Sunday, June 28, 2009

PAREB Code of Ethics and Standards of Practice

Preamble

Under all is the land. REALTORS® recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of ownership.

Such interests impose obligations, grave social responsibility and a patriotic duty to which REALTORS® should dedicate themselves, and for which they should be diligent in preparing themselves. REALTORS® therefore, are zealous to maintain and improve the standards of their calling and share with their fellow REALTORS® a common responsibility for its integrity and honor.

In recognition and appreciation of their obligations to clients, the public, their fellow REALTORS®, their Board and the Association, REALTORS® continuously strive to become and remain informed on issues affecting real estate and, as knowledgeable professionals, they willingly share with others the fruit of their experience and study with others. They identify and take steps, through enforcement of this Code of Ethics and by assisting appropriate regulatory bodies, to eliminate practices that may damage the public or may bring dishonor to the real estate profession.

The term REALTOR® has come to connote competency, fairness and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations.

In the interpretation of their obligations, REALTORS® can take no safer guide than that which has been handed down through centuries embodied in the Golden Rule: Whatsoever ye would that others should do to you, do ye even so to them.

Accepting these standards as their own, REALTORS® pledge to observe its spirit in all of their activities whether conducted personally, through associates or others, or via technological means, and to conduct their business in accordance with the tenets set forth below.


Part I. Duties to Clients

Article 1

When representing buyers, sellers, lessors, lessees or other clients. REALTORS® pledge themselves to protect and promote the interests of their clients. This obligation to clients is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly.
  • Standard of Practice 1-1
The duties imposed by the Code of Ethics encompass all real estate-related activities and transactions whether conducted in person, electronically, or through any other means.
  • Standard of Practice 1-2
REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.
  • Standard of Practice 1-3
REALTORS®, when seeking to become a buyer/lessee representative, shall not mislead buyers or lessees as to savings or other benefits that might be realized through use of the REALTOR®'s services.
  • Standard of Practice 1-4
REALTORS® may represent the seller/lessor and buyer/lessee in the same transaction with full disclosure to both parties.
  • Standard of Practice 1-5
REALTORS® shall submit offers and counter-offers objectively and as quickly as possible.
  • Standard of Practice 1-6
When acting as listing brokers, REALTORS® shall continue to submit to the seller/lessor all offers and counter-offers unless the seller/lessor says otherwise. REALTORS® shall not be obligated to continue to market the property after an offer has been accepted by the seller/lessor. REALTORS® shall recommend that sellers/lessors obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the preexisting purchase contract or lease.
  • Standard of Practice 1-7
REALTORS®, acting as brokers of buyers/lessees, shall submit to buyers/lessees all offers and counter-offers until acceptance but have no obligation to continue to show properties to their clients after an offer has been accepted unless otherwise agreed in writing. REALTORS®, acting as agents or brokers of buyers/lessees, shall recommend that buyers/lessees obtain the advice of legal counsel if there is a question as to whether a ­pre-existing contract has been terminated.
  • Standard of Practice 1-8
The obligation of REALTORS® to preserve confidential information provided by their clients in the course of any agency relationship continues after termination of agency relationships. REALTORS® shall not knowingly, during or following the termination of professional relationships with their clients:
  1. Reveal confidential information of clients; or
  2. Use confidential information of clients to the disadvantage of clients; or
  3. Use confidential information of clients for the REALTOR®'s advantage or the advantage of third parties unless:
    1. Clients consent after full disclosure; or
    2. REALTORS® are required by court order; or
    3. It is the intention of a client to commit a crime and the information is necessary to prevent the crime; or
    4. It is necessary to defend a REALTOR® or the REALTOR®'s employees or associates against an accusation of wrongful conduct.
Information concerning latent material defects is not considered confidential information under this Code of Ethics.
  • Standard of Practice 1-9
REALTORS® shall, consistent with the terms and conditions of their real estate licensure and their property management agreement, competently manage the property of clients with due regard for the rights, safety and health of lessees and others lawfully on the premises.
  • Standard of Practice 1-10
REALTORS® who are employed to maintain or manage a client’s property shall exercise due diligence and make reasonable efforts to protect it against reasonably foreseeable contingencies and losses.
  • Standard of Practice 1-11
REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property. Where disclosure is authorized, REALTORS® shall also disclose whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker.
  • Standard of Practice 1-12
REALTORS®, when acting as principals in a real estate transaction, remain obligated by the duties imposed by the Code of Ethics.
  • Standard of Practice 1-9
REALTORS® shall, consistent with the terms and conditions of their real estate licensure and their property management agreement, competently manage the property of clients with due regard for the rights, safety and health of lessees and others lawfully on the premises.
  • Standard of Practice 1-10
REALTORS® who are employed to maintain or manage a client’s property shall exercise due diligence and make reasonable efforts to protect it against reasonably foreseeable contingencies and losses.
  • Standard of Practice 1-11
REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property. Where disclosure is authorized, REALTORS® shall also disclose whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker.
  • • Standard of Practice 1-12
REALTORS®, when acting as principals in a real estate transaction, remain obligated by the duties imposed by the Code of Ethics.


Article 2

REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency relationships.

  • Standard of Practice 2-1
REALTORS® shall only be obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas. Article 2 does not impose upon the REALTOR® the obligation of expertise in other professional or technical disciplines.
  • Standard of Practice 2-2
REALTORS® shall not be parties to the naming of a false consideration in any document.


Article 3


The REALTORS® should cooperate with other REALTORS® on property listed, sharing commissions on an agreed basis. Negotiations concerning property listed exclusively with one REALTOR® should be carried on with the listing broker, not with the owner, except with the consent of the listing REALTOR®.

  • Standard of Practice 3-1
REALTORS® shall, with respect to offers of compensation to another REALTOR®, timely communicate any change of compensation for cooperative services to the other REALTOR® prior to the time such REALTOR® produces an offer to purchase/lease the property.
  • Standard of Practice 3-2
Standard of Practice 3-2 does not preclude the listing broker and cooperating broker from entering into an agreement to change cooperative compensation.
  • Standard of Practice 3-3
REALTORS®, acting as listing brokers, have an affirmative obligation to disclose the existence of dual or variable rate commission arrangements (i.e., listings where one amount of commission is payable if the listing broker’s firm is the procuring cause of sale/lease and a different amount of commission is payable if the sale/lease results through the efforts of the seller/landlord or a cooperating broker). The listing broker shall, as soon as practical, disclose the existence of such arrangements to potential cooperating brokers and shall, in response to inquiries from cooperating brokers, disclose the differential that would result in a cooperative transaction or in a sale/lease that results through the efforts of the seller/lessor. If the cooperating broker is a buyer/lessee representative, the buyer/lessee representative must disclose such information to their client before the client makes an offer to purchase or lease.
  • Standard of Practice 3-4
REALTORS® shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation.
  • Standard of Practice 3-5
When seeking information from another REALTOR® concerning property under a management or listing agreement, REALTORS® shall disclose their REALTOR® status and whether their interest is personal or on behalf of a client and, if on behalf of a client, their representational status,
  • Standard of Practice 3-6
REALTORS® shall not misrepresent the availability of access to show or inspect a listed property


Article 4

REALTORS® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest of at least 20-percent in any real property without making their true position known to the owner or the owner’s agent or broker. In selling property they own, or in which they have any interest, REALTORS® shall reveal their ownership or interest to the purchaser or the purchaser’s representative.

  • Standard of Practice 4-1
For the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by REALTORS® prior to the signing of any contract.


Article 5

REALTORS® shall not undertake to provide professional services concerning a property where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties.

Article 6

REALTORS® shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent.

When recommending real estate products or services, REALTORS® shall disclose to the client to whom the recommendation is made any financial benefits or fees, other than the standard industry referral fees, the REALTOR®or REALTOR®'s firm may receive as a direct result of such recommendation.

  • Standard of Practice 6-1
REALTORS® shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion.


Article 7

In a transaction, REALTORS® shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties.

Article 8

REALTORS® shall keep separate from their own funds, monies coming into their possession in trust for other persons, such as down payments, reservations or earnest money, amortizations, clients’ monies, and other like items and under instruction by the principal keep them in a separate account.

Article 9

REALTORS®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing agreements, sales contracts, and leases are in writing in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties. A copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing.

  • Standard of Practice 9-1
For the protection of all parties, REALTORS® shall use reasonable care to ensure that documents pertaining to the purchase, sale, or lease of real estate are kept current through the use of written extensions or amendments.

• Standard of Practice 9-2

When assisting or enabling a client in establishing a contractual relationship electronically, REALTORS® shall make reasonable efforts to explain the nature and disclose the specific terms of the contractual relationship being established prior to it being agreed to by a contracting party.


Part II. Duties to the Public

Article 10

REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin.

REALTORS®, in their real estate employment practices, in accordance with law, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin.

  • Standard of Practice 10-1
When involved in the sale or lease of a residence, REALTORS® shall not volunteer information regarding the racial, religious or ethnic composition of any neighborhood nor shall they engage in any activity which may result in panic selling, however, REALTORS® may provide other demographic information.
  • Standard of Practice 10-2
REALTORS® may provide demographic information related to a property, transaction or professional assignment to a party if such demographic information is (a) deemed by the REALTORS® to be needed to assist with or complete, in a manner consistent with Article 10, a real estate transaction or professional assignment and (b) is obtained or derived from a recognized, reliable, independent, and impartial source. The source of such information and any additions, deletions, modifications, interpretations, or other changes shall be disclosed in reasonable detail.
  • Standard of Practice 10-3
REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, or national origin.
  • Standard of Practice 10-4
As used in Article 10 “real estate employment practices” relates to employees and independent contractors providing real estate-related services and the administrative and clerical staff directly supporting those individuals.


Article 11

REALTORS® shall protect the public against fraud, misrepresentation or unethical practices in the real estate industry.

REALTORS® shall help prevent or stamp out any practice which could and allied professions, as well as lend help to othe damage the dignity and integrity of the real estate profession. And towards this end, shall lend help to the government offices charged with the duty of regulating the practices of real estate brokers, salesmen, appraisers, consultants r government offices dealing with land and its improvements.

  • Standard of Practice 11-1
REALTORS® shall not deal with and engage the services of unlicensed real estate professionals.
  • Standard of Practice 11-2
REALTORS® shall not offer or agree to pay, split or rebate any commission, fee or valuable consideration, directly or indirectly, with any person who is not a duly licensed real estate broker or salesman under him, cooperating, assisting in or endorsing a transaction.
  • Standard of Practice 11-3
REALTORS® shall not procure or help procure consent to close or consummate any real estate transaction or engagement of their services by means of fraud, deceit, intimidation, violence or immoral
  • Standard of Practice 11-4
REALTORS® shall act and conduct themselves in a competent, trustworthy and honest manner with utmost respect and compliance for the laws of the land.


Article 12

The services which REALTORS® provide to their clients shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, real estate syndication, real estate auction, and international real estate.

REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth.

  • Standard of Practice 12-1
REALTORS® shall keep themselves informed as to movements affecting real estate in their community, city or province and the nation so that they may be able to contribute to public thinking on matters of taxation, legislation, land use, city planning and other issues affecting real estate.
It shall be the duty of REALTORS® to be well informed on current market conditions in order to be in a position to advice on fair market value.
  • Standard of Practice 12-2
REALTORS® shall ascertain all pertinent facts concerning every property for which he accepts the agency, so that they may fulfill their obligations in order to avoid error, exaggerations, misrepresentation or concealment of pertinent facts.
  • Standard of Practice 12-3
The obligations under this Code of Ethics with respect to real estate disciplines other than appraisal shall be interpreted and applied in accordance with the standards of competence and practice which clients and the public reasonably require to protect their rights and interests considering the complexity of the transaction, the availability of expert assistance, and, where the REALTOR® acts under an agency arrangement, the obligations of a fiduciary.
• Standard of Practice 12-4
When REALTORS® provide consultative services to clients which involve advice or counsel for a fee (not a commission), such advice shall be rendered only when REALTORS® are licensed as a real estate consultant and such advice must be rendered in an objective manner and the fee shall not be contingent on the substance of the advice or counsel given.
  • Standard of Practice 12-5
The competency required by Article 12 relates to services contracted for between REALTORS® and their clients; the duties expressly imposed by the Code of Ethics; and the duties imposed by law or regulation.


Article 13

REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.

  • Standard of Practice 13-1
REALTORS® shall always indicate their real estate license number in their calling cards, letterheads, signboards, billboards, advertisements and other public announcement.
  • Standard of Practice 13-2

REALTORS® may use the term “free” and similar terms in their advertising and in other representations provided that all terms governing availability of the offered product or service are clearly disclosed at the same time.

  • Standard of Practice 13-3
REALTORS® may represent their services as “free” or without cost even if they expect to receive compensation from a source other than their client provided that the potential for the REALTOR® to obtain a benefit from a third party is clearly disclosed at the same time.
  • Standard of Practice 13-4
The offering of premiums, prizes, merchandise discounts or other inducements to list, sell, purchase, or lease is not, in itself, unethical even if receipt of the benefit is contingent on listing, selling, purchasing, or leasing through the REALTOR® making the offer. However, REALTORS® must exercise care and candor in any such advertising or other public or private representations so that any party interested in receiving or otherwise benefiting from the REALTOR®'s offer will have clear, thorough, advance understanding of all the terms and conditions of the offer. The offering of any inducements to do business is subject to the limitations and restrictions of law and the ethical obligations established by any applicable Standard of Practice.
  • Standard of Practice 13-5
REALTORS® shall not offer for sale/lease or advertise property without authority. When acting as listing brokers, REALTORS® shall not quote a price different from that agreed upon with the seller/lessor.
  • Standard of Practice 13-6
REALTORS® shall not advertise nor permit any person employed by or affiliated with them to advertise listed property in any medium (e.g., electronically, print, radio, television, etc.) without disclosing the name of that REALTOR®'s firm in a reasonable and readily apparent manner.
  • Standard of Practice 13-7
REALTORS®, when advertising unlisted real property for sale/lease in which they have an ownership interest, shall disclose their status as both owners/lessors and as REALTORS® or real estate licensees.
  • Standard of Practice 13-8
Only REALTORS® who participated in the transaction as the listing broker or cooperating/selling broker may claim to have “sold” the property. Prior to closing, a cooperating broker may post a “sold” sign only with the consent of the listing broker.
  • Standard of Practice 13-9
The obligation to present a true picture in representations to the public includes information presented, provided, or displayed on REALTORS®’ websites. REALTORS® shall use reasonable efforts to ensure that information on their websites is current.
When it becomes apparent that information on a REALTOR®'s website is no longer current or accurate, REALTORS® shall promptly take corrective action.
  • Standard of Practice 13-10
REALTOR® firm websites shall disclose the firm’s name and region of licensure in a reasonable and readily apparent manner.
Websites of REALTOR® and non-member licensees affiliated with a REALTOR® firm shall disclose the firm’s name and that REALTOR®'s or non-member licensee’s region of licensure in a reasonable and readily apparent manner.
  • Standard of Practice 13-11
REALTORS®’ obligation to present a true picture in their advertising and representations to the public includes the URLs and domain names they use, and prohibits REALTORS® from:
  1. Engaging in deceptive or unauthorized framing of real estate brokerage websites;
  2. Manipulating (e.g., presenting content developed by others) listing content in any way that produces a deceptive or misleading result; or
  3. Deceptively using metatags, keywords or other devices/ methods to direct, drive, or divert Internet traffic, or to otherwise mislead consumers.
  • Standard of Practice 13-12
REALTORS® intending to share or sell consumer information gathered via the Internet shall disclose that possibility in a reasonable and readily apparent manner.
  • Standard of Practice 13-13
REALTORS® shall not use URLs or domain names that present less than a true picture; or register URLs or domain names which, if used, would present less than a true picture.
  • Standard of Practice 13-14
The obligation to present a true picture in advertising, marketing, and representations allows REALTORS® to use and display only professional designations, certifications, and other credentials to which they are legitimately entitled.


Article 14

REALTORS® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.

Article 15

If charged with unethical practice or asked to present evidence or to cooperate in any other way, in any professional standards proceeding or investigation,

REALTORS® shall place all pertinent facts before the proper tribunals of their Board and shall take no action to disrupt or obstruct such processes.

  • Standard of Practice 15-1
REALTORS® shall not be subject to disciplinary proceedings in more than one Board of REALTORS® with respect to alleged violations of the Code of Ethics relating to the same transaction or event.
  • Standard of Practice 15-2
REALTORS® shall not make any unauthorized disclosure or dissemination of the allegations, findings, or decision developed in connection with an ethics hearing or appeal or in connection with an arbitration hearing or procedural review.
  • Standard of Practice 15-3
REALTORS® shall not obstruct the Board’s investigative or professional standards proceedings by instituting or threatening to institute actions for libel, slander, or defamation against any party to a professional standards proceeding or their witnesses based on the filing of an arbitration request, an ethics complaint, or testimony given before any tribunal.
  • Standard of Practice 15-4
REALTORS® shall not intentionally impede the Board’s investigative or disciplinary proceedings by filing multiple ethics complaints based on the same event or transaction.


Part III. Duties to Fellow REALTORS®

Article 16

REALTORS® shall not knowingly or recklessly make false or misleading statements about competitors, their businesses, or their business practices. In instances where their opinion is sought, or where REALTORS® believe that comment is necessary, their opinion is offered in an objective, courteous, professional manner, uninfluenced by any personal motivation or potential advantage or gain.

  • Standard of Practice 16-1
REALTORS® shall not knowingly or recklessly file false or unfounded ethics complaints.
  • Standard of Practice 16-2
The obligation to refrain from making false or misleading statements about competitors’ businesses and competitors’ business practices includes the duty to not knowingly or recklessly repeat, re-transmit, or re-publish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the Internet), or by any other means.


Article 17

REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients.

  • Standard of Practice 17-1
Article 17 is not intended to prohibit aggressive or innovative business practices which are otherwise ethical and does not prohibit disagreements with other Realtors® involving commission, fees, compensation or other forms of payment or expenses.
  • Standard of Practice 17-2
Article 17 does not preclude REALTORS® from making general announcements to prospects describing their services and the terms of their availability even though some recipients may have entered into agency agreements or other exclusive relationships with another REALTOR®. A general telephone canvass, general mailing or distribution addressed to all prospects in a given geographical area or in a given profession, business, club, or organization, or other classification or group is deemed “general” for purposes of this standard.
Article 17 is intended to recognize as unethical two basic types of solicitations:

First, telephone or personal solicitations of property owners who have been identified by a real estate sign, multiple listing compilation, or other information service as having exclusively listed their property with another REALTOR®; and

Second, mail or other forms of written solicitations of prospects whose properties are exclusively listed with another REALTOR® when such solicitations are not part of a general mailing but are directed specifically to property owners identified through compilations of current listings, “for sale” or “for rent” signs, or other sources of information required by Article 3 and Multiple Listing Service rules to be made available to other REALTORS® under offers of sub-agency or cooperation.
  • Standard of Practice 17-3
Article 17 does not preclude REALTORS® from contacting the client of another broker for the purpose of offering to provide, or entering into a contract to provide, a different type of real estate service unrelated to the type of service currently being provided (e.g., property management as opposed to brokerage) or from offering the same type of service for property not subject to other brokers’ exclusive agreements. However, information received through a Multiple Listing Service or any other offer of cooperation may not be used to target clients of other REALTORS® to whom such offers to provide services may be made.
  • Standard of Practice 17-4
REALTORS® shall not solicit a listing which is currently listed exclusively with another broker.
  • Standard of Practice 17-5
When REALTORS® are contacted by the client of another REALTOR® regarding the creation of an exclusive relationship to provide the same type of service, and REALTORS® have not directly or indirectly initiated such discussions, they may discuss the terms upon which they might enter into a future agreement or, alternatively, may enter into an agreement which becomes effective upon expiration of any existing exclusive agreement.

• Standard of Practice 17-6

The fact that a prospect has retained a REALTOR® as an exclusive representative or exclusive broker in one or more past transactions does not preclude other REALTORS® from seeking such prospect’s future business.
  • Standard of Practice 17-7
The fact that an exclusive agreement has been entered into with a Realtor® shall not preclude or inhibit any other REALTOR® from entering into a similar agreement after the expiration of the prior agreement.
  • Standard of Practice 17-8
REALTORS®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service.
  • Standard of Practice 17-9
REALTORS®, acting as buyer or lessee brokers, shall disclose that relationship to the seller/lessor’s broker at first contact not later than execution of a purchase agreement or lease.
  • Standard of Practice 17-10
On unlisted property, REALTORS® acting as buyer/lessee brokers shall disclose that relationship to the seller/lessor at first contact not later than execution of any purchase or lease agreement.
REALTORS® shall make any request for anticipated compensation from the seller/lessor at first contact.
  • Standard of Practice 17-11
REALTORS®, acting as brokers of sellers/lessors or as subagents of listing brokers, shall disclose that relationship to buyers/lessees as soon as practicable not later than execution of any purchase or lease agreement.
  • Standard of Practice 17-12
In cooperative transactions REALTORS® shall compensate cooperating REALTORS® and shall not compensate nor offer to compensate, directly or indirectly, any of the sales licensees employed by or affiliated with other REALTORS® without the prior express knowledge and consent of the cooperating broker.
  • Standard of Practice 17-13
REALTORS®, acting as subagents or buyer/lessee brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/lessee brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation.
  • Standard of Practice 17-14
REALTORS®, acting as subagents or as buyer/lessee brokers, shall not attempt to extend a listing broker’s offer of cooperation and/or compensation to other brokers without the consent of the listing broker.
  • Standard of Practice 17-15
REALTORS® shall not use information obtained from listing brokers through offers to cooperate made through multiple listing services or through other offers of cooperation to refer listing brokers’ clients to other brokers or to create buyer/lessee relationships with listing brokers’ clients, unless such use is authorized by listing brokers.
  • Standard of Practice 17-16
Signs giving notice of property for sale, rent, lease, or exchange shall not be placed on property without consent of the seller/lessor.
  • Standard of Practice 17-17
REALTORS®, prior to or after terminating their relationship with their current firm, shall not induce clients of their current firm to cancel exclusive contractual agreements between the client and that firm. This does not preclude REALTORS® (principals) from establishing agreements with their associated licensees governing assign ability of exclusive agreements.


Article 18

In the event of contractual disputes between REALTORS® they shall submit the dispute to arbitration in accordance with the regulations of their Board or Boards rather than litigate the matter.

In the event clients of REALTORS® wish to arbitrate contractual disputes arising out of real estate transactions, REALTORS® shall arbitrate those disputes in accordance with the regulations of their Board, provided the clients agree to be bound by the decision.

The obligation to participate in arbitration contemplated by this Article includes the obligation of REALTORS® to cause their firms to arbitrate and be bound by any award.

  • Standard of Practice 18-1
The filing of litigation and refusal to withdraw from it by Realtors® in an arbitrable matter constitutes a refusal to arbitrate.
  • Standard of Practice 18-2
Article 18 does not require REALTORS® to arbitrate in those circumstances when all parties to the dispute advise the Board in writing that they choose not to arbitrate before the Board.
  • Standard of Practice 18-3
REALTORS®, when acting solely as principals in a real estate transaction, are not obligated to arbitrate disputes with other REALTORS® absent a specific written agreement to the contrary.


Part IV. Duties to the Board and the Association

Article 19

REALTORS® shall uphold the principles espoused by the Board and the Association and shall abide by its Articles of Incorporation, By-laws, and its rules and regulations.

Article 20

Membership in their respective Boards and in the Association carries with it the moral obligation to serve as Director, Officer or Committee Chairman or Member in either the Board or in the Association when so qualified, elected or duly called upon to serve.

Article 21

In the best interest of the community, the Board, the Association and of his business, REALTORS® shall be loyal to the Board and to the Association and shall be active in its works.
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PAREB

The Philippine Association of REALTORS® Boards, Inc. (PAREB) is the umbrella organization of 42 boards from Luzon, the Visayas and Mindanao. Its general membership is composed of bonafide REALTORS® all of whom are government-licensed real estate brokers and many of whom are also licensed appraisers, real estate consultants, property developers, builders, and practitioners of other professions.

The 47-year-old PAREB is the sole affiliate of the National Association of REALTORS® (NAR-USA) in the Philippines. By virtue of its international agreement with NAR-USA, PAREB members of good standing are given the right to exclusive use of the trademark REALTOR® and the block "R" logo in doing real estate business in the Philippines as well as the exclusive right to be called REALTORS®.

REALTORS® devote time and effort to master the processes and intricacies of their calling, including the documentary and legal aspects of every transaction. REALTORS® keep themselves informed on current market conditions so that they may advise their clients on the fair market prices of real estate properties. REALTORS® ascertain all pertinent facts concerning every property for which they accept the agency so that they may fulfill their obligation without error, exaggeration, misrepresentation or concealment of pertinent facts. REALTORS® are committed to protect the public against fraud and other unethical practices that proliferate in the industry.

Your REALTORS® is just a phone call away ready to provide you with professional advise and assistance in buying, selling or leasing a property.

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Services the REALTORS® Provides


Remember now, not every real estate agent or broker is a REALTORS®. You must be able to distinguish a REALTOR® from a non-REALTOR®. In the Philippines the REALTORS® is a member in good standing of the Philippine Association of REALTORS® Boards (PAREB). He is a government-licensed broker and a trained professional in the real estate business.

Make the right choice – partner with a REALTOR®.

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Only a REALTOR® can access the Multiple Listing Service™, The MLS™ is the single largest database of real estate properties for sale or lease in the world, even in the Philippines. But more than a database of property listings, the MLS is a comprehensive compilation on real estate information and services. The REALTOR® can tap the MLS™ for you in case you need to buy or lease a property, or add your property to its database in case you need to sell. When he does that, it is like announcing your requirement to all the REALTORS. You deal with one but you can be sure more than one REALTOR® will move to satisfy your need. The MLS™ is a most reliable mechanism that non-REALTORs® cannot offer you even if they want to.

Agency

Whether you are buying, selling or leasing a property, make sure to discuss “Agency” with your REALTOR®. Make sure to discuss your requirements and its parameters as well. The REALTOR® may represent you as buyer or seller, as lessor or lessee. It is possible for him to represent both the buyer and the seller, the lessor or the lessee, in the transaction. Whatever, you can expect him to disclose his participation in the transaction.

Buying

If you're buying, you may be asked to sign a Buyer Agent Agreement. Buyer representation services can include a "needs" assessment and searching for the right property, Your REALTOR® can provide you with several properties to choose from, each property to come with complete presentation of facts and documents, all verified, and with objective assessment of the neighborhood, for your consideration. Your REALTOR® can validate claims of ownership and authority to sell to prevent you from incurring losses due to fraud or misrepresentation. Your REALTOR® can help determine your buying power and he can negotiate with the sellers for you to get the best price and terms. Your REALTOR® can guide you through the closing process and take care of the documentary and legal requirements to make sure everything goes smoothly.

Selling

If you're selling, you may be asked to sign a Seller Agent Agreement. Seller representation services are about selling your property as quickly as possible, at the best price possible. Your REALTOR® has a wide range of marketing and selling services to achieve it. Your REALTOR® can provide current information about market conditions and about pricing of similar properties in similar neighborhoods. Your REALTOR® can pay newspapers and magazines to advertise your property, Your REALTOR® can do internet postings and networking with other real estate brokers. Your REALTOR® can enlist your property in the MLS. Should there be inquiries, your REALTOR® can do property staging, host an Open House and drive the interested parties to a site visit of the property. Should there be offers to buy, your REALTOR® can help you make an objective evaluation of each proposal. Your REALTOR® can negotiate with the buyers to get you the best price and terms. Your REALTOR® can guide you through the closing process and take care of the documentary and legal requirements to make sure everything goes smoothly.

Take full advantage of the professional services a REALTOR® can provide you. The REALTOR® abides by the stringent, enforceable REALTOR® Code of Ethics, which obliges him to treat his Agency with you with utmost care, integrity, confidentiality and loyalty. He is trained to focus his heart and mind towards one goal: client satisfaction.

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Why Use A REALTOR®?

Why Use A REALTOR®?

Not every real estate agent or broker is a REALTOR®. The trademark REALTOR®and the familiar block “R” logo are patented to the National Association of REALTORS® of the USA. Only members in good standing of NAR-USA and its foreign affiliates are authorized to use them.

Image While all REALTORS® are government-licensed brokers, majority of the non-REALTOR® real estate agents in the Philippines are not. Another major difference between them is that the REALTORS® have taken an oath to abide by the stringent, enforceable REALTOR® Code of Ethics with Standards of Practice that promote the fair, ethical and honest treatment of all parties in a transaction. Non-REALTORS® take no such oath and are not morally bound to protect their clients and co-brokers from fraud, misrepresentation and other unethical practices that proliferate in the industry.

For your peace of mind and as an extra precautionary measure, make sure to partner with a REALTOR®.

WARNING:

No one in the Philippines may use the trademark REALTOR® or the block "R" logo except for members in good standing of the PHILIPPINE ASSOCIATION OF REALTORS® BOARDS (PAREB). Unauthorized use is an infringement of and punishable under Republic Act No. 166. It also constitutes a ground for revocation of the real estate broker's license pursuant to the Department of Trade and Industry (DTI) Administrative Order 75-1.

REALTOR® is a service mark registered in the Commission of Patents of the United States of America under Document No. 515199 and in the Philippine Patent Office under Document No. 5385 as property of then the National Association of REALTORS® Boards, now known as the National Association of REALTORS® (NAR-USA).

PAREB is the sole affiliate of NAR-USA in the Philippines. NAR-USA has conferred upon PAREB the authority to use the term and trademark REALTOR® since 1960.

NAR-USA's recent victory in a legal challenge to the uniqueness of the REALTOR® as a trademark is a timely reminder that REALTOR® and REALTORS® are neither generic terms nor synonyms for a real estate practitioner, agent or broker.

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REIT: Liquefying real-estate assets

Is it time for a Philippine Real Estate Investment Trust (REIT)? Governments around Asia have had REITs since early 2000. Japan and Korea were the pioneers. In just five years, the number of REITs has gone through the roof, from merely five in 2001 to around 80 in 2006. This includes Hong Kong, Malaysia, Singapore, Taiwan and Thailand.

REITs have also been around in countries outside Asia: Australia, Belgium, Bulgaria, Canada, France, Germany, Italy, the Netherlands, New Zealand, South Africa, Turkey, the United Kingdom and the United States (where the concept originated). China, India and Pakistan, on the other hand, are in the process of introducing REITs.

A brief explanation for those unfamiliar with this unique income-oriented asset class: A REIT is a tax designation for a corporation investing in real estate that reduces or eliminates corporate income taxes. In return, REITs must distribute at least 90 percent of their income. A REIT is designed to provide a similar structure for investment in real estate as mutual funds provide for investment in stocks. Like other corporations, REITs can be publicly or privately held. Public REITs may be listed on a public stock exchange, like shares of common stock in other companies.

REITs carry with them manifold benefits. REITs level the playing field for real-estate actors. It does this by allowing small and large investors alike to participate directly in the ownership and financing of large-scale real-estate projects at affordable rates of investment. REITs don’t have the disadvantages of illiquidity, high transaction and management cost, as compared with traditional private real-estate ownership. REITs offer higher yield. While interest rates on savings account are below 1 percent per annum, REITs are paying an average of 5 percent to 9 percent. This is made possible through a steady stream of income from rents. Shareholders enjoy big dividends, as REITS are required to return at least 90 percent of earnings.

REITs also smooth out overall returns, especially during market downturns. They are protected against declining prices of stocks and bonds. Their tangible assets and long-term lease contracts make them one of the most stable companies in the market.

REITs provide steady income to investors and the national government. What’s more, they will encourage strategic foreign investment in the capital market. According to Global Real Estate Investment Trust Report 2008 of Ernst & Young, the total market capitalization of publicly listed REITs around the world reached nearly $605 billion. REITs in Asia have been the best performers, with South Korea first in the rankings. With China’s pilot REIT project set to begin in 2009, there is renewed interest in the public REIT sector in Asia. Take note that Asia is poised to overtake Europe as the second-largest REIT market in the world. In a few years, it will challenge North America’s No. 1 standing.

Finally, REIT translates to a stable real-estate industry, which, in turn, translates to a stable economy. It is undeniable that the strength or weakness of economic activities in real estate has the capacity to stimulate or dampen economic growth in all areas.

It is for this reason I authored and am sponsoring on the Senate floor a Real Estate Investment Trust Act (REIC). Now is the most opportune time to establish a Philippine REIT. We have a strong real-estate industry driven by the influx of remittances from overseas Filipino workers, the boom of tourism, and the growing number of offshore businesses in the country.

We need REIT to build up our capital markets and help businesses thrive. This will cushion against the crunch in the short term, and strengthen the financial system in the long term. Our neighbors thought globally, and so they reaped globally.

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Capital gains tax exemption on the sale of the family home

Buying and/or selling one’s home is probably one of the most important decisions that one will have to make in his life. This is especially true for us Filipinos as the family home is considered the culmination of one’s lifetime efforts and accomplishments. More than that, a home is the place where we nurture and build relationships, hence, efforts to make it comfortable and suitable for the family will necessarily entail costs. As this also involves the investment of a huge amount of money, and will definitely tie up a person’s finances for many years, it would only be prudent to be aware of the tax treatment for these kinds of transactions.

Generally, a tax of six percent based on the selling price or fair market value of the property, whichever is higher, is imposed on the presumed gain derived by individuals on the sale of real property.

An exception is when the property involved is the principal residence and its proceeds of the sale are utilized in acquiring or constructing a new principal residence. The exemption, however, may be availed of only once every 10 years.

There are three conditions attending the exemption: (1) the property sold must be the principal residence; (2) there must be full utilization of the proceeds within 18 calendar months from the date of sale of the property; and (3) the documentary requirements provided in the pertinent Revenue Regulations are complied with.

1. Principal residence. The principal residence is defined as the dwelling house, including the land on which it is situated, where the husband and wife or an unmarried individual and members of his/her family reside. This definition is similar to that of a family home under the Family Code of the Philippines, but unlike in the Family Code, no actual occupancy of the family home is necessary for the structure to be considered the “principal residence,” and make the tax exemption applicable. Also, for purposes of the tax exemption, the principal residence is not considered abandoned or interrupted due to travel or studies or work abroad. In other words, the principal residence is generally characterized by permanency, that is, the place to which, whenever absent for business or pleasure, one still intends to return.

Needless to say, an individual can only have one principal residence at any given time.

2. Proceeds fully utilized within 18 months. For the tax exemption to apply, the proceeds from the sale of the principal residence must be used for the purpose of acquiring or constructing a new principal residence. Any other use of the said proceeds would make the gains from the sale of the principal residence subject to tax. Full utilization of the proceeds is also vital in availing of the tax exemption. If the funds are not fully utilized, the individual-seller will be liable for deficiency capital gains tax on the gains corresponding to the unutilized portion, inclusive of 20 percent interest per annum, computed from the 31st day after the date of sale of the old principal residence. Another aspect of this condition is the period of time within which to utilize the proceeds from the sale of the principal residence. The proceeds from sale must be fully utilized within 18 months from the date of sale of the old principal residence, otherwise, the individual-seller will be liable for capital gains tax.

3. Documentary requirements. The seller-individual has the obligation to submit the complete documentary requirements to be able to avail of the tax exemption.

To prove that positive action was undertaken to utilize the proceeds for the acquisition or construction of the new principal residence within the required period, the seller-individual must submit to the concerned Revenue District Officer (RDO) an affidavit attesting to the full utilization of the proceeds within thirty (30) days after the lapse of the 18-month period, a copy of the Building Permit, and a certified statement from his/her architect or engineer showing the cost of materials and labor for the construction of the new principal residence, or, in case the house is acquired by purchase, a copy of the Deed of Sale. Failure to submit these documents will create the presumption that the proceeds were not fully used up and the seller-individual will most likely be assessed for deficiency capital gains tax plus interest.

Revenue Regulations (RR) No. 13-99, as amended by RR No. 14-00, require the execution of an escrow agreement. The six percent capital gains tax which would have been due to the government had it not been for the tax exemption must be deposited in an interest-bearing account with a Bureau of Internal Revenue (BIR)-Authorized Agent Bank (AAB) under an Escrow Agreement between the concerned RDO, the seller-individual and the AAB. The terms in the Agreement must be such that the amount so deposited, including the interest, will be released to the seller-individual only upon certification by the RDO that the proceeds of the sale has in fact been utilized in the acquisition or construction of a new principal residence within 18 calendar months from the date of sale. The RDO will release the Escrow on the AAB upon a showing by the seller-individual that the proceeds of the sale have been fully utilized.

Also, while the seller-individual may not be required to pay the capital gains tax, he/she is required to file a Capital Gains Tax Return (BIR Form No. 1706) covering the sale of the principal residence with the concerned RDO within 30 days from the date of sale. Supporting documents such as the affidavit of the Barangay Chairman attesting to the fact of residency of the seller-individual, the deed of sale, proof of payment of the documentary stamp tax, the Transfer Certificate of Title (or Condominium Certificate of Title), tax declaration, and the building or occupancy permit must accompany the tax return.

The exemption from capital gains tax on the sale of the principal residence is really a huge tax-saving measure that Filipinos could benefit from. Having the entire proceeds of the sale used solely for one’s own benefit, without having to allocate for payment of taxes is certainly an incentive worth availing of. Given the present economic situation, we should take full advantage of this exemption granted by law to maximize utilization of one’s sources.

(Veronica Jude E. Abarquez is an assistant manager for tax and corporate services of Manabat Sanagustin & Co., CPAs, a member firm of KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. This article is for general information only and is not intended to be, nor is it a substitute for, informed professional advice. While due care was exercised to ensure the quality of the information contained in this article, readers should carefully evaluate its accuracy, completeness and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances. For comments or inquiries, please email manila@kpmg.com.ph This e-mail address is being protected from spambots. You need JavaScript enabled to view it or vabarquez@kpmg.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).

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Senate OKs Real Estate Act

The Senate, by a unanimous vote, approved on third and final reading Monday, Senate Bill 2063, to be known as the Real Estate Service Act (RESA), designed to professionalize the real estate industry, Senate President Juan Ponce Enrile said yesterday.

Enrile said the measure, once enacted into law, would help increase the contribution of the real estate industry to the economic progress and stability in the country by professionalizing its practitioners.

The complete title of the bill is "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 therefore and for other Purposes.’’

Enrile explained the bill would establish an effective regulatory regime for the real estate service through the creation of Professional Board of Real Estate Service Board (PRESB) composed of highly respected practitioners.

The PRESB will be under the Professional Regulation Commission (PRC). The board will then be mandated to come up with measures that will professionalize the careers involved in the real estate industry.

Under the bill, Enrile explained, agents would be required to take licensure examination before becoming real estate brokers, real estate appraisers or real estate consultants.

Opposition Sen. Panfilo M. Lacson, one of the principal authors of the bill, said the measure seeks to form a pool of competent, disciplined and highly respected real estate service practitioners who could help stimulate the development of the country’s real estate industry.

During one of the public hearings on the bill, Philippine Association of Realtors Board (PAREB) national president Bobby Sy said the real estate industry contributes only roughly 6.6 percent to the national income, which is way below the 50 percent potential contribution.

Lacson said the creation of a professionalized corps of real estate practitioners would contribute in boosting revenue generation for the government on real property transactions, developing more confidence in the government valuation system, encouraging investment in the real property market, stimulating greater economic activity and generating more funds for poverty alleviation programs.

The other authors of the bill are Senators Miriam Defensor Santiago, Antonio Trillanes IV and Rodolfo G. Biazon, chairman of the Senate housing, resettlement and urban planning.
Download RESA Bill
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RESA Senate Final Version

CONGRESS OF THE PHILIPPINES

fourteenth congress

Second Regular Session

SENATE S. No. 2963

(In Substitution of Senate Bill Nos. 1298,1644, 1656, and taking into consideration HBN 3514)

Prepared By The Committees on Civil Service And Government Reorganization, Urban Planning, Housing And Resettlement And Finance With Senators Santiago, Blazon, Trellanes IV, Lacson, Escudero, Zubiri and Gordon As Authors thereof

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

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

ARTICLE I

TITLE, DECLARATION OF POLICY AND DEFINITION OF TERMS

SEC. 1. Title. - This Act shall be known as the "Real Estate Service Act of the Philippines".

SEC. 2. Declaration of Policy. - The State recognizes the vital role of real estate service practitioners in the social, political, economic development and progress of the country by promoting the real estate market, stimulating economic activity and enhancing government income from real property-based transactions. Hence, it shall develop and nurture through proper and effective regulation and supervision a corps of technically competent, responsible and 15 respected professional real estate service practitioners whose standards of practice and service shall be globally competitive and will promote the growth of the real property industry.

SEC. 3. Definition of Terms. - As used in this Act, the following terms shall mean:

  1. "Appraiser" also known as valuer, refers to a person who conducts valuation/appraisal; specifically, one who possesses the necessary qualifications, license, ability and experience to execute or direct the valuation/appraisal of real property;
  2. "Assessor" refers to a person in the local government unit, who performs appraisal and assessment of real properties, including plants, equipment, and machineries, essentially for taxation purposes. This definition also includes assistant assessors;
  3. "Real estate" refers to the land and all those items which are attached to the land. It is the physical, tangible entity, together with all the additions or improvements on, above or below the ground;
  4. "Real estate development project" means the development of land for residential, commercial, industrial, agricultural, institutional or recreational purposes, or any combination of such including, but not limited to, tourist resorts, reclamation projects, building or housing projects, whether for individual or condominium ownership, memorial parks and others of similar nature;
  5. "Real estate developer" refers to any natural or juridical person engaged in the business of developing real estate development project for his/her or its own account and offering them for sale or lease;
  6. 'Heal property" includes all the rights, interests and benefits related to the ownership of real estate;
  7. "Real estate service practitioners" shall refer to and consist of the following:
    1. Real estate consultant - a duly registered and licensed natural person who, for a professional fee, compensation or other valuable consideration, offers or renders professional advice and judgment on: (i) the acquisition, enhancement, preservation, utilization or disposition of lands or improvements thereon; and (ii) the conception, planning, management and development of re al estate projects;
    2. Real estate appraiser - a duly registered and licensed natural person who, for a professional fee, compensation or other valuahle consideration, performs or renders, or offers to perform services in estimating and arriving at an opinion of or acts as an expert on 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 - a duly registered and licensed natural person who works in a local government unit and performs appraisal and assessment of real properties, including plants, equipment, and machineries, essentially for taxation purposes;
    4. Real estate broker - a duly registered and. licensed natural person who, for a professional fee, commission or other valuable consideration, acts as an agent of a party in a real estate transaction to offer, advertise, solicit, list, promote, mediate, negotiate or effect the meeting of the minds on the sale, purchase, exchange, mortgage, lease or joint venture, or other similar transactions on real estate or any interest therein; and
    5. Real estate salesperson - a duly accredited natural person who performs service for, and in behalf of, a real estate broker who is registered and licensed by the Professional Regulatory Board of Real Estate Service for or in expectation of a share in the commission, professional fee, compensation or other valuable consideration.

ARTICLE II

PROFESSIONAL REGULATORY BOARD OF REAL ESTATE SERVICE

SEC. 4. Creation and Composition of the Board. ~ There is hereby created a Professional Regulatory Board of Real Estate Service, hereinafter referred to as the Board, under the supervision and administrative control of the Professional Regulation Commission (PRC), hereinafter referred to as the Commission, composed of a chairperson and four (4) members who shall be appointed by the President of the Philippines from the three (3) recommendees chosen by the Commission from a list of five (5) nominees per position submitted by the accredited and integrated professional organization of real estate service practitioners: Provided, That the four (4) two (2) of the members shall each represent the real estate consultants, the real estate appraisers, the real estate assessors, and the real estate brokers. of the proposed Board shall represent the government assessors and appraisers.

The first Board shall be organized within six (6) months from the effectivity of this Act.

SEC. 6. Powers and Functions of the Board. - The Board is hereby vested the following powers and functions:

  1. Provide comprehensive policy guidelines for the promotion and development of the real estate industry;
  2. Conduct licensure examinations for the practice of the real estate service profession and prescribe the appropriate syllabi of the subjects for examination;
  3. Issue, suspend, revoke or reinstate, after due notice and hearing, certificates of registration or professional identification cards for the practice of real estate service;
  4. Maintain a comprehensive and updated register of licensed real estate service professionals;
  5. Monitor the conditions affecting the practice of real estate service and adopt such measures as may be proper for the enhancement of the profession and/or the maintenance of high professional, ethical and technical standards;
  6. Adopt a national Code of Ethics and Responsibilities to be strictly observed by all licensed real estate service practitioners;
  7. Hear or investigate any violation of this Act, its implementing rules and regulations, and the Code of Ethics and Responsibilities for real estate service practitioners and issue subpoena and subpoena duces tecum to secure the appearance of witnesses and the production of documents in connection therewith;
  8. Safeguard and protect legitimate and licensed real estate service practitioners and, in coordination with the accredited and integrated professional organization of real estate service practitioners, monitor all forms of advertisements, announcements, signboards, billboards, pamphlets, brochures and others of similar nature concerning real estate and, where necessary, exercise its quasi-judicial and administrative powers to finally and completely eradicate the pernicious practices of unauthorized or unlicensed individuals;
  9. Prescribe, in cooperation with the Commission on Higher Education (CEDED) or the concerned state university or college, the essential requirements as to the curricula and facilities of schools, colleges or universities seeking permission to open academic courses or already offering such courses in real estate service, and to see to it that these requirements, including the employment of qualified faculty members, are properly complied with;
  10. Promulgate, administer and enforce rules and regulations necessary in carrying out the provisions of this Act;
  11. Supervise and regulate the registration, licensure and practice of real estate service in the Philippines;
  12. Assess and fix the rate of reasonable regulatory fees
  13. Administer oaths and affirmations;
  14. Adopt an official seal of the Board;
  15. Evaluate periodically the status of real estate service education and profession, and recommend and/or adopt measures to upgrade and maintain its high standard;
  16. Prescribe guidelines and criteria for the Continuing Professional Education (CPE) program for real estate service practitioners in consultation with the accredited and integrated professional organization of real estate service practitioners;
  17. Screen, issue and monitor permits to organizations of real estate professionals in the conduct of seminars and accredit such seminars pursuant to the CPE program, as well as the instructors or lecturers therein, for the purpose of upgrading the quality and knowledge of the profession;
  18. Monitor and supervise the activities of the accredited and integrated professional organizations and other associations of real estate service practitioners; and
  19. Discharge such other powers, duties and functions as the Commission may deem necessary to carry out the provisions of this Act

The policies, resolutions and rules and regulations issued or promulgated by the Board shall be subject to the review and approval by the Commission. However, the Board's decisions, resolutions or orders which are not interlocutory, rendered in an administrative case, shall be subject to review by the Commission only on appeal.

SEC. 6. Qualifications of the Chairperson and Members of the Board. - The chairperson and the members of the Board shall, at the time of their appointment, possess the following qualifications:

  1. A citizen and resident of the Philippines;
  2. A holder of a bachelor's degree related to real estate;
  3. An active licensed practitioner of real estate service for at least ten (10) years prior to his/her appointment;
  4. A bona fide member in good standing of the accredited and integrated professional organization of real estate service practitioners but not an officer or trustee at the time of his/her appointment;
  5. Neither be a member of the faculty of an institute, school, college or university, nor have any pecuniary interest, direct or indirect, in any institution or association where review classes or lectures in preparation for the licensure examination are being offered or conducted; and
  6. Of good moral character, and must not have been convicted b}r final judgment by a competent court of a criminal offense involving moral turpitude.

SEC. 7. Term of Office. - The chairperson and the members of the Board shall hold office for a term of three (3) years from the date of their appointment and until their successor/s shall have been appointed: Provided, That the members of the first appointed Board. shall hold office for the following terms: one (1) member as chairperson, to serve for three (3) years; two (2) members, to serve for two (2) years; and two (2) members, to serve for one (1) year.

The chairperson and the members of the Board may be reappointed for a second term but in no case shall he/she serve continuously for more than six (6) years. Any vacancy in the Board shall be filled for the unexpired portion of the term of the member who vacated the position. On the constitution of the first Board, the chairperson and the members of the Board shall automatically be registered and issued certificates of registration and professional identification cards. Each member of the Board shall take the proper oath of office prior to the assumption of duty.

SEC. 8. Compensation and Allowances of the Chairperson and Members of the Board. – The chairperson and the members of the Board shall receive compensation and allowances comparable to the compensation and allowances received by the chairman and the members of existing professional regulatory boards under the Commission, as provided for in the General Appropriations Act.

SEC. 9. Removal of the Chairperson and Members of the Board. — The chairperson or any member of the Board may be suspended or removed by the President of the Philippines, upon the recommendation of the Commission, for neglect of duty; abuse of power; oppression; incompetence; unprofessional, unethical, immoral or dishonorable conduct; commission or toleration of irregularities in the conduct of examination or tampering of the grades therein, or for any final judgment or conviction of any criminal offense involving moral turpitude.

SEC. 10. Supervision of the Board, Custodian of Its Records, Secretariat and Support Services. -The Board shall be under the general supervision and administrative control of the Commission. All records of the Board, including applications for examination, examination papers and results, minutes of deliberations, administrative and other investigative cases involving real estate service practitioners, shall be kept by the Commission. The Commission shall designate the secretary of the Board and shall provide the secretariat and other support services to implement the provisions of this Act subject to the usual government accounting and auditing rules and regulations.

SEC. 11. Annual Report. - The Board shall, at the close of each calendar year, submit an annual report to the Commission, giving a detailed account of its proceedings and accomplishments during the year and recommending measures to be adopted with the end-in-view of upgrading and improving the conditions affecting the practice of real estate service in the Philippines.

ARTICLE III
LICENSURE EXAMINATION AND REGISTRATION

SEC. 12. Licensure Examination, - Every applicant seeking to be registered and licensed as a real estate service practitioner, except a real estate salesperson, shall undergo an examination as provided for in this Act. Examinations for the practice of real estate service in the Philippines shall be given by the Board at least once every year in such places and dates as the Commission may designate.

SEC. 13. Scope of Examination. - An examination shall be given to the licensure applicants for real estate brokers, real estate appraisers and real estate consultants which shall include, but not limited to, the following:

  1. For real estate consultants - fundamentals of real estate 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 analyses; consulting for specific engagement, which include consulting for commercial, industrial, recreation and resort and hotel properties, and consulting for government and corporate and financial institutions; land management system and real property laws; and any other related subjects as may be determined by the Board;
  2. 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
  3. For real estate brokers - fundamentals of property ownership; code of ethics and responsibilities; legal requirements for real estate service practice; real estate brokerage practice; subdivision development; condominium concept; real estate finance and economics; basic principles of ecology; urban and rural land use; planning, development and zoning; legal aspect of sale, mortgage and lease; documentation and registration; real property laws; and any other related subjects as may be determined by the Board.

To conform with technological and modern developments, the Board may recluster, rearrange, modify, add to, or exclude any of the foregoing subjects as may be necessary.

SEC. 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:

  1. A citizen of the Philippines;
  2. 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 shad make this course a requirement for taking the licensure examination; and
  3. 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.

All applications for examination shall be filed with the Board which shall assess and approve said applications and issue to the qualified examinees the corresponding permits to take such examination.

SEC. 15. Ratings in the Examination. – In order that a candidate may be deemed to have successfully passed the examination, he/she must have obtained an average of at least seventy-five percent (75%) in all subjects, with no rating below fifty percent (50%) in any subject.

SEC. 16. Release of the Results of Examination.- The results of the licensure examination shall be released by the Board within ten (10) days from the last day of the examination.

SEC. 17. Issuance of the Certificate of Registration and Professional Identification Card, - A certificate of registration shall be issued to examinees who pass the licensure examination for real estate service subject to payment of fees prescribed by the Commission. The certificate of registration shall bear the signature of the chairperson of the Commission and the chairperson and the members of the Board, stamped with the official seal of the Commission, indicating that the person named therein is entitled to practice the profession with all the benefits and privileges appurtenant thereto. This certificate of registration shall remain in full force and effect until revoked or suspended in accordance with this Act.

A professional identification card bearing the registration number, date of issuance and expiry date, duly signed by the chairperson of the Commission, shall likewise be issued to every registrant upon payment of the required fees. The professional identification card shall he renewed every three (3) years and upon satisfying the requirements of the Board, such as, but not limited to, attendance in the CPE program.

SEC. 18. Refusal to Register. - The Board shall not register and issue a certificate of registration to any successful examinee who has been convicted by a court of competent jurisdiction of any criminal offense involving moral turpitude or has been found guilty of immoral or dishonorable conduct after investigation by the Board, or has been found to be psychologically unfit.

SEC. 19. Revocation or Suspension of the Certificate of Registration and the Professional Identification Card or Cancellation of Special/Temporary Permit. - The Board may, after giving proper notice and hearing to the party concerned, revoke the certificate of registration and the professional identification card, or cancel the special or temporary permit of a real estate service practitioner, or suspend him/her from the practice of the profession for any unprofessional or unethical conduct, malpractice or violation of any of the provisions of this Act, its implementing rules and regulations, and the Code of Ethics and Responsibilities for real estate service practitioners. on any of the following instances hereunder:

  1. Procurement of a certificate of registration and/or professional identification card, or special temporary permit by fraud or deceit;
  2. Allowing an unqualified person to advertise or to practice the profession by using one's certificate of registration or professional identification card or special temporary permit;
  3. Unprofessional or unethical conduct;
  4. Malpractice or violation of any of the provisions of this Act, its implementing rules and regulations, and the Code of Ethics and Responsibilities for Real Estate Service Practitioners; and
  5. Engaging in the practice of the profession during the period of one's suspension.

SEC. 20. Registration Without Examination.- Upon application and payment of the required fees, the following shall be registered, and shall be issued by the Board and the Commission a certificate of registration and a professional identification card without taking the prescribed examination:

  1. Those who, on the date of the effectivity of this Act, are already licensed as real estate brokers, real estate appraisers or real estate consultants by the Department of Trade and Industry (DTI) by virtue of Ministry Order No. 39, as amended: Provided, That they are in active practice as real estate brokers, real estate appraisers and real estate consultants, and have undertaken relevant CPE to the satisfaction of the Board;
  2. Assessors and appraisers who, on the date of the effectivity of this Act, hold permanent appointment and are performing actual appraisal and assessment functions for the last five (5) years, have passed the Real Property Assessing Officer (RPAO) examination conducted and administered by the Civil Service Commission (CSC) in coordination with the Department of Finance (DOF), and have undertaken relevant CPE to the satisfaction of the Board; and
  3. Assessors and appraisers who, on the date of the effectivity of this Act, hold permanent appointment and have at least ten (10) years actual experience in real property appraisal or assessment and have completed at least one hundred twenty (120) hours of accredited training on real property appraisal conducted by national or international appraisal organizations or institution/entities recognized by the Board and relevant CPE to the satisfaction of the Board.

Those falling under categories (b) and (c) shall register with the Board after they shall have complied with the requirements for registration as assessors or appraisers: Provided, That those seeking to be licensed to a new credential level shall be required to take the pertinent licensure examination. Those so exempt under the aforementioned categories shall file their application within two (2)
years from the effectivity of this Act: Provided, That the renewal of the professional identification card is subject to the provisions of Section 17 hereof.

SEC. 21- Reinstatement, Reissuance or Replacement of Certificate of Registration, Professional Identification Card and Special/Temporary Permit. - The Board, after the expiration of two (2) years from the date of revocation of a Certificate of Registration and/or Professional Identification Card, and upon application, compliance with the required CPE units, and for reasons deemed proper and sufficient, reinstate any revoked certificate of registration and reissue a suspended professional identification card and in so doing, may, in its discretion, exempt the applicant from taking another examination.

A new certificate of registration, professional identification card or special/ temporary permit may be issued to replace lost, destroyed or mutilated ones, subject to the rules as may he promulgated by the Board.

SEC. 22. Roster of Real Estate Service Practitioners. - The Board, in coordination with the integrated professional organization of real estate service practitioners, shall prepare, update and maintain a roster of real estate service practitioners which shall contain the names of all registered real estate service practitioners, their residence and office addresses, license number, dates of registration or issuance of certificates, and other data which the Board may deem pertinent. Copies thereof shall be made available to the public upon request.

SEC. 23. Issuance of Special or Temporary Permit. - Upon application and payment of the required fees and, subject to the approval of the Commission, the Board may issue special or temporary permit to real estate service practitioners from foreign countries whose services are urgently needed in the absence or unavailability of local real estate service practitioners for the purpose of promoting or enhancing the practice of the profession in the Philippines.

SEC. 24. Foreign Reciprocity. - No foreign real estate service practitioner shall be admitted to the licensure examination or be given a certificate of registration or a professional identification card, or be entitled to any of the privileges under this Act unless the country of which he/she is a citizen specifically allows Filipino real estate service practitioners to practice within its territorial limits on the same basis as citizens of such foreign country.

ARTICLE IV

ACTICE OF REAL ESTATE SERVICE

SEC. 25. Oath. - All successful examinees qualified for registration and all qualified applicants for registration without examination as well as accredited salespersons shall be required to take an oath before any member of the Board or any officer of the Commission duly authorized by the Commission to administer oaths prior to entering into the practice of real estate service in the Philippines.

SEC. 26. 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 bond, renewable every three (3) years, in an amount to be determined by the Board, which in no case shall be less than One hundred thousand pesos (P100,000.00) nor more than One million pesos (P1000.000.00).

SEC. 27. Acts Constituting the Practice of Real Estate Service. - Any single act or transaction embraced within the provisions of Section 3(g) hereof, as performed by real estate service practitioners, shall constitute an act of engaging in the practice of real estate service.

SEC. 28. Exemptions from the Acts Constituting the Practice of Real Estate Service. The provisions of this Act and its rules and regulations shall not apply to the following:

  1. Any person, natural or juridical, who shall directly perform by himself/herself the acts mentioned in Section 3 hereof with reference to his/her or its own property, except real estate developers;
  2. Any receiver, trustee or assignee in bankruptcy or insolvency proceedings;
  3. Any person acting pursuant to the order of any court of justice;
  4. Any person who is a duly constituted attorney-in-fact for purposes of sale, mortgage, lease or exchange, or other similar contracts of real estate, without requiring any form of compensation or remuneration; and
  5. Public officers in the performance of their official duties and functions, except government assessors and appraisers.

SEC. 29. Prohibition Against the Unauthorized Practice of Real Estate Service. – No person shall practice or offer to practice real estate service in the Philippines or offer himself / herself as real estate service practitioner, or use the title, word, letter, figure or any sign tending to convey the impression that one is a real estate service practitioner, or advertise or indicate in any manner whatsoever that one is qualified to practice the profession, or be appointed as real property appraiser or assessor in any national government entity or local government unit, unless he/she has satisfactorily passed the licensure examination given by the Board, except as otherwise provided in this Act, and is a holder of a valid certificate of registration, and professional identification card or a valid special/temporary permit duly issued to him/her by the Board and the Commission, and in the case of real estate brokers and private appraisers, they have paid the required bond as hereto provided.

SEC. 30. Positions in Government Requiring the Services of Registered and Licensed Real Estate Service Practitioners. - Within three (3) years from the effectivity of this Act, all existing and new positions in the national and local governments, whether career, permanent, temporary or contractual, and primarily requiring the services of any real estate service practitioner, shall be filled only by registered and licensed real estate service practitioners.

All incumbent assessors holding permanent appointments shall continue to perform their functions without need for reappointment and without diminution of status, rank and salary grade, and shall enjoy security of tenure. However, they may not be promoted to a higher position until they meet the qualification requirements of that higher position as herein prescribed. Nothing in this Act shall be construed to reduce any benefit, interest, or right enjoyed by the incumbents at the time of the enactment of this Act The appointing authority shall exercise his power to appoint the assessor in accordance with the provisions of this Act only when a vacancy occurs.

SEC. 31. Supervision of Real Estate Salespersons. - For real estate salespersons, no examination shall be given, but they shall be accredited by the Board: Provided, That they have completed at least two (2) years of college and have undergone training and seminars in real estate brokerage, as may be required by the Board. Real estate salespersons shall be under the direct supervision and accountability of a real estate broker. As such, they cannot by themselves be signatories to a written agreement involving a real estate transaction unless the real estate broker who has direct supervision and accountability over them is also a signatory thereto. No real estate salesperson, either directly or indirectly, can negotiate, mediate or transact any real estate transaction for and in behalf of a real estate broker without first securing an authorized accreditation as real estate salesperson for the real

estate broker, as prescribed by the Board. A real estate broker shall be guilty of violating this Act for employing or utilizing the services of a real estate salesperson when he/she has not secured the required accreditation from the Board prior to such employment.

No salesperson shall be entitled to receive or demand a fee, commission or compensation of any kind from any person, other than the duly licensed real estate broker who has direct control and supervision over him, for any service rendered or work done by such salesperson in any real estate transaction.

No violation of this provision shall be cause for revocation or suspension of the certificate of registration of the real estate broker unless there was actual knowledge of such violation or the broker retains the benefits, profits or proceeds of a transaction wrongfully negotiated by the salesperson.

SEC. 32. Corporate Practice of the Real Estate Service. -

  1. No partnership or corporation shall engage in the business of real estate service unless it is duly registered with the Securities and Exchange Commission {SEC), and the persons authorized to act for the partnership or corporation are all duly registered and licensed real estate brokers, appraisers or consultants, as the case may be. The partnership or corporation shall regularly submit a list of its real estate service practitioners to the Commission and to the SEC as part of its annual reportorial requirements. There shall at least be one (1) licensed real estate broker for every twenty (20) accredited salespersons.
  2. Divisions or departments of partnerships and corporations engaged in marketing or selling any real estate development project in the regular course of business must be headed by full time registered and licensed real estate brokers.
  3. 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.

In case of resignation or termination from employment of a real estate service practitioner, the same shall be reported by the employer to the Board within a period not to exceed fifteen (15) days from the date of effectivity of the resignation or termination.

Subject to the provisions of the Labor Code, a corporation or partnership may hire the services of registered and licensed real estate brokers, appraisers or consultants on commission basis to perform real estate services and the latter shall be deemed independent contractors and not employees of such corporations.

SEC. 33. Display of License in the Place of Business. — Every registered and licensed real estate service practitioner shall establish and maintain a principal place of business and such other branch offices as may be necessary, and shall conspicuously display therein the original and/or certified true copies of his/her certificate of registration as well as tile certificates of registration of all tile real estate service practitioners employed in such office.

SEC. 34. Accreditation and Integration of Real Estate Service Practitioners. - All real estate service practitioners shall be integrated into four (4) professional one national organization, one each for real estate consultants, real estate appraisers, real estate assessors, and real estate brokers, which shall be recognized by the Board, subject to the approval of the Commission, as the only accredited and integrated professional organization for each of real estate service practitioners. A real estate service practitioner duly registered with the Board shall automatically become a member of his/her respected the accredited and integrated professional organization of real estate service practitioners, and shall receive the benefits and privileges appurtenant thereto. 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.

SEC. 35. Coda of Ethics and Responsibilities for Real Estate Service Practitioners. - The Board shall adopt and promulgate the Code of Ethics and Responsibilities for real estate service practitioners which shall be prescribed and issued by the accredited and integrated professional organizations of real estate service practitioners.

SEC. 36. Continuing Professional Education (CPE) Program. - The Board shall develop, prescribe and promulgate guidelines on CPE upon consultation with the accredited and integrated professional organization of real estate service practitioners, affiliated association of real estate service practitioners and other concerned sectors, and in accordance with such policies as may have been prescribed by the Board, subject to the approval of the Commission. The Board shall create a CPE Council that shall be composed of a chairperson coming from the Board, a member from the accredited and integrated professional organizations of real estate service practitioners and a member from the academe.

SEC. 37. Enforcement Assistance to the Board.- The Board shall be assisted by the Commission in carrying out the provisions of this Act and its implementing rules and regulations and other policies. The lawyers of the Commission shall act as prosecutors against illegal practitioners and other violators of this Act and its rules. The duly constituted authorities of the government shall likewise assist the Board and the Commission in enforcing the provisions of this Act and its rules.

SEC. 38. Indication of the Certificate of Registration, Professional Identification Card/license Number, Privilege Tax Receipt (PTR) Number and Accredited Professional Organization (APO) Number. - Seal estate service practitioners shall be required to indicate the certificate of registration, professional identification card, PTR number, and APO receipt number, and the date of issuance and the duration of validity on the documents he/she signs, uses or issues in connection with the practice of his/her profession.

ARTICLE V

PENAL AND FINAL PROVISIONS

SEC. 39. Penal Provisions. - Any violation of this Act, including violations of implementing rules and regulations, shall be meted the penalty of a fine of not less than One hundred thousand pesos (P100,000.00) but not more than One million pesos (Pl,000,000.00) or imprisonment of not less than six (6) months but not more than six (6) years, or both such fine and imprisonment upon the discretion of the court. In case the violation is committed by an unlicensed real estate service practitioner, the penalty shall be double the aforesaid fine and imprisonment.

In case the violation is committed by a partnership, corporation, association or any other juridical person, the partner, president, director or manager who has committed or consented to or knowingly tolerated such violation shall be held directly liable and responsible for the acts as principal or as a co-principal with the other participants, if any.

SEC. 40. Appropriations. — The chairperson of the Professional Regulation Commission shall immediately include in the Commission's programs the implementation of this Act, the funding of which shall be included in the annual General Appropriations Act and thereafter.

SEC. 41. Transitory Provision. - Within ninety (90) days from the effectivity of this Act, the DTI - Bureau of Trade Regulation and Consumer Protection (BTRCP) shall transfer all pertinent records, documents and other materials to the Professional Regulatory Board of Real Estate Service.

SEC. 42. Implementing Rules and Regulations. - Within six (6) months after the effectivity of this Act, the Commission, together with the Board and the accredited and integrated professional organizations of real estate service practitioners, the Department of Finance, and the CHED, shall prepare the necessary rules and regulations, including the Code of Ethics and Responsibilities for real estate service practitioners, needed to implement the provisions of this Act.

SEC. 43. Separability Clause. - If any clause, sentence, paragraph or part of this Act shall be declared unconstitutional or invalid, such judgment shall not affect, invalidate or impair any other part of this Act.

SEC. 44. Repealing Clause, -

  1. Sections 3 (e) and (ee) of Act No. 2728, as amended by Act No. 3715 and Act No. 3969, Sections 472 and 473 of the Local Government Code of 1991 (RA 7160), and pertinent provisions of the Civil Service Law are hereby modified accordingly.
  2. All laws, decrees, executive orders, department or memorandum orders and other administrative issuances or parts thereof which are inconsistent with the provisions of this Act are hereby modified, superseded or repealed accordingly.

SEC. 45. Effectivity. - This Act shall take effect fifteen (15) days following its publication in the Official Gazette or in a major daily newspaper of general circulation in the Philippines. Approved,

Last Updated on Sunday, 15 March 2009 23:59


more info call:

Realtor Samuel Lao
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