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Penalty for Unlicensed Real Estate Brokers Increased

Penalty for unlicensed real estate selling increased

Attention, open in a new window.The Secretary of Trade and Industry issued DTI Administrative Order No. 6 dated August 24, 2007 increasing the fines on violations of Republic Act No. 2728, as amended by Republic Acts No. 3715 and No. 3969.

According to the DTI order, any violation of RA No. 2728 shall be fined as follows:

New Schedule of Fines






Licensed real estate practitioner




Unlicensed practitioner




Juridical person




RA No. 2728 regulates real estate practice in the country.

The licensed practitioner shall be penalized for his violation of the Real Estate Code of Ethics. (specifically Art. IX of M.O. No. 39, Series of 1985 as amended)

The unlicensed dealer, broker and salesman shall be penalized for engaging in real estate selling and leasing without the proper license. Presidential Decree No. 957, Section 11 which complements RA No. 2728, states that no natural or juridical person may engage in the business of selling or leasing real estate in the Philippines without registering first with the Housing and Land Use Regulatory Board (HLURB).

In case the violator is a juridical person (corporation, partnership, cooperative, or association), the president, manager or administrator or the person who has charge of the administration of the business shall be held criminally responsible for the violation.

In addition to paying the fine, everyone caught selling or leasing real estate without the proper license may, upon conviction, be punished by imprisonment of not more than ten (10) years, according to PD No. 957.

The fines under DTI AO No. 6 could be higher. Art. IX, Section 2 of the order states that “For every day of continuing violation, the amount of not more than P1,000 shall be imposed over and above the administrative fine to be reckoned from the date when the Writ of Execution is served. The amount of fine for each day shall be equivalent to 10% of the actual administrative fine but not less than P100 and not more than P1,000.”

In case the violator is a licensed practitioner, Section 3 states that “In addition to the administrative fine imposed, other penalties such as but not limited to censure, confiscation, cancellation or suspension of any license, permit, authority or registration which may have been granted by the Department, may be imposed if the circumstances warrant.”

Section 3(e) and (ee) of RA No. 2728 empowers the Department of Trade and Industry to license real estate dealers, brokers and salesmen. But DTI Administrative Order No. 8, Series of 1999, has deputized the HLURB to do the licensing.

DTI AO No. 6 considers real estate dealers, brokers and salesmen with expired registration as unregistered and likewise liable.

All dealer and broker’s registrations expire automatically on the last day of December and will have to be renewed annually. The salesman’s registration ceases automatically upon termination of his employment with a dealer or broker.

Only applicants of good repute and who have complied with the requirements of the Authority may register.

One registration requirement is the posting of cash bond (or other security in lieu thereof) the amount of P5,000 for applicant brokers and P1,000 for applicant salesmen.

Members of real estate associations recognized by either the DTI or HLURB need not post bond provided their respective associations issue a certification that it shall assume any and all liabilities the applicant-members may cause up to the amount of P5,000.

Registration renewal should be made “not less than thirty nor more than sixty days before the first day of the ensuing year.” Late applications for renewal shall be penalized and treated as original applications (meaning paperworks and other requirements will have to be filed anew).

All approved registrations shall be recorded in a Register of Brokers, Dealers and Salesmen which shall be open to public inspection.

Source: Department of Trade and Industry
Published Wednesday, November 7, 2007 12:13 AM by Chona Esguerra


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