THIRTEENTH CONGRESS OF TH 
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OF THE PHILIPPINE 
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Firsf Regular Session 
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S E N A T E  
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introduced by Senator S. R. OsmeAa Ill 
EXPLANATORY NOTE 
Real estate industry is a key industry in the economy. Home 
building and real estate construction constitute a sizable proportion of 
the country's investments or capital formation, and 
provide a strong 
stimulus for economic booms. Given its strategic 
importance in the 
economy, any conditions of dis-equilibrium can also have far-reaching 
implications. 
Speculative bubbles, and the inevitable subsequent 
collapse can do as much damage to the economy as a fundamentally 
sound surge in investments can boost economic activity. Safeguarding the 
public welfare from fraud and the machinations of unlicensed and 
unscrupulous operators is therefore a matter of grave policy interest. 
This bill, which was introduced by Senator Gonzales in the 'lofh 
Congress seeks to ensuring the integrity of transactions within the real 
estate industry 
through the creation of the Real Estate Commission, 
which will be tasked to perform the following functions: 
(a) to consolidate and enforce all rules and regulations governing the 
practice of the real estate profession in the Philippines and to 
centralize the licensing powers pertaining thereto; 
(b) to supervise and monitor all real estate transactions to make them 
conform to government rules and regulations; 
(c) to implement government policies relating to real estate; 
(d) to compile and consolidate all laws, rules and regulations related 
to real estate in all of its concepts into a cohesive Code and 
recommend its enactment by Congress; and 
(e) to undertake measures to stabilize real estate prices. 
By consolidating jurisdictional responsibility and regulatory powers 
in the Commission, 
this bill will minimize the industry's exposure to 
unauthorized practitioners, improve tax collection and contribute to the 
sustainable growth and development of the industry. 


In view of the foregoing, the immediate approval of this bill is 
earnestly requested. 
SE 
Senator 
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THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
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, 
I 
S E N A T E  
Introduced by Senator S. R. Osmefia 111 
AN ACT 
CREATING THE REAL ESTATE COMMISSION, PRESCRIBING ITS 
DUTIES, POWERS AND FUNCTIONS, APPROPRIATING FUNDS 
THEREFOR, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled: 
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SECTION I. Title - This Act shall be known as the “Real Estate 
Commission Act.” 
SEC. 2. Declarafion of Policies - It is hereby declared the policy of the 
State to professionalize the activities of real estate practitioners in the Philippines 
by placing their operation on a sound, credible, legitimate and efficient basis, in 
order to better serve the needs of the general public, industry, commerce and 
agriculture and which consequently shall be under the supervision and control 
of a Commission with proper quasi-judicial and police powers to curtail and 
prevent act or practices prejudicial to the public interest. 
SEC. 3. Definition of Terms - As used in this Act, the following terms 
shall means: 
(a) Real Estate - all lands, whether rural, urban, suburban as well as all 
buildings and improvements permanently appended as attached thereto 
including all rights and interests therein; 


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(b) Real Estate Development Projects - the development of land for 
residential, 
commercial, 
industrial, 
agricultural, 
institutional or 
recreational purposes, or any combination of such; or as tourist resorts, 
reclamation, buildings or housing projects for individual or condominium 
ownership, memorial parks, and others of a similar nature; 
(c) Real Estate Salesman - any natural person who performs for and in 
behalf of a real estate broker under whom he is licensed, any or all the 
functions of a real estate broker, for or in expectation of a share in the 
commission, fee, compensation, or other valuable considerations; 
(d) Real Estate Broker - any person, natural or juridical, who on behalf of 
another person and for or in expectation of a fee, commission, 
compensation or other valuable consideration, shall perform any of the 
following acts: 
offers, advertises, solicits, 
lists, promotes, mediates, 
negotiates or effects a sale, purchase, exchange, mortgage, lease, joint 
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venture or other transactions in real estate or any interest herein; 
(e) Real Estate Appraiser - a natural person who is a qualified real estate 
broker and who, for and in expectation of a fee, compensation or other 
valuable 
considerations, 
offers to render or renders services in 
estimating and arriving at an opinion of or acts as an expert on real 
estate values; 
(fj Real Estate Consultant - a natural person who is likewise a qualified real 
estate broker and who for and in expectation of a fee, compensation or 
other valuable considerations, offers to render or renders professional 
service, advice and sound judgment on matters involving the acquisition, 
preservation, utilization or disposition of land and its present and future 
sales, lease, exchange, 
mortgage or cession, such as subdivision, 


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condominium, 
market stalls, 
memorial parks and other real estate 
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development projects; 
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(9) Commission - the Real Estate Commission created by this Act; 
(h) Real Estate Profession . acting, engaging or doing business as a real 
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estate salesman, real estate broker, real estate appraiser or real estate 
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consultant. 
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SEC. 4. The Real Estate Commission, Composition, Tenure and 
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Compensation. - There is hereby created a Real Estate Commission which 
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shall be composed of a Chairman and two (2) members who shall be appointed 
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by the President, and the tenure of office of such members shall be five (5) 
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years, provided that the Chairman shall serve for five (5) years, and the 
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members for four (4) years and three (3) years, respectively. 
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SEC. 
5. 
Powers 
and Functions of the Commission. - 
The 
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Commission shall exercise the following powers and functions: 
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(a) To provide 
comprehensive 
policy guidance for the promotion and 
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development of the Real Estate industry; 
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(b) To initiate, 
integrate 
and recommend 
such rules and regulations, 
standards, 
growth and effective enhancement of the real estate profession; 
guidelines and procedures as may be necessary for the 
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(c) Gather 
and 
compile 
statistical 
data 
required 
in 
the 
effective 
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implementation of this Act; 
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(d) Draw up recommendations to government agencies or departments 
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concerned for the purpose of rationalizing and coordinating real estate 
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transactions ; 
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(e) To promulgate such rules and regulations as may be necessary to 
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implement effectively the provisions of this Act; 
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(9 To assess and fix the rate of reasonable regulatory license fees; 


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(9) To administer oath and affirmation and to issue subpoena and subpoena 
duces tecum in connection with any investigation of which it has 
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jurisdiction under this Act; 
(h) To appoint, discipline and/or remove subordinate officials or employees 
and to determine the compensation of its technical staff or personnel, 
provided that except as to its technical staff and such other position as the 
Board may declare to be highly technical or primarily confidential, all 
positions under the Board are subject to the provisions of the Civil Service 
Law and Rules, but are exempt from the regulations of the Wage and 
Position Classification office; 
(i) After notice and hearing, revoke, cancel or suspend the exercise or 
enjoyment of license and benefits granted under this Act; 
(j) To monitor not only all advertisements by newspapers, audiovisual, radio, 
television 
or by any other means that offers to sell or exchange real 
estate and to provide every possible safeguard that only legitimate and 
licensed practitioners shall be allowed to do, and in pursuance thereto it 
shall exercise its judicial and police powers to finally and completely 
eradicate the pernicious practices of unauthorized or “colorum” brokers 
who have eroded the quality and credibility of the profession; 
(k) To screen, supervise and issue permits to any accredited aggrupation of 
professionals in the industry; to accredit seminars for the purpCise’ of‘ 
upgrading the quality and knowledge of the profession; and to conduct 
examination as a pre-requisite in the practice of the profession; 
(I) To require all transactions involving the sale or exchange of real estate to 
be certified to by the parties before a duly licensed real estate broker that 
they had fully complied with all the rules and regulations of the Housing 


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and Land Use Regulatory Board (HLURB) as well as all laws related to 
the transactions and the applicable tax laws; 
(m)To have an exclusive jurisdiction in determining and integrating all rules 
and regulations with respect to the payment of government fees, dues 
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any charges in relation to the privilege to practice the profession; 
(n) To adopt a National Code of Ethics to be strictly observed by all licensed 
Real Estate Brokers and Salesmen under them, 
Appraisers and 
Consultants; 
(0) To compile all laws, rules and regulations related to real estate in all of its 
concepts into a comprehensive and cohesive Code and to recommend 
the enactment by the Congress of the Philippines of such remedial laws 
that will cure these laws which are antiquated or in conflict with any related 
laws; 
SEC. 6. Real Estate Pracfice. - Any single act or transaction embraced 
within the definitions contained in Section 3 hereof, shall constitute as a 
professional real estate services act, except when the same is performed by: 
(a) Any natural or juridical person who directly performs by himself or itself 
any of the above-mentioned acts with respect to his or its own property, 
without the assistance of any licensed salesman, broker, appraiser or 
consultant ; 
(b) Any receiver, trustee or assignee in insolvency proceedings; 
(c) Any person acting pursuant to the order of any court of justice; 
(d) Public officer in the performance of their official duties; and 
(e) Officials and employees of banks, insurance companies, savings and 
loan associations or other financial 
institutions with respect to the 
foreclosure and eventual disposition of their acquired assets: Provide, 
That all the exempt persons mentioned above shall comply with the 
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requirement of reporting their acts to the Commission within the 
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prescribed period. 
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SEC. 7. License Requirement. - 
No person may engage in the 
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practice of the real estate profession unless he has been duly licensed by the 
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Commission in accordance with this Act; 
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No partnership or corporation shall engage in the real estate practice or as 
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realty service practitioner unless duly authorized by the Commission and  the^ 
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person or persons authorized to act as such for the partnership or corporation is 
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or are duly licensed brokers, appraisers, or consultants, as the case may be. 
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Real estate brokers, appraisers, or consultants under a branch office shall 
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be the responsibility of such branch office where they are employed. 
SEC. 8. Application for License. - Any natural person who successfully 
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passed the examination required by this Act for real estate brokers, appraisers 
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or consultants, may apply for a license as real estate broker, appraiser, or 
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consultant on forms duly prescribed by the Commission; 
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Any qualified person may apply as a real estate broker, after passing the 
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required examination, upon the recommendation and undertaking of a licensed 
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SEC. 9. Qua/ifications. - Any applicant for examination for license to 
real estate broker, appraiser, or consultant, who is his employer. 
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engage 
in the real estate profession shall, 
at the time of the filing of his 
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application, be: 
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(a) Filipino citizen; 
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(b) At least twenty-one (21) years old in the case of a salesman; twenty-four 
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(24) years old in the case of a broker; twenty-nine (29) years old in the 
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case of an appraiser; and thirty-four (34) years old in the case of a 
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consultant. 
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(c) Of good moral character; and 


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(d) A holder of an Associate College Degree or two years college work in the 
case of the salesman; a college degree for a broker and who has been 
duly licensed salesman for at least three (3) years; at least five (5) years 
experience as a licensed broker for an appraiser; and at least ten ( I O )  
years experience as a licensed broker, including five (5) years as a 
licensed appraiser for a consultant. 
SEC. 10. 
Examination 
Before Admission fo Practice. - 
The 
Commission shall conduct written examinations twice a year on such dates as 
may be fixed by the Commission for real estate salesmen, brokers, appraisers 
and consultants and the same'shall include the following subjects and topics: * 
(a) Principle of land economics; 
(b) Principles of Business Management, Salesmanship, Promotions, Ethics 
and Accounting; 
(c) Laws on property rights, land registration obligations and contracts, 
agency, sales, transfer, exchange, mortgage and conveyancing; 
(d) Basic 
principles of ecology, 
urban 
and rural land use planning, 
development and management; 
(e) Basic 
understanding of land maps, 
survey, 
building plans and 
specifications, construction, operation and maintenance; 
(9 Fundamental procedures and mechanics 
of listing, 
selling, leasing, 
exchanging, and mortgaging different types of properties in the case of 
brokers and appraisers, and rendition of advice on different types of real 
estate problems, in case of consultants; 
(9) And such other subjects as the Commission may deem proper and 
necessary to include. 
These examinations shall be conducted 
and supervised by an 
Examination Committee composed of three (3) members, to be appointed by the 
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Commission: Provided, That one of the members shall be licensed real estate 
consultant with not less than ten ( I O )  years experience. 
SEC. 1 I. Duration of License. - All licenses shall be valid for a period 
one (I) 
year and renewable for another year, provided that such licenses are 
still qualified for renewal under the provisions of this Act. 
SEC. 12. 
Excluded 
from fhe Pracfice of the Profession. - 
Immediately upon the effectivity of this Act, no person or entity other than 
those specified in Section 4 hereof shall be allowed to practice the real estate 
profession in the Philippines. Any person or entity found guilty of violating this 
provision shall be subject to penalties provided in Section 25 hereof. 
SEC. 1 3. 
Duties 
and Responsibilities of Licensed Salesmen, 
Brokers, Appraisers and Consulfanfs. - All licenses, in the practice of the 
profession are required to: 
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Undertake an accurate verification of all land titles, survey plans, 
technical description, 
transferability 
of ownership or possession, 
construction plans and specifications, zoning regulations, 
rules and 
laws, appraisals, assessed values and actual market valuation, before 
promoting or negotiating any transaction on any particular real estate 
development projects; 
Promote the fairest agreement among and between the parties in any 
real estate transactions; 
Authenticate every contract negotiated by him or for and in behalf of his 
partnership 
or corporation, 
with his personal 
signature 
and 
professional seal; 
Advice the parties of the amount of taxes, fees and other assessment 
due the government in connection with said transaction; 


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(e) Keep a registry of all transactions consummated by him, on a registry 
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book to be made available by the Commission, specifying the nature of 
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the property, assessed value, actual consideration for the contract, and 
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nature of transaction, whether a sale, exchange, mortgage, cession, 
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joint venture or the like, and 
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(9 Submit semi-annual report of all his transactions to the Commission 
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SEC. 14. 
License Numbers. - 
The Commission 
shall assign a 
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permanent license number for each registered broker, appraiser and consultant, 
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which number shall be indicated in their respective letterheads, dry seals 
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signboards, 
billboards, 
advertisements 
and other public announcements. 
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Every salesmen shall use the license number of the broker under whom he is 
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licensed while juridical persons shall utilize the license numbers of the qualified 
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SEC. 15. Bonds. - Before a license is issued, the applicant shall post 
natural person acting on their behalf. 
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a bond for the performance of his professional rights and obligations under this 
Act, in such amount as may be determined by the Commission. 
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SEC. 16. Certification of Transaction. - The parties to a real estate 
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transaction involving sale or exchange shall certify under oath that a real estate 
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broker has negotiated and mediated in the consumption, 
and that the 
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consideration and all material facts contained in the deed of conveyance are true 
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and correct: Provided, however, That in cities and provinces where there are 
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no licensed real estate brokers, or that the parties have directly negotiated and 
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consummated the transaction with each other without the mediation of a real 
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estate broker, the certification shall state that fact and shall be made under oath 
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before the Register of Deeds of the city or province where the real estate is 
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located. 


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No deed of conveyance in any real estate transaction mentioned herein 
shall be accepted for registration by the Registry of Deeds unless the aforesaid 
certification of the parties and the real estate brokers herein are presented and 
filed accordingly. 
SEC. 17. Brokers’ Registry Book, - The real estate broker shall keep 
and maintain a registry book where he shall record all real estate transactions in 
which he has negotiated or mediated until its final consummation, or that are 
referred to for purposes of certification prescribed in the preceding Section. 
SEC. 18. Grounds for Suspension and Revocafion. - The Real Estate 
Commission may, motu propio, or upon verified complaint in writing by any 
person, investigate the activities of any real estate broker, salesman, appraiser 
and consultant and after due notice and hearing, suspend or revoke the license 
for such period as the Commission may deem proper, when the licensee is 
found guilty of any of the following activities: 
(a) Procuring license through fraud and deceit and making false, fraudulent 
or deceitful statement of facts in his application for license; 
(b) Making any false and deceitful promise directly or through prospectus, 
advertisements, 
brochures or billboards 
which are likely 
to induce 
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decision in a transaction; 
(c) Procuring or helping to procure consent to or effecting closing or 
consummation of any real estate transaction or engagement of his service 
by means of bribery or corruption, fraud, deceit, intimidation, violence 
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or immoral offerings; 
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(d) Inducing any real party to a real estate transaction to break his contract 
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for the purpose of substituting in lieu thereof a new contract with the 
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same or different principal where such substitution is likely to benefit or 
enhance the interest of the licensee; 


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(e) Representing himself as a member of an accredited association of real 
estate brokers, appraisers or consultants unless he is a member in good 
standing of the respective association that had been granted a license 
of recognition by the Commission upon compliance with a set of 
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standards to be so prescribed with special emphasis on the strict 
adherence to the National Code of Ethics’ 
Using a trade name, insignia 
or membership in any real estate 
organization, profession or trade of which the licensee is not a member; 
Splitting or offering or agreeing to pay, split, or rebate any commission, 
fee or valuable consideration, directly or indirectly with the principal 
parties to the transaction or with any person who is not a duly licensed 
real estate broker or real estate salesman licensed under him for 
cooperating, assisting 
in or endorsing a transaction or engagement of 
his services; 
Failure to account or remit within fifteen (15) 
days 
from receipt of 
possession of any money belonging to his client, 
unless a different 
period is expressly stated by a mutual agreement between the realty 
service practitioner and his clients; 
Conviction of a crime for wrongful conversion of any person’s funds or 
p t-0 pedy ; 
Dishonesty in engaging in fraudulent representations in. any prospectus, 
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advertisement, 
brochures 
or billboards or in any circular or other 
literature that has been placed, put up or otherwise distributed concerning 
any real estate transaction; 
Failure to treat as a separate trust account, 
or commingling by the 
licensee, the money or other funds of his principal, patron, or client held 
in trust by the licensee; 


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(I) 
Violation of any of the provision of this Act or any order of the Commission 
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SEC. 
19. 
Procedure in fhe Suspension and/or 
evocation of 
of which the broker has notice. 
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4 License. - 
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(a) The Commission shall motu propio or upon verified complaint investigate 
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and decide matters involving the implementation and/or violation of the 
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provisions of this Act and such investigation shall be mandatory when 
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from the allegations of the complaints and the answer of the respondent, 
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including the supporting documents, the merit of the case cannot be 
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decided judiciously 
without conducting an investigation even if the 
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respondent does not request a formal investigation; 
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(b) The investigation shall be held not earlier than five (5) days and not later 
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than ten ( I O )  days from the date of receipt of respondent’s answer by 
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the Commission, and shall be terminated within thirty (30) days from 
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the date of receipt of respondent’s answer by the Commission, unless 
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the period is extended by the Commission in extremely meritorious cases. 
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The decision shall be rendered by the Commission within thirty (30) 
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days from the termination of the investigation or submission of the report 
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of the investigation which report shall be submitted within fifteen (15) 
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days from the conclusion of the investigation; 
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(c) The direct evidence from the complainant and the respondent shall 
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consist of the sworn statement and documents submitted in support of the 
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complaint or answer, as the case may be, without prejudice to the 
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presentation of additional evidence 
deemed necessary but‘ was’ 
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unavailable during the time of filing of the complaint or answer, upon 
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which the cross-examination by respondent and the complainant, 


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respectively, shall be based. Following the cross-examination, there may 
be redirect and re-cross- examination; 
(d) Either party may avail himself of the service of counsel and may require 
the attendance of witnesses and the production of documentary evidence 
in his favor through the compulsory process of subpoena or subpoena 
duces tecum; 
(e) The investigation shall be conducted only for the purpose of ascertaining , 
the truth and without necessarily ad hering to technical rules applicable 
in judicial proceedings. 
SEC. 20. Appeals. - 
(a) Appeals shall be made by the party adversely affected by the decision to 
the Office of the President within fifteen (15) days from receipt of the 
decision unless a petition for reconsideration if reasonably filed, which 
petition shall be decided within fifteen (15) days. Notice of the appeal 
shall be filed with the Commission which shall forward the reccrds of the 
case together with the notice of appeal to the Office of the President or 
his duly authorized representative within fifteen (15) days from filing of 
the notice of appeal, with its comment, if any. The notice of appeal shall 
specifically state the date the decision was appealed from as well as the 
date of receipt thereof. It shall also set forth clearly the grounds relied 
upon in making the appeal from the decisions; 
(b) A petition for reconsideration shall be based only on any of the following 
g rounds: 
(I) 
nee evidence 
has been discovered which materially affects the 
decision rendered; 
(2) the decision is not supported by the evidence on record; or 
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(3) errors of law or irregularities have been committed prejudicial to the 
interest of the respondent. 
Provided, 
That 
only 
one petition 
for reconsideration shall be 
entertained . 
SEC. 21, Preventive Suspension. - The Commission may preventively 
suspend any license under this Act pending an investigation, in the charge 
against any license involves misrepresentation, dishonesty or grave misconduct 
or fraud and there are strong evidence to believe that the respondent is guilty 
of the charges which would warrant the revocation of his license. 
SEC. 22. Lifting of Preventive Suspension. - When the administrative. 
case with preventive suspension is not finally decided by the Commission within 
the period of ninety (90) days after the date of suspension of the respondent, the 
suspension shall be automatically lifted; Provided, That when the delay in the 
disposition of the case is due to 
the fault, negligence 
or petition of the 
respondent, the period of delay shall not be counted in computing the period of 
suspension herein provided. 
SEC. 23. Rules and Regulations. - The Commission shall promulgate 
such rules and regulations as may be necessary or proper to carry out effectively 
the provisions of this Act. 
SEC. 24. Administrative Fines. - The Commission may prescribe and 
impose fines not exceeding Ten Thousand Pesos (P10,OOO.OO) for violation of 
the provision of this Act or any rule or regulation thereof. Fines shall be payable 
to the Commission and enforceable through writs of execution in accordance 
with the Rules of Court. 
SEC. 25. Penalties. 
- Any licensed person who is found guilty of 
dishonesty or gross misconduct in any realty transaction handled by him or shall 
willfully violate any provision of this Act or any rules or regulations thereof shall 
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be fined by not less than Fifty Thousand Pesos (P50,OOO.OO) 
and/or 
imprisonment of not more than two (2) years at the discretion of the court. If the 
violator is a juridical entity, 
its president or highest officer is subject to the 
penalties herein provided. 
Any individual 
who practices the real estate profession without first 
obtaining a license to practice or having secured a license, the same is not valid 
at the time of this Act, shall after being found guilty be fined by not less than Fifty 
Thousand Pesos (PS0,000.00) and/or imprisonment of not more than two (2) 
years at the discretion of the court without prejudice of imposing on such 
individual separate penalties for violating any provision of this Act. 
SEC. 26. Appropriafions. - For its first year’s operation the National 
Treasury 
shall provide such sums as are necessary for the effective 
implementation of this Act. Thereafter the Commission shall d‘raw its fund fr‘om’ 
the income receipts generated from its operation and such additional sums 
necessary 
to cover its subsequent yearly budget shall be provided in the 
General Appropriations Act. 
SEC. 27. Repealing Clause. - All laws, decrees, rules and regulations, 
or parts thereof, inconsistent with this Act are hereby repealed. 
SEC. 28. Effectivity. - This Act shall take effect immediately upon its 
approval. 
Approved,