7/25/2010

IRR of RA 9646 - Real Estate Service Act of the Philippines - Part 1 of 4


[Basic Knowledge for Brokers] The Implementing Rules and Regulation (IRR) of the R.A. No. 9646 was published in the Philippine Daily Inquirer on July 24, 2010. In accordance with Sec. 45 of the IRR, it shall take effect on 8 August 2010.

FOREWORD


The IRR basically looks like the RA 9646 with some "anomalous" insertions. It did not alter the arrangement of the Sections of the RA 9646, but it did inserted some provisions that somewhat aimed to provide ruling on some controversial sections especially the automatic licensing without examination, the continuing professional education, the requirements of registration for private practice and government assessors, the rulings on the salespersons, and the exemptions to the regulation. The IRR also created the official seal of the Professional Regulatory Board of the Real Estate Service.

I called PRC a while ago to request for a soft copy of the IRR, but I was so disappointed they are selling at it P50 for first page and P20 for each of the succeeding pages. So, for the benefit of the industry, I just painstakingly and encoded/typed it myself with reference to the printed publication in the Philippine Daily Inquirer (PDI).

I noticed some fixation on the number twenty (20) by the legislators when this law was made. For one, the law says there should be at least one broker for every twenty (20 salespersons. Secondly, the Professional Bond has increased 400% to twenty thousand pesos (20,000). Oh, they must love the number 20.


On SECTION 31. I detected an inconsistency in the required number of credit units for salespersons in Section 31 of the IRR. Paragraph 1 only require 12 units of training in real estate brokerage for initial salesperson applicant, but in the succeeding paragraph, the salespersons who are already active are required some 120 training hours. The inconsistency shows a lot of greed by and over-accommodation to CPE providers who are probably looking at securing their captured customers, sales, and profits -- and surprisingly, the PRB-RES paid attention to their lobby without thinking about the impact on the expenses of the brokers who run independent offices that the law now require.

I recommend 12 credit units of training for new and continuing salespersons -- 120 credit units is too much burdensome. I recommend that the brokers who supervise the salesperson should be authorized to personally train and seminar his own salespersons by himself. Teaching is another way to enhance the skills and knowledge of the broker. The most relevant training on the salespersons is the Code of Ethics and Responsibilities, and I think it is sufficient that the the seminar can be evidenced by the signature of understanding of the salesperson on the printed copy of the Code of Ethics.

Now let us look at money matters. Normally, CPE providers charge P3,000 for a 24 credit unit seminar. By economics of scale, I expect that they could be charging P15,000 for a 120 unit seminar. If you run an independent brokerage office and you have 20 salespersons, you should be ready for some P300,000 expenses for training, this is too burdensome.


On SECTION 34. I also suspect that the IRR was finished in a hurry. There seems to be an erratum in Section 34 of the IRR published in PDI. There is something wrong in the PRC Resolution Number. There is also a "strange" and "strongly disagreeable" insertion in Section 34 particularly on a the Board's power to issue a Resolution to mandate the payment of the membership fee for the AIPO.

The R.A. No. 9646 is clear that membership to the AIPO is automatic, meaning, there should be no obligations. However, of course the members of the AIPO can always independently decide among themselves, in a democratic process, on how much membership fee they would impose upon themselves to run the necessary office operation of the AIPO.

It is somewhat too encroaching for the Board to expand its power and mandate the membership fee in the AIPO. I think it is absurd for the Board to "hostages" the requirement for the renewal of the Professional Identification Card using the AIPO membership fee as the demanded ransom. I can smell a very strong lobby here by the squabbling applicants for accreditation to become the AIPO (specifically the people behind FRESA and PhilRES).

RESISTANCE. Let's not tolerate these people who squabble for accreditation as AIPO, specially the FRESA and the PhilRES who are aggressively making a move outside the process of democracy. The AIPO must be born out of a National Convention of licensed practitioners. PRC has a list of current practitioners and they should initiate a move to organize a general national convention of real estate practitioners with the objective of forming the AIPO, instead of entertaining those selfish thick-faced squabblers.

STRONG MESSAGE. FRESA and PhilRES, please withdraw your lobbying to become AIPO. Wala pang guideline on IPO accreditation eh nag-apply na kayo at nag squabble without the knowledge of majority of the real estate service practitioners. We have over 20,000 licensed brokers (alone) in the Philippines and you are only less than 100, we have not yet counted the other kinds of practitioners. You are too few to become the AIPO. If you will not stop lobbying, there will surely be a major conflict among ourselves. Believe me, our future is much brighter and the AIPO is much credible if it is formed using a National Convention and officers be elected in a democratic process. If you will not withdraw your applications, probably you are proud of what you are doing, then I will have to publish your names here in this blog, and you will be recorded in our industry's history as the squabblers who wants to by-pass the democratic process.

TO THE PRC. You have the list of existing licensed real estate professionals. I expect you to organize a National Convention and send invitation for ALL real estate professionals. In that Convention, the IPO will be born, we will select our officers and trustees, in a democratic and widely participated manner. We will also use the democratic process in the IPO to form the best minds in our profession into a working group to draft the Code of Ethics and Responsibilities in the real estate service. We paid so much licensing fee to government, it is unreasonable if you can't even spend an eight pesos stamp to send us an invitation letter on the National Convention.

By the way, please post the real estate practitioners roster (refer to Section 22 of the IRR) in a website and provide us printed copies of the IRR for FREE as part of your official communications and advocacy -- it is absurd that you are selling information to the public at exuberant prices. Government agencies have budget for communication and advocacy projects, charge it to that expense item.

I also expect you to come up very quickly with a complaint procedure against colorum real estate practitioners, in compliance to your duties and functionality on Section 37. Please do not try to think of disappointing us by neglecting your duties in this particular aspect. The complainant should not be asked of a fee for the complaint.

Remember, there is a user-fee principle. We pay government licensing fee, and for every peso we pay for the licensing, we expect service in return. We oblige you to listen to us, because we, the professional real estate practitioners, and the public, are your customers.

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Go to PART 1
Go to PART 2
Go to PART 3
Go to PART 4
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Republic of the Philippines
Professional Regulation Commission
Manila

PROFESSIONAL REGULATORY BOARD OF REAL ESTATE SERVICE
Resolution No. 02
Series of 2010

IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 9646, KNOWN AS THE "REAL ESTATE SERVICE ACT OF THE PHILIPPINES'.


Pursuant to Section 5, (J), Article II and Section 42, Article V of Republic Act 9646, An Act Regulating the Practice of Real Estate Service, Appropriating Funds Therefor aqnd for Other Purposes", the Professional Regulatory Board of the Real Estate Service, hereinafter referred to as the Board, after the review and approval by the Professional Regulatory Commission, hereinafter referred to as the Commission, hereby adopts, issues, and promulgates this resolution embodying the following Implementing Rules and Regulations to carry out, administer, and enforce the provisions of R.A. No. 9646.

RULE I

TITLE OF THE RULES, DECLARATION OF POLICY & DEFINITION OF TERMS


SEC. 1. Title

These Rules shall be known as "THE IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO 9646", known as the "Real Estate Service Act of the Philippines", in short, the "IRR of R.A. No. 9646", or merely the IRR.

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 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 property industry.

The IRR shall be interpreted, construed, and carried out in the light of the above Declaration of Policy, which embodies the legislative intent in enacting R.A. No. 9646.

SEC. 3. Definition of Terms

As used in the IRR, the following terms shall be understood to mean as follows:

(A) “Appraiser” also known as valuer, refers to a person who conducts valuation/appraisal; specifically, one who possesses the necessary qualifications, ability and experience to execute or direct the valuation/appraisal of real or personal property.

(B) “Assessor” refers to an official in the local government unit, who performs appraisal and assessment or real properties, including plants, equipment, and machineries, essentially for taxation purpose. This definition also includes assistant assessors.

(C) “Real estate” refers to the land and all those items which are attached to the land. It is the physical, tangible entity, together with all additions or improvements on, above or below the ground.

(D) “Real estate development project” means the development of land for residential, commercial, industrial, agricultural, institutional and recreational purposes, or any combination of such including, but not limited to, tourist, resorts, reclamation projects, building or housing projects, whether for individual or condominium ownership, memorial parks and others of similar nature.

(E) "Real estate developer" refers to any natural or juridical person engaged in the business of developing real estate development project for his/her or its own account and offering them for sale or lease.

(F) “Real property” includes all the rights and benefits related to the ownership of real estate.

(G) “Real estate service practitioners” shall refer to and shall consist of the following:

(1) Real Estate Consultant – a duly registered and licensed natural person who, for a professional fee, compensation or other valuable consideration, offers or renders professional advice and judgment on: (i) the acquisition, enhancement, preservation, utilization or disposition of lands or improvements thereon; and (ii) the conception, planning, management and development of real estate projects;

(2) Real Estate Appraiser – a duly registered and licensed natural person who, for a professional fee, compensation or other valuable consideration, performs or renders, or offers to perform services in estimating and arriving at an opinion of or acts as an expert on real estate values, such services of which shall be finally rendered by the preparation of the report in acceptable written form;

(3) Real Estate Assessor – a duly registered and licensed natural person who works in a local government unit and performs appraisal and assessment of real properties, including plants, equipment, and machineries essentially for taxation purposes.

(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 , list, promote, 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 for, and in behalf of, a real estate broker who is registered and licensed by the Professional Regulatory Board of Real Estate Service for or in expectation of a share in the commission, professional fee, compensation or other valuable consideration.

(H) "Accredited and Integrated Professional Organization (AIPO)" - the national integrated organization of natural persons duly registered and licensed as Real Estate Service Practitioners that the Board, subject to the approval by the Commission, shall recognize and accredit as the one and only AIPO, pursuant to Sec. 34, Art. IV of R.A. 9646.

(I) "Interim Accredited Professional Organization (IAPO)" - the professional organization accredited by the Commission only to operate and perform activities or acts to and until the recognition or birth of the AIPO as defined in H. above.

RULE II.

PROFESSIONAL REGULATORY BOARD OF REAL ESTATE SERVICE

SEC. 4. Creation and Composition of the Board

There is hereby created a Professional Regulatory Board of Real Estate Service, hereinafter referred to as the Board, under the supervision and administrative control of the Professional Regulation Commission (PRC), hereinafter referred to as the Commission, composed of a chairperson and four (4) members who shall be appointed by the President of the Philippines from the three (3) recommendees chosen by the Commission from a list of five (5) nominees per position submitted by the accredited and integrated professional organizations of real estate service practitioners: Provided, that two (2) members of the Board shall represent the government assessors and appraisers, who are both in active government service.

The first Board shall be organized within six (6) months from the effectivity of R.A. No 9646.

This provision shall be implemented in accordance with the guidelines of Executive Order No. 496, Series of 1991 on the selection, nomination, recommendation, and appointment of those who will fill up any vacancy in the Board.

SEC. 5. Powers and Functions of the Board

The Board is hereby vested the following specific powers and functions:

(A) Provide comprehensive policy guidelines for the promotion and development of the real estate industry in relation to the regulation of the practice of the real estate service profession;

(B) Conduct licensure examinations for the practice of the real estate service profession and prescribe the appropriate syllabi of the subjects for examination with their tables of specifications;

(C) Issue, suspend, revoke or reinstate, after due notice and hearing, certificates of registration or professional identification cards for the practice of real estate service;

(D) Maintain a comprehensive and updated register of licensed real estate service professionals;

(E) Monitor the conditions affecting the practice of real estate service and adopt such measures as may be proper for the enhancement of the profession and/or the maintenance of high professional, ethical and technical standards;

(F) Adopt the national Code of Ethics and Responsibilities issued by the AIPO to be strictly observed by all licensed real estate service practitioners;

(G) Hear or investigate any violation of R.A. No. 9646, the IRR, and the Code of Ethics and Responsibilities for real estate service practitioners and issue subpoena and subpoena duces tecum to secure the appearance of witnesses and the production of documents in connection therewith;

(H) Safeguard and protect legitimate and licensed real estate service practitioners and, in coordination with the accredited and integrated professional organization (AIPO) of real estate practitioners, monitor all forms of advertisements, announcements, signboards, billboards, pamphlets, brochures and others of similar nature concerning real estate and, where necessary, exercise its quasi-judicial and administrative powers to finally and completely eradicate the pernicious practices of unauthorized or unlicensed individuals;

(I) Prescribe, in cooperation with the Commission on Higher Education (CHED) or the concerned state university or college, the essential requirements as to the curricula and facilities of schools, colleges or universities seeking permission to open academic courses or already offering such courses in real estate service, and to see to it that these requirements, including the employment of qualified faculty members, are properly complied with;

(J) Promulgate, administer and enforce rules and regulations necessary in carrying out the provisions of R.A. No. 9646;

(K) Supervise and regulate the registration , licensure and practice of real estate service in the Philippines;

(L) Assess and fix the rate of reasonable regulatory fees;

(M) Administer oaths and affirmations;

(N) Adopt an official seal of the Board with the interpretation of its symbols attached to this Resolution and made an integral part thereof as Annex "A";

(O)Evaluate periodically the status of real estate service education and profession, and recommend and/or adopt measures to upgrade and maintain its high standard;

(P) Prescribe guidelines and criteria for the Continuing Professional Education (CPE) program for real estate service practitioners in consultation with the accredited and integrated professional organizations of real estate service practitioners;

(Q) Screen, issue and monitor permits to organizations of real estate professionals in the conduct of seminars and accredit such seminars pursuant to the CPE program, as well as the instructors or lecturers therein, for the purpose of upgrading the quality and knowledge of the profession;

(R) Monitor and supervise the activities of the accredited and integrated professional organizations (AIPO) and other associations of real estate service practitioners; and

(S) Discharge such other powers, duties and functions as the Commission may deem necessary to carry out the provisions of R.A. No. 9646.

The policies, resolutions, rules and regulations issued or promulgated by the Board shall be subject to the review and approval by the Commission. However, the Board’s decisions, resolutions or orders which are not interlocutory, rendered in an administrative case, shall be subject to review by the Commission only on appeal, in accordance with Republic Act No. 8981 and its Implementing Rules and Regulations.


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Go to PART 1
Go to PART 2
Go to PART 3
Go to PART 4

14 comments:

Bonzenti said...

For Mr. John Petalcorin,

I admired your courage in posting all your observations regarding the recently approved IRR of RA9646, more especially on your effort to retype of "for sale" IRR from the PRC. For 3 days that I've been searching for the IRR, finally I've found one in your Blog. In this regard, may I ask permission to copy the IRR for my own reflection also with what you have exposed? Rest assured that I would support your advocacy in correcting the old system, the "lobbying" of some "ksp/sipsip people" in real estate sector/industry.

Thanks.

Engr. Bonzenti R. Panganiban
Civil Engineer
Real Estate Broker
Real Estate Appraiser

JOHN ODONNELL R. PETALCORIN said...

Engr. Panganiban:

Go ahead sir. Information sharing is FREE. Knowledge is like light, when shared for free, it will be benefited by many.

Jurie said...

Question:

People are asking: What will happen to us on August 8,2010... should we stop selling?

JOHN ODONNELL R. PETALCORIN said...

Jurie: Hi! If you have no license and registration, selling any further would mean taking the risk of getting caught. The industry really do need sample indictments for publication and deterrent purposes.

Anonymous said...

Reaction to Jurie: our licenses under MO 39 will cease to be effective on AUg. 8, 2010. Technically speaking we are all considered "unlicensed" unless and until we register in accordance with Sec. 20.

JOHN ODONNELL R. PETALCORIN said...

Your license issued under MO-39 will still be honored until it expires as long as you have complied to that memorandum of PRC that you must submit a letter of intent to register to PRC along with the requirements (please find their memo). When your MO-39 license expires, you have to follow procedure on Section 20 to register.

Example in my case, my license under MO-39 expires on December 31, 2010 and I have already complied to the PRC memo. This license is good until 31 Dec 2010. Before this license expires, I will have to register following Section 20 procedure (and prepare P20,000 cash bond).

Anonymous said...

John, the letter of intent is NOT a license. While you may submit a letter of intent in order to continue with your activities, it is not the same as extending the effectivity of your licenses. What the PRC memo only provided for a grace period to register without examination.

Ipso jure, ALL licenses under MO39 will cease to be effective. Further, since the IRR has already been issued, the stop gap retroacts even to the effectivity of the law (July 29, 2009).

This interpretation serves a lot of purposes, among others, the integrated and Accredited Professional Organization of Real Estate Service Practitioners accreditation must be applied by a group of PRC registered and licensed practitioners. It is not sufficient that a mere letter of intent can enable them to group together and apply for accreditation.

JOHN ODONNELL R. PETALCORIN said...

I did not say that the letter of intent is a license. It is the MO-39 license that is a license and PRC will honor the expiration of the MO-39 license. The latest MO39 license expiration is 31 December 2010. PRC will have to honor the MO-39 license to avoid inevitable gaps.

It will take time for PRC to organize the registration process for practitioners who no longer need to take the exam. They need to get an office space, they need to establish capital outlay, they need to hire staff, they need to train staff, they need to establish the system. It will take time. If they are fast and they have the budget, I can conservatively estimate the Secretariat Formation would be completed between October-December of 2010. We, the real estate practitioners have legal authorization to practice and should continue serving the public by virtue of our MO-39 from 8 August 2010 until the PRC start processing license.

There is no provision in the R.A. 9646 and its IRR that mentions that ALL Mo-39 licenses are administrative revoked on 8 August 2010.

jun said...

Hello John,

Be informed that I have been reading your blog for a long time especially on matters regarding the RESA Law.

Pardon me, but initially, I found you too brash, all-knowing, unmindful of other people's opinion and basically arrogant.

I was biased, of course, for I belong to that large group of real estate agents who are considered colorum. I even have my own website where I DABBLED on selling real estate properties.

But the more I read your blog, the more I started to appreciate the importance of this groundbreaking law and the more I realized your sincerity in elevating the local real estate profession to a global level. You have thought up of some very innovative ideas that some practitioners who have double your experience (in terms of years) wouldn’t have thought of.

Whenever I read foreign articles on real estate written by professionals, I can only gawk at the amount of knowledge these people have in their chosen profession. And the more I realize how far behind we are compared to them; and, therefore, the urgency of the RESA Law if we are to catch up with them.

It’s now clear to me that you have to be brash for you are championing a very important advocacy that many people either cannot or refuse to understand. Champions are never meek like lambs.

You have earned my deepest admiration for having stood and having articulated your strong opinions virtually alone while those who will greatly benefit from this law simply sat on the sidelines and kept silent.

My warmest regards and more power to you.

Anonymous said...

good day.

i am just curious on some section of resa. does this mean that if our municipal assessor retires this august, i, being the next in rank, will not be appointed as assessor. so there will be a vacancy that will exist for a long time because i am not yet qualified and nobody from the lgu is, and the date of the first examination is still unknown. i am worried if in case those who will be given an instant license will apply but the fear that they will just use the position for their own benefit or the conflict of interest will arise because the fact is that they are business minded individuals and not service oriented individuals.

JOHN ODONNELL R. PETALCORIN said...

If you will lack the qualification to succeed the retiring municipal assessor, you will have to work harder to catch up with the requirements. Current employees of government have no monopoly over the sense of nationalism, patriotism, and service-orientedness. Once a once private practitioner joins the government ranks, he/she will be subject to public sector rules on avoidance of conflicts of interest.

Anonymous said...

as a person speaking for your self, i may say that your insights are truly good to be true. but as a neophyte in the government sector, who is doing all the possible deeds for better governance, i am truly scared. i know of many assessors doing selling and agents work. asking commissions on transactions they came across even if they are not the real player. what more if a licensed private individual enters a government service. modesty aside, as an new appraiser but very much qualified to be an assessor prior to resa, i am doing my best to eradicate bureaucracy, red tape, graft and corruption, and conflict of interest. before entering government service, i heard of those ugly connotations on govt employees, but i and the rest of the new group who is tasked to do appraisal, we make it sure that the bad image of government be turned into a good one. for me assessors should not be licensed on the ground that even if they do proper valuing, the value that the chief executive and the sanngunian will adopt will be very much lower because of their fear to be the enemies of the taxing constituents, who will, in return, will not vote for them if they approve a correct/high valuation.

angelo h said...

This information is very helpful. Thanks for the post.

real estate ph

Anonymous said...

can you please post and also send to my email all implementing guidelines that licensed broker is needed and a must in all transaction of real estate here in the Philippines. In some municipalities like here in our place, transaction is done without the needs of brokers due to no ideas of any implementing guidelines approved. Thank you so much. My email add chua.archie@yahoo.com