Code of Ethics and By Laws

Introduction

Under all is the land. Upon its wise utilization and widespread ownership depend the advancement of national well-being and the perpetuation of the free institutions that go to make the democratic way of life.

The REALTOR® has husbanded and developed the land resource of the nation and, with his help, ownership has attained its widest distribution - a distinguishing mark that differentiates this from other civilizations and provides the real safeguard against radical impenetrations.

The REALTOR® is a creator of homes, both urban and rural, and by his activities, helps mold the form of his future community, not only in the living of its people, but in its commercial and industrial aspects.

Such functions impose obligations beyond those of ordinary business; they impose grave social responsibilities which the REALTOR® can meet only by diligent preparation and by dedicating himself as a civic duty to their fulfillment.

The REALTOR® therefore must be zealous to maintain and continually improve the professional standards of his calling. He shares with his fellow-REALTORS® a common responsibility for the integrity and honor of that calling. In the interpretation of his obligations, he can take no safer guide than that which has been handed down through twenty centuries embodied in the golden rule. In substance:

"Whatsoever ye would that man should do to you, do ye even to them"

Accepting this standard as his own, every REALTOR® pledges himself to observe its spirit in all his dealings and to conduct his business in accordance with the following Code of Ethics, adopted by the Philippine Association of REALTORS® Boards, Inc. (PAREB).

Part I
Relations to the Public

ARTICLE 1

The REALTOR® should keep himself informed as to the movements affecting real estate in his community, city or province and the nation, so that he may be able to contribute to public thinking on matters of taxation, legislation, land use, city planning and other questions affecting property interest.

ARTICLE 2

It is the duty of the REALTOR® to be well-informed on current market conditions in order to be in a position to advise his clients as to the fair market price.

ARTICLE 3

It is the duty of the REALTOR® to protect the public against fraud, misrepresentation or unethical practices in the real estate field. He should endeavor to help stamp out or prevent arising in his community, any practices which could be damaging to the public or to the dignity and integrity of the real estate profession. The REALTOR® should lend help to the government offices charged with the duty of regulating the practices of real estate brokers, salesmen, appraisers, and allied professions and other government offices having to do with land and its improvement, cooperate with them and report violations of improper practices.

ARTICLE 4

The REALTOR® should ascertain all pertinent facts concerning every property for which he accepts the agency, so that he may fulfill his obligation to avoid error, exaggeration, misrepresentation or concealment of pertinent facts.

ARTICLE 5

The REALTOR® should not be instrumental in introducing into neighborhood a character of property or use which will clearly be detrimental to property values in that neighborhood.

ARTICLE 6

The REALTOR® should not be a party to the naming of a false consideration in a deed, unless it be the naming of an obviously nominal consideration.

ARTICLE 7

The REALTOR® should not engage in activities that constitute the practice of law and should recommend that title be examined and legal counsel be obtained when the interests of either party required it.

ARTICLE 8

The REALTOR® should keep in a special bank account, separated from his own funds, money coming into his hands in trust for other persons, such as escrows, trust funds, client's money and other like items.

ARTICLE 9

The REALTOR® , in his advertising, should be especially careful to present a true picture and should not advertise without disclosing his name or his firm's name, nor permit his salesmen to use individual names of telephone numbers, unless the salesmen's connection with the REALTOR® is obvious in the advertisement.

ARTICLE 10

The REALTOR® , for the protection of all parties with whom he deals, should see that financial obligations are in writing, expressing the exact agreement of the parties and that copies of such agreements at the time are placed in the hands of all parties involved.

Part II
Relations to the Client

ARTICLE 11
In accepting employment as an agent, the REALTOR® pledges himself to protect and promote the interests of the client.
The obligation of absolute fidelity to the client's interest is primary and does not release the REALTOR® from the obligation of dealing fairly with all parties to the transaction.

ARTICLE 12

In justice to those who place their interests in their hands, the REALTOR® should endeavor always to be informed regarding the law, proposed legislation, legal orders issued and other essential facts and public policies which affect those interests.

ARTICLE 13

Since the REALTOR® is representing one or another party to a transaction, he should not accept compensation from more than one party without the full knowledge of the parties to the transactions.

ARTICLE 14

The REALTOR® should not acquire an interest in or buy for himself, his firm, or any member thereof, a corporation in which he has an interest, property listed with him, or his company or firm without making his true position known to the listing owner. In selling property owned by him, or in which he has some ownership interest, the exact facts should be revealed to the purchaser.

ARTICLE 15

The exclusive listing of property should be urged and practiced by the REALTOR® as a means of preventing dissension and misunderstanding and of assuring better service to the owner.

ARTICLE 16

When acting as agent in the management of property, the REALTOR® should not accept any commission, rebate or profit on expenditures made for an owner, without the owner's knowledge and consent.

ARTICLE 17

The REALTOR® should charge for his services only such fees as are fair and reasonable and in accordance with local practice in similar transactions.

ARTICLE 18

When asked to make a formal appraisal of real property, the REALTOR® should not render an opinion without careful and thorough analysis and interpretation of all factors affecting the value of property. His counsel constitutes professional service for which he should make a fair charge.

The REALTOR® should not undertake to make an appraisal or render an opinion of value on any property where he has a present or contemplated interest unless such interest is specifically disclosed in th appraisal report. Under no circumstances should he undertake to make a formal appraisal when his employment or fee is contingent upon the amount of his appraisal.

The REALTOR® should not undertake to make an appraisal that is outside the field of his experience unless he obtains the assistance of a REALTOR® or appraiser familiar with such types of property, or unless the fact is disclosed to the client.

ARTICLE 19

The REALTOR® should not submit or advertise property without authority, and in any offering, the price should not be other than that agreed upon with the owners as the offering price.

ARTICLE 20

In the event that more than one formal offer on a specific property is made before the owner has accepted a proposal, all written offers should be presented to the owner for his decision.

Part III
Relations to His Fellow REALTORS®

ARTICLE 21

The REALTOR® should seek no unfair advantage over his fellow-REALTORS® and should willingly share with them the lessons of his experience and study.

ARTICLE 22

The REALTOR® should so conduct his business as to avoid controversies with his fellow-REALTORS® ; but in the event of a controversy, should be submitted for arbitration in accordance with regulations of their board and not to a suit of law. The decision in such arbitration should be accepted as final and binding.

ARTICLE 23

Controversies between REALTORS® who are not members of the same real estate board should be submitted to an arbitration board consisting of one arbitrator chosen by each REALTOR® from the real estate board to which he belongs. One other member, or a sufficient number, should be selected by the arbitrators thus chosen.

ARTICLE 24

When the REALTOR® is charged with unethical practice, he should voluntarily place all pertinent facts before the proper tribunal or the real estate board of which he is a member, for investigation and judgement.

ARTICLE 25

Whe the REALTOR® accepts a listing from another broker, the agency of the broker who offers the listing should be respected until it has expired and the property has come to the attention of the accepting REALTOR® from a different source, or until the owner without solicitation offers to list with the accepting REALTOR®, unless contrary to the rules of the local real estate board; furthermore, such a listing should not be passed on to a third broker without the consent of the listing broker.

ARTICLE 26

The REALTOR® should never publicly criticize a competitor, nor volunteer an opinion of a competitor's transaction. If his opinion is sought, it should be rendered with strict professional integrity and courtesy.

ARTICLE 27

The REALTOR® 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®.

ARTICLE 28

The REALTOR® should not solicit the services of an employee or salesman in the organization of a fellow-REALTOR® without the knowledge of the employer.

ARTICLE 29

Signs giving notice of property for sale, rent, lease or exchange should not be placed on any property by more than one REALTOR® and then only if authorized by the owner.

Part IV
Relations to His Board and the Association

ARTICLE 30

In the best interest of society, of his associates and of his own business, the REALTOR® should be loyal to the real estate board of his community and active in its work.

ARTICLE 31

Election to Membership in the Member Board and the Philippine Association of REALTORS® Boards, Inc. (PAREB) carries with it the moral obligation to serve as Director, Officer or Committee Chairman or Member in either said Member Board or the PAREB when so qualified, elected or duly called upon to server and therefore such election to the Directorate or any office in the Member Board or in the PAREB should not be the subject of election campaign, letters or circulars announcing one's candidacy or appealing for votes for certain nominees or candidates or other forms of electioneering or any agreements, or any acts which will interfere with the free and wise choice or the secret ballot by the Membership or Directorate.

DTI will no longer accept applications for license, whether original or renewal upon effectivity.

After years of lobbying, Republic Act No. 9646 otherwise known as the “Real Estate Service Act of the Philippines” or RESA was finally signed into law on June 29, 2009 by President Gloria Macapagal Arroyo and will take effect July 30, 2009.

How does this law affect the practitioners?

RESA is an an act regulating the practice of real estate service in the Philippines, creating for the purpose a Professional Regulatory Board of Real Estate Service (Board) under the supervision and administrative control of the Professional Regulation Commission (PRC). The express repeal by RESA of Sections 3 (e) and (ee) of Act. No. 2728, as amended, the law from which Department of Trade and Industry (DTI) draws its authority to regulate the real estate service practice, will also result in the repeal of Ministry Order No. 39, Series of 1985, as amended, and other related issuances implementing Act No 2728.

One of the provisions of this law that is of immediate significance is the registration without examination of real estate brokers, real estate appraisers and real estate consultants who on the date of effectivity of the law are already licensed by DTI pursuant to M.O. No. 39. 

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.

The RESA mandates the transfers of regulation of real estate practice from the DTI to the PRC and transfer all pertinent records to the PRC within ninety (90) days from effectivity. 

As a consequence, starting July 30, 2009 the DTI Field Offices will no longer accept application for license, whether original or renewal, of real estate consultants, appraisers, brokers and salespersons. All records pertaining to licensed practitioners will be prepared for transmittal to the Board.

Those who have expired licenses or passers of previous examinations who have not applied for a license as of the above deadline will now be subject to the RESA which requires examination for licensure.

New and tougher requirements have been adopted in the RESA, like for brokers, an applicant for examination must be 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 shall make this course a requirement for taking the "licensure examination”. 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.

The Act also states a penalty of a fine of not less than One hundred thousand pesos (P100,000.00) or imprisonment of not less than two (2) years, or both for any violations of this act or including violations of implementing rules and regulations.

However, any cases involving violation of Act No. 2728 as amended, whether pending or those that will be filed prior to effectivity of RESA, shall remain with DTI given the prospective application of the law.

RESA also mandates that all real estate service associations shall be integrated into one (1) national organization, which shall be recognized by the Board, subject to the approval of the Commission, as the only accredited and integrated professional organization of real estate service practitioners.

A real estate service practitioner duly registered with the Board shall automatically become a member of the accredited and integrated professional organization of real estate service practitioners.