Saturday, January 21, 2017

Amendments to RESA Law

Amendments to RESA Law

One of the professions now regulated by the Professional Regulation Commission in the Philippines is the practice of  real estate service which is comprised of three licensures -- Real Estate Broker, Real Estate Appraiser and Real Estate Consultant.  These three licenses were placed under regulation  and supervision of the PRC with the enactment of R.A. 9646 (otherwise known as the RESA Law) in June 2009. 

While the RESA law has certainly given a new level of respectability and credibility to the careers of real estate agents and valuers, it is also the root for the eventual demise of the profession. In its initial 6 years of implementation of the RESA law, there was an initial rapid and dramatic upsurge in the numbers of licensed real estate brokers and appraisers licensed by the PRC. By the end of 2015, the number of real estate service practitioners licensed by PRC had reached about 40,000.  

But in 2016, the growth suddenly came to an abrupt and dramatic stop when the PRC began to implement the requirement that only graduates of a B.S. Real Estate Management degree would be allowed to take the board examination as enshrined in the RESA law.   And so today, the real estate service profession faces a sudden downturn which will slowly result in the eventual dearth of licensed professional brokers and appraisers.

To avert disaster, one of the country's oldest real estate organizations -- the Manila Board of Realtors, Inc. (established in 1938), has proposed amendments to the RESA law which we reproduce below for public opinion.

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A PROPOSAL TO AMEND R.A. 9646 –
AN ACT REGULATING THE PRACTICE OF REAL ESTATE SERVICE IN THE PHILIPPINES, CREATING FOR THE PURPOSE A PROFESSIONAL REGULATORY BOARD OF REAL ESTATE SERVICE, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES

Main Proponent:  Manila Board of Realtors, Inc.

WHEREAS R.A. 9646 which was enacted in 2009 has become a very important piece of legislation that has contributed to the growth of the real estate industry in the Philippines;

WHEREAS, there is a strong clamor from the stakeholders in the real estate industry to to remove or revise restrictive provisions in  R.A. 9646 in order to enhance the continuing growth of the ranks of licensed real estate professionals;

Now therefore, in response to the needs of the real estate industry, the following amendments to R.A. 9646 are hereby proposed by the Manila Board of Realtors, Inc.

1)  To amend the academic qualification of applicants for examination.

R.A. 9646, Section 14 provides the following qualification for applicants for examinations:

Section 14. Qualification of Applicants for Examinations. - In order to be admitted to the licensure examination for real estate service, a candidate shall, at the time of filing his/her application, establish to the satisfaction of the Board that he/she possesses the following qualifications:

(a) A citizen of the Philippines;

(b) A holder of a relevant bachelor's degree from a state university or college, or other educational institution duly recognized by the CHED: Provided, That as soon as a course leading to a Bachelor's degree in Real Estate Service is implemented by the CHED, the Board shall make this course a requirement for taking the "licensure examination; and

(c) Of good moral character, and must not have been convicted of any crime involving moral turpitude: Provided, That an applicant for the licensure examination for real estate consultants must show proof that he/she has at least ten (10) years experience as a licensed real estate broker or an assessor, or as a bank or institutional appraiser or an employed person performing real property
valuation, or at least five (5) years experience as a licensed real estate appraiser.

We propose three significant amendments to Section 14 as follows:

1.1  Section 14 (a) shall be amended to read as follows:

(a) A citizen of the Philippines; provided however that a citizen of a foreign country may be allowed to take the licensure examination if there is an equivalent  reciprocity agreement between the said foreign country and the Philippines.

JUSTIFICATION:

What is hampering reciprocity agreements between the Philippines and many foreign countries, including the ASEAN, is the restrictive provision limiting examinations only to Filipino citizens.  However, if there is a reciprocity agreement allowing Filipinos to practice in a foreign country, this will be beneficial to us because we will now be able to sell Philippine real estate in foreign lands.  In fact, there are many forecasts that the next boom in our real estate market will come if we can market Philippine real estate in to former Filipinos who now live in affluence in foreign countries.

1.2  Section 14 (b) shall be amended to add another phrase as shown below:

(b) A holder of a relevant bachelor's degree from a state university or college, or other educational institution duly recognized by the CHED: Provided, That as soon as a course leading to a Bachelor's degree in Real Estate Service is implemented by the CHED, the Board shall make this course a requirement for taking the "licensure examination for brokers and appraisers only; and provided further that if the number of graduates of this course is insufficient to meet the needs of the real estate industry, the Commission, on recommendation by the Board and leading organizations in the real estate industry, may continue to allow  other bachelor’s degree holders to take the licensure examinations subject to fulfillment of other requirements such as review seminars, short courses, or actual experience in real estate service practice.

JUSTIFICATION

1) In 2016, the Commission began to implement the B.S. Real Estate requirement as a qualification for the board examinations.  Regretfully, only a handful of graduates took the examination – about 50 for real estate brokers and 30 for real estate appraisers.  Thus, it is quite clear that the graduates of the bachelor’s degree in real estate is still grossly insufficient. 

2) Meanwhile, the real estate industry grows unabated.  Numerous developers need to professionalize thousands of  salespersons, otherwise there will be an increase in unlicensed practitioners (colorum).

3)  In the offices of local government assessors, there continues to be a dearth of licensed appraisers.   R.A. 9646, Section 30, restricts local governments from hiring new personnel who are not licensed and likewise restricts the promotion of assessors who are not licensed appraisers.  Thus, there is still a need to open up the examinations for appraisers.


1.3  Section 14 (c) shall be amended to read as follows:

(c) Of good moral character, and must not have been convicted of any crime involving moral turpitude: Provided, That an applicant for the licensure examination for real estate consultants must show proof that he/she has at least ten (10) five (5) years experience as a licensed real estate broker or an assessor, or as a bank or institutional appraiser or an employed person performing real property valuation, or at least five (5) two (2) years experience as a licensed real estate appraiser.

JUSTIFICATION:

Until today, there are only about 150 licensed real estate consultants, a dismally disproportionately small number out of the total of nearly 40,000 real estate service professionals.  There is a great need to motivate more brokers and appraisers to sit for the real estate consultant examinations by relaxing the 10-year / 5-year experience requirement.

2)  To remove or delete Section 26, as follows:

Section 26. Professional Indemnity Insurance/Cash or Surety Bond.
All real estate brokers and private real estate appraisers shall, in addition to the oath referred to in the preceding section, be required to post a professional indemnity insurance/cash or surety bond, renewable every three (3) years, in an amount to be determined by the Board, which in no case shall be less than Twenty thousand pesos (P20,000.00), without prejudice to the additional requirement of the client.

JUSTIFICATION:

In the last 5 years, the real estate professionals have dutifully complied with this provision, to the delight of the insurance companies.  However until today, there is no known case where the required idemnity or surety bond was called to remunerate an obligee.  Since the real estate service professions are not well-regulated by the Commission which has imposed continuing education and compliance with a code of ethics, we strongly believe this bond is unnecessary.  In fact, it is inequitable because other professionals – lawyers, doctors, nurses, etc.  are not required to post bonds.

3)  To clarify the nature of the proposed accredited and integrated professional organization of real estate service practitioners.

R.A. 9646, Section 34, shall be amended to read as follows:

Section 34. Accreditation and Integration of Real Estate Service Associations.

All licensed real estate service professionals service associations shall be integrated into one (1) national organization, which shall be recognized by the Board, subject to the approval of the Commission, as the only accredited and integrated professional organization of real estate service practitioners (AIPO-RESP). 

A real estate service practitioner duly registered with the Board shall automatically become a member of the AIPO-RESP accredited and integrated professional organization of real estate service practitioners, and shall receive the benefits and privileges appurtenant thereto.  An organization or association of licensed real estate professionals may likewise apply to  join the AIPO-RESP as an institutional member if it meets the qualifications prescribed by the organization.


Membership in the accredited and integrated professional organization of real estate service practitioners shall not be a bar to membership in other associations of real estate service practitioners.


JUSTIFICATION:
In the last 5 years, there has been a continuing debate as to whether membership in the AIPO shall consist only of associations (juridical entities) or only of individuals (natural persons).  Recently the Board and the Commission issued Resolution 2016-151 stating that the AIPO can be a hybrid organization composed of both entities.  OIn support of the PRC’s resolution, and to further clarify this issue, the above amendments is thereby added to Section 34.

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Submitted by:

Manila Board of Realtors, Inc.                                                       Date




2 comments:

  1. To be honest, the intention of RA 9646 is very noble. However, it is a fact that being a full-time real estate broker will not guarantee consistent income. It will always boils down to having good contacts or network of property buyers which actually already employs people to look for properties to buy. Only a handful of successful transactions goes to the licensed brokers. I myself had been a freelance broker along with my regular employment and never gotten a substantial commission for me to decide in going full time in real estate despite that I already attended several training on property appraisal and consultancy. RA 9646 is very noble but a suicide for the Real Estate industry. I can only sigh on how short was the vision of the author of that law, imagine only a handful of people are interested to take the exam and I bet there is less for 2018 that probably forced PRC to re-schedule the examination in March of 2019. The Philippine Real Estate Industry is very complex and licensing of the brokers associates should be made because they are the ones that are keeping the industry running especially in the countryside. Nobody will go find a land in a far flung unfamiliar area except for those already there and only wanted to make an income out of a real estate transaction for an idle land he/she knows can be utilized if sold.

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  2. Who in his right mind will pursue a college course like BS in REM which will only put one inside a box, a career that does not guarantee consistent income. Any college degree should be allowed to take the exam no ifs and but. In reality, real estate brokers/consultants is only a second job and that is still true today.

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