2.

1b CODE OF ETHICS
By Engr. Wilfredo L. Segovia

Basis : R.A. NO. 9646 – RESA Law

DTI – National Code of Ethics for the Realty Service Practice. Sept. 1993

R.A. 9646 Section 35. Code of Ethics and Responsibilities for Real Estate Service Practitioners. -

The Board shall adopt and promulgate the Code of Ethics and Responsibilities for real estate service
practitioners which shall be prescribed and issued by the accredited and integrated professional
organization of real estate service practitioners.

DTI National Code of Ethics for the Realty Service Practice

Declaration of Principles - Scope and Purview of the Code; Rules of Conduct and Practice; Sanctions;
Effectivity

ARTICLE 1 – DECLARATION OF PRINCIPLES

SECTION 1.
…comply with all the laws, decrees, orders and rules and regulations of duly constituted government
authorities.
SECTION 2.
…observe fidelity, sincerity, respect for colleagues in the profession, and honesty… in their relation with
the client, the community and the nation…
SECTION 3.
..maintain adequate knowledge, competence and expertise in real estate development and
management … effect the upgrading of the standards of practice …in the interest of the social and
economic progress of the country.
SECTION 4.
..promote camaraderie, cooperation and professional relationship among practitioners …every
organization shall …maintain a high level of integrity, honesty and competence in the profession for the
best interests of the community and the nation.
SECTION 5.
..maintain high level of professional relationship with colleagues… and their dealings with each other
shall always be fair, honest and just.
SECTION 6.
…The Golden Rule – “Treat others as you like them to treat you.”
… in all 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.
…Realty Service Practice includes all persons, partnership or corporations duly licensed by 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
ARTICLE III – RULE OF CONDUCT AND PRACTICE
SECTION 1. RELATION TO THE GOVERNMENT
(a) …secure all …Licenses, permits… from 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) …help, assist and cooperate with the BDT, and all government agencies …in the promotion,
development and conservation of lands and other natural resources…
(d) …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) …not offer or agree to pay, to split or rebate any commission, fee or valuable consideration… with
any person not a 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) …indicate license number … in letterhead, dry seal, signboard, billboard, advertisement of other
announcement …

SECTION 2. RELATION TO THE PUBLIC

(a) 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) …be well informed of any movement affecting real estate in his community, city or province, so that
he may contribute to public thinking on matters of taxation, land use, city planning and other programs
of the government.
(d) …cooperate with government in protecting the public against deceptive, unfair and unconscionable
acts and practices of unscrupulous or unlicensed practitioners…
(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.
(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 ad..s, brochures, announcements --present a true picture… improvements, rights, interests…liens
or encumbrances..
(i)…indicate name, firm name, address and license number… In case of real estate salesman, indicate
the name, firm name and license number of the broker under whom he is employed.
(j) …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…if necessary, authenticated by a Notary
Public.

 
ARTICLE III – RULE OF CONDUCT AND PRACTICE
SECTION 3. RELATION TO THE CLIENT/CUSTOMER
(a) …in accepting an appointment or authority to act for and in behalf of a client or customer – pledge
utmost fidelity and good faith.. protect and promote the interest of client without sacrificing the
legitimate interest of the other party…
(b) …be well informed of current legislation, policies and programs of the government including
proposed legislation which may affect the interest of his client.
(c) …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….
(c) … not 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) …not acquire an interest… buy for himself or his family within the 4 th degree, his firm or any member
thereof or a corporation or partnership in which he or his relatives within the 4th degree have at least
20% property interest, without making it 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) …endeavor to make his client and customer conclude a fair contract advantageous to both…assist
his customer acquire possession and ownership of the property …
(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 -- not render an opinion without a careful and thorough analysis and
interpretation of all factors affecting the value of the property… make a fair and reasonable charge.
(k) As an appraiser –not make an appraisal or opinion outside the field of his experience and
competence unless with assistance of another practitioner familiar with such…or unless the facts are
fully disclosed by the client.

ARTICLE III – RULE OF CONDUCT AND PRACTICE

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) ..agency of the broker who offers the listing should be respected until 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) …not create a referral prospect to a third broker or for creating a buyer’s prospect, unless such use is
authorized by the listing broker…
(e) …cooperate with other brokers.. share the commission..if exclusive listing, respect the listing
broker.. Do not go direct unless with consent..
ARTICLE III – RULE OF CONDUCT AND PRACTICE
SECTION 4. RELATIONS TO FELLOW PRACTITIONERS
(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) …avoid controversy with fellow practitioners. In a controversy…same association…submit for
arbitration… decision, if accepted by both parties, will be final and binding…
(j) …controversy between practitioners belonging to different organizations or associations – submit to
an Arbitration Board…
(j) …Arbitration Board --one member from each organization, third member shall be chosen by them…
or from the national association where the parties to the controversy are affiliated.
(k) ..if practitioners in controversy are not members of any duly recognized organization.. the Bureau of
Domestic Trade shall assume jurisdiction over said controversy.
(l) …complaint is filed against a practitioner with his organization or association for unethical or unfair
practice -- voluntarily submit all pertinent facts before an investigating body formed by his organization
or association…
 
ARTICLE III – RULE OF CONDUCT AND PRACTICE
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…no campaigning, or use
of letters or circulars announcing one’s candidacy…appealing for votes for himself or for other nominees
or candidates or other form of electioneering …
(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.

Conduct in relation to --
Government
Public
Client
Fellow practitioners
Org and its national ass
Gov—Public—Client—Fellows—Org GPCFO

Summary of “in relation to the Government”

1) Secure license
2) Pay taxes
3) Assist GOVT in conservation
4) Do not abet tax evasion
5) Do not collude with other RESPs
6) Indicate license number..
Summary of “in relation to the Public”
1) Social conscience
2) HABU
3) Be well-informed
4) Cooperate with GOVT vs. unscrupulous practitioners..
5) Avoid error, misrepresentation or concealment ..
6) Do not introduce use that will impair values
7) No false considerations in the deeds
8) Safekeep monies in trust.
9) Truth in advertising..
10) Real estate transactions in writing.. notarized..”SOF”

Summary of “in relation to Client”

1) Interest of client, without sacrificing other party..
2) Be well informed ..for the interest of client.
3) Commission only from client, unless with consent; no OP..
4) Fair and reasonable fees or commissions..
5) Not buy for himself, family 4th degree, entity where they have over 20% interest..or inform
seller/buyer
6) Do not advertise without authority..
7) Present all written offers to owner..
8) Fair contract; assist customer take possession
9) As witness - unbiased, honest, truthful and professional manner.
10) Appraisers- thorough analysis.. fair and reasonable charge.
11) Appraisers – do not undertake if no experience.. unless assisted..

Summary of “In relation to fellow practitioners..”

1) Respect exclusive listing of another..
2) Respect co-broker’s agency.. Do not pass or publish without consent..
3) Signage by only one broker and only if authorized by owner.
4) Do not refer a shared listing to a third broker or for creating a buyer’s prospect, unless authorized by
listing broker.
5) Cooperate and share commission with other brokers,
6) Do not solicit services of an employee of another practitioner without consent..
7) Do not criticize publicly a competitor
8) Do not seek unfair advantage.. Share PF..
9) Avoid controversy with his fellow practitioners.. If fellow member, submit for arbitration..
10) Arbitration board 1+1=2 +1
11) If not fellow members, BDT will assume..
12) Voluntarily submit facts before an investigating body..
 
Summary of “in relation to his organization, including national association”
1) Abide by the C&BL..
2) No campaigning and electioneering..
3) Support his organization..
4) Exhaust all administrative remedies..
ARTICLE IV – SANCTIONS
Violation –sanction imposed by the organization…disciplinary action by DTI… 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]

…fifteen (15) days after its publication… Done in Makati, Metro Manila, this 19th day of September
1986.

ARTICLE V – EFFECTIVITY [As Amended, 1993]

…immediately after publication…Done in Makati, Metro Manila, this 29th day of September, 1993.

SAMPLE QUESTIONS:
Q. With regards to the relation with a client, the practitioner who accepts an authority to act and in
behalf of the client, can perform such, except:
A. Acquire an interest or buy himself or members of his family within the 4 th civil degree
B. Endeavor to make buyer and seller conclude a fair contract, advantageous to both parties
C. Assist his client acquire possession and ownership of the property bought in accordance with the
terms and conditions agreed upon
D. Should not accept any commission or fee from any party in any transaction except from his client

Q. The declaration of Principle of the Code of Ethics for Realty Service Practitioners clearly states the
Golden Rule which says:
A. Treat others as you wanted them to be treated
B. Do not do unto others what you want others do unto you
C. Do unto others what you do not want other do unto you
D. Treat others as you like them to treat you

Q. In relation to _______, the practitioner should first exhaust all administrative remedies before
taking any judicial or quasi-judicial action.
A. Government
B. Public
C. Client or Customers
D. Fellow Practitioners
E. His organization

Q. A broker attempts to generate listings by telling people in the neighborhood that their propertys’
values might be going down soon because a particular unwanted group is coming into the
neighborhood. This practice is called:

A. Soliciting C. Prospecting
B. Farming D. Blockbusting

Q. Three of the four enumerated acts of a broker are considered unethical. Which is not?
A. Encouraging the parties to a sale to undervalue the actual selling price
B. Keeping a separate bank account, for all monies received in trust such as client’s money and similar
items
C. Disclosing his client’s confidential personal information to a fellow broker.
D. Delaying submission of a formal offer from a prospective buyer in the hope of getting a higher offer.

Q. With respect to fellow practitioners, a broker who does this might still violate the code --
A) Apply for accreditation with a property owner who is known to give open listings;
B) Puts up a sign on the property for sale with several other brokers so long as authorized by Owner;
C) Passes on to a third party the listing extended by an original broker after obtaining consent;
D) Does not seek an unfair advantage over fellow practitioners.

Q. From whom may a freelance real estate salesperson demand a fee, commission or compensation
of any kind for any service rendered or work done by him in any real estate transaction?
A. Buyer B. Real Estate Developer C. Real Estate Broker D. Any of the Above

Q. An ethical broker always strives to protect his client’s interest. Which of the following is not in the
best interest of your client/seller?
A. Maintain utmost confidentially on matters not directly related to the property.
B. Strive to be familiar with laws and ordinances on real estate.
C. Tell your client that his price is too high and give your opinion on the fair market value of the
property.
D. Inform your client about the forthcoming commercial development in the area.

Q. Real estate practitioners shall be governed by the following rules of conduct and practice, except:
A. Relation to family
B. Relation to government
C. Relation to fellowpractitioners
D. Relation to client
E. Relation to the public
 
Q. The Chairman of the Professional Regulation Commission is
Eduardo G. Ong
Florencio C. Dino
Rafael M. Fajardo
Teresita R. Manzala
(Example of an old question)

Current PRC Members

HON. FLORENTINO C. DOBLE, M.D.  (retired recently)
Chairman
HON. ANGELINE T. CHUA CHIACO 
Commissioner
HON. YOLANDA D. REYES 
Commissioner

Thank you very much 

Engr. Wilfredo L. Segovia
Mobile: 0917-839-4409
Mail: wls.segovia@gmail.com