Published on February 26, 2014,

Written by Jomar Canlas

THE Supreme Court (SC) has affirmed the constitutionality of the Real Estate Service Act (Resa), or Republic Act (RA) 9646, saying it does not violate the equal protection clause.

In a full court decision, the High Tribunal denied the petition for review filed by Remman Enterprises Inc. (REI) and the Chamber of Real Estate and Builders’ Association (Creba), as it upheld the July 12, 2011, decision of a Manila Regional Trial Court (RTC).

The RTC dismissed the petitions of REI and Creba to declare as unconstitutional Sections 28(a), 29 and 32 of RA 9646.

Resa, which was signed into law by then-President Gloria Arroyo in June 2009, aims to professionalize the real estate service sector through a regulatory scheme that involves the licensing, registration and supervision of real estate practitioners in the Philippines.

On December 7, 2010, REI and Creba filed a case before a Manila RTC to declare as void and unconstitutional certain provisions of the law.

Section 28 or Resa exempts from its coverage natural and juridical persons dealing with their own property, and other persons such as receivers, trustees or assignees in insolvency or bankruptcy proceedings.

Real estate developers were specifically mentioned as also an exception.

The petitioners argued that the aforementioned provision violates the equal protection clause, because it unjustifiably treats real estate developers differently from those exempted persons who also own properties and desire to sell them.

Meantime, Section 29 or Resa requires as a condition precedent for all persons who will engage in acts constituting real estate service, including advertising in any manner one’s qualifications as a real estate service practitioner, compliance with licensure examination, and other registration requirements including the filing of a bond for real estate brokers and private appraisers.

Meanwhile, Section 32 of RA 9646 states that, “No partnership or corporation shall engage in the business of real estate service unless it is duly registered with the Securities and Exchange Commission [SEC], and the persons authorized to act for the partnership or corporation are all duly registered and licensed real estate brokers, appraisers or consultants, as the case may be. The partnership or corporation shall regularly submit a list of its real estate service practitioners to the commission and to the SEC as part of its annual reportorial requirements. There shall at least be one licensed real estate broker for every 20 accredited salespersons.”

The petitioners sought to also declare as unconstitutional the aforementioned provisions.
No violation of equal protection clause

But in its decision, the High Tribunal said that “RA No. 9646 does not violate equal protection clause.”

It also ruled that the petition of REI and Creba lacked merit, and that there was no justifiable controversy.

“Although the equal protection clause of the Constitution does not forbid classification, it is imperative that the classification should be based on real and substantial differences having reasonable relation to the subject of the particular legislation,” the ruling stated.

The High Tribunal also said in its ruling that there is nothing in Resa that repeals any provision of Presidential Decree (PD) 957, or The Subdivision and Condominium Buyers’ Protective Decree, which vested the National Housing Authority with exclusive jurisdiction to regulate the real estate trade and business.

“There is no conflict of jurisdiction because the HLURB [Housing and Land Use Regulatory Board] supervises only those real estate service practitioners engaged in the sale of subdivision lots and condominium projects, specifically for violations of the provisions of PD 957, and not the entire real estate service sector which is now under the regulatory powers of the PRBRES [Professional Regulatory Board of Real Estate Service],” the ruling stated.