The Fake Realtor: COLORUM in the Real Estate

Service Industry

Compiled by:
Dr.Janrey A. Colmo,REA,REB,CB,CTT,MRITax,MPA,D.B.A
 TOPICS FOR DISCUSSION
PART 1: DEFINITION OF COLORUM IN THE
REAL ESTATE SERVICE INDUSTRY

PARRT 2: REAL VS FAKE: AM I ENGAGED

IN THE PRACTICE OF COLORUM REAL
ESTATE SERVICE?
RA 9646

 Real Estate Service Act of the

Philippines (Section 1, RA
9646)
 Approved on June 29, 2009
 RA 9646 does not define the
word “colorum”
 “Colorum” - the word has been
commonly used in the
Philippines to describe the
practice of operating a business
or profession w/o a license,
permit or a franchise and
considered as illegal or
unauthorized practice of a
Colorum Practice in Diffirent Industry
 Colorum in Public Transportation
 Colorum in the Practice of Optometry
 Colorum in the Practice of Architecture (RA
9266)
 Colorum in the Practice of Notary Public
Colorum in the Real Estate Service
Sec 29, RA 9646 States:
Section 29. Prohibition Against the Unauthorized Practice of Real
Estate Service. - No person shall practice or offer to practice real estate
service in the Philippines or offer himself/herself as real estate service
practitioner, or use the title, word, letter, figure or any sign tending to
convey the impression that one is a real estate service practitioner, or
advertise or indicate in any manner whatsoever that one is qualified to
practice the profession, or be appointed as real property appraiser or
assessor in any national government entity or local government unit,
unless he/she has satisfactorily passed the licensure examination given
by the Board, except as otherwise provided in this Act, a holder of a
valid certificate of registration, and professional identification card or a
valid special/temporary permit duly issued to him/her by the Board and
the Commission, and in the case of real estate brokers and private
appraisers, they have paid the required bond as hereto provided.
Types of Colorum /Illegal Practice of Real
Estate Service
 Did not pass the Licensure
Exam (subject to exception
of Sec 12, RA 9646)
 W/o Certificate of
Registration (Sec 17, RA
9646)
 W/o PRC ID or Special
/Temporary Permit (STP)
Sec 23, RA 9646.
Types of Colorum /Illegal Practice of Real
Estate Service
 Those who has been convicted by a court of
competent jurisdiction of any criminal offense
involving moral turpitude (Sec 18, RA 9646)
 Those has been found guilty of immoral or
dishonorable conduct after investigation by the
Board. (Sec 18, RA 9646)
 Found to be psychologically unfit. (Sec 18, RA
9646)
 Revoked COR/PRC ID
 Cancelled STP
 Suspended in the Practice of RES
Types of Colorum /Illegal Practice of Real
Estate Service
 Foreigners (Sec 24, RA 9646)
 Those who did not take oath (sec 25, Ra 9646)
 REB and REA who did not post the BOND (Sec 26,
RA 9646)
 Unregistered corporation or partnership w/ SEC (Sec
32, RA 9646)
 Real Estate Developers engaging the prohibited acts
under Sec 29
 Those mentioned under Sec 28 who received a
compensation, fees or any form of renumeration.
The Grand Father Rule under RA 9646
 Under Section 20. Registration Without Examination: The
law allows certain individuals to practice w/o taking the
licensure examination.

 (a) Those already licensed as REB, REA, REC from the DTI
 Must apply the registration with the PRC within the 2 year
period from the effectivity of RA 9646 or until June 29, 2011
 Must attend or obtain the required CPD units required by the
PRBRES
 Once registered under the Grandfather Rule, must
subsequently comply with the requirement of the renewal of
license every 3 years.
 PART II

FAKE VS REAL: AM I
ENGAGING IN THE
COLORUM PRACTICE OF
REAL ESTATE SERVICE?
PRC Online Verification
Tell-Tale Signs of a fake Real Estate Service
Practitioner

The Hobbyist Finder’s Keepers

Broker –Brokeran

“I can sell a property w/o a “I can look for a property that

“I have a license before but did
license because my clients suits your needs basta bigyan
not renew it because I am
trust me and I have been in mo ako ng ATS. Bahala ka na
always in the States. Selling
this business for twenty sa finders fee ko.”
property is just a hobby. I
years”
am doing this for a friend”
“I have a property being offered
“I do not need a license for pasalo, fully furnished,
“There are so many
since I can sell a property complete requirements.
requirements now to be a
even w/o it. I know the Pipirma ka na lang sa Deed
licensed RESP I am not
PMO and the Marketing of Sale with Mortgage sayo
doing this full-time. I have
Head of the developer. na yung property nakatipid
other business”
Direct ako” ka pa.”
Frequently Asked Questions
My aunt has several
condominium units in BGC
and she asked me to look
I am a REB, can I ask my I am a US citizen but for a tenants. She issued a
salesperson to attend my former Filipino Special Power of Attorney
CPD and accredit the Citizen, can I practice (SPA) in my favor. Am I
allowed to advertise in
points on my behalf? RES? facebook and internet that I
am looking for a tenant?
Answer:
No, Attendance in CPD is a NO, Foreigners cannot YES. There is no
prohibition against a dully
personal compliance practice RES authorized representative
requirement of the Exemptions: Dual provided that the
applicant. May constitute Citizens and Foreign representative shall not ask
fraud or deceit on the part Reciprocity or be given any fee or
commission for the
of RESP. transaction.
Frequently Asked Questions
I a an OFW based in Singapore
My Property is under litigation and has no license to
I am the owner of a property
and I requested my Attorney to practice RES. Can I offer or
and I do not want to ay a
sell the property at a reasonable advertise for sale the
5% commission to a
price and portion of the selling condominium units in the
licensed RESP but a am Philippines to my OFW co
price shall be applied to his
willing to pay finders fee workers.
attorney’s fees. Will this be
fixed at Php 10,000 for
considered as practice of RES?
anyone who can find a As a general rule, Philippine
buyer for my property. Am laws are territorial. Acts
NO. The lawyer is entitled to be committed abroad cannot be
I liable under RA 9646?
paid hi/her attorneys fees. punished in the Philippines.
However, If she asks for a However, if the act of
NO, RA 9646 does not punish
commission for the sale on the selling or advertising is
or prohibit the aiding and committed thru the internet
top of the attorneys fees, It is a
abetting of the illegal or social media, the
violation of the RESA Law if
practice of RESA law. Cybercrime Prevention act
he/she is not a licensed RES.
of 2012 may effect.
Various Laws Affecting the Practice of RESP
Criminal law: Revised Penal Code (Act 3815 and RA
10951)

 Article 315 – Estafa

 Article 318- Other Deceits

Administrative and Criminal Law: RA 9646 (RESA

LAW) and RA 8991
Sec 19, RESA Law Revocation and Suspension of COR
and PIC and Cancellation of STP
Sec 39 Penal Provision
Sec 7 of RA 8981: PRC Modernization Act
Reasons Why COLORUM practice of RESA Law
should be stopped
1) Public Interest – RESP practice is imbued w/ public
interest. When you are a licensed to RES, you are
holding your self out to the public that you have the
technical knowledge to engage in the service of real
estate practice as compared to colorum realtors.
2) Unfair competition - Licensed RESP are competing
with unlicensed individual in the industry. In most
cases, both licensed and unlicensed individuals are
charging the same amount of commission/fee for the
real estate transaction.
3) Tax Evasion – The COMMISSIONS of licensed RESP
are subject to tax while unlicensed individuals are not
Administrative and Criminal Sanctions:
RESA Law
Sec. 19, RA 9646
- Revocation & Suspension of COR and PIC

Sec. 39, RA 9646 – PENAL Provision

Question?
I am a registered salesperson
and my REB did not pay
my commission. What cases
can I file against the REB?
Answer:
 Estafa – criminal case for failure to
remit the commission to be filed with
the prosecutors office.
 RES Board – administrative complain

against the REB for suspension/

revocation of license.
I want to file a case against
colorum individuals who are
selling properties without a
license, what cases can I file
against them?
Answer
 Violation of RESA law -file with PRC under RA
9646 and RA 8991.
 The PRBRES can direct the NBI/CIDG to conduct
entrapment operation or investigation.
 DILG - Strict Implementation of R.A. No. 9646
or the Real-Estate Service Act of the Philippines.
Reference Number: MC2019-86
Responsible Office: All Provincial Governors,City
Mayors, Municipal Mayors, Punong Barangays,
DILG Regional Directors, DILG Field Officers, and
all others concerned
I want to file a case against a
colorum with PRC/Board
what proof of evidence
should I prepare in the
filling of the case?
Answer
 Statement from witnesses to prove that he/she is
engaging in the practice of RES.
 Copies of advertisement, flyers and other materials
to prove that he/she is engaging in the practice of
RESP.
 Proof that he/she is asking or has received a fee
/commission to the real estate transaction.
 Certification from PRC that he or she is not a
licensed RESP.
 What is meant by crimes
involving moral turpitude
that is against that is ground
for administrative
complaint against a RESP
before PRBRES?
- Adultery, concubinage, rape, arson, evasion of
income tax, barratry, bigamy, blackmail, bribery,
criminal conspiracy to smuggle opium, dueling ,
embezzlement, extortion, forgery, libel, making
fraudulent proof of loss on insurance contract,
murder, mutilation of public documents, fabrication
of evidence, offenses, against pension law, perjury,
seduction under the promise of marriage, estafa,
falsification of public documents, and estafa thru
falsification of public documents.
 What are
malpractice
suits?
 The RESA law does not define the term
“malpractice”. But in cases decided by
supreme court “Malpractice” connotes
failure to do something that a professional
individual should have done.
 Negligence or omitted acts should be

alleged
 Expert witness should be presented.
 What are
unprofessional and
unethical conduct of
RESP?
 Under 2019 Code of Ethics and Responsibilities of
RESP
 Failure to attend CPD
 Engaging tax evasion or tax reduction
 Material non disclosure in the transaction
 Charging unlawful or exorbitant fees
 Disrespectful towards fellow RESP
Thank you very
much!!!