Code of Ethics in Philippine Real Estate

Service - Part 1 of 2

Code of Ethics governs the conduct of those in realty service practice. Most of the principles
contained herein are also discussed in the DTI-BTRCP Rules and Regulations under M.O. Order No.
39, Series of 1985.

Violations by the broker of any provisions of the Code, gives rise to sanctions that may be imposed
by the brokers organization, without prejudice to disciplinary action that concerned DTI-BTRCP may
impose when a complaint is filed against him.

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Go to PART 2

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INTRODUCTION

The Realty Service Practice, a profession, calling or occupation, is dedicated to the

promotion,development and conservation of land and natural resources, including improvements
and rights and interest appurtenant thereto for the benefit and enjoyment of the Filipino people. As
such, those engaged therein are bound by a code of conduct, morals, and values in performance of
their duties and obligations towards the government, co-practitioners and the people they serve.

It is, therefore, imperative and necessary to adopt this NATIONAL CODE ETHICS FOR THE
REALTY SERVICE PRACTICE to govern the rule of conduct of those who will engage therein.

ARTICLE 1 – DECLARATION OF PRINCIPLES

SECTION 1. The Realty Service Practice is a noble profession, calling or occupation and those
engaged therein shall abide by and comply with all the laws, decrees, orders and rules and
regulations enacted or promulgated by duly constituted government authorities.SECTION 2. Utmost
fidelity, sincerity, respect for colleagues in the profession, and honesty shall be observed at all times
by those in the realty service practice in their relation with the client, the community and the nation in
general.

SECTION 3. Adequate knowledge, competence and expertise in real estate development and
management shall be maintained, and the upgrading of the standards of practice shall be effected
when the need arises; all these for, and in the interest of the social and economic progress of the
country.

SECTION 4. The spirit of camaraderie, cooperation and professional relationship among the
practitioners shall be promoted; and every organization to which they shall be encouraged to join
shall aims and purposes as will set up, upgrade, and maintain a high level of integrity, honesty and
competence in the profession for the best interests of the community and the nation.

SECTION 5. A high level of professional relationship with colleagues in the Realty Service Practice
shall be maintained, and their dealings with each other shall always be fair, honest and just.

SECTION 6. The Golden Rule which reads “Treat others as you like them to treat you.” shall be
observed in all the dealings and relation of the practitioners with clients, fellow practitioners, the
organization to which they belong, and the general public.

ARTICLE II – SCOPE AND PURVIEW OF THE CODE

SECTION 1. As used in this code and for the purpose hereof, the Realty Service Practice shall
embrace and include all persons, partnership or corporations who are duly licensed by the Bureau of
Domestic Trade in accordance with SECTION 3 (e) & (ee) of Act. No. 2728 as amended by Act No.
3715 & 3969 and Ministry Order No. 39, such other practitioners as the Director of Domestic Trade
may now or hereafter license pursuant to any law, rule or regulation that may be promulgated by the
government. They shall be called Realty Service Practitioners hereinafter known as Practitioners.

ARTICLE III – RULE OF CONDUCT AND PRACTICE

The Practitioners shall be governed by the following rules of conduct and practice.

SECTION 1. RELATION TO THE GOVERNMENT

 (a) The Practitioner should secure all the necessary Licenses, permits and authority from the
Bureau of Domestic Trade and other government agencies as may be required by law, ordinance or
rules and regulations and comply with all the requirements thereof engaging in the same.

 (b) He should pay any and all taxes, fees, dues, levies or changes that the government may
impose in accordance to law, ordinances, or rules and regulations.

 (c) He should help, assist and cooperate with the Bureau of Domestic Trade and all
government agencies and instrumentality in the promotion, development and conservation of lands
and other natural resources, its improvements and rights and interest therein.

 (d) He should not encourage, abet, tolerate or participate in the evasion or illegal reduction in
the payment of all taxes, fees, dues, levies or charges that may be imposed by the government.

 (e) He should not offer or agree to pay, to split or rebate any commission, fee or valuable
consideration, directly or indirectly with any person who is not duly licensed practitioner or to
cooperate, assist or endorse any transaction or engagement of his services in violation of any
existing law, rule or regulation.
 (f) He should indicate the license number of the certificate issued by the Bureau of Domestic
Trade in his letterhead, dry seal, signboard, billboard, advertisement of other announcement in
relation to the Realty Service Practice.

SECTION 2. RELATION TO THE PUBLIC

 (a) The Practitioner should be imbued with a social conscience for he does not live by
himself and his family alone but he is a part of society with social responsibilities.

 (b) He should ensure the highest and best use of the land and the equitable distribution of
ownership, irrespective of political beliefs, cultural background, sect, religion or class.

 (c) He should keep himself well informed to any movement affecting real estate in his
community, city or province, so that he may be able to contribute to public thinking on matters of
taxation,land use, city planning and other programs of the government.

 (d) He should cooperate with the government in protecting the public against deceptive,
unfair and unconscionable acts and practices of some unscrupulous or unlicensed practitioners like
fraud, misrepresentation, concealment of relevant information and other related unethical practices.

 (e) He should ascertain all pertinent facts concerning every property and avoid error,
exaggeration, misrepresentation or concealment of pertinent facts.

 (f) He should not be instrumental in introducing in a neighborhood a certain character or use

of property which will tend to impair or erode property values within that neighborhood.

 (g) He should not be a party to the naming of a false consideration in a deed or instrument.
 Code of Ethics in Philippine Real Estate
Service - Part 2 of 2

Code of Ethics governs the conduct of those in realty service practice. Most of the principles
contained herein are also discussed in the DTI-BTRCP Rules and Regulations under M.O. Order No.
39, Series of 1985.

Violations by the broker of any provisions of the Code, gives rise to sanctions that may be imposed
by the brokers organization, without prejudice to disciplinary action that concerned DTI-BTRCP may
impose when a complaint is filed against him.

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Go to PART 1
Go to PART 2

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SECTION 3. RELATION TO THE CLIENT/CUSTOMER

 (a) The Practitioner, in accepting an appointment or authority to act for and in behalf of a
client or customer should pledge himself with utmost fidelity and good faith to protect and promote
the interest of his client without, in any manner, sacrificing the legitimate interest of the other party in
the transaction.

 (b) For the sake of justice and fairness to his client who have reposed confidence in him, the
practitioner should endeavor to be well informed of current legislation, policies and programs of the
government including proposed legislation which may affect the interest of his client.

 (c) He should not accept any commission, fee or any valuable consideration from any party
in any transaction except from his client unless with the full knowledge and consent of all the parties
in the transactions. He shall not also introduce or work for an overprice either from the buyer or
seller, except the usual standard rate of commission on any real estate transaction.

 (d) He should charge or collect only such fees or commissions as are fair and reasonable in
accordance with local practice in similar transactions.

 (e) He should not acquire an interest in or buy for himself or members of his family within the
fourth civil degree, his firm or any member thereof or a corporation or partnership in which he or his
relatives within the fourth civil degree have at least 20% property interest, without making his true
position known to the owner, buyer or seller.

 (f) He should not advertise any property without authority and in any offering, the price
quoted should be in accordance with the price agreed with the owners as the offering price.

 g) In the event that more than one formal offer on a specific property is made before the
owner has accepted a proposal, all written offers should be presented to the owner for his decision.

 (h) He should endeavor to make his client and customer conclude a fair contract
advantageous to both.(i) He should assist his customer acquire possession and ownership of the
property bought in accordance with the terms and conditions agreed upon.

 (i) In case he is called upon to act as witness in a court proceeding he should give his
testimonies in the most unbiased, honest, truthful and professional manner.

 (j) As a real estate appraiser, he should not render an opinion without a careful and thorough
analysis and interpretation of all factors affecting the value of the property. His counsel and advice
constitutes a professional service for which he should make a fair and reasonable charge.

 (k) As an appraiser, he should not undertake to make an appraisal or render an opinion that
is outside the field of his experience and competence unless he obtains the assistance of another
practitioner familiar with such type of property or unless the facts are fully disclosed by the client.

SECTION 4 RELATIONS TO FELLOW PRACTITIONERS

 (a) He should not solicit a listing that is currently listed exclusively with another broker unless
the listing agreement has expired or revoked by the owner and the owner offers to list the same to
the new broker without soliciting the same.

 (b) When he accepts a listing from another broker, the agency of the broker who offers the
listing should be respected until it has expired and the property has come to the attention of the
accepting broker from a different source, or until the owner, without solicitation, offers to list with the
accepting broker. Such a listing should not be passed to a third broker or published in a daily
newspaper without the knowledge and consent of the listing broker.

 (c) Signs giving notice of a property for sale, rent, lease or exchange should not be placed
on any property by more than one broker and only if authorized by the owner.

 (d) He should not use information obtained by him from a listing broker through offers to
cooperate or received through multiple listing services or other sources authorized by the listing
broker for the purpose of creating a referral prospect to a third broker or for creating a buyer’s
prospect, unless such use is authorized by the listing broker.

 (e) He should cooperate with other brokers on property listed and share the commission on
an agreed basis. Negotiations concerning property listed exclusively with one broker should be
carried with the listing broker, and not the owner, except with the consent of the listing broker.

 (f) He should not solicit or use the services of an employee or salesman of another
practitioner without the knowledge of the employer.

 (g) He should not criticize publicly a competitor nor volunteer an opinion of a competitor’s
transaction. If his opinion is sought, it should be rendered with professional integrity and courtesy.

 (h) The practitioner should seek no unfair advantage over his fellow practitioners and should
willingly share with them the lessons of his experience and study.
 (i) He should conduct his business properly to avoid any controversy with his fellow
practitioners. In the event of a controversy between practitioners belonging to the same organization
or association, such controversy should be submitted for arbitration to such organization or
association whose decision, if accepted by both parties, will be final and binding as far as the
association is concerned.

 (j) If the controversy is between practitioners belonging to different organizations or

associations, it should be submitted to an Arbitration Board consisting of one member from each
organization or association chosen by each of the parties to the controversy. A third member shall be
chosen by members previously chosen from either organization or association or from the national
association where the parties to the controversy are affiliated.

 (k) In case the practitioners who are parties to a controversy are not members of any duly
recognized organization or the Arbitration Board can not settle the controversy, the Bureau of
Domestic Trade shall assume jurisdiction over said controversy.

 (l) In case a complaint is filed against a practitioner with his organization or association for
unethical or unfair practice, he should voluntarily submit all pertinent facts before an investigating
body that may be formed by his organization or association for evaluation and resolution.

SECTION 5. RELATION TO HIS ORGANIZATION INCLUDING THE NATIONAL ASSOCIATION

TO WHICH HIS ORGANIZATION IS AFFILIATED

 (a) In the interest of society and his own profession, calling or occupation, the practitioner
should abide by the Constitution and By-laws of his Association or Organization and the National
Association to which it is affiliated.

 (b) Elections as officer or member of the governing body of the organization or association
carries with it the moral obligation to serve honorably, unselfishly, diligently and efficiently. It should
not be the subject of election campaigning, or use of letters or circulars announcing one’s candidacy
or appealing for votes for himself or for other nominees or candidates or other form of electioneering
agreement or any act which will interfere with the free and wise choice of the officers and members
of the governing body of the organization.

 (c) He should support his organization morally and financially and actively support its plans,
programs and projects for the benefit of all the members of the organization or association.

 (d) Any practitioner should first exhaust all administrative remedies available under existing
laws, rules and regulations before taking any judicial or quasi-judicial action.

ARTICLE IV – SANCTIONS

Violation of any provisions of this Code shall give rise to any sanction that may be imposed by the
organization to which a practitioner belongs as a member, without prejudice, however, to disciplinary
action that the Department of Trade and Industry may deem expedient thereon hen the proper
complaint against the erring practitioner for alleged misconduct is filed with the Department in
accordance with existing rules and regulations. In the case of practitioners who are not members of
any organizations, any complaint against them shall be governed by existing laws, rules and
regulations governing controversies.

ARTICLE V – EFFECTIVITY [Original, 1986]

This Code shall take effect fifteen (15) days after its publication in a newspaper of general
circulation. Done in Makati, Metro Manila, this 19th day of September 1986.

ARTICLE V – EFFECTIVITY [As Amended, 1993]

This Code shall take effect immediately after its publication in a newspaper of general
circulation.Done in Makati, Metro Manila, this 29th day of September, 1993.

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 (h) He should keep a special bank account separate and distinct from his own funds, all
monies received in trust for other persons, such as deposit in escrow, trust funds, client’s money and
similar items.

 (i) In his advertisements, brochures or announcements, he should present a true picture of

the property, its improvements, or rights and interests therein including whatever liens or
encumbrances it may have, if any, and should indicate his name, fi rm name, address and license
number of the Certificate of issued by the Department of Trade and Industry. In case of real estate
salesman, he should indicate the name, fi rm name and license number of the broker under whom
he is employed.
 (j) He should see to it that all agreement, terms and conditions, financial obligations and
commitments in real estate transactions are in writing, duly signed by all parties concerned and if
necessary, to be properly authenticated by a Notary Public.