Real estate transactions in the Philippines often involve agents who facilitate property sales and rentals. However, not all individuals acting as agents are licensed by the Professional Regulation Commission (PRC). This raises important legal and financial questions, especially regarding commissions. Can unlicensed real estate agents earn a commission? What are the risks and penalties involved? This article explores the legal framework, industry practices, and implications of working with unlicensed real estate agents in the Philippines.
Understanding Real Estate Licensing in the Philippines
In the Philippines, real estate professionals are governed by Republic Act No. 9646, also known as the Real Estate Service Act (RESA) of 2009. Under this law:
- Only individuals registered and licensed by the PRC as real estate brokers can legally practice real estate brokerage.
- Real estate salespersons must be accredited under a licensed broker and cannot operate independently.
- Unauthorized individuals engaging in real estate transactions can face legal consequences.
Can an Unlicensed Real Estate Agent Earn a Commission?
Under RESA Law, an unlicensed individual is not legally entitled to commissions from real estate transactions. Commission payments are reserved exclusively for PRC-licensed real estate brokers and accredited salespersons working under them.
If an unlicensed agent facilitates a property sale, the following issues may arise:
- The transaction could be deemed illegal, leading to fines and penalties.
- The broker or developer may refuse to release the commission due to regulatory restrictions.
- The unlicensed individual has no legal recourse to claim unpaid commissions.
Penalties for Acting as an Unlicensed Real Estate Agent
The RESA Law imposes strict penalties on individuals practicing real estate without a valid license.
Legal Consequences:
- Fines of up to PHP 200,000
- Imprisonment for up to four (4) years
- Possible blacklisting from future real estate licensing applications
These penalties highlight the government’s commitment to professionalizing the real estate industry and protecting consumers from unqualified agents.
Risks of Working with an Unlicensed Real Estate Agent
For buyers, sellers, and property developers, engaging with unlicensed agents presents several risks:
- Lack of accountability: If disputes arise, unlicensed agents have no regulatory body overseeing their conduct.
- Potential fraud: Without proper credentials, there is a higher risk of scams, misrepresentation, or unethical practices.
- No legal protection: Clients dealing with unlicensed agents cannot file complaints with the Professional Regulation Commission (PRC) or the Housing and Land Use Regulatory Board (HLURB).
Who Can Legally Earn Real Estate Commissions in the Philippines?
The following professionals are legally entitled to earn real estate commissions:
1. Licensed Real Estate Brokers
- Must pass the PRC Real Estate Licensure Exam.
- Can work independently or establish a brokerage firm.
- Entitled to receive full commissions from transactions.
2. Accredited Real Estate Salespersons
- Must be registered under a PRC-licensed real estate broker.
- Cannot independently sign contracts or negotiate deals.
- Entitled to a share of the broker’s commission as agreed.
3. Referral Agents (Under a Licensed Broker)
- Some brokers allow individuals to refer clients in exchange for a referral fee.
- These fees are usually a small percentage of the broker’s commission.
- This setup provides a legal way for unlicensed individuals to earn from real estate.
How to Become a Licensed Real Estate Broker in the Philippines
If you are interested in legally earning commissions, obtaining a real estate broker license is the best course of action. Here’s how:
- Meet Educational Requirements
- A Bachelor’s Degree in Real Estate Management (BSREM) is required.
- Graduates from other fields may need additional training or certification.
- Pass the PRC Licensure Exam
- The Real Estate Broker Exam is conducted by the PRC.
- Examinees must meet all requirements before taking the test.
- Obtain a PRC License
- Successful candidates must register with the PRC and secure their real estate broker’s license.
- Stay Compliant
- Brokers must renew their licenses and comply with Continuing Professional Development (CPD) requirements.
Alternatives for Unlicensed Individuals Interested in Real Estate
For those who want to engage in real estate without a license, there are legal alternatives:
- Work under a licensed broker as an accredited salesperson
- Earn referral fees by connecting clients with a licensed broker
- Invest in real estate instead of facilitating transactions
- Pursue property management, leasing, or real estate marketing roles
Conclusion
Earning commissions as an unlicensed real estate agent in the Philippines is illegal and carries significant risks. The RESA Law ensures that only PRC-licensed professionals can conduct real estate transactions and receive commissions. To operate within the law, aspiring agents should either obtain a real estate broker license or work legally as accredited salespersons. Buyers and sellers are advised to transact only with licensed professionals to ensure a secure and transparent real estate experience.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific concerns regarding real estate licensing, consult with a legal professional or the Professional Regulation Commission (PRC).
