Why Developers are embraced by RESA

QUESTION: A broker is ethically obliged to disclose to the buyer if he is selling his own property. What is the relation of this ethic on the inclusion of the Developer in the professionalization requirement of RESA?

ANSWER: A person may have two kinds of property. One kind of property that he may own are those are intended for his personal use, this is called ordinary asset. Other kinds of property that he may own are those intended to be sold out to for a profit/gain, this is called capital asset.

When a person sells his own ordinary asset, he don't need to be licensed as real estate broker so he can sell it himself. He also has an option to sell it using a licensed real estate broker.

When a person sells his own capital asset, he needs to be a licensed real estate broker to he can sell it himself, or he needs to hire the services of a broker who will sell it for him.

All units of a subdivision/condominium Development Projects are classified as Capital Assets because these are intended to be businessly sold out to the public for a profit, and the owner is called a Developer. Under RA 9646 and PD 957, a Developer is covered by the clout of RA 9646, meaning, he cannot sell these projects as if it is his own ordinary asset.

QUESTION: What will happen to the price if the developer or broker is selling his own property?

ANSWER: A broker is ethically obliged to disclose to the buyer if he is selling his own property. The wisdom of this is that an Owner cannot incorporate commission in the price if he is selling his own property. The price of properties being sold by brokers in the market are assumed to have incorporated already the commission. Example, if a property Owner will commission the propery to a Broker, the broker can sell it at P10M, the price already includes the 5% brokers commission. If it is the owner who sells the same property without a Broker, he can't justify the selling price of P10M because he is not supposed to incorporate the 5% commission, he can sell it at P9.5M.

QUESTION: What will happen to the agents if the developer needs no license to sell his own development projects that he claim as his own property?

ANSWER: The license to sell a development project is issued by the HLURB to the Developer per PD 957, and this is supported by RA 9646. If you are a Developer, you need to be a licensed Real Estate Consultant if you perform a function of a Consultant as stipulated in Sec 3 of RA 9646, or you need to be a licensed Appraiser is you will appraise your project, or you need to be a licensed Broker of you want to operate a Marketing Office for your project, or you need to be a registered Salesperson if you want to perform the function of a Salesperson. During construction, you need to be a Civil Engineer if you want to supervise the construction. As part of a Corporation of Developers, if you are just a Capitalist Owner, and you don't intend to act as Consultant, Appraiser, Broker, or Salesperson, then you don't need to have a real estate professional license.

To answer the question above, it will be unfair to the Brokers if the Developers can perform the profession of a Broker without securing first a license as a professional Broker. This also applies to Consulting, Apraising, and Salespersoning.

That is why I am saying, Section 28A of RA 9646 can be implemented as is without any conflict with any other laws or constitutional rights of property owners. This section need not be padded with any further with explanatory insertions. You just need to understand it from a broader perspective.

If this article goes to Supreme Court, the CREBA Petition will surely be denied. So, I suggest CREBA will just withdraw the Petition so we can have peace, understanding, and together we can sit down and create the Real Estate Service Sector using a vibrant democracy.


QUESTION: Sir John, gaano ba kabigat yang mga kalaban natin na gusto ma exempt ang Developers sa RESA? ANSWER: Hehehehe. Mabigat mga dudes. Henry Sy, Lucio Tan, John Gocongwei, Manny Villar, mga Ayala, at iba pang mabibigat na tycoons. Nagulat lang kasi siguro sila na akala nila kinakaladkad sila na magpa-license sa PRC. Ehhhh, hindi dapat sila mag-over-react, sabi ko nga in my opinion, they don't need PRC license to own real estate devt corporations but they have to hire professionals to market, appraise, and build their projects.

Subukan ko personal na bisitahin or padalhan ng advocacy letter etong ating pinaka-mamahal na mga malalaking industrialists. Naniniwala ako na solid ang social responsibility and moral foundation ng mga may-ari ng real estate development corporations na yan eh, at mahalaga sa kanila ang professional standard ng company. Naniniwala ako na ang nag-reresort lang naman ng exploitation sa mga unregistered agents ay yang mga sales managers/directors ng marketing arm nila eh. Makakatulong ng malaki sa professionalization advocacy natin pag mga big boss na ang karamay natin.


Hindi naman kailangan registered/licensed real estate professional para maging OWNER ng Real Estate Firm. Kailangan lang nila mag-hire ng Broker para maka-benta sila.

Parang bus company bah, pwede walang kamay at paa at walang drivers license ang may-ari ng company, pero kailangan niya mag-hire ng Professional bus driver para maka operate ang mga bus niya.

Lahat na manager and supervisor positions sa isang real estate marketing firm ay Broker ang minimum qualification. Sabi ko nga, yung mga Sales Managers and Directors of the marketing arm of the developers na apektado ng RA 9646 na hindi maging licensed brokers, ehhh I think their best option is to establish their OWN RE Firm and hire brokers to work as supervisor /manager of the salespersons.


Mhar Pernia said...

I am a contracted sales Consultant in Filinvest. a had sold 1 unit of lot worth 13M, according to my signed contract, 3% commisions would be my commissions, but Filinvest only 13,000 pesos will be given to me because according to them, the client demand a big discounts and it was deducted to my commissions.
I was so shocked, i dont know where to fle a complain againts the developer.
Please Help me, thanks.

Rltr. John R. Petalcorin said...

The issue here is, do you have a license as a real estate salesperson? The problem is, how can you file a complain against the Developer if you have no PRC/HLURB license as a real estate salesperson?