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  • Essential Guide to Paying Professional Tax Annually

    “Professional is not a label you give yourself – it’s a description you hope others will apply to you.”

    – David Maister, Author and Former Harvard Business School Professor

    Sample Professional Tax Receipt (PTR) issued by a local government unit in the Philippines

    By Realttorney®

    Ti auguro un buon anno nuovo! It is the second day of the new year. For some, it is back to work. Others are still in vacation mode until Sunday, January 5 — which we Catholics in the Philippines celebrate as the Feast of the Epiphany. For the rest of the country, this coming Sunday is the final day of the Christmas season.

    Whether you are working now or still vacationing, a real estate service practitioner must be reminded of legal compliance that must be made at the beginning of every new year. Before the effectivity of the Ease of Paying Taxes Act, licensed real estate brokers and accredited real estate salespersons would visit the Bureau of Internal Revenue to pay the annual registration fee of Five Hundred Pesos, under BIR Form No. 0605. But that is no more today.

    In this article, we will focus on the payment of the professional fee to your Local Government Unit. What is it? Who pays it? And why do we need to pay an annual professional tax?

    Section 139 of Rep. Act No. 7160, otherwise known as the “Local Government Code of 1991”, provides the legal basis for provinces to impose and collect professional tax on each person engaged in the exercise or practice of his/her profession.

    Meanwhile, cities are also authorized to impose professional tax under Section 151 of the Local Government Code, which provides that a city may levy taxes, fees, and charges that a province or municipality may impose.

    So now, what is a professional tax, and who pays it? It is a tax imposed by the provincial or city government on each person engaged in the exercise or practice of his or her profession.

    The professional tax is paid by anyone who is legally authorized to practice a profession in the Philippines. This is interpreted to mean all professions that are supervised by the Professional Regulation Commission (PRC) and required to take and pass a licensure examination.

    Kindly note that any individual or corporation employing a person subject to professional tax shall require payment by that person of the tax on his profession before employment and annually thereafter, as may be provided under a duly enacted local ordinance.

    Furthermore, professionals exclusively employed in the government shall be exempt from the payment of this tax, unless he/she has been duly authorized to practice the profession outside of his/her official functions.

    When do you pay professional tax? The professional tax shall be payable annually, on or before the thirty-first (31st) day of January. Any person first beginning to practice a profession after the month of January must, however, pay the full tax before engaging therein. The Sanggunian concerned may, for a justifiable cause or reason, extend the time of payment of such taxes, fees, or charges, without surcharges or penalties, but only for a period not exceeding six (6) months.[1]

    Where do you pay the professional tax? The payment of the professional tax shall be made to the province or city where the professional practices his/her profession or has his/her principal office is maintained, in case one practices the profession in several places.

    Please remember that a professional who has paid the corresponding professional tax is entitled to practice his/her profession in any part of the Philippines without being subjected to any other national or local tax, license, or fee for the practice of such profession.

    In the case of Intestate Estate of Jose Uy v. Atty. Pacifico M. Maghari III (A.C. No. 10525, September 1, 2015), the Supreme Court stated that “with the professional tax receipt number, [authorities] can verify if the same person is qualified to engage in a profession in the place where he or she principally discharges his or her functions.”

    How much professional tax do we pay? Professionals shall pay an amount not to exceed PhP 300.00, Philippine currency, or the rate provided under a duly enacted local ordinance, subject to adjustment not exceeding ten percent (10%) every five (5) years.[2]

    What if I have several licenses from different professions? A line of profession does not become exempt even if conducted with some other profession for which the tax has been paid. Thus, an attorney who is also a licensed real estate broker must pay the professional tax imposed for each profession, if he/she is to practice both professions.

    What do I need to present before I pay the professional tax? To collect the tax, the provincial treasurer or his/her duly authorized representative shall require from such professionals their current annual registration cards issued by the competent authority before accepting payment of their professional tax for the current year.

    Finally, according to Local Finance Circular No. 001-2019 of the Department of Finance, the PRC shall likewise require the professionals to present proof of the annual payment of professional tax before registration of professionals or renewal of their licenses. This proof of payment is called the Professional Tax Receipt, or simply PTR.

    But is this being practiced by the PRC in its main office and in its regional offices? Share your experience in the comment section.

    After reading all the above, if you are an accredited real estate salesperson you may be wondering that since you are not required by Rep. Act No. 9646 to take and pass a licensure examination, do you still need to pay the professional tax?

    The answer is a resounding YES. Why? Because an accredited real estate salesperson is a type of Real Estate Service Practitioner (RESP) according to Section 3 of the Real Estate Service Act (RESA).

    Section 38 of RESA requires all real estate service practitioners to indicate the certificate of registration, professional identification card, PTR number, and APO receipt number, and the date of issuance and the duration of validity on the documents he/she signs, uses, or issues in connection with the practice of his/her profession.

    The penultimate question that needs to be addressed here is about the payment of business permits for those RESPs who operate a realty office – whether outside their place of residence or within their home office.

    As a professional who has already paid my professional tax, am I still required to pay business tax to the LGU?

    Section 6 of the Local Finance Circular No. 001-2019 of the Department of Finance states that a professional who has paid his/her professional tax shall be exempt from the payment of business permit fee in the operation of his/her office.

    However, a professional shall still be required to secure a business permit, at no cost, from the concerned LGU during the registration of office and renewal thereof, subject to a duly enacted local ordinance.

    Finally, if upon verification, a professional is actually engaged in selling, trading, or distributing any article of commerce of whatever kind, or involved in the function of trade, or undertakes any business activity that does not constitute the practice of profession, according to applicable law/s governing the practice of such profession, he/she shall be liable to pay the annual local business tax (LBT) to the city or municipality concerned, pursuant to the applicable rates provided under Sections 143 and 146 of the LGC, and as may be provided under a duly enacted local ordinance.

    Now that you know everything that you need to know about professional tax, when will you get yours? Remember, compliance with Section 38 of RESA is mandatory for all licensed real estate brokers and accredited real estate salespersons. Failure to do so will subject us to disciplinary sanctions by the PRBRES.

    Would you want to risk that?

    Hence, the final question here is, when will you pay your professional tax? I suggest that you do it on or before the end of next Friday. Don’t wait until the deadline. Be different. Comply as soon as you can.

    Have a successful and abundant year to everyone.

    ——-

    Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.

    [1] Section 167 [Time of Payment] of the Local Government Code of 1991.

    [2] Section 191 [Authority of Local Government Units to Adjust Rates of Tax Ordinance] of the Local Government Code of 1991.

  • 5 Critical Things to Know About the Real Property Valuation and Assessment Reform Act

    “Per World Bank estimates, the Philippines’ real property taxes account for only 0.37% of the Gross Domestic Product (GDP) with an overall collection efficiency of 71%.”

    – OIC-Director Brenda L. Miranda, BLGF Local Fiscal Policy Service

    House approves the Real Property Valuation and Assessment Reform Bill (https://blgf.gov.ph)

    By Realttorney®

    Sometime on April 2-4, 2013, ranking officials of our Department of Finance (DOF) presented “Property Tax Reforms in the Philippines” during the Fourth IMF-Japan High-Level Tax Conference at Hotel Nikko, Tokyo, Japan. During this event, the Philippines identified eight (8) Issues and Challenges regarding our property-related tax administration system.

    The eight are as follows: (1) lack of uniform property valuation systems and methodology; (2) outdated real property values; (3) political interference in property valuation; (4) limited use of information technologies in the appraisal process; (5) multiple taxes on property ownership and transfers; (6) relatively high transfer taxes, which discourage formal transactions; (7) weak enforcement of property-related taxes; and (8) no provision for formal education and training of assessors/appraisers

    The promulgation and adoption of DOF Department Order No. 37-09 [Philippine Valuation Standards, 1st Edition] on October 19, 2009, continues to address the first item above, while the passage of Rep. Act No. 9646 addressed the last item on the list.

    Meanwhile, the various Joint Memoranda of the DOF and the DILG enjoined all Local Government Units (LGUs) regarding the regular preparation of Schedule of Market Values (SMV) and the conduct of general revision of property assessment in their respective jurisdictions.

    Way back on May 12, 2012, the House of Representatives passed the Valuation Reform Bill [House Bill No. 6044] to address most of the 8 Issues and Challenges mentioned above. However, the Senate of the Philippines failed to pass the counterpart bill at that time until recently.

    In the 2022 State of the Nation Address (SONA), Pres. Marcos, Jr. identified the Real Property Valuation and Assessment Reform Act (RPVARA) as one of his Administration’s priority legislations, and a key tax reform under the Comprehensive Tax Reform Program under the Duterte Administration.

    On December 12, 2022, the House of Representatives passed on third and final reading, the Real Property Valuation and Assessment Reform bill [House Bill No. 6558]. Thankfully, this time, the Senate of the Philippines had counterpart bills on hand.

    In the Explanatory Note of Senate Bill No. 897, filed by Sen. Pia S. Cayetano on July 26, 2022, she stated that “there are various agencies conducting or requiring property valuation, with each agency using their own system and methodology of valuation” of the economy, including the real estate industry. Understanding these implications is crucial for real estate professionals, investors, and policymakers.

    Senate Bill No. 2386 was passed on the third and final reading on March 11, 2024, via a unanimous vote by all 23 Senators present. Both Houses of Congress ratified the final version of the bill on March 20, 2024. The President approved the bill as Republic Act No. 12001 on June 13, 2024.

    As a real estate service practitioner (RESP), what do you need to know about this crucial tax reform program that was signed into law in June 2024?

    1. Updated and Fairer Property Valuation: According to RPVARA, it is the policy of the State to promote the development of a just, equitable, and efficient real property valuation system. Thus, it aims to establish uniform appraisal standards and procedures. This should lead to more accurate and consistent valuations across the country, reducing unfair tax burdens on property owners.

    According to Ma. Pamela Quizon, Director of the Bureau of Local Government Finance (BLGF), this reform bill will address the current inefficiencies in the system such as overlapping valuation. She stressed that there are currently 23 national government agencies requiring valuations of 1,715 LGUs.

    However, each government agency uses its own systems and methodologies which is causing wide disparities between zonal values, market values, and private appraisers’ values. Thus, leading to varying and multiple values for the same parcel of land or real property.

    RPVARA strengthened and expanded the powers and functions of the BLGF as the primary or lead implementing agency of this reform bill. The BLGF shall be the agency responsible for ensuring that valuations or revaluations are completed per standards outlined in the RPVARA.

    Finally, under the RPVARA, an updated schedule of market values (SMV) will be used as the basis for local and national land and property-related taxes. There shall be only one valuation for a specific real property.

    The SMV refers to a table of base unit market values for all kinds of real property, except machinery within an LGU, prepared by assessors according to existing laws, rules and regulations. LGUs are mandated to update SMV and its revision once every 3 years under Section 219 of the Local Government Code of 1991, as amended.

    2. Transparency and Efficiency: RPVARA shall develop and maintain the Real Property Information System (RPIS). This is an up-to-date electronic database of the sale, exchange, lease, mortgage, donation, transfer, and all other real property transactions and declarations in the country and on the cost of construction or renovation of buildings and other structures, and on prices of plant, machinery, and equipment.

    For this purpose, the BLGF shall require the mandatory submission of necessary documents from the concerned officials or employees of government agencies and instrumentalities, and LGUs. Towards this end, the BLGF shall establish mechanisms for the electronic submission of the required documents. Upon the creation of the RPIS, the private sector may access the database subject to the guidelines of the BLGF and the payment of a reasonable amount as an administration fee.

    This electronic database will centralize data on real estate transactions and shall be an important tool for all valuers – especially private appraisers who can now accurately prepare Appraisal Reports based on actual data of “comparables” in a given property location. No more educated guesses with the aid of Google and real estate listing sites.

    3. Streamlined Government Services: The RPVARA mandates all LGUs to automate their real property tax administration operations, such as but not limited to, tax mapping technology, maintaining software-enabled valuation systems, undertaking regular data cleansing, and computerized records management, with the guidance of the BLGF, in coordination with the Department of Information and Communications Technology (DICT). This could benefit the clients of RESPs involved in transactions requiring these services.

    Moreover, automating processes through the RPIS could expedite government activities related to property, such as right-of-way acquisition and land transfer tax administration which will redound to the benefit of its stakeholders.

    4. Taxpayer Relief: Republic Act No. 12001 grants a two-year amnesty on penalties, surcharges, and interest on real property taxes and special levies that were unpaid before the Act took effect (Section 30). The amnesty may be availed of within two years after the Act’s effectivity. A delinquent owner may pay the taxes in one lump sum or in installments. The amnesty does not apply to properties already sold at public auction for tax delinquency, properties whose delinquencies are covered by a compromise agreement, or properties subject to pending court cases on real property tax delinquencies. As noted above, this provision was not indicated in SBN 2386 or HBN 6558, but it appears in the enacted law, and it is a welcome addition to this important piece of legislation.

    This provides an opportunity for clients to settle outstanding tax obligations without extra charges and fend off the levy of the property and its public auction by the concerned LGU. It is a timely relief for landowners as they battle the effects of inflation and high-interest rates from 2021 up to the present. Because the window runs for two years from the Act’s effectivity, clients should confirm the exact deadline with the concerned LGU.

    5. Increase Collection of Real Property Taxes: The reform will broaden the tax base for local and national property and property-related taxes. With a wider tax base, the collection of real property taxes is expected to increase based on updated property values, which is most important to increase collection efficiency, and overall tax revenue by LGUs and the Bureau of Internal Revenue (BIR).

    Oftentimes, outdated property values result in unrealized revenues and socio-economic benefits from delayed projects, and conflicting land values which result in right-of-way (ROW) compensation problems, lengthy court litigations arising from valuation disputes, delayed projects, and cost overruns.

    With the increased collection efficiency, it is expected that LGUs will be able to translate this into better basic services for its constituents and critical infrastructure projects by the National Government based on the increased revenue-based national real property transfer taxes.

    With fairer valuations and a more transparent system, RPVARA would lead to a steady increase in market values of real properties in the Philippines at regular intervals without increasing the tax rates or introducing new taxes. Therefore, it is incumbent on RESPs to advise our clients as to the timing of such increases to take advantage of relatively low prices when they desire to purchase real properties.

    In conclusion, the Real Property Valuation and Assessment Reform Act brings several positive changes in the valuation system and the real estate sector in the Philippines in general. The reform bill shall implement a more efficient valuation system and will use a single valuation base, which will eliminate wide disparities caused by overlapping valuations.

    This would lead to consistency in real property valuation as well as the predictability of valuation. As such, the adoption of true market-based values for taxation purposes will increase revenues without necessarily adopting new tax measures.

    RPVARA endeavors to increase the capacity of the government to generate revenues from real property through the RPT, national government real property transfer taxes, and other related taxes. In addition, RPVARA aims to reduce government costs particularly unnecessary expenses incurred due to conflicting appraisals which lead to court litigations, project delays, and cost overruns.

    As RPVARA aims to implement uniform standards and efficient processes in the real property tax system, the government hopes that this will instill more confidence in the country’s real estate industry. In the end, the government desires to motivate and inspire real estate investors and public confidence because the valuation is done professionally, properly, and following current local and international standards.

    ——-

    Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.

  • Reminders as 2024 Rolls In

    “Our goal is to set the gold standard when it comes to compliance.”

    – Cathy Engelberg, Commissioner of the WNBA

    By Realttorney®

    Happy New Year. We wish you all the best for the Year of the Dragon. May you all work synergistically with your teams or other REPs to have the most prosperous 2024 possible.

    Photo by fauxels on Pexels.com

    We hope that you have your yearly goals written and these goals broken down into quarterly, monthly, and weekly goals.  Since this is the first working day of 2024, we would like to remind all real estate service professionals (RESPs) of some regulatory compliances according to Republic Act No 9646 and its Implementing Rules and Regulations (IRR).

    First, in Section 38, Rule IV of the IRR “Real estate service practitioners shall be required to indicate the certificate of registration, professional identification card, Privilege Tax Receipt (PTR) number, AIPO membership and/or receipt number.”

    Now, the IRR says ”privilege tax receipt” but in reality, this is called the Professional Tax Receipt or PTR. Yet, despite the “misspelling”, the mandate is clear. All licensed RESPs should get a PTR.

    Here are my previous year’s Professional Tax Receipts as an attorney and real estate broker

    It costs around PhP 300.00 and you can get this at the Office of the Treasurer of your LGU. Just say that you will get a PTR when you stand in front of the transaction window of the Treasurer’s Office. Some LGUs may not have a PTR, but instead have an OTR – the Occupational Tax Receipt – which is the same thing.

    What must you bring with you when you apply for a PTR? For veteran RESPs, a photocopy, digital copy, or the original copy of the PTR of the previous year will suffice. For the new salespersons and brokers, you need to bring a photocopy of your Certificate of Registration and the PRC ID Card with you.

    Second, if you are already registered with the Bureau of Internal Revenue (BIR) then you should pay your annual registration fee of PhP 500.00 using the BIR Form 0605. You can remit the payment at the BIR Revenue District Office (RDO) that you registered in or at the Authorized Agent Banks of the concerned RDO.

    Third, and final reminder, concerns accredited real estate salespersons and licensed real estate brokers who engage in project selling. If it is your cup of tea to sell subdivision and condominium projects then you are mandated by Presidential Decree No. 957 to register with the Department of Human Settlements and Urban Development (DHSUD), according to existing rules and regulations.

    Like securing a PTR, the Certificate of Registration must be renewed annually. You can apply at the Main office of DHSUD in Quezon City or at its Regional Offices nearest your place of residence.

    For licensed real estate brokers wanting to do project selling for the first time or those who are renewing their certificate of registration, kindly prepare for submission the following:

    (1) duly accomplished Application Form – which is specific per region. The application form you can download if you click here is only for Region IV-A [CALABARZON];

    (1) Photocopy of valid PRC-issued Certificate of Registration and PRC-issued Professional Identification Card (Originals thereof to be presented upon filing for comparison as faithful reproduction);

    (2) previous year’s Official Receipt;

    (3) Two recent 2 X 2 ID pictures; and

    (4) Surety/Cash Bond.

    If you are lucky to have been issued an ID Card issued by DHSUD then a copy of it can also be submitted. The registration fee is PhP 720.00 if renewed before expiration.

    Here is my DHSUD Identification Card for the year 2023

    Meanwhile, for newly accredited salespersons or those wanting to renew, you need to submit the following:

    (1) duly accomplished Application Form – which is specific per region. The application form you can download if you click here is only for Region IV-A [CALABARZON];

    (2) Two recent 2 X 2 ID pictures;

    (3) a copy of the PRC-issued accreditation card, or PRC-issued Official Receipt. or the PRC-issued claim stub;

    (4) Cash/Surety bond; and

    (5) the Letter of Engagement/Employment signed by a DHSUD registered Real Estate Broker with these attachments – copies of the PRC ID card of the broker, the DHSUD ID card, and the listing of accredited salespersons from PRC under the broker’s name. The registration fee is PhP 288.00 if renewed before expiration on December 31.

    Here is a sample of the Salesperson’s Letter of Engagement/Employment. Once again, notice that the Letter is region-specific. I secured this since I filed my requirements to the CALABARZON region in Brgy. Halang, Calamba City, Province of Laguna.

    Here is a final note. According to Section 4.7. of PRBRES Resolution No. 11, Series of 2021, “it is only after Mass Oath taking that the RES-Applicant can be considered Accredited and can already practice the real estate brokerage profession and may now register at DHSUD.”

    Let it be known that the Real Estate Salesperson-Applicant can only apply for registration at the DHSUD after attending the oathtaking ceremony – whether in person or online – NOT before. We hope this is clear.

    So kindly perform these regulatory compliances for you to work fully compliant with the requirements of the law that regulates our profession. Failure to comply is a violation of the law and the professional can be subjected to criminal and administrative sanctions.

    Start the year right. As professionals, these are the things we do. It is part of our identity as legal and fully compliant real estate service professionals.

    ——-

    Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.

  • Strengthening Online Compliance: Can the New Internet Transactions Act End Colorum Practice?

    “Risk comes from not knowing what you’re doing.”

    – Warren Buffet, American Business Magnate, Investor and Philanthropist

    By Realttorney®

    In the Philippines, as with many other countries, the proliferation of online platforms has both facilitated legitimate real estate transactions and has provided avenues for fraudulent activities as well.

    Early last month, President Marcos, Jr. signed into law 2 of his priority bills he first mentioned during his first State of the Nation Address in July 2022. The first is Republic Act No. 11966 otherwise known as the Public-Private Partnership (PPP) Code of the Philippines.

    The second one is the focus of this article, which is Republic Act No. 11967, also known as the Internet Transactions Act of 2023. This piece of legislation aims to protect online consumers and merchants engaged in Internet transactions. It was enacted on December 5, 2023, and became effective 15 days after its publication in the Official Gazette according to Section 38 of Rep. Act No. 11967.

    What are the key provisions of the relatively new Republic Act?

    First, is the Establishment of the Electronic Commerce Bureau (ECB). The ECB is a new government agency tasked with implementing and enforcing the provisions of the Act. It has the power to investigate and resolve complaints, issue cease and desist orders, and impose fines on violators.

    Second, the Protection of Online Consumers. The law strengthens the protection of Filipino online consumers by (a) requiring online merchants to provide clear and accurate information about their products and services, including prices, payment terms, delivery schedules, and return policies; (b) prohibiting any misleading or deceptive advertising practices; (c) mandating that online merchants have a privacy policy in place that outlines how they collect, use, and protect consumer data; (d) giving consumers the right to cancel orders within seven days of purchase, with some exceptions; and (e) establishing a mechanism for consumers to file complaints and seek redress for any violations of their rights.

    Now, can real estate buyers who engage colorum practitioners be protected by this provision? In my opinion, the resounding answer is YES. It must be emphasized that the Internet Transactions Act of 2023 requires online merchants (colorum practitioners) to clear and accurate information about their products (house and lot, farm lots, condominium units, etc.) including price and payment terms.

    What clear and accurate information needs to be included in the social media posts of the colorum practitioners, apart from the details of the real properties, their prices, and their terms?

    1. Full name and designation;
    2. The PRC License Number or PRC Accreditation Number of a real estate salesperson;
    3. Validity of the license or accreditation number;
    4. The PRC Identification Card Number;
    5. The Current Professional Tax Receipt Number;
    6. The AIPO Number, if available; and
    7. The date of issuance of the PTR Number and the AIPO Official Receipt for the current year.

    But, if you are a project-seller then aside from the 7 information, the colorum practitioner should indicate each item in his social media posts:

    1. DHSUD Registration Number and date of issuance;
    2. Office Address;
    3. Contact Information and Email Address;
    4. Name of Project;
    5. Location of the Project
    6. Project Classification: PD 957 or BP 220
    7. State max. selling price if under BP 220
    8. Project Type: Subd/Condo/Memorial Park
    9. Name of Owner/Developer;
    10. License To Sell No.?
    11. Completion Date?

    These details are all required by HLURB Board Resolution No. 921, Series of 2014, in conjunction with Rep. Act No. 9646.

    Third, the Protection of Online Merchants. These are the new law that protects online merchants: (a) Prohibits unauthorized access to or use of electronic data and systems; (b) Provides for the protection of intellectual property rights in the online environment; (c) Establishes a dispute resolution mechanism for resolving conflicts between consumers and merchants.

    Fourth and final, Regulates online advertising and marketing practices. This is equally important as the provisions that protect online users discussed above: (a) Prohibit the sale of counterfeit goods online; (b) Require online platforms to take down illegal content upon notice; and (3) Encourage the development of self-regulatory mechanisms by the e-commerce industry.

    How can the real estate buyers be protected using these provisions of the law? The PRBRES in coordination with the PRC should now make representation with the Department of Trade and Industry to inform Facebook, YouTube, and other social media platforms to take down illegal content upon discovery of the lack of the mandated information listed in Section 38 of RA 9646 and HLURB Board Resolution No. 921, Series of 2014 in the posts of colorums as part of their marketing efforts using the internet.

    Rep. Act No. 11967 is a significant step towards building a more robust and trustworthy e-commerce environment in the Philippines. It is expected to promote consumer confidence, encourage more businesses to operate online and contribute to the growth of the digital economy. Hence, we can use the provisions of this new law to curb, if not totally stop the colorum practice in our midst.

    I call upon all licensed real estate brokers and accredited real estate salespersons to unite and make our voices heard by Facebook and other social media platforms, through the DTI, and ECB to stop once and for all the illegal practice of all colorum practitioners.

    What do you think? Do you share my views on the application of Rep. Act No 11967? Let me know in the comments section and let us start a conversation.

    ——-

    Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector

  • What is The Best Way to Set Up a Home Office For A Real Estate Broker?

    “Most people who work at home find they do not have the benefit of receptionists who serve as personal guards.”

    – Judith Martin, American Journalist, Author and Etiquette Authority

    This article was written last August 31, 2013. It was probably published on my WordPress site the next day or a few days after. The record of it was lost when I lost control of the domain name four years ago. But, I just found out that an updated version of this article was published on October 7, 2013, on the website ZipMatch.

    The title of the ZipMatch version of my article is “Working-from-Home Tips for Licensed Brokers.” I am so grateful that ZipMatch used and cited my article. It brings joy to my heart. Compared to other websites that claim my written articles as their own.

    Since this article is more than a decade old, then it is now time to update it as well while keeping in mind what the world has gone through with COVID-19. The updates will be in blue font.

    Photo by Ameruverse Digital Marketing Media on Pexels.com

    By Realttorney®

    Do real estate service practitioners (RESPs) in the Philippines need a physical office? Yes is the sad answer to the question.

    Section 33 of RA 9646 mandates licensed real estate brokers, appraisers, and consultants to “establish and maintain a principal place of business and such other branch offices as may be necessary, and shall conspicuously display therein the original and/or certified true copies of his/her certificate of registration as well as the certificates of registration of all real estate service practitioners employed in such office.”

    The legislators felt that requiring RESPs to have physical offices would give them credibility and make them look more professional vis-à-vis fly-by-night colorum brokers that are still operating despite the passage of the Real Estate Service Act (RESA) more than 14 years ago.

    However, the cost of maintaining an office is a drain on the meager resources of independent RESPs. Therefore, I would venture a guess and declare that most independent RESPs have home offices – where they can display their certificate of registration proudly as required by RESA.

    Having a home office is the best of both worlds for real estate brokers. First, you comply with what is required by RESA. Second, you do not have high overhead costs to maintain a home office.

    Third, you do not even have to dress up and commute to work. Lastly, you have the flexibility to work whatever time you want while balancing your business time with your family time.

    If this is the case, then it shouldn’t be really hard to establish a home office. Correct?

    Not exactly, because it is more than what it seems. Working from home is not as easy as people would like many to believe. Oftentimes, having the flexibility of time makes it harder to be productive and complete each day’s goals or tasks.

    I have experienced this when my daughter often interrupts my work by politely asking for something as mundane as “Papa, can I please have a glass of water?” She is four years young and although I am irritated sometimes, I still welcome such interruption. But, for others, such may not be the case, especially when there is a deadline to meet.

    At home, distractions abound as well. And it becomes easy to put off those particularly annoying tasks – like tracking and listing your daily expenses for tax purposes – until tomorrow.

    For veteran brokers and newbies (newly licensed real estate brokers) alike, here are five (5) tips to guide RESPs on getting the most out of working from home, four of which were taken from the article from Argonautnews.com.

    TIP 1: Make a schedule and stick to it. A good schedule covers what you absolutely need to accomplish while being realistic about the amount of time each week to grow your business and prospect for new business. Stick to your schedule. For instance, spend your mornings completing administrative paperwork, touching base with clients on current deals, and securing exclusive listing agreements. Then, spend the rest of the day prospecting – in the home office or out.

    Create a flexible schedule. This means planning for potential distractions, including personal phone calls, family members, pet noise, and televisions. However, this does not mean you are to put your personal life second. Some brokers find themselves on the clock all the time, as they’ve allowed the line to blur between work hours and non-work hours. Make sure to schedule time for family and friends outside of your established working hours. To have a life, plan it.

    Tip 2: Establish a routine. Sometimes, it is tempting to get out of bed and go straight to the laptop and begin working because you thought of numerous things upon waking up. Resist this urge. Instead, create a routine that prepares your physical and mental state to tackle the work for the day.

    As much as possible, wake up at the same time every day. Start off your day by meditating, exercising, or finding quiet time to reflect on your personal life. Shower, dress up, have breakfast, and take your child or children to school. Create a routine that takes into account the most important matters in your life. It all depends on what goals you want to accomplish this year and the year after. Afterward, it’s time to get down for some serious and uninterrupted work time.

    TIP 3. Make a space. Camping out and working on the couch is not likely to get you very far. Invest heavily in personalizing your office space. Stock it with the office equipment you need to get the job done. Do not try to conduct your entire business from your smartphone. You will need an actual computer (or laptop), printer-scanner-xerox machine – and of course a desk and comfortable chair. This is your workspace.

    As you’ll invariably spend many hours in your car each week, keep chargers for your mobile products – tablets and phones – in your car. Increasingly, real estate brokers carry laptops or tablets (and sometimes mobile printers) so they can type up and process transactions quickly. To keep all your work materials together, consider purchasing a car organizer. Most importantly, make sure that you have more than ample data connectivity for the day.

    TIP 4. Find support. Working from home can make anyone feel disconnected. However, the great thing about working from home in this day and age is that you are not alone. There are plenty of other workers – in real estate and other professions – who live nearby and deal with the same struggles unique to working from a home office. Organize midday breaks for walks, refreshments, and conversations about work and family. Where can you find these fellow home office workers? Start by asking around your own professional network. You can also reach out through the virtual social network to create a live one. Form a community by planning regular meetings with these solitary workers.

    TIP 5: Take advantage of the benefits. Working from home can save money by skipping expensive rent or desk fees for co-working arrangements, and time by eliminating your commute and office-chatter distractions. Further, tax deductions are allowed for some of the expenses and utilities used exclusively for your home office. Consult your certified public account on this matter.

    To summarize, licensed real estate brokers should have an office – whether a home office or a physical office with a separate address. However, a home office is often most advantageous to real estate brokers because we are still compliant with RESA, have minimal overhead costs, and have no commute time to work.

    To make a home office setup work, real estate brokers need to step up a schedule and stick to it, establish a routine, create a workspace at home, and take advantage of tax benefits. Just make sure that your office space at home will be conducive and inspire you to work smart.

    In the end, whether you work at home or not, real estate brokers are people person in general. Your people skills are the most important of all. No one likes a grumpy and hard-to-get-along broker. This is what makes or breaks the career of a licensed real estate broker, not their home office setup.

    Are there other tips that we have forgotten to mention above? Let us know by leaving your comments below.

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    Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.