regulatory Board for Real Estate Practice under PRC sees fit. After passing, applicants will then take an oath before a member of the Board or the PRC. Lastly, they need to pay a surety bond not less than Php20,000 for professional indemnity insurance and is renewable every 3 years, with the license. In turn, the licenses must be displayed out for everyone in the establishment to see. Being a broker allows you to have 20 agents working for you and access buyer lists at half-off the regular price.
The Consequences For Violators
There have been issues with brokers rumored to fail in complying with the RESA Law for agents and brokers. What can happen to your certificate of registration and professional ID when they are subject to suspension or revocation are:
- Acquisition of license by fraud or deceit.
- Misuse of profession by someone else using your credentials.
- Violating the RESA Law and its IRR, as well as the Code of Ethics and Responsibilities for Real Estate Service Practitioners.
- After suspension for an offense, continued practice may result in revocation.
As punishment, there is a penalty of a fine not less than Php100,000 or imprisonment of not less than 2 years, or both. Unlicensed offenders are subject to double the penalty. For partnerships, corporations, associations, or other judicial entities that are involved or tolerated the aforementioned violations are also subject to the same penalty.
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