Republic of the Philippines
HOUSE OF REPRESENTATIV!
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House Bill No.27 5

INTRODUCED BY REPRE!

[ATIVE ARTHUR C. YAP

EXPLANATORY NOTE

Republic Act (R.A.) No. 9646, otherwise known as “The Real Estate Service Act of the
Philippines” or “the RESA law” was signed into law on June 29, 2009 as a measure to
regulate and professionalize real estate industry practices in the Philippines. One of its
objectives is the development of technically competent, well-trained, professional and
accountable real estate practitioners in the country.

The RESA law requires that only licensed real estate practitioners are authorized to
engage and conduct the practice of real estate in the Philippines, subject to a few
exemptions. While the purpose of the RESA law is highly commendable, there are certain
provisions which result in undue restriction instead of promotion of employment to less
educated individuals.

Thus, the proposed measure seeks to amend provisions which require the applicants of
the licensure examination to be holders of Bachelor’s degree in Real Estate Service, This
is not a necessary. Persons from different backgrounds should be allowed to practice as
long, as they have undergone training and accreditation. The educational requirement is
too stringent. Ample experience or accreditation is sufficient to allow an individual to
enter the Real Estate Profession.

Moreover, this measure also amends Section 4 of the law pertaining to the Creation and
Composition of the Professional Regulatory Board of Real Estate Service (PRBRES),
The industry exists primarily due to extensive investment by owners and developers, and
is facilitated by the support service providers. In the present law however, the PRBRES
composed entirely of service practitioners. Developers and owners should be given
representation in the board, It is not reasonable to have the service providers outweigh the
owner/investors in decisions pertaining to the conduct of their business just because their
number of members is bigger than that of actual investors and operators.

Furthermore, Section 28 of RESA law which excludes real estate developers from the
practice of real estate service is also proposed to be deleted. Developers should have the
same rights as other owners to dispose of their own properties. ‘The provision provides
that any, natural, or juridical person may act as a Real Estate Service Practitioner (Broker,
Appraiser, Assessor, or Consultant) with respect to his own property except if you are a
developer. This provision should be deleted for the following reasons, to wit


1. In the case of Real Estate Broker, the owner of the property cannot act as
“agent” or “Broker” for himself/herself since he/she is the owner of the
property. Article I, Section 3 of this Law defines Real Estate Broker as 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, xxx. In this regard section 28 does not serve any
legally valid purpose.

2, In the case of real estate Appraiser or Assessor, the owner of the real
estate property cannot and must not be allowed to officially undertake
appraisal, assessment or consulting of his own property since this will be
self: serving, a conflict of interest and will be legally defective

Finally, Section 32 of the RESA law is also amended to remove the 1:20 ratio for
accredited salespersons and licensed broker. A real estate broker’s business should be
allowed to flourish based on his ability to manage the people just as other professionals
like lawyers, engineers, and architects. There is no restriction in the number of assistants
they have. This ratio requirement unduly reduces the promotion and growth of
employment and livelihood opportunities in our country. We must allow the real estate
and housing industry to contribute more significantly in addressing the unemployment
ctisis and the alleviation of poverty. Since the quality of service is still maintained by
licensed practitioner.

For the foregoing reasons, the immediate passage of the bill is earnestly sought,



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City. Metro Manila

16" Congress
First Regular Session

House Bill No, 52°75,

Introduced by
REPRESENTATIVE ARTHUR C, YAP

ANACT

INSTITUTING REFORMS IN THE REAL ESTATE SERVICE PRAC

AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 9646, ENTITLED “AN
ACT REGULATING THE PRACTICE OF REAL ESTATE SERVICE IN THE
PHILIPPINES, CREATING FOR THE PURPOSE A PROFESSIONAL
REGULATORY BOARD OF REAL ES' SERVICE, APPROPRIATING
FUNDS THEREFOR AND FOR OTHER PURPOSES,” AND FOR OTHER
PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled:

Section 1. Short Title. - This Act shall be known as the “Real Estate Service
Practice Reforms Act of 2014."

Section 2. Amendatory Provisions. ~ For purposes of this Act, and in order to
institute the reforms needed to make Republic Act (R.A.) No, 9646, entitled: "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 Therefore
and for Other Purposes" more relevant and more responsive to current real estate

conditions, the following provisions are hereby amended to read as follows:

(a) Section 2 of Republic Act No. 9646 is hereby amended to read as follows
“Section 2. Declaration of Policy. ~ 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, WIDENING
ECONOMIC OPPORTUNITIES IN THE SECTOR and
enhancing government income from real _property-based
transactions, Hence, it 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 AS WELL AS CONTINUE TO ALLOW THE
LESS EDUCATED APPROPRIATE AND INVALUABLE
OPPORTUNITIES IN THIS SECTOR UNDER THE
SUPERVISION OF THOSE AC

EDITED."

(b) On Section 3. Definition of Terms, Sub-paragraph (4) and (5), Paragraph(g), of
R.A, 9646 is hereby amended to read as follows

“Section 3, Definition of Terms. - As used in this Act, the following terms
shall mean:

XXX

(g) “Real estate service practitioners” shall refer to and consist of the
following,
XxX
(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, flistpromote], 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] ffor-and-in-behalf} ACTS AS AN AGENT OF A
PARTY IN A REAL ESTATE TRANSACTION TO fa-real-estate
broker —who—is—registered—and—licensed—by—the—Professional
Regul Board-of Real-Es «PRBRES)-for—{i

expectation-of—a-share-in-the-] OFFER, SOLICIT, MEDIATE,
NEGOTIATE OR EFFECT THE MEETING OF THE MINDS
ON THE SALE, PURCHASE, EXCHANGE, OR OTHER
SIMILAR TRANSACTIONS ON REAL ESTATE OR ANY
INTEREST THEREIN UNDER THE SUPERVISION OF



DULY A REGISTERED AND LICENSED REAL ESTATE

BROKER in expectation of a share in the commission

Iprofossional-fee-compensati hice seiablosonstd 2
(©) Section 3 is hereby amended to add the preceding provision under sub-paragraph

(6), to wit:

“(6) GENERAL SERVICE AND INFORMATION PROVIDER
~- A NATURAL PERSON, WHO DOES NOT NEED A
LICENSE OR ACCREDITATION SINCE THEY PERFORM.
ACTS THAT OF THEMSELVES DO NOT CREATE UNDUE
RISK FOR NORMAL PERSONS SUCH AS DISTRIBUTION
OF FLYERS OR SALES BROCHURES, ANSWERING
PHONE INQUIRIES AND GIVING GENERAL
INFORMATION WITHOUT ENDORSING OR ADVISING
LEGALLY, AS THE ASSISTANTS, CLERKS AND
MESSENGERS DO FOR ACCOUNTING, LAW AND
MEDICAL INSTITUTIONS.

Xxx

(d) Section 4 of Republic Act No. 9646 is hereby amended to read as follows
Section 4. Creation and Composition of the Board. There is hereby
created a Professional Regulatory Board of Real Estate Service
(PRBRES), hereinafter referred to as the Board, under the
supervision and administrative control of the Professional
Regulation Commission (PRC), hereinafter referred to as the
Commission, WHICH SHALL BE composed-fof-a-chairpersen;
four-(4)-members-whe-shall-be-appointed-by-the President-of the
Philippines—from—the-three (3) recommendees—chesen—by_the

Commission-from-atist-of five (5) nominees per pX ibmitted
by-the-accredited-and ed_ professional ation-of real

practitioners-PrevidedThat-two-(2)-of the members
of -the—Board—shalt_rep: he—govern s—and

appraisers} OF THE FOLLOWING FIVE (5) MEMBERS, A
CHAIRMAN AND A CONSULTATIVE BODY TO BE
SELECTED AS FOLLOWS:


A. CHAIRPERSON- REFERS TO A PROFESSION-
NEUTRAL PERSON FROM THE GOVERNMENT WHO
WILL DRIVE FROM A PERSPECTIVE OF BALANCING
REQUIREMENTS OF DIFFERENT SECTORS FOR A
STABLE, COMPETENT AND VIBRANT INDUSTRY, TO BE
APPOINTED BY THE PRESIDENT OF THE PHILIPPINES;
FROM AMONG THE THREE(3) RECOMMENDEES
CHOSEN BY THE COMMISSION, PROVIDED, SUCH
NOMINEES COME FROM THE FIFTEEN (15) NOMINEES
OF THE ACCREDITED AND — INTEGRATED
PROFESSIONAL ORGANIZATION (AIPO) OF REAL
ESTATE PRACTITIONERS;

B. TWO (2) REPRESENTATIVES, FROM AMONG T

RECOMMENDATIONS OF THE COMMISSION, TO BE
A

) PRESIDENT, REP! 3 THE
HREE (3) SECTORS OF REAL ESTATE PROFESSION,
LES PERSONS/BROKERS, APPRAISERS, — AND
ASSESSORS, PROVIDED, SUCH NOMINEES COME
FROM THE FI (1S) NOMINEES OF THE
ACCREDITED AND _ IN’ R: ID PROFESSIONAL
ORGANIZATION — (AIPO) OF REAL ESTATE
PRACTITIONERS; AND FINALLY,

C. ONE (1) REPRESENTATIVE, OFFICIALLY ENDORSED
FROM PRIVATE HOUSING, SUBDIVISION AND
COMMERCIAL DEVELOPERS ASSOCIATIONS, AND A
REPRESENTATIVE FROM THE ASSOCIATION OF A
REGISTERED ENGINEERS, ARCHITECTS, OR URBAN
PLANNERS AND A CONSULTATIVE BODY COMPOSED
OF DULY SELECTED REPRESENTATIVES FROM, DOLE,
DSWD AND ALIKE WHOSE INPUTS SHALL FORM PART
OF THE MINUTES.


‘The first Board shall be organized within six (6) months from the
effectivity of this Act.

(e) Paragraph (b), Section 14 of R.A. 9646 is hereby amended to read as follows:

“Section 14, Qualification of Applicants for Examinations, - In order to
be admitted to the licensure examination for real estate service, a
candidate shall, at the time of filing his/her application, establish to the
satisfaction of the Board that he/she possesses the following
qualifications:
XXX
(b) A holder of a [relevant] bachelor's degree from a state
university or college, or other educational institution duly
recognized by the CHED OR AN EQUIVALENT OF ATLEAST
FIVE (5) YEARS OF RELEVANT WORK EXPERIENCE
FROM A REALTY FIRM OR DEVELOPER WHO IS A
GOOD STANDING MEMBER OF A MAJOR REAL ESTATE
INDUSTRY, DULY CERTIFIED BY THE COMPANY’S
AUTHORIZED REPRESENTATIVE;-{Provided,-Phat—as-soon
se leading to-a- Bachelor’s-degree in Real Estate S eis
implemented-by-the-CHED,-the-Board—shall-make-this-course-a
requirement-for-taking-the-licensure-examination-and}

xxx

(O) Section 28 of R.A. 9646 is hereby amended to read as follows:

“Section 28. fExemptions|PERSONS EXEMPTED from the Acts
Constituting the Practice of Real Estate Service. - The provisions of this

Act and its rules and regulations shall not apply to the following”

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; [exeept-realestate
developers];

KK


(g) The first paragraph of Section 31of R.A, 9646 is hereby amended to read as

follows:

“Section 31. Supervision of Real Estate Salespersons. - For 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 feollege} TRADITONAL HIGH SCHOOL OR JUNIOR
HIGHSCHOOL FROM AN_ EDUCATIONAL INSTITUTION
RECOGNIZED BY THE DEPARTMENT OF EDUCATION and
UNDERTAKEN OR HAS ACCUMULATED AN EQUIVALENT OF
AT LEAST THREE (3) YEARS OF RELEVANT WORK
EXPERIENCE FROM A REAL ESTATE DEVELOPER OR A
REALTY PRACTICE FIRM WHO IS A GOOD STANDING
MEMBER OF A MAJOR REAL ESTATE INDUSTRY
ASSOCIATION OR in A 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] DULY AUTHORIZED BY A real estate broker:
{who—has--direet—supervision—and—accountabilityover—them—is—also—a
signatory-thereto] No real estate salesperson, either directly or indirectly,
can negotiate, mediate or transact fany-real-estate-transaetion} for, WHEN
and in behalf of a real estate broker without first securing an authorized
accreditation as real estate salesperson [for-the-real-estate-breker,] as
prescribed by the Board--{A-real-estate-broker-shall_be-guilty-of violating
this-Act-for-employing-o utilizing the services-of a-real-estate-salesp
when-he/she-has-not-secured-the -required_acereditation fromthe Board
prior to-such-employment]

Xxx

(h) We propose to include this paragraph under Section 31 paragraph b, to wit

“Section 31B. SUPERVISION OF GENERAL SERVICE
PROVIDER- - FOR GENERAL SERVICE PROVIDER, NO
EXAMINATION AND/OR ACCREDITATION IS


REQUIRED. AS SUCH THEIR FUNCTION INCLUDES
DISTRIBUTION OF FLYERS OR SALES BROCHURES,
ANSWERING PHONE INQUIRIES AND GIVING
GENERAL INFORMATION, MESSENGERIAL,
COORDINATORS, DOCUMENT PROCESSORS, OR
OTHER SIMILAR SERVICES TO PROSPECTIVE
CLIENTS. THEY CANNOT, NEGOTIATE, MEDIATE OR
TRANSACT ANY REAL ESTATE TRANSACTION FOR,
WHEN AND IN BEHALF OF A REAL ESTATE BROKER
WITHOUT THE ACTUAL PRESENCE OF THE
REGISTERED BROKER AND/OR SALES PERSON DULY
AUTHORIZED.

(i) Paragraphs (a) and (b), Section 32 of R.A. 9646 are hereby amended to
read as follows

“Section 32, Corporate Practice of the Real Estate Service,

a. No partnership or corporation shall engage in the
HABITUAL 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
WHOSE PURPOSE IS REALTY BROKERAGE SERVICES
shall regularly submit fa-tist] AT LEAST ONE of its real estate
service practitioners, PERFORMING — RELEVANT
FUNCTIONS to the Commission and to the SEC as part of its
annual reportorial requirements. [There shall-be-atleast-be-one-))

licensed—reat broker—for—every—twenty—(20)-accredited
salespersons}
b. Divisions or departments of partnerships and corporations

TO SUPPORT THE MARKETING AND SELLING
FUNCTIONS OF THE OWNER OR DEVELOPER IN ANY
REAL ESTATE DEVELOPMENT PROJECT must [be-headed
by-fall-time] ENGAGED THE SERVICES OF registered and

licensed real estate broker[s].”


(j) Section 36 of R.A. 9646 is hereby amended to read as follows

“Section 36. Continuing Professional Education (CPE)
Program.- The Board shall develop, prescribe and promulgate
guidelines on CPE upon consultation with the accredited and
integrated professional organization of real estate service
practitioners, affiliated association of real estate service
practitioners and other concerned sectors, and in accordance with
such policies as may have been prescribed by the Board, subject to
the approval of the Commission, The Board shall create a CPE
Council that shall be composed of a chairperson coming from the
Board, a member from the accredited and integrated professional
organization of real estate service practitioners, A MEMBER
FROM THE REAL ESTATE DEVELOPER SECTOR AS
SECONDED BY A MAJOR DEVELOPERS ASSOCIATION,
A REPRESENTATIVE FROM THE ASSOCIATION OF A
REGISTERED ENGINEER, ARCHITECTS, OR URBAN
PLANNERS, BUT NOT NECESSARILY A REAL ESTATE
PRACTITIONER and a member from the academe. ALL
SHOULD HAVE REPUTATION FOR KNOWLEGEABILITY
AND NO MAJOR DEROGATORY CASE FILED WITH
SUBSTANTIVE BASIS AGAINST THEIR PERSON AND
INTEGRITY.”

“CURICULUM SHOULD HAVE CRITERIA OF
SIGNIFICANCE, RELEVANCE, EFFICIENCY AND
DELIVERY VERSUS VALUE CREATED.”

(k) Section 39 of R.A. 9646 is hereby amended to read as follows:

“Section 39. 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
P400,000.00)} TWENTY (P 20,000.00) THOUSAND PESOS or
imprisonment of not less than [two-(@2)-years]-FIFTEEN (15) DAYS , or


AS STATED IN THE IRR 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. OTHER PENAL LAWS ARE STILL
APPLICABLE. x x x”

(1) We hereby recommend for the amendment of Sections 42. 43, 44 and 45 of RA
9646 and new formulation is hereby proposed to be read as follows

{Section-42,—ImplementingRules-and-Regulations 1f-withinsix (6)

hs-after-the effectivity of this Act, th ission, together-with-the
Board-and-the-accredited-and-i -professional-organization-of reat
estate-service-practitioners,the-Department-of Finance and-the-CHED,
shall-prepare-the-neeessary-rutes-and-regulations,-inckiding the Code-of
Bthies-and Responsibilities-for real estate-service-practitioners-needed-to
implement-the provisions of this Act}

Xxx

SECTION 3. IMPLEMENTING RULES AND
REGULATIONS. — WITHIN SIX (6) MONTHS
AFTER THE APPROVAL OF THIS ACT, THE
PROFESSIONAL REGULATORY BOARD OF
REAL ESTATE SERVICE SHALL FORMULATE
‘THE APPROPRIATE RULES AND REGULATIONS
NECESSARY TO EFFECTIVELY IMPLEMENT
THE PROVISIONS OF THIS ACT.

SECTION 4. /Seetion-44-] Repealing Clause- |{a)-Seetions-3(e)-and-(ee)

rf Act Ne - \ded-by Ne-3H15-and-Act-No-3969-sections
472-and 473-0f the-Local Govern de-of 1991 {Repub} et-No.
7160),--and—pertinent provisions the-Civil-Servicetaw—are—hereby:
modified accordingly}

{()} All laws, decrees, executive orders [department—or

orand ders; cs Ph admit i -issuances]



PROCLAMATIONS, RULES AND REGULATIONS AND OTHER
ISSUANCES or part or parts thereof, which are inconsistent with the
provisions of this Act, are hereby modified, {superseded} or repealed

accordingly.

SECTION 5. —{Seetion43.] Reparability Clause- \f FOR ANY
REASON, any [clause;-sentence,paragraph-or-part-of this-Act-shall-be]
PROVISION OF THIS ACT IS declared unconstitutional or invalid;
{such judgment shall-not-aflect invalidate orimpainany-par-oF this vet |
THE REMAINING PROVISIONS NOT AFFECTED THEREBY
SHALL CONTINUE TO BE IN FORCE AND EFFECT.

SECTION 6. EFFECTIVITY CLAUSE. ~ This Act shall take effect
[fifteen-days-upon} FOLLOWING ITS publication in {the official Gazette

of-in-a-majordaily] AT LEAST TWO (2) newspaper{s} of general
circulation fin-the Philippines}

Approved