Must-known Key Facts About RESA Law

It's always a smart move to hire a real estate agent if you plan on purchasing a house and lot in the Philippines. A license is required to sell land or evaluate properties, although not all land or property appraisers have one.

If you're planning to start a real estate investment, you should only work with licensed professionals who are abiding by the RESA Law. The buyer is safeguarded and the quality of real estate services is improved by this measure. What, however, is the RESA Law, and how does it function?

If you want to be sure you're dealing with a trustworthy real estate agent, assessor, or broker, read on to learn more about the RESA Law. With this basic knowledge, you may confidently ask around for an affordable house and lot for sale as your property investment.

What is the Real Estate Service Act of the Philippines?

Often abbreviated as "RESA Law," the Real Estate Service Act of the Philippines or Republic Act No. 9646, regulates who may provide real estate services, what kinds of training they must have, and what kinds of consequences they face if they break the law.

Laws exist to safeguard the interests of persons who identify themselves as real estate professionals and to establish the standards that these individuals must meet in order to get a license from the Professional Regulation Commission (PRC).

Below are the important things you need to know about RESA Law:

A. People involved in the practice of real estate and the things they do.

As defined by RESA Law, there are five categories of professionals that provide real estate services.

Real estate consultants

Those in this industry provide assistance to clients in acquiring, improving, preserving, using, or selling land or improvements. They help with everything from brainstorming to project management and construction of real estate developments. As such, they need to be officially recognized and licensed by the PRC.

Real estate appraisers

Professional real estate appraisers provide clients with estimates and opinions of value for residential or commercial properties. They, too, must be PRC-registered and PRC-licensed in order to practice.

Real estate assessors

Real estate assessors are public servants whose job is to determine the monetary worth of physical assets like buildings, land, and machinery for local governments like cities, towns, and provinces. They must also be duly registered and licensed by PRC to become this type of real estate service practitioners. Although appraisers do their work for the sake of providing an accurate evaluation of property values, assessors do it to collect taxes.

Real estate brokers

They are those who represent another party in a real estate deal. Brokers play a vital role in facilitating the sale, exchange, mortgage, lease, joint venture, and other similar transactions involving real estate by advertising, soliciting, listing, promoting, mediating, and bringing together interested parties. In essence, they mediate transactions between those looking to purchase and sell real estate. They must have a certificate of registration and a license to become one.

Real estate salespersons

Brokers may employ salespeople to help with client transactions. In the Philippines, it is normal practice for a single real estate broker to supervise many salespeople. These real estate service practitioners shall need to be accredited in order to perform any real estate transaction. Although not required, knowing interesting things such as the best place to go during the types of holidays in the Philippines and where to eat famous Filipino snacks are a plus when entering the real estate industry.

B. Required qualifications under RA 9646

Applicants must be Filipino citizens; the law makes no distinction between those born in the Philippines and those who become citizens via naturalization. In addition to not having any criminal convictions, a real estate service practitioner needs a bachelor's degree to apply for a real estate licensure exam, or at least two years of college for salespersons, in order to practice real estate service.

For consultants

In addition to the aforementioned qualifications, consultants must additionally demonstrate their expertise by being a licensed real estate broker, assessor, bank or institutional appraiser, property-evaluating employee for 10 years, or licensed appraiser for at least 5 years.

For corporations and partnerships

Legally recognized corporations and partnerships may also do real estate business if they are SEC-registered. Only registered and licensed natural real estate agents, appraisers, or consultants may operate on behalf of a company or partnership.

For licensed practitioners who started providing real estate services before 2009

Real estate professionals who met one of the following criteria prior to the implementation of the RESA Law in 2009 are exempted from completing the required examination and will instead be issued a certificate and professional ID:

• They currently have a valid license from the Department of Trade and Industry as a real estate broker, appraiser, or consultant.

• They have been working as assessors or appraisers for at least five years (preceding 2009) and have completed the Real Property Assessing Officer test given by the Civil Service Commission.

• They are appraisers or assessors with long-term appointments, at least ten years of experience in the field, and a minimum of 120 hours of formally recognized education or training in the appraisal of real property.

C. Exemptions from RESA Law

The following are excluded from the RESA Law's requirements as outlined in Section 28:

Owners of real property (or private owners)

No certification is needed for them to sell their own property. The Housing and Land Use Regulatory Board, however, oversees the activities of real estate developers.

Trustees in bankruptcy or insolvency proceedings and people who act pursuant to court orders (court sheriffs)

Public officials who conduct such activities in the course of their official responsibilities except for government assessors, and duly constituted attorneys-in-fact permitted to negotiate the sale, lease, mortgage, or exchange of real property are also exempt from compensation requirements.

Foreign reciprocity

Providing real estate services in the Philippines is generally forbidden to foreigners. Nevertheless, Section 24 of RA 9646 states that foreigners are not allowed to conduct real estate services in the Philippines, with an exception made if the applicant's home country permits Filipinos to operate real estate services there on equal terms with their own residents.

D. Prohibitions of RA 9646

Without a valid license from the PRC (save for those exempted by the RESA Law), it is illegal to provide real estate services or advertise as a real estate service practitioner as defined in Section 29 of RESA Law.

E. RESA Law violation penalties

If you break the RESA Law or any of its Implementing Rules and Regulations, you're looking at a punishment of at least Php100,000 and/or up to 2 years in jail, or both, as stated in Section 39. The aforementioned punishment doubles to Php200,000 and/or 4 years in jail if the criminal lacks a license.

Additionally, any partnership, company, organization, or other judicial entity that commits, consents to or knowingly tolerates such a violation is considered a principal or co-principal of the offense along with the other participants and is thus liable to the same punishment.

Putting down the cash for an affordable house and lot is a major financial commitment. This is why thorough preparation and study are essential prior to begin any endeavor. This is essential for maximizing the return on your investment, preventing unwelcome occurrences, and providing a swift, effective reaction when the unavoidable occurs.

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