The Supreme Court Clarifies the Integration of Real Estate Practitioners into One National Organization

Allan Du Yaphockun, et al. vs. Professional Regulation Commission, et al., G.R. Nos. 213314 and 214432, March 23, 2021

Imagine a bustling real estate market where the professionals who drive it are bound by a common set of standards and regulations. This vision lies at the heart of Republic Act No. 9646, the Real Estate Service Act of the Philippines (RESA), which seeks to professionalize and regulate the real estate service sector. However, the implementation of this law sparked a legal battle that reached the Supreme Court, centering on the interpretation of the integration of real estate service practitioners (RESPs) into a single national organization.

The case, Allan Du Yaphockun, et al. vs. Professional Regulation Commission, et al., revolved around the validity of a provision in the Implementing Rules and Regulations (IRR) of RESA that defined the Accredited and Integrated Professional Organization (AIPO) as an entity composed of individual real estate practitioners, rather than associations. This ruling not only clarified the intent of the law but also set a precedent for how professional organizations are integrated and regulated in the Philippines.

Legal Context: Understanding the RESA and Professional Regulation

The Real Estate Service Act of the Philippines, enacted in 2009, aimed to elevate the real estate service sector by establishing a regulatory framework for licensing, registration, and supervision of RESPs. This includes real estate brokers, appraisers, assessors, consultants, and salespersons. The law transferred the regulatory function from the Department of Trade and Industry to the Professional Regulation Commission (PRC) and the Professional Regulatory Board of Real Estate Service (PRBRES).

Section 34 of the RESA mandates the integration of all real estate service associations into one national organization, which would be recognized as the AIPO. This provision reads: “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.”

The controversy arose when the IRR defined the AIPO as an organization of natural persons, leading to conflicting interpretations. To understand this, consider a scenario where a homeowner hires a real estate broker to sell their property. The broker, as a natural person, must be licensed and registered under the PRC, ensuring they adhere to professional standards and ethics. The integration into an AIPO ensures that all such practitioners are part of a single, regulated body, facilitating better oversight and accountability.

Case Breakdown: From Dispute to Supreme Court Decision

The legal battle began when petitioners, including individual RESPs and real estate associations, challenged the validity of Section 3(h), Rule I of the IRR, which defined the AIPO as an organization of natural persons. They argued that the AIPO should be an umbrella organization of associations, as they interpreted Section 34 of the RESA.

The petitioners filed two separate petitions for certiorari and prohibition directly to the Supreme Court, which were consolidated due to the common issue at hand. The Court had to determine whether the petitions were the proper remedy and whether the IRR contravened the RESA.

The Supreme Court, in its decision, emphasized the importance of the AIPO in regulating the profession effectively. Justice Gesmundo wrote, “It is these natural persons who are the primary subjects of government regulation and who will be ultimately held accountable for any breach of their professional duties and ethics.” The Court upheld the validity of the IRR, stating, “The interpretation of Sec. 34 of the RESA made by respondents PRC and PRBRES being more consistent with the policy and objectives of the law… the Court sees no difficulty in upholding the validity of Sec. 3(h), Rule I of Resolution No. 2, Series of 2010 issued by the PRC and the PRBRES.”

The Court’s decision was influenced by the fact that similar provisions in other Professional Regulatory Laws (PRLs) also established AIPOs composed of individual practitioners. This consistency across professions reinforced the Court’s view that the AIPO should be composed of natural persons rather than associations.

Practical Implications: Impact on Real Estate Practitioners and Associations

This ruling has significant implications for the real estate service sector in the Philippines. It clarifies that all RESPs must be part of the AIPO as individual members, ensuring uniform regulation and oversight. Real estate associations can continue to exist and operate independently, but they will not be part of the AIPO’s membership structure.

For real estate practitioners, this means a streamlined approach to professional regulation, with clear pathways for licensing, registration, and adherence to a national code of ethics. For associations, while they may not be integrated into the AIPO, they can still play a vital role in supporting their members and advocating for the profession.

Key Lessons:

• Individual RESPs must join the AIPO to comply with regulatory requirements.
• Real estate associations should focus on supporting their members while recognizing the AIPO’s role in national regulation.
• Understanding the legal framework governing professional organizations is crucial for effective compliance and advocacy.

Frequently Asked Questions

What is the purpose of the Real Estate Service Act of the Philippines?

The RESA aims to professionalize the real estate service sector by establishing a regulatory framework for licensing, registration, and supervision of real estate service practitioners.

What is the Accredited and Integrated Professional Organization (AIPO)?

The AIPO is a national organization recognized by the PRC and PRBRES as the sole accredited and integrated body of real estate service practitioners, composed of individual practitioners rather than associations.

Can real estate associations still exist under the RESA?

Yes, real estate associations can continue to operate independently, but they are not part of the AIPO’s membership structure.

What are the implications of the Supreme Court’s ruling for real estate practitioners?

RESPs must join the AIPO as individual members to comply with regulatory requirements, ensuring uniform standards and oversight across the profession.

How can real estate associations support their members under the new ruling?

Associations can focus on providing training, advocacy, and support services to their members, while recognizing the AIPO’s role in national regulation.

ASG Law specializes in real estate law and professional regulation. Contact us or email hello@asglawpartners.com to schedule a consultation.