A look at the RESA Law

Philippine Star

October 1, 2010

By: Atty. Manuel M. Serrano

MANILA, Philippines - Throughout the country real estate developers are up in arms over certain provisions of R.A. 9646, also known as the “Real Estate Service Act of the Philippines” (RESA), which regulates the practice of real estate service in the Philippines, creating for the purpose a Professional Regulatory Board of Real Estate Service (PRBRES) and its subsequent funding.

Much of the protestations stem from Sections 28 (a) and 29 of the RESA Law, which prohibit real estate developers from practicing real estate service in the country. To many developers the practice of real estate service, which includes offering, advertising, soliciting, listing, promoting, negotiating and selling of real estate is not only an integral part of their business but an inherent right. Having invested millions in the development of their projects developers have much to lose in the business and it is only fitting that they provide not only quality products but quality real estate service as well.

More important is the fact that real estate developers have acquired, through years of practice and experience, greater knowledge, expertise, vision and professionalism in providing real estate service. For developers to go to brokers and middlemen, most of whom are in their employ anyway, is illogical, to say the least. Because developers, whether natural or juridical, place greater premium on giving quality service compared with brokers and middlemen whose major interest is to earn as high a commission as possible. That is why developers should be included in the exemption and not be subjected to licensing and registration the law now requires.

From a legal standpoint, the spirit on which the law was premised appears shaky and at best, unconstitutional, because the prohibition is not germane to the subject matter of the RESA Law. First, it is one thing to regulate the practice of real estate, which the law mandates, and it is quite another thing to prohibit developers from engaging in the practice of real estate service in connection with their own properties. The latter is not embraced by the former. This is obviously a violation of Section 26 (1) of Article VI of the Philippine Constitution which states that “every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof.” 

The prohibition against real estate developers from engaging in real estate service is an unreasonable and unlawful deprivation of their property rights, in violation of Section 1, Article III of the Constitution, which holds, among others, that “no person shall be deprived of life, liberty or property without due process of law.” It also impinges on their right to dispose of their property under Article 428 of the Civil Code.

The RESA Law simply puts developers at the mercy of brokers and middlemen who from the start had no participation in the development and conceptualization of the properties they will be servicing. Thus CREBA is urging the Professional Regulatory Commission to suspend the aforementioned provisions in the RESA which prevent developers from practicing real estate service on their own or as an alternative, exempt real estate developers from the licensing and registration requirements.

(Atty. Serrano is the chairman of the Chamber of Real Estate and Builders Associations Inc. or CREBA)

Philippine Star

October 1, 2010

By: Atty. Manuel M. Serrano