FUNCTIONS & DUTIES OF A REAL ESTATE BROKER & RELATED RULES IN IRR OF RA 9646 (RESA

LAW)

PROFESSOR GEORGE A. PIMENTEL

April 24, 2020
BASIS: LEGAL REQUIREMENTS FOR REAL ESTATE SERVICE

Highlights of IRR of RA 9646, RESA LAW

PRB-RES Res. No. 2, July 21, 2010

(R.A. 9646 – “Real Estate Service Act of the Philippines” - June 30, 2009)
Real Estate Service Practitioners – registered, licensed natural persons who, for a fee,
compensation or other valuable consideration, -
……………
4. Real Estate Broker - an agent of a party in a real estate transaction to offer, advertise, solicit,
list, promote, mediate, negotiate the sale, purchase, exchange, mortgage, lease or joint
venture, or other similar transactions on real estate or any interest therein.

Real Estate Service Practitioners

– registered, licensed natural persons who, for a fee , compensation or other valuable
consideration, -
……………
----------
-- a natural person can only be a licensed real estate broker or practitioner. A juridical person or
entity, corporation, government agency, or a non-human entity with legal identity cannot be a
real estate service practitioner or broker.

FUNCTIONS OF A BROKER:
1) Offer
2) Advertise
3) Solicit
4) List
5) Promote
6) Mediate
7) Negotiate

AREAS OF BROKERAGE:
Sale, Purchase, Exchange, Mortgage (Loan), Lease or Joint Venture (SPELL-JV) or other similar
transactions on real estate or any interest therein.
AREAS OF BROKERAGE:
(SPELLJV)
1) SALE
2) PURCHASE / BUY
3) EXCHANGE
4) MORTGAGE / LOAN
5) LEASE
6) JOINT VENTURE
7) OTHER SIMILAR TRANSACTIONS
OF R.E.

RA 9646 – IRR : LEGAL REQUIREMENTS FOR REAL ESTATE SERVICE

a. Effectivity - July 30, 2009
b. Purposes:
I. To regulate real estate practice through PRBRES “The Board”
II. Create Professional Regulatory Board of Real Estate Service
III. Carry out, administer and enforce provision of IRR RA 9646

Rule 1 - Title, Declaration of Policy, Definitions Section 1: Title: Implementing Rules and
Regulations of RA 9646

Section 2: Declaration of Policy

a. State recognizes the vital role of real estate service practitioners;
b. Develop them to be at par with global competitors through effective regulation and
supervision;
c. Promote growth of the real estate industry through them.

Section 3: Definition of Terms

Accredited and Integrated Professional Organization (AIPO) - national integrated organization of
natural persons duly registered and licensed as real estate service practitioners, pursuant to
Sec. 34 of RA 9646

LEGAL REQUIREMENTS FOR REAL ESTATE SERVICE

 Appraiser - also known as valuer, a person who conductsvaluation/ appraisal.
 Assessor - an official in the LGU who performs appraisal and assessment of real
properties, plants, equipment, and machinery, essentially for taxation.
 Real Estate - land and all those items which are attached to the land i.e. improvements
 Real Estate Development Project - development of land for residential, commercial,
industrial, agricultural, institutional, recreational purposes including resorts, reclamation
project, housing, memorial parks, condominium.
 Real Estate Developer - person engaged in developing real estate, offering them for sale
or lease.
 Real Property - all rights interests, benefits related to ownership of real estate.
  Real Estate Service Practitioners – registered, licensed natural persons who, for a fee ,
compensation or other valuable consideration, -

1. Real Estate Consultant - renders professional advice

and judgment on the acquisition, enhancement, preservation, utilization or disposition of lands
or improvement thereon;
ii. the conception, planning, management and development of real estate projects.

2. Real Estate Appraiser - performs or renders, services in estimating 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 - works in a LGU to perform appraisal and assessment of real properties,
including plants, equipment, and machinery, essentially for taxation purposes. Maybe
exempted in taking the appraiser’s examination

4. Real Estate Broker - an agent of a party in a real estate transaction to offer, advertise, solicit,
list, promote, mediate, negotiate the sale, purchase, exchange, mortgage, lease or joint
venture, or other similar transactions on real estate or any interest therein. General
qualification: At least college graduate (4-year course)

5. Real Estate Salesperson - a duly accredited person who performs service for, and in behalf of
a licensed real estate broker for or in expectation of a share in the commission, professional
fee, compensation or other valuable consideration.
I. No examination needed
II. Must be under a licensed broker to be accredited
III. General qualification:
a) At least with 72 units in college

RULE II: Professional Regulatory Board of Real Estate Service ( PRB-RES )

Section 4: Composition: Chair + 4 members, appointed by the President (at least 2 from
government assessors and appraisers); PRC to recommend 3 nominees for each position
from the AIPO who recommend 5 nominees for each position. The first board should be
organized in 6 months from the effectivity of the law.
Eduardo Gutierrez Ong - Chairman
Rafael M. Fajardo - Member
Florencio C. Dino II - Member
Bansan C. Choa - Member (resigned)
Ramon C.F. Cuervo - Member (deceased)
Section 5: Powers and functions of the Board
a) Make policy and guidelines for the real estate industry;
b) Conduct licensure examination; prescribe syllabi of subjects for exams;
c) Issue, suspend, revoke, or reinstate, COR or professional ID cards, due notice and hearing;
d) Maintain the register of licensed real estate service professionals;
e) Monitor conditions affecting real estate service, adopt measures to enhance the profession;
f) Adopt a National Code of Ethics and Responsibilities issued by the AIPO;
g) Hear or investigate any violation of RA9646; issue subpoena;
h) Prescribe ( in coordination with CHED ) curricula and facilities of school, for real estate
courses;
j) Promulgate, administer and enforce rules and regulations for this Act;
k) Supervise and regulate the registration, licensure and practice of real state service;
l) Assess and fix the rate reasonable regulatory fees;
m)Administer oaths and affirmations;
n) Adopt an official seal of the Board;
o) Evaluate real estate service education and profession; recommend measures its high
standard;
p) Prescribe guidelines and criteria for CPE program consult with AIPO;
q) Screen, issue and monitor, accredit seminar/ review and instructors pursuant to the CPE
program;
r) Monitor and supervise the AIPO and other associations of real estate practitioners; and
s) Discharge such other powers, duties and functions as the Commission may deem necessary.

Section 6: Qualifications of the Chairperson & members of the Board.

a) Citizen and resident of the Philippines;
b) Holder of Bachelor’s degree related to real estate;
c) Active practitioner of real estate service for at least 10 years prior;
d) Member in good standing of the AIPO-RES but not an officer or trustee at the time of
appointment;
e) Not a faculty member, nor have pecuniary interest in any entity conducting exam review
classes;
f) Good moral character, not convicted (final judgment) of criminal offence involving moral
turpitude.

Section 7: Term of Office

a. Appointed by the President for 3 years term.
First Board:
Chairperson - 3 years
Two members - 2 years
Last 2 members - 1 year

b. May be reappointment for a second term but in no case shall serve for more than six years.
Section 8: Compensation and Allowances
a. Comparable to amount received by other member of existing professional boards

Section 9: Removal of chairperson/ members of the Board.

a. Suspended or removed by the President, upon PRC recommendation. For
b. Neglect of duty; abuse of power
c. Oppression; incompetence
d. Unprofessional, unethical conduct
e. Immoral or dishonorable conduct
f. Irregularities in the exams, tampering of grades,
g. Final judgment or conviction of any criminal offence involving moral turpitude

ROLE OF PRC

Section 10: Supervision of the Board Custodian of its Records, Secretariat and Support
Services;

Section 11: Annual Report Requires submission of an Annual Report from the Board.

RULE III: Licensure Examination and Registration

Section 12: Licensure Examination

a. All applicants:
i. Brokers, appraisers and consultants
ii. Must undergo examination given by the Board (not PRC)
iii. Salespersons are exempted from the exam

Section 13: Scope of Examination. Exams required to be given at least once a year.
a. For real estate consultants - fundamentals of realestate consulting; standards and ethics;
consulting tools and techniques, which include project feasibility study and investment
measurement tools; real estate finance and economics; real estate consulting and investment
analysis; consulting for specific engagement, which includes consulting for commercial,
industrial, recreation, resort and hotel properties, and consulting for government, corporate
and financial institutions; land management system and real property laws; and any other
related subjects as may be determined by the Board.

b. For real estate appraisers – fundamentals of real estate principles and practices;
standards and ethics; theories and principles in appraisal; human and physical geography;
methodology of appraisal approaches; valuation procedures and research; appraisal
of machinery and equipment; practical appraisal mathematics; appraisal report
writing; real estate finance and economics; case studies; land management system and
real property laws; and any other related subjects as may be determined by the Board;
and
c. For real estate brokers –
1) fundamentals of property ownership;
2) code of ethics and responsibilities;
3) legal requirements for real estate service practice;
4) real property laws;
5)local taxation, national taxation;
6) subdivision development;
7) condominium concept;
8) legalaspect of sale, mortgage and lease;
9) documentation and registration;
10) real estate brokerage practice;
11) real estate finance and economics;
12) urban and rural land use;
13) planning, development and zoning;
14) basic principles of ecology;
15) basic appraisal for real estate brokers; map reading, and any other related subjects as may
be determined by the Board.

Section 14: Qualification of Applicants for the Examinations

a. Filipino Citizen;
b. BS degree holder ( institution recognized by CHED ), completed 120 credit units from
accredited service providers; but as soon as a BS degree in Real Estate Service is implemented
by CHED, this course will be a requirement for taking the “licensure examination; and
c. Good moral character and must not have been convicted of any crime involving moral
turpitude. Additionally, for real estate consultants - 10 years experience as 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 5 years experience as a licensed real estate appraiser.

Documents required for board examinations:

1) Original and photocopy, Birth Certificate (NSO) and/ or valid passport, proof of citizenship;
2) Original and photocopy, transcript of records and/ or diploma with scanned picture and “For
Exam Purposes Only” stamp
3) Original and photocopy, notarised certification by employer of experience; or Certificate of
Registration (as realty practitioner) and/or Professional identification card or DTI license ( for
real estate consultants );
4) Original and photocopy, NBI Clearance
5) Original and photocopy, duly notarized accredited seminar training certificate;
6) Community Tax Certificate (cedula)
7) Colored passport size picture, white background, complete name tag.
Section 15: Ratings in the Examination
Average of at least 75% in all subjects, no subject below 50%.

Section 16: Release of Results of Examination

a) Shall be released by the Board within 10 days from the last day of exam
b) To be published in a daily newspaper of general circulation and
c) PRC website: www.prc.gov.ph

Section 17: Issuance of Certificate of Registration (COR) and Professional ID Card (PIC)
1. COR - signed by the chairperson of the Commission, chairperson and the members of the
Board;
2. PIC - bears registration number, date of issuance and expiry date; signed by the chairperson
of the Commission, renewable every 3 years, upon satisfying requirements such as CPE.

Section 18: Refusal to Register

Cause:
• The successful examinee is convicted by a court of competentjurisdiction
1. Criminal offense involving moral turpitude
2. Guilty of immoral and dishonorable conduct
3. Found to be psychologically unfit

Section 19: Grounds for Revocation or Suspension of the

COR and PIC or Special-Temporary Permit
a) Procurement of a certificate of registration and/ or ID by fraud or deceit;
b) Allowing unqualified person to advertise or use one’s COR, PIC or permit;
c) Unprofessional or unethical conduct
d) Malpractice or violation of this Act, its IRR and the Code of Ethics;
e) Engaging in the practice of the profession during the period of one’s suspension.

Section 20: Registration Without Examination (Qualification)

a. Those already licensed by DTI. Provided in active practice and have undertaken relevant CPE;
b. Assessors, appraisers with permanent appointments, performing actual appraisal and
assessment for the last 5 years, have passed Real Property Assessing Officer (RPAO)
exam and have undertaken relevant CPE;
c. Assessors and appraisers with permanent appointments, at least 10 years actual experience
in appraisal and assessment, completed at least 120 hours of accredited training on real
property appraisal conducted by national or international entities recognized by the Board and
relevant CPE.
Section 21: Reinstatement, Reissuance or Replacement of CR, ID, Permit
After 2 years from revocation, must apply with CPE, petition for reinstatement subject top PRC
approval.

Section 22: Roster of the Real Estate Practitioners

Available to the public upon request.

Section 23: Issuance of Special and Temporary Permit

For real estate service practitioners from foreign countries. Their services are urgently needed
in the absence of local practitioner.
Purpose: Promotion and enhancement of the practice in the Philippines

Section 24: Foreign Reciprocity

Foreign country allowing Filipino practitioners on the same basis.
Rule IV: Practice of Real Estate

Section 25: Oath

Required. Take before any member of the Board or any officer authorized by PRC.

Section 26: Cash or Surety Bond

Renew every 3 years, amount determined by the Board, at least P20,000.00

Section 27: Acts Constituting the Practice of Real Estate

Any single act or transaction embraced by real estate practitioners, shall continue an act
engaging in the practice of real estate.

Section 28: Exemptions from Acts Constituting the Practice of Real Estate
a. Acts pertaining to his/her or its own property, except real estate developers;
b. Any receiver, trustee or assignee in bankruptcy or insolvency proceedings;
c. Any person acting pursuant to the order of any court of justice;
d. Any person who is attorney-in-fact to transact real estate, without compensation or
remuneration;
e. Public officers performing official duties, except government assessors and appraisers. (like
sheriff on foreclosure sale).

Section 29: Prohibition vs. Colorum Practice

Real estate practice without license is prohibited and subject
to penalties.
Section 31: Supervision and Registration of Real Estate Salespersons
(PRBRES Resolution 13)
Real Estate Salespersons. No exams but shall be accredited by the Board.
a) At least 2 years college and have undergone training and seminars, at least 12 credit units or;
b) Salespersons previously registered with DTI/HLURB + 120 hours training; or
c) Salespersons in active practice 3 years + 120 hours training.
• Under direct supervision and accountability of a real estate broker. Cannot sign real estate
transactions unless the supervising real estate broker is a signatory too.
• Should secure Board accreditation as real estate salesperson for the real estate broker. Real
estate broker will be violating this Act for employing or utilizing salesperson without Board
accreditation.
• Not entitled to receive or demand a fee, commission or compensation of any kind, other than
from the supervising real estate broker.

DEADLINE FOR REGISTRATION:

Per IRR, the original date was July 30, 2011, however, it was extended until the end of
December 2011. This is applicable only to 2ND and 3rd group above. Thus, after this
deadline, NO high school graduate salesperson can apply for a salesperson’s license anymore.

Section 32: Corporate Practice of the Real Estate Service

Partnership or corporation: register with SEC; submit a list of duly registered and licensed real
estate brokers, appraisers or consultant to PRC and SEC annually. At least be one (1) licensed
real estate broker for every 20 accredited salespersons. Corporations or partnerships may hire
licensed practitioners on commission. Divisions or departments engaged in marketing or selling
-must be headed by full- time registered and licensed real estate brokers. Branch offices of real
estate brokers, appraisers or consultants must be manned by a duly licensed real estate broker,
appraiser or consultant as the case may be. Report resignations or terminations within 15 days.

Miscellaneous Requirements:

Section 33: Display of License in Place of Business

Display license at place of business. Indicate COR, PIC Number, PTR and AIPO Number on
pertinent documents signed.

Section 34: Accreditation and Integration of Real Estate Service Associations

All real estate 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 organisation of real estate service practitioners pursuant to PRC Res.
2004-178, Series of 2004.
“A real estate service practitioner duly registered with the Board shall automatically become a
member of the accredited and integrated professional organization of real estate service
practitioners, and shall receive the benefits and privileges appurtenant thereto; provided that
the Board, subject to the approval by the Commission, shall issue a resolution
on the membership and payment of the fee therefor as a requirement for the renewal of the
PIC. The automatic 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 practitioners.

Section 35: Code of Ethics.

PRB-RES shall adopt code of ethics to be prescribed and issued by the AIPO.

Section 36: Continuing Professional Education

PRB-RES shall develop, prescribe and promulgate guidelines on CPE upon consultation with the
AIPO, affiliated associations of RESP and other concerned sectors. Create CPE Council
chairperson from PRB-RES, a member from the AIPO and member from the academe.

Section 37: Enforcement Assistance to the Board

To be assisted by the Commission. Lawyers of the Commission shall act as prosecutors vs. illegal
practitioners. Duly constituted authorities of the government shall also assist.

Section 38: Indication

COR,PIC, PTR No. and AIPO membership and/or receipt number, date of issuance and duration
of validity.. on the document he/she signs or issues in connection with practice.
Rule IV: Penal and Final Provisions

Section 39: Penal Provisions

If violation was made by licensed practitioner
i. Fine not less than P100,000.00 or
ii. Imprisonment not less than 2 years or BOTH (court decides)
If violation was made by unlicensed practitioner, the penalty is doubled.
i. Fine of not less than P200,000.00, or
ii. Imprisonment of not less than 4 years or BOTH

Section 40: Appropriations

a) Chairperson of the PRC shall include in their program RA9646 implementation
b) Funding shall be included in the annual General Appropriations Act.

Section 41: Transitory Provision

Within 90 days from effectivity of this Act, DTI-BTRCP shall transfer all pertinent records to the
PRC

Section 42: Implementing Rules and Regulations (IRR)

Within 6 months from the effectivity of the law, the following shall prepare IRR including Code
of Ethics:
i. The Commission and the Board
ii. The AIPO, Department of Finance
iii. CHED
Section 43: Separability Clause
Any clause or sentence or part of the IRR shall be declared unconstitutional or invalid, such
judgment shall not affect, or impair any other part thereof.

Section 44: Effectivity

IRR shall take effect after 15 days following its full and complete publication in: Official Gazette
or In a major daily newspaper of general circulation

DONE IN THE CITY OF MANILA THIS 21ST DAY OF JULY, 2010 SIGNED
BY:
1. PRBRES chairpersons and 4 other members
2. Attested by: Carlos G. Almelor, Sec. Prof. Regulatory Board
3. Approved by: Nicolas Lapena, Jr. – PRC Chairman
4. Plus: Two other PRC Commissioners

QUIZ
DEFINE AND DIFFERENTIATE THE
FOLLOWING, AS DEFINED IN RA 9646:
1.RE BROKER
2.RE APPRAISER
3.RE ASSESSOR
4.RE CONSULTANT
5.RE SALESPERSON