If you want to buy a house and lot in the Philippines, it is highly recommended that you get the help of a real estate professional right away. However, not all land or property appraisers are obliged to hold a license in order to sell land or evaluate properties. If you are thinking about getting into the real estate investing business, you should only collaborate with licensed professionals who strictly adhere to the RESA Law. By taking this action, the buyer is protected, and the quality of the real estate services provided is better. However, what exactly is the RESA Law, and how exactly does it work?
Read on to discover more about the RESA Law if you want to make sure you’re dealing with a professional real estate agent. Now that you know the basics, you can look for a cheap house and lot for sale as your next real estate investment.
What is RESA LAW or Real Estate Service Act?
Many people in the Philippines have a lifelong desire to purchase their own piece of real estate, but doing so requires a significant amount of capital. For this reason, prospective homebuyers and investors are extremely cautious about conducting business with anyone and everyone. Because of this, the government in the Philippines takes measures to ensure that the real estate industry is properly regulated and that those who identify themselves as real estate professionals are in possession of valid professional licenses. This is the fundamental goal of the Real Estate Service Act of the Philippines, more often known as the “RESA Law.”
The Republic Act No. 9646, also known as the Real Estate Service Act of the Philippines and more generally referred to as the RESA laws, is a piece of legislation that serves to preserve the legal standing of those who identify themselves as real estate professionals. This particular law became effective on July 30, 2009, and it largely addresses the activities that are deemed to be services related to real estate, the penalties that correspond to infractions of its provisions, and the qualifications of people who are allowed to perform the profession. In addition, the law is intended to prevent the operation of “colorum” agents and also those who sell property who are still supporting the so-called freelancers, illegal real estate agents, in order to avoid paying tax and paying the correct commission rates. Both of these activities are intended to be prevented by the law.
Before the RESA Law was passed in 2009, all real estate brokers needed to obtain a license from the Department of Trade and Industry. (DTI). After the bill was signed into law, the Professional Regulation Commission was given the responsibility of overseeing the various professions in the country. (PRC). Those individuals, on the other hand, who already possess a license issued by the DTI do not need to take the Real Estate Broker Licensure Examination in order to be eligible for a license issued by the PRC.
Who are the True Service Providers according to RESA LAW?
1. Real Estate Consultants
Those who work in this sector offer advice to customers who are interested in buying land or making improvements, improving the land, preserving it, using it, or selling it. They lend a hand with everything from conceptualization and ideas to the administration of projects and the building of real estate developments. As a result, they are required to have formal recognition from the PRC as well as a license to operate.
Appraisers of real estate give clients evaluations and opinions regarding the value of properties that are both residential and commercial. Appraisers may be licensed or work without a license. In order to engage in professional activities, they, too, need to be registered with the PRC and licensed by the PRC.
2. Real Estate Assessors and Real Estate Appraisers
Assessors are public employees whose job is to figure out how much a municipality’s properties, buildings, and equipment are worth in terms of money. Assessors work for municipalities on a local, municipal, and provincial level. To become this form of real estate service practitioner, they additionally need to be legally registered with and licensed by the PRC. Assessors have the responsibility of determining a property’s taxable value, whereas appraisers undertake their work with the goal of providing an accurate estimate of property values.
3. Real Estate Brokers
They are individuals that negotiate a real estate transaction on behalf of a third party. By marketing, solicitation, listings, advertising, negotiating, and bringing potential buyers together, brokers play an essential position in the process of enabling the exchange, purchase, mortgage, leasing, collaborative effort, and other comparable agreements involving real estate. In essence, they operate as mediators in transactions between individuals interested in either buying or selling real estate. In order to become one, they are required to acquire a certificate of registration as well as a license.
Also Read: What’s the Difference Between a Real Estate Agent and a Broker?
4. Real Estate Salespersons
It’s possible for brokers to work with salesperson to assist with client transactions. It is common practice in the Philippines for an individual real estate broker to oversee a large number of salesperson at the same time. In order for these real estate services professionals to participate in any kind of real estate transaction, they are going to need to be accredited. When entering the real estate market, it is beneficial to have knowledge of interesting topics, including the ideal locations to go during all kinds of holidays in the Philippines and the greatest places to eat popular Filipino foods. Although this knowledge is not essential, it is a plus.
5. What are the qualifications required under RA 9646?
The legislation does not differentiate between people who are naturalized citizens and those who are citizens by birth when it comes to eligibility for applications. In order to apply for a real estate license exam and perform real estate services, a real estate service practitioner must have a bachelor’s degree, or at least two years of college for salespeople, in addition to being free of any criminal convictions.
For Expert Consultants
In addition to the above requirements, consultants must be licensed as a real estate broker, assessor, bank or institutional appraiser, property-evaluation employee for at least ten years, or licensed appraiser for at least five years.
For Partnership and Corporation
A company or partnership can buy or sell real estate if it is registered with the SEC.Only real estate professionals, appraisers, or advisors who come from the outside can be registered and licensed on behalf of a corporation or partnership.
Prior to 2009, licensed professionals who began offering real estate services
Real estate experts who met one of the following requirements before the RESA Law was passed in 2009 don’t have to take the required exam. Instead, they will get a license and professional ID:
- As a broker, appraiser, or consultant in real estate, they currently hold a current license from the Department of Trade and Industry.
- They’ve passed the Civil Service Commission’s Real Property Assessing Officer test and have at least five years’ worth of experience as assessors or appraisers (prior to 2009).
- They are appraisers or assessors with long-term jobs, at least 10 years of experience in the field, and at least 120 hours of study or training in real estate appraisal that has been approved by professionals.
Does passing the licensure exam guarantee registration?
Even though you were successful on the licensing exam, the PRC may decide not to approve your application to work in the real estate service sector. The following are the three primary justifications most frequently given: First, if you have ever been found guilty of a criminal offense in a court of law, you will not be permitted to vote. Second, if you have been found to have engaged in behavior that is unethical or dishonorable as a result of an investigation conducted by the PRC. Last but not least, if it has been determined that you are psychologically unsuitable for the occupation.
What about experts who have been providing real estate services prior to 2009?
According to Section 20, real estate professionals who have been working in the field before the RESA Law went into force in 2009 are eligible to receive a certificate and professional ID without having to take the required exam if they meet any one of the following requirements:
- They already hold licenses from the Department of Trade and Industry as real estate agents, appraisers, or consultants in their respective fields.
- They are already appraisers or assessors who have permanent appointments, have been working in their field for the previous five years (prior to 2009), and have completed the Real Property Assessing Officer test that was administered by the Civil Service Commission. In addition, they must have permanent appointments.
- They are appraisers or assessors who hold permanent positions, have at least ten years of practical experience in real property appraisal or assessment, and have finished at least one hundred twenty hours of recognized training on real property appraisal.
Exemptions to the RESA LAW
The following things are not part of the RESA Law’s standards and requirements, as listed in Section 28:
1. Owners of Real Estate and Land Property
They do not require any sort of accreditation in order to sell their own property. On the other hand, the Housing and Land Use Regulatory Board is in charge of monitoring the actions of real estate developers.
2. Trustees in insolvency or bankruptcy cases, as well as those who carry out court mandates (court sheriffs)
Except for government assessors, public officials who do these things as part of their job duties do not have to pay for them. Likewise, lawfully constituted attorneys-in-fact who are authorized to negotiate the purchase, lease, mortgage, or exchange of real estate are similarly exempt from payment obligations.
3. The Concept of Foreign Reciprocity
Most of the time, foreigners are not allowed to work as real estate brokers in the Philippines. Section 24 of Republic Act 9646, on the other hand, says that foreigners are not allowed to offer real estate services in the Philippines. There is an exception to this rule, which is made if the petitioner’s country of origin allows Filipinos to carry out real estate services overseas on an equal basis with their own inhabitants..
RA 9646 Restrictions
Real estate services cannot be rendered and real estate service practitioners cannot be advertised without a valid license from the PRC (with the exception of those exempted by the RESA Law)
Law-Violation Fines: RESA LAW
According to Section 39, you could face a fine of at least Php 100,000 and/or a sentence of up to two years in prison, or even both, if you violate the RESA Law or any of its Implementing Rules and Regulations. If the offender is caught without a license, the penalty mentioned above is doubled to Php 200,000 and/or 4 years in prison. In addition, any partnership, business, group, or other legal body that violates the law, approves of it, or knowingly tolerates it faces the same penalties as the other participants because it was a principal or co-principal in the crime.
Buying an affordable house and lot with cash is a big financial commitment. This is why it’s important to plan and study carefully before starting any project. This is important if you want to get the most out of your investment, stop bad things from happening, and be ready to act quickly and effectively when anything bad does happen.
To make sure your hard-earned money is protected, there are reliable and well-known real estate projects in the Philippines that offer inexpensive housing. One of these is Bria Homes, the Philippines’ premier real estate developer. Building affordable, high-quality houses in over fifty housing projects across the country. This is the goal that motivates every employee at the organization. It is a real estate company that does not seek to profit but rather to assist its customers in their search for a house to call their own. Bria’s greatest joy is seeing a client happily move into one of Bria Homes.
Written by Darlene F. Semera