R E S AT H E R E A L E S T A T E S E R V I C E A C T

“An Act Regulating the Practice of Real Estate Service in the Philippines, Creating for the Purpose a Professional Regulatory Board of Real Estate Service,

Appropriating Funds Therefor & for Other Purposes”

R E P U B L I C A C T N O . 9 6 4 6

T H E R E A L E S T A T E S E R V I C E A C T ( R E S A )

Now R.A. No. 9646 Signed 29 Jun ‘09

Published 15 Jul ’09 (Philippine Daily Inquirer)

Regulatory law on the

practice of real estate

service in the Philippines

Professionalizes &

regulates practitioners

through the Professional

Regulation Commission:

Real estate consultants

Real estate appraisers (including LGU assessors &NGA

appraisers)

Brokers

9 6 4 6

T H E R E S A L A W

overview

R A T I O N A L E

Real property is a vital driver of the economy

Professionalization & regulation essential for Stimulating the land market Encouraging investments Revenue generation by the government Sound decision making of property owners Better policy making & governance Protection of public, etc.

Real estate practice is a profession with multi-disciplinary body of knowledge

Gearing towards international best practices

R A T I O N A L E

Valuation/appraisal: core of professionalization Covers a broad range of property types in varied

geographical & economic conditions Results of such highly technical work provide the basis

for decisions with regard to property sales, expropriation compensation, mortgage financing, assessment of taxes, etc.

Consultancy as an expert level of practicing valuation and/or brokerage Brokerage facilitates transactions of parties Profession requires technical competence/

continuing education & confidence of the public

W H Y P R O F E S S I O N A L I Z E L G U A S S E S S O R S ?

They are appraisers who also perform assessment function essentially for LGU taxation purposes

A very large group, larger than private appraisers:physical presence all over the country outputs are complex, voluminous & varied

Perform sensitive functions within a unique & highly politicized environment

Output is crucial & critical to the viability of LGUs as they directly affect local revenues & national income

Professionalization will provide them continuing technical education & training geared to global standards

S T A T E P O L I C Y (ARTICLE I. SEC. 2)

1. State recognizes vital role of the profession in the social, political, economic development and progress of the country

2. State to develop and nurture a corps of technically competent, responsible and respected professionals through proper and effective regulation and supervision

3. State to promote standards of practice and service to be globally competitive and the growth of the real estate industry

T H E R E S A L A W

salient provisions

ACTS CONSTITUTING REAL ESTATE SERVICE PRACTICE

Render professional advice & judgment on the acquisition, enhancement, preservation, utilization or disposition of lands or improvements thereon, & the conception, planning, management & development of real estate projects

CONSULTANT

Performs or renders, or offers to perform services in estimating & 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

APPRAISER

Performs appraisal & assessment of real properties, including plants, equipment, & machineries, essentially for taxation purposesASSESSOR

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

BROKER

Performs service for, & in behalf of, a real estate broker for or in expectation of a share in the commission, professional fee, compensation, or other valuable consideration

SALES PERSON

- ARTICLE I. SEC. 3G

T H E P R O F E S S I O N A L B O A R D

Board Creation/Composition (Sec. 4)

to be organized within 6 mos. Appointment by the President from 3

recommendees chosen by PRC 2 members shall represent the govt.

assessor & appraisers

Term of Office (Sec. 7)

3 years each; re-appointment not to exceed 6 consecutive years

First Board: Chairman: 3 years; First 2 members: 2 years; 2 other members: 1 year

Compensation /Allowances (Sec. 8)

based on existing rates of other Boards

Suspension/Removal from the Board (Sec. 9)

by the President, upon PRC recommendation- for neglect of duty, abuse of power, oppression, incompetence, etc., or for conviction of any criminal offense involving moral turpitude.

Board to submit annual report to PRC detailing all accomplishment (Sec. 11)

PRC to supervise the Board and provide secretariat and enforcement assistance (Sec. 10 & Sec. 37)

KEY POWERS & FUNCTIONS OF THE BOARD (ARTICLE II. SEC. 5)

Policy guidance

Licensure examinations; prescription of appropriate syllabi

Issuance, suspension, revocation or reinstatement of certificates of registration or PRC ID

Monitor and enhance the practice of the profession; maintain high professional, ethical/technical standards

Adopts a Code of Ethics & Responsibilities (Sec. 35)

Hear and investigate violations: quasi-judicial & admin powers

Safeguard & protect legitimate practitioners

Prescribe academic requirements for course offering; CPE program; accredits seminars, lecturers, etc.

Supervise APO & related associations

QUALIFICATIONS OF CHAIR & BOARD MEMBERS (ARTICLE II. SEC. 6)

Filipino citizen; resident of the Philippines

Bachelor’s Degree related to real estate

active practice for at least 10 years prior to appointment

bona fide member of the APO but not an officer or trustee at the time of appointment

neither a faculty member of any academic institution nor have any pecuniary interest in any group where review classes or lectures are offered or conducted

good moral character, not convicted of a criminal offense

S C O P E O F E X A M I N A T I O N(ARTICLE III. SEC. 13)

LICENSURE EXAMINATION & REGISTRATION (ARTICLE III)

7 5 % P A S S I N G R A T E I N A L L S U B J E C T S ;

N O G R A D E I N A N Y S U B J E C T B E L O W 5 0 % (ARTICLE III. SEC. 15)

1 0 D A Y S – R E L E A S E O F E X A M R E S U L T S (ARTICLE III. SEC. 16)

QUALIFICATIONS OF APPLICANTS FOR EXAM (ARTICLE III. SEC. 14)

Filipino citizenship

Relevant bachelor’s degree (a Bachelor's degree in Real

Estate Service shall be a requirement upon its implementation by the CHED)

Of good moral character & must not have been convicted of any crime involving moral turpitude

For real estate consultants: At least 10 years experience in either capacity as a licensed

real estate broker, an assessor, or as a bank or institutional appraiser or an employed person performing RP valuation

At least 5 years experience as an appraiser

CERTIFICATE OF REGISTRATION & PRC ID (ARTICLE II. SEC. 17)

PRC ID renewable every 3 years satisfy Board requirements, i.e. CPE to be displayed in the place of business (ARTICLE IV. SEC. 33)

Practitioners to indicate license information (APO/PTR numbers/date of

issuance) on documents he/she signs (ARTICLE III. SEC. 38)

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TITLE OF PROFESSION

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N A M E O F P R O F E S S I O N A L

T I T L E O F P R O F E S S I O N

N A M E O F P R O F E S S I O N A L B O A R D

REVOCATION OF PRC ID & CERTIFICATE (ARTICLE II. SEC. 19)

fraudulent/deceitful procurement of a certificate of registration &/or PRC ID, or special temporary permit

advertisement of unqualified person using somebody else’s certificate, PRC ID, or special temporary permit

unprofessional or unethical conduct

malpractice or violation of RESA, its IRR, & the Code of Ethics & Responsibilities

Practice of profession while under suspension

REGISTRATION WITHOUT EXAMINATION (ARTICLE II. SEC. 20)

Application shall be within 2 years from the effectivity of RESA

Renewal of the PRC ID is subject to the provisions of Section 17

B & C shall comply w/ the requirements for registration as RE

appraisers

Those seeking to be licensed to a new credential level shall be

required to take the pertinent licensure examination

Those already licensed as real estate brokers, real estate appraisers or real estate consultants by the DTI under Ministry Order No. 39 They are in active practice as brokers, appraisers & consultants Have undertaken relevant CPE to the satisfaction of the Board

A

Assessors & appraisers who hold permanent appointment & are performing actual appraisal & assessment functions for the last 5 years Passed the RPAO Examination Have undertaken relevant CPE to the satisfaction of the Board

B

Assessors & appraisers who hold permanent appointment & have at least 10 years experience in real property appraisal or assessment Have completed 120 hours of accredited training Have undertaken relevant CPE to the satisfaction of the Board

C

FOREIGN PRACTITIONERS

Foreign Reciprocity Principle (ARTICLE III. SEC. 24)

Foreign practitioners, whose governments admit Filipinos to practice the profession in their countries, will be allowed to practice the profession in the Philippines

Special/Temporary Permit (ARTICLE III. SEC. 23)

Applicable for foreign practitioners whose services are urgently needed in the absence or unavailability of local practitioners

T H E R E S A L A W

practice of real

estate service

OTHER REQUIREMENTS TO PRACTICE PROFESSION (ARTICLE IV)

OATH (ARTICLE IV, SEC. 25)

Applies to all qualified examinees, applicants for registration without examination, and accredited salespersons

PROFESSIONAL INDEMNITY INSURANCE/BOND (ARTICLE IV, SEC. 26)

Applicable only to private sector practitioners- Additional requirement for licensure/renewal

Amount to be determined by the Board, but not less than Php20,000.00 Client may require additional bond/insurance Renewable every 3 years

E X E M P T I O N S F R O M T H E P R A C T I C E (ARTICLE IV. SEC. 28)

any person who shall directly perform the acts of real estate service upon own property, except real estate developers

receivers, trustees or assignees in bankruptcy/insolvency proceedings

persons acting pursuant to the order of the court

attorney-in-fact on sale, mortgage, lease or exchange, or other similar acts on real estate, without compensation or remuneration in any form

public officers while performing their official duties & functions, except government assessors & appraisers

PROHIBITIONS AGAINST UNAUTHORIZED PRACTICE

P R I V A T E P R A C T I C E

No license + bond = no practice/advertisement of profession (ARTICLE IV. SEC. 29)

G O V E R N M E N T P R A C T I C E

No license = no appointment as real property appraiser or assessor in any NG entity or LGU (ARTICLE IV. SEC. 29)

Within 3 years, all existing & new NG & LGU positions, whether career, permanent, temporary or contractual shall be filled only by registered & licensed practitioners (SEC. 30)

Incumbent assessors/assistant assessors with permanent appointments shall continue to perform functions without reappointment, diminution of status, rank & salary grade, & shall enjoy security of tenure. Not be promoted to a higher position until they meet the qualification requirements of the higher position.

S U P E R V I S I O N O F S A L E S P E R S O N S (ARTICLE IV. SEC. 31)

accreditation only

2 years college

trainings & seminars in real estate brokerage

direct supervision & accountability brokers

cannot sign transaction documents, co-signed by a licensed broker

not entitled to receive or demand a fee, commission or compensation of any kind from any person, other than the broker

C O R P O R A T E P R A C T I C E (ARTICLE IV. SEC. 32)

SEC registration

Persons acting for the partnership or corporation should all be duly registered & licensed practitioners

1 Broker for every 20 accredited salespersons

Divisions or departments engaged in marketing or selling any real estate development project must be headed by full time registered & licensed brokers

Branch offices must be manned by licensed practitioners

May hire the services of registered & licensed practitioners on commission basis as independent contractors & not as employees

ACCREDITATION & INTEGRATION (ARTICLE IV. SEC. 34)

All real estate service associations to be integrated into 1 national organization as the only accredited & integrated professional organization of practitioners

Automatic membership to the integrated organization

Is not a bar to membership in other associations

CONTINUING PROFESSIONAL EDUCATION (ARTICLE IV. SEC. 36)

Board will develop, prescribe, & promulgate CPE program & guidelines

In consultation with the integrated professional organization & other concerned sectors

CPE council

CPE Council

T H E R E S A L A W

penal & final

provisions

P E N A L & F I N A L P R O V I S I O N S O F R E S A (ARTICLE V)

Penal Provisions (SEC. 39)

Fine - not < Php100,000.00; Imprisonment - < than 2 years Offense committed by unlicensed practitioner, penalty – double fine &

imprisonment Corporate offense: covers those consented to or tolerated the violation

Appropriations for the Board (SEC. 40)

Funding requirement of RESA - GAA

Transitory Provision (SEC. 41)

DTI-BTRCP to transfer records & documents to PRC w/in 90 days

IRR (SEC. 42)

Shall be prepared w/in 6 mos by the Board, APO, DOF & CHED

Repealing Clause (SEC. 44)

Act Nos. 2728, 3715, & 3969 granting DTI the regulation of the practice RA 7160 (Secs. 472 & 473) and pertinent provisions of CSC law

Effectivity (SEC. 45)

Takes effect 15 days after publication in the Official Gazette or in a major daily newspaper of general circulation

T H E R E S A L A W

RESA Implementation

Updates

T H E I N T E R I M A C C R E D I T E D P R O F E S S I O N A L

O R G A N I Z A T I O N ( A P O )

October 22, 2009 -PRC met with LAMP-BLGF and the public and private sector RESPs’ associations for the organization of the Federation of Real Estate Service Associations (FRESA)

F I R S T M E E T I N G O F F R E S A F O R T H E E L E C T I O N O F

O F F I C E R S

(1) technical assistance in the establishment of the interim FRESA; and (2) support FRESA in the selection of nominees to the Board from the

government and private sectors and for submission to the PRC.

M E E T I N G W I T H P R I V A T E S E C T O R B U I L D E R S

The Subdivision and Housing Developers Association (SHDA) met with the Advocacy Team on January 28, 2010 to discuss concerns on RESA

M E E T I N G W I T H T H E C I V I L S E R V I C E C O M M I S S I O N ( C S C ) O N T H E

A P P L I C A T I O N O F T H E G R A N D F A T H E R C L A U S E

Meeting with CSC Chairman Francisco Duque III on February 11, 2010, on the implementation of RESA

T H E R E S A L A W

LAMP Assistance

•TAs for formulation of IRR

•TA for development of licensure examination

• Nationwide RESA dissemination

L A M P A S S I S T A N C E O N R E S A I M P L E M E N T A T I O N

Thank You!