The Legal Perils of Dealing with Unlicensed Real Estate Agents

By Bronx Hebrona

A fine of not less than PhP200,000 or imprisonment of at least four (4) years, or both.

Such are the penalties for engaging the services of an unlicensed real estate broker or agent, or engaging in the practice of real estate without the proper license and registration, as prescribed by Republic Act 9646.

RA 9646, also known as the "Real Estate Service Act of the Philippines," took effect on 15 July 2009.

Besides increasing the penalties for unlicensed realty services, the new law also transferred the regulation of real estate service practitioners from the Department of Trade and Industry (DTI) to the Professional Regulation Commission (PRC), under which a Professional Regulatory Board of Real Estate Service (PRBRES) has been created.

As PRC-regulated practitioners, real estate service professionals such as brokers, appraisers and consultants, are now in the same league as nurses, doctors, accountants, teachers and engineers. Real estate salespersons or agents are now required to be PRC-accredited and have to be affiliated with a licensed real estate broker, otherwise, their practice is deemed illegal and the penalties of RA 9646 apply.

The new law also mandated the Commission on Higher Education (CHED) to create a course curriculum for a bachelor's degree in real estate service. Beginning the school year 2012-2013, a number of colleges nationwide have implemented the academic program Bachelor's Degree in Real Estate Management (BS REM). Upon availability of graduates from the said program, the PRC shall require every board examinee for real estate brokers and appraisers to have earned the said degree.

The passage of R.A. 9646 is a product of years of advocacy by licensed and legitimate real estate practitioners and a government program to reform the land valuation and asset management in the country. Professionalization and better regulation of real estate service practice in the country is one step to improve valuation and tax revenues related to real property transactions the Philippines.

It has been widely observed that a lot of people take on the title of "Real Estate Broker," “Real Estate Agent” or “Property Consultant” without taking and passing the licensure examinations. Illegal use of said titles are penalized by RA 9646.

These unlicensed persons are often the ones taking advantage of the ignorance of property buyers and sellers, offering to "fix" transactions with government agencies such as the Registry of Deeds, and in many instances, running away with the client's money without delivering the service.

In the old rules, the regulation of realty service was under the Bureau of Trade Regulation and Consumer Protection of the DTI. Besides competing with the various sub-departments of the DTI for resources and attention, the Bureau had no expressed powers to run after illegal real estate practitioners. Thus, the proliferation of unscrupulous agents and swindlers which victimized clients and tainted the realty profession.

Under RA 9646, the lawyers of the PRC and the PRBRES shall act as prosecutors against illegal practitioners and violators. The law enforcement agencies such as the Philippine National Police and the National Bureau of Investigation are also mandated to assist the PRC and the Board in enforcing the provisions of the law.

The PRBRES is also mandated to formulate and implement a Code of Ethics and Responsibilities for Real Estate Service Practitioners. Violation of the said Code could result in the revocation of license of a real estate service practitioner.

Established and new organizations of real estate service practitioners are now actively campaigning for the full implementation of RA 9646, especially the provisions on eradicating unlicensed, illegal practitioners. Among these are the Philippine Association of Real Estate Boards (PAREB) and the Genuine Advocates of Professionalism of Real Estate Service Practitioners (GUAPO RESP).

(Mr. Bronx Hebrona (PRC Real Estate Broker Reg. No. 0008695) is Managing Broker of Shepstein Realty, a Top Professional Realty Service Firm in General Santos City and Southern Mindanao. He is a Trustee of the PAREB-General Santos-Sarangani Real Estate Board and chairs its Education and Professional Development Committee. He is the Founder and current President of the Genuine Advocates of Professionalism of Real Estate Service Practitioners (GUAPO RESP). He may be contacted at: shepsteinrealty@gmail.com).

The Ongoing Real Estate Boom in Gensan

By Bronx Hebrona

In a fifty-minute trip from out of town recently, in the midst of a lively discussion about Philippine politics, a third companion in the car butted in: "Is real estate in Gensan booming nowadays?"

In the brief, awkward silence that ensued, it became clear to whom the question was directed -- I was the only real estate broker in the car, and my "expert" opinion is being sought.

Just like in other places in the Philippines, nobody in General Santos City regularly monitors and publishes real estate prices. The only available reference is the schedule of valuation by the Bureau of Internal Revenue for taxation purposes. Seldom updated, said schedule is not very reliable especially if it is the latest current market value that you want to know.

The local bankers' association called CBAGS (Commercial Bankers Association of General Santos) used to publish real estate price guides in certain selected streets in the city, but I haven't seen an updated guide in the last eight years.

The best way to gauge property values in an area is to hire a licensed real estate appraiser to give you an educated estimate, based on a mainstream formula used by property valuers anywhere. It would, however, cost you some amount if you seek to have every property you are interested in appraised by the licensed appraisers.

The banks, of course, have their in-house appraisers, who also use similar formulas in property valuation. However, bank appraisers might not show you the best value for your property as their primary mandate is to make their financing deals favorable to the bank by being very conservative in estimating the value of your property.

That leaves me to base my estimate of a general increase in real estate values in Gensan on my subjective personal observation and experience. I therefore, with my biases, opine that there is an increasing trend in real estate values in Gensan. I base this on the following:

* The entry of major residential developers such as Vista Lifescapes of Manny Villar, Sta. Lucia Realty and Robinsons Homes.

* The entry of the country's mall chains. John Gokongwei's Robinsons Place opened shop last September 2009, while Henry Sy's SM City Gensan Mall opened just last August. Word has also been going around that Rustan's, Ayala Malls and NCCC are also seriously studying to open branches in the city.

* The ongoing expansion of local malls such as KCC and Gaisano.

* The ongoing construction of more commercial buildings by Gensan-based and outside investors.

* The ongoing development of socialized to middle-level cost housing projects by local developers.

* The continuing purchase of prime properties and construction of commercial buildings by local boxing hero Manny Pacquiao.

The above facts show that the use (and therefore, the value) of real estate in the city is improving.

The other factors that have a bearing on property values include the following:

* Increasing vehicle traffic in the city. The city government has been installing traffic lights in major intersections to better regulate the flow of vehicles.

* The increasing number of brand-new car dealerships. This means more people can now afford to buy new cars (and thus, property), some of whom are looking for a new residence with a bigger garage.

* While a few major banks have merged and consolidated nationwide, the number of local bank branches increased. This indicates a growing clientele in construction and development financing and home mortgages.

* The airlines plying the Gensan-Manila and Gensan-Cebu routes have reported an increase in passenger and cargo traffic. This indicates that more people have disposable income (and can now afford air transport) and some domestic and export trading businesses are thriving.

My best personal proof, however, of an ongoing real estate boom in Gensan is based on the value of a few subdivision lots I purchased on installment in mid-2005. The selling price of lots in the same subdivision has increased by more than 400% now, despite it being about 1.5 kilometers away from major developments and from the national highway. That means properties closer to the said areas have increased in value at a higher rate.

So, yes, there seems to be an ongoing real estate boom in Gensan amidst the worldwide financial crisis. And in my opinion, the best time to participate was last year. However, the second best time is now. Tomorrow is always uncertain.

  (Mr. Bronx Hebrona (PRC Real Estate Broker Reg. No. 0008695) is Managing Broker of Shepstein Realty, a Top Professional Realty Service Firm in General Santos City and Southern Mindanao area. He may be contacted at: shepsteinrealty@gmail.com)