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).