10 Things You Need to Know About the RESA Law

What are the 10 most important things you need to know about the RESA Law or RA 9646?

Are you currently involved in what is considered to be real estate services? If so, your official acts and transactions are covered by Republic Act No. 9646 or the Real Estate Service Act of the Philippines, which is more commonly referred to as the RESA Law. If you are not sure whether your acts constitute a violation of this law, or whether you are even covered by the law, we suggest you read on.

The RESA Law, which took effect on July 30, 2009, deals primarily with the acts generally considered to be real estate services, the qualifications of those who may practice the profession, and the penalties corresponding to violations of its provisions.

The law protects the rights of those who call themselves real estate professionals, and also lays down the rules which these professionals have to adhere to, so that they may be registered under the Professional Regulation Commission (PRC) and be allowed to continue their practice.

1. Who are those deemed to be practitioners of real estate services and what do they do?

Section 3(g) of the RESA Law lists five types of professionals who are considered to be in the practice of real estate services. They are real estate consultants, appraisers, assessors, brokers, and salespersons. The first must be duly registered and licensed by the PRC, while real estate salespersons need only be accredited.

According to the RESA Law, real estate consultants are those who offer or render professional advice and judgment on the acquisition, enhancement, preservation, utilization, or disposition of lands or improvements thereon. They also facilitate the conception, planning, management, and development of real estate projects.

Real estate appraisers are those who perform services that involve estimating and rendering an opinion on the value of the property. Real estate assessors, on the other hand, are those who are employed by local government units (cities, municipalities, and provinces) and appraise and assess the value of real properties, which include plants, equipment, and machinery. While appraisers perform their tasks for the purpose of reporting the values as appraised, assessors perform such tasks for the purpose of taxation.

Real estate brokers are those who act as agents of a party in a real estate transaction. They facilitate the offer, advertisement, solicitation, listing, promotion, mediation, negotiation, or the actual meeting of minds between parties on the sale, exchange, mortgage, lease, joint venture, or any similar transaction involving real properties. In a nutshell, they act as middlemen between the person offering to sell their property and the one offering to buy it.

Finally, real estate salespersons are those who may act on behalf of a real estate broker to facilitate a real estate transaction. It is not uncommon in the Philippines for a single real estate broker to have several salespersons working under him or her.

2. What are the qualifications required under RA 9646?

All applicants must be Filipino citizens, although the law, in this case, does not distinguish between natural-born and naturalized Filipino citizens. In addition, they must have a college degree (or at least 2 years of college education for salespersons) and have not been convicted of any crime.

In addition to the above-mentioned requirements, consultants must also show proof of experience in the field, including proof of being licensed for at least 10 years as a broker, an assessor, a bank or institutional appraiser, a property-evaluating employee, or as a licensed appraiser for at least 5 years.

Corporations and partnerships are also allowed to engage in real estate practice if they are duly registered with the Securities and Exchange Commission. However, a corporation/partnership’s officers or those authorized to act in its behalf must all be licensed real estate brokers, appraisers, or consultants.

3. How about professionals who have been practicing real estate services since before 2009

According to Section 20, professionals who have been practicing real estate services before the RESA Law took effect in 2009 can be issued a certificate and professional ID without taking the prescribed exam, provided that they satisfy any of the following requirements:

  • They are already real estate brokers, appraisers, or consultants licensed by the Department of Trade and Industry
  • They are already assessors or appraisers who hold permanent appointments and have been practicing their profession for the last 5 years (before 2009) and have passed the Real Property Assessing Officer exam conducted by the Civil Service Commission
  • They are assessors or appraisers who hold permanent appointments, have at least 10 years of actual experience in real property appraisal or assessment, and have completed at least 120 hours of accredited training on real property appraisal

4. Does passing the licensure exam automatically lead to registration?

The PRC may deny your application for the real estate service profession, even if you have passed the licensure exam. The three most common grounds are the following: First, if you have been convicted by a court of law of any criminal offense. Second, if you, upon investigation by the PRC, have been found guilty of immoral or dishonorable conduct. Finally, if you have been found to be psychologically unfit for the profession.

5. Who is exempted from the application of the law?

Section 28 of the RESA Law stipulates that the following are exempted from the application of its provisions.

First are owners of real property (or private owners), as they are not required to have a license in order to sell their own property. However, this does not include real estate developers, because they are regulated by the Housing and Land Use Regulatory Board (HLURB).

Trustees in bankruptcy or insolvency proceedings are also exempted, as well as people who act pursuant to court orders (e.g., sheriff of the court); duly constituted attorneys-in-fact authorized to negotiate the sale, mortgage, lease, or exchange of real estate (provided that they do not require any form of compensation); and public officers who perform such acts in line with their official duties. However, it is important to know that the latter does not include government assessors.

6. Can foreigners practice real estate services in the Philippines?

Generally, no. However, the law does state an exemption: foreign reciprocity. Section 24 of the RESA Law stipulates that foreigners are prohibited from the practice of real estate services in the Philippines, although it also says that this rule shall not apply if the country where the foreign applicant is from allows Filipinos in the real estate service industry to practice within its territory as its own citizens would.

7. Are there any other details regarding the licensure examination and the license itself?

The licensure exam is prepared and administered by the Professional Regulatory Board for Real Estate Practice, which is under the PRC. It is composed of 13 real estate-related subjects, which may be increased as the Board sees fit.

After passing the examination, you will be required to take an oath before a member of the Board or the PRC. In addition, applicants for real estate brokers and appraisers are required to post a cash or surety bond that would serve as professional indemnity insurance. This bond is renewable every 3 years and shall not be less than Php20,000. The license issued is also renewable every 3 years.

The PRC licenses must be displayed in a conspicuous area in the office or business establishment that is dedicated to the practice of real estate services.

8. Can my license be suspended or revoked?

The PRC may revoke your certificate of registration and professional ID for a number of reasons. First, if you got your license through fraud or deceit. Second, if you allow an unqualified person to advertise or practice the profession using your own certificate, ID card, or permit. Third, if you engage in unprofessional or unethical conduct. Fourth, if you commit any form of malpractice or a violation of the RESA Law itself, its Implementing Rules and Regulations, and the Code of Ethics and Responsibilities for Real Estate Service Practitioners. And finally, if you get suspended for an offense and continue practicing real estate services.

9. What does the law prohibit?

Section 29 prohibits the practice or the offer to practice real estate services or to offer yourself as a real estate service practitioner if you have not been licensed by the PRC (except those who are covered by the RESA Law’s exemption).

10. What are the penalties for violating RA 9646?

Section 39 stipulates that any violation of the RESA Law, including violations of its Implementing Rules and Regulations, shall be penalized with a fine of not less than Php100,000 or imprisonment of not less than 2 years, or both. If the offender happens to be unlicensed, the aforementioned penalty is doubled (Php200,000 and/or 4 years’ imprisonment).

Furthermore, partnerships, corporations, associations, or other judicial entities who have committed, consented to or knowingly tolerated such a violation are deemed a principal or a co-principal of the violation, along with the other participants, and are subject to the same penalty.

Read our previous journal for more real estate tips and features.

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