Negative Impact if Developers will be Exempt in the Coverage of RA 9646
[ADVOCACY SERIES] - The negative impact would be (1) uneven playing field in the sector, (2) rational shift of career, (3) intensification of negative campaign messages, (4) recruitment discrimination, (5) continued exploitation.
QUESTION: Sir John, what are the consequences if the developers will be exempted in the IRR of RA 9646?
ANSWER: The RA 9646 clearly includes the developers as it says:
"SEC. 28. Exemptions 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 judicial, who shall directly perform by himself/herself the acts mentioned in Section 3 hereof with reference to his/her or its own property, except real estate developers;"
If the developers will be exempted in the IRR of the RA9646, it will have the following disastrous impact in the Real Estate Service Industry.
1. UNEVEN PLAYING FIELD. It will establish an uneven playing field between the licensed salespersons and the in-house salespersons. Both are selling the same projects but the registered salespersons follow the Code of Ethics and professional supervision of licensed brokers, while the in-house salespersons are totally not covered by the ethical standards and training requirements.
2. RATIONAL SHIFT OF CAREER. More brokers would shift to rather become registered in HLURB as developers because it is cheaper and less restrictive to register as developer corporation than maintain a license and pool of salespersons as a broker. Aside from the restrictions of being licensed professional, there are administrative expenses associated with it such as the mandatory P20,000 professional performance bond for licensed brokers. To evade these expenses without sacrificing the income-generating activity, the best way is to rather become a developer than a licensed broker.
3. THE INTENSIFICATION OF NEGATIVE CAMPAIGN MESSAGE. Licensed brokers would naturally intensify the advertising and negative campaign message that will tell buyers that in-house agents of developers in the Philippines are professionally unregulated, uneducated, without professional quality control, and does not follow Code of Ethics that protect the customers. If this negative message reaches the international community, it will smear the real estate industry in general.
4. RECRUITMENT DISCRIMINATION. The RA 9646 primarily protects the registered salespersons from exploitation of developers. Once a salesperson become "registered" and "protected" by forces external to the developers, he will naturally be discriminated by the "labor-exploiter-type" of developers because he is a high-risk in legal terms. In this scenario, developers would prefer hiring the services of the unregistered ones.
5. CONTINUED EXPLOITATION. Many in-house sales employees and agents of developers complain of labor unfair practices. The very common examples of these labor malpractices are (1) non-payment of commissions for manipulative reasons, (2) stealing of buyers by twisting the hold-over-clause, (3) unpaid wages for a day's full-time work of handing out fliers, (4) casualization, lifetime non-regularization and everlasting contractual job, (5) non-payment of income taxes, (6) unfair competition with other agents, (7) non-granting of health insurance, leave benefits, and other humanitarian fringe benefits. These exploitation and unfair practices would continue if the developers and those who work in sales units of their organization will not be covered by the implementing rules of the RA 9646.
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