PHILIPPINE real estate practitioners have been reminded to carefully follow the provisions of the Real Estate Services Act (RESA), or face stiff penalties including revocation of license, fines of up to P200,000, and a jail sentence of up to four years.
The reminder was offered in response to two recent, somewhat amusing new stories—which fortunately happened outside the Philippines —best described as examples of “agents behaving badly.”
In the first incident, reported by the US-based real estate services firm Inman, a 22-year-old sales agent named Marissa Seloff and her boyfriend Joshua Leal were arrested August 20 in a recently sold but still unoccupied home in Friendswood, Texas (near Houston) when concerned neighbors saw flashlights inside the darkened home and called police.
According to the report on local TV news station KTRK’s website, officers arrived and found the pair on the
floor in what they described as a “passionate embrace.”
Seloff reportedly told the officers she was the house’s owner, but confessed to being the listing agent after a small amount of marijuana was found by the officers in her car.
The new homeowners – Seloff’s recent clients – filed a complaint of criminal trespass against the pair, who were released on $1,000 bail. In addition, Inman reported, Seloff’s name was quickly removed from the website of the real estate firm she worked for.
In the second incident, an Auckland, New Zealand sales agent has had his license revoked and faces other possible penalties for tricking two different homeowners into selling their properties at far less than their value.
According to a notice posted on the website of the Real Estate Agents Authority, former real estate agent Aaron Hughes had his license permanently revoked after defrauding two homeowners by telling them their properties were worth much less than their actual value, and buying them through his company for a reduced price.
In the case of the first home, Hughes apparently sold it the same day he purchased it in April for NZ$700,000 more than the purchase price, which was not disclosed. In the second case, Hughes purchased a property for NZ$590,000, but the sellers later discovered it had an appraised value of NZ$720,000.
Hughes pleaded guilty to misconduct over the sale of the first house for failing to obtain the best possible price for the sellers and bringing the industry into disrepute, Real Estate Agents Authority chief executive Kevin Lampen-Smith explained in an e-mail response, clarifying that these are clear violations written into the code of ethics for New Zealand property professionals.
PH industry guided by RESA law
Here in the Philippines, the certification and conduct of real estate professionals is governed by the Real Estate Services Act of 2009, which became law in 2011, and which requires the professional licensure of real estate consultants, brokers, salespersons, assessors, and appraisers.
The RESA law does not include a code of ethical conduct for real estate professionals, but is complemented by the “National Code of Ethics and Responsibilities for Real Estate Service Practice” developed by the Professional Regulatory Board of Real Estate Service (PRB-RES).
As real estate foreclosure expert Jay Castillo explained on his blog, the RESA law is wide-ranging in its enforcement of licensing. According to Section 28 of the law, only those who are selling their own property—with the exception of real estate developers, a stipulation CREBA finds objectionable and is trying to have amended – are exempt from licensure requirements. Anyone else “engaging in the practice of real estate services” is required by law to be licensed.
The RESA law gives jurisdiction over all licensing matters to the Professional Regulatory Commission (PRC), including the setting of conditions for revoking a license, which include obtaining the license through fraud or deceit; allowing another person to use the license or accompanying ID number to make real estate transactions; any violation of the RESA law itself, its implementing rules and regulations, or the National Code of Ethics and Responsibilities; engage in other kinds of unprofessional or unethical conduct; and continuing to practice real estate services while suspended for another offense.
Property listing firm Lamudi Philippines reminded people engaged in real estate practice to “check first whether they are covered by the RESA law, or if any of their activities might be a violation. There are many resources available for this, including in our own website,” a company representative said.
Real estate expert Castillo offered similar advice. “When in doubt, don’t be afraid to ask questions, and use good old common sense,” he said. “There is simply no excuse for anyone to be ignorant of the RESA Law and how it affects everyone doing just about anything related to real estate.”