SABABAN, KIM T.

BS REM- 2B
Case Analysis
Case 1: Unlicensed Salesperson
Mr. Cruz, a fresh graduate, works in a real estate developer’s office. Since he is good at talking
to clients, he started selling condominium units directly to buyers. However, he has no PRC
license and no accredited broker supervising him. He also collects reservation fees and
commissions in his own name.
Guide Questions:
1. Which section of RESA Law applies in this situation?
Based on the scenario, section of RESA LAW that implies is Section 29 of RESA Law (RA
9646) and Section 39 of RESA LAW. According to the requirements of the RESA Law, a person
must be licensed before engaging in any sale or transaction involving real estate. This applies to
Mr. Cruz in the first case scenario. Even if you are highly skilled in communication, you must
still comply with the rules set by the PRC. In Section 29, it states that a person is not allowed to
offer real estate services—even through a letter, word, or title associated with real estate—unless
they have the proper license to do so.
2. What is wrong with Mr. Cruz’s actions?
Mr. Cruz violated the law by engaging in transactions without a license and without being a duly
registered and accredited real estate broker. Under Section 29 of the Real Estate Service Act, it is
illegal for any person to practice real estate service or even claim to be a real estate service
practitioner through titles, words, or actions without a valid license. Selling condominium units
directly to buyers qualifies as practicing real estate service.
2. What are the penalties under RESA Law?
According to Section 39 of the RESA Law, any person found guilty of violating the law shall
face a fine of not less than ₱100,000 or Imprisonment of not less than two (2) years, or Both fine
and imprisonment, at the discretion of the court. but since he is not real estate practitioner, he
shall face double for double penalty.
3. What should be the correct course of action?

Mr. Cruz must stop selling real estate immediately because he is not licensed to do so. To legally
work in the real estate industry, he needs to apply for accreditation as a Real Estate Salesperson
through the Professional Regulation Commission (PRC). This process also requires him to work
under the supervision of a licensed real estate broker. He is only allowed to assist in selling or
marketing properties if he is properly accredited and guided by a licensed broker. If Mr. Cruz
wants to become a licensed real estate broker in the future, he must complete the required
education and gain enough experience before taking and passing the Real Estate Broker
Licensure Examination given by the PRC. Following these steps will ensure that he complies
with the law and avoids legal penalties.
Case 2: Broker’s Responsibility

Ms. Santos is a licensed real estate broker. She has 5 salespersons under her supervision.
One of them, without her knowledge, closed a deal with a client but failed to remit the
client’s payment to the developer. The client filed a complaint against both the salesperson
and Ms. Santos.

Guide Questions:

1. Which section of RESA Law applies in this situation?

Section 31 is the perfect section I apply in this case. Section 31 states the supervision of real
estate salespersons. All salespersons are required to work directly under the guidance and
supervision of a licensed broker. Because of this, the broker is responsible for the actions
and transactions made by the salespersons they oversee.

2. Why is Ms. Santos accountable even if she did not directly commit the act?

Because she is the one who supervise the salesperson. Anything that happen to her
salesperson, she is liable. As the broker in charge, she is tasked with supervising, guiding,
and making sure that every transaction carried out by her team follows all legal and ethical
rules. Even if she didn’t know about any wrongdoing by the salesperson, she is still
accountable for what they do. They are both liable in this problem.

3. What penalties/liabilities may arise?

Since this is a law, it involves civil liability and criminal liability. It includes suspension, pay
damages, legal proceeding that can also lead to revocation of licenses depending on
seriousness of the violation. In addition, client has the right to file a case to recover any lost
funds.

4. How should Ms. Santos properly handle her salespersons to avoid this problem?

Prevention is better than cure; to prevent this kind of problem, Ms. Santos should create
and implement clear rules and policies and procedures for managing transactions. She
must consistently check every activity of her salespersons, ensure that all transactions are
properly documented, and confirm that payments are submitted directly to the developer
or other authorized parties. Moreover, regular training sessions, thorough audits, and clear
lines of communication are essential to minimize the risk of unauthorized or fraudulent
conduct.
Case 3: Appraisal Practice Without License

Mr. Dela Peña, a bank officer, was asked by his boss to prepare an appraisal report for a
foreclosed property. He is not a licensed appraiser but has been working in real estate for
many years. He submitted the report and signed it under his job title as “Real Estate
Officer.”

Guide Questions:

1. Which section of RESA Law applies in this situation?

Section 29 of the RESA Law is applicable here. It prohibits any person from offering,
performing, or providing real estate services, including appraisal, without a license issued
by the PRC.

2. Why is Mr. Dela Peña’s action considered illegal practice?

No matter how many years he has worked in real estate, what he did is still illegal because
he doesn’t have a license as a real estate appraiser. Only licensed appraisers are allowed to
prepare and sign appraisal reports. These licenses prove that the appraiser has received
the proper training and follows the rules set by the authorities. Doing appraisals without a
license breaks the law and can cause serious problems, such as incorrect property values,
financial losses, and legal issues for everyone involved. It also puts buyers, sellers, and
lenders at risk because they rely on accurate appraisals to make important decisions.
That’s why the law strictly requires that only qualified and licensed professionals handle
this work.

3. What are the possible penalties for this act?

Same as case 1, According to Section 39 of the RESA Law, any person found guilty of violating
the law shall face a fine of not less than ₱100,000 or Imprisonment of not less than two (2) years,
or Both fine and imprisonment, at the discretion of the court.

4. What should the bank have done instead?

The bank is required to hire a licensed real estate appraiser to prepare any appraisal
report. This responsibility should never be given to individuals who are not licensed,
regardless of how many years of experience they may have in the real estate industry.
Licensing ensures that the appraiser has the proper training, follows professional
standards, and is accountable under the law. Allowing an unlicensed person to handle such
a critical task not only violates regulations but also puts the accuracy and credibility of the
appraisal at risk, which can lead to legal and financial consequences for all parties involved.