Another important piece of legislation that real estate service professional must take notice of is the bill known as the Real Estate Investment Trust Act of 2009.
Hon. Juan Edgardo M. Angara, Representative of the Lone District of Aurora filed the bill in May 19, 2009. HB 6379 is entitled “AN ACT PROVIDING THE LEGAL FRAMEWORK FOR REAL ESTATE INVESTMENT TRUSTS AND FOR OTHER PURPOSES”. It was approved on Third Reading last June 3, 2009.
For further information on REITS, kindly read the online new report by clicking on the link below: http://www.businessmirror.com.ph/home/economy/14084-house-bill-proposes-to-regulate-real-estate-investment-trusts.html
A similar bill was filed by Sen. Edgardo J. Angara in June 30, 2007 at the Senate of the Philippines. Senate Bill No. 63 is entitled “AN ACT PROVIDING THE REGULATORY FRAMEWORK FOR REAL ESTATE INVESTMENT TRUSTS AND FOR OTHER PURPOSES”. Although Sen. Angara has issued a press statement that the passage of the said Senate bill in the 14th Congress is imminent. However, there is no evidence at this time to verify the veracity of such a statement.
According to the bill, a “real estate investment trust” (REIT) is a stock corporation formed for the sole purpose of investing in income-producing real estate assets. Income producing properties include apartment buildings, office buildings, warehouses, medical facilities, hospitals, mixed industrial/office buildings and other commercial and residential properties.
Sen. Angara says that in other jurisdictions, the real estate investment trust regime has also been used to help develop the tourism industry by building resorts, hotels, shopping centers, outlets as well as develop other infrastructure projects like highways, railroads, prisons, and other similar projects
The Gentleman from Aurora argues that main the purpose of REIT is to provide small and large investors alike with the opportunity to participate directly in the ownership and financing of large-scale real estate projects at affordable rates of investment, without the disadvantages of illiquidity, high transaction and management costs, as compared to traditional private real estate ownership.
When the bill is enacted to law, REITs shall be allowed to invest in real estate, whether freehold or leasehold, in or outside of the Philippines; real estate-related assets, listed or unlisted debt securities and listed shares of or issued by local or foreign non-property corporations; government securities issued on behalf of the Philippine Government or governments of other countries and cash and cash equivalent items.
This legal framework is designed to provide a similar structure for investments in the real estate industry in the same manner that mutual funds provide for investment in stocks and securities.
More on REITs in future posts…