What is RESA LAW?

Real Estate Service Act or RESA law: What you need to know

Buying a property is a life-long dream for many people in the Philippines, but it involves a considerable amount of money- the reason why many home-buyers/investors are so careful in transacting with just anybody. That is why the government ensures that the real estate profession is well regulated here in the Philippines, and that the people who introduce themselves are real estate professionals are licensed (like architects, lawyers, doctors, engineers, etc.). This is the primary objective of the Real Estate Service Act of the Philippines, more commonly known as the “RESA Law”.

What is RESA law?

Republic Act No. 9646 or the Real Estate Service Act of the Philippines, which is more commonly referred to as the RESA laws the law that protects the rights of those who call themselves as real estate professionals. This said law took effect on July 30, 2009 and it deals primarily with the acts considered to be real estate services, the penalties corresponding to violations of its provisions and the qualifications of those who may practice the profession. Furthermore, the law is meant to prevent the practice of “colorum” agents and also property sellers who are still patronizing to the so-called freelance illegal property agents to avoid paying taxes and proper commission rates.

Before the RESA Law was introduced in 2009, all real estate brokers were licensed under the Department of Trade and Industry (DTI). When the law was passed, the role of regulating the profession was handed to the Professional Regulation Commission (PRC). However, those already licensed under the DTI are still eligible to get a license from the PRC without taking the Real Estate Broker Licensure Examination (under the so-called grandfather clause).
What can be considered as “engaging in the practice of real estate service”?

Based on Section 27 of the RESA Law, acts constituting the practice of real estate service are as follows:

“Any single act or transaction embraced within the provisions of Section 3(g), Rule II hereof, as performed by real estate service practitioners, shall constitute an act of engaging in the practice of real estate service.”
” Furthermore, Section 3(g) states that:

“g. “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 real estate projects.

(2) Real estate appraiser – a duly registered and licensed natural person who, for a professional fee, compensation or other valuable 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

(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.”

Who are exempted from the RESA Law?

Section 28 of the RESA law stipulates who are exempted from the said law:Owners of real property are not required to have a license in order to sell their own property. However, real estate developers are not included because they are regulated by the Housing and Land Use Regulatory Board (HLURB).
Trustees in bankruptcy or insolvency proceedings.
People who act pursuant to court orders and duly constituted attorneys that are authorized to negotiate the sale, mortgage, lease, or exchange of real estate.
Public officers who performs such acts in line with their official duties. Except that government assessors should have a license.
What is prohibited?

Let me quote Section 29 of the RESA Law below:

“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 R.A. No. 9646 and the IRR 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 provided for in R.A. No. 9646.”
What are the penalties for violating RA 9646?

Section 39 stipulates that licensed real estate professionals who are proven guilty of violating of the said law, shall be penalized with a fine of not less than Php100, 000.00 or imprisonment of not less than two (2) years. However, if the offender happens to be unlicensed, the penalty shall be double (that would mean Php200, 000.00 or imprisonment of not less than four (4) years.

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