Legal basis of realty brokerage practice (II)-A A +A
Real Estate Updates
Sunday, September 23, 2012
CONTINUING our discourse on the pertinent provisions contained in the Civil Code of the Philippines related to real estate especially on the Law on Agency:
In No. 5 of our previous Article on Agency (Article No. 1874, CCP), we would like to reiterate this provision where it states, “When a sale of a piece of land or any interest therein (meaning real estate) is through an agent (or Real Estate Broker/Salesperson), the authority of the latter shall be in writing; otherwise, the sale shall be void.” Take note that in any sale of real property, the sale can be invalidated if the Broker/Salesperson selling such property does not have any authority from the Owner/Seller in writing.
It is a must therefore, that real estate service practitioner and those authorized to sell real estate properties must observe and be careful of this provision in our Civil Code relating to the real property sales.
6. In many instances involving real estate transactions where practitioners are required to undertake specific and special engagements, a Special Power of Attorney (SPA) are necessary in the following cases: (Article No. 1878, CCP)
(1) To make such payments as are not usually considered as acts of administration;
(2) To effect innovations which put an end to obligations already in existence at the time the agency was constituted;
(3) To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive obligations to the venue of an action or to abandon a prescription already acquired;
(4) To waive any obligation gratuitously;
(5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration;
(6) To make gifts, except customary ones for charity or those made up to employees in the business managed by the agent;
(7) To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration;
(8) To lease any real property to another for more than one year;
(9) To bind the principal to render some service without compensation;
(10) To bind the principal in a contract of partnership;
(11) To obligate the principal as a guarantor or surety;
(12) To create or convey real right over immovable property;
(13) To accept or repudiate an inheritance;
(14) To ratify or recognize obligations contracted before the agency; and
(15) Any other act of strict dominion.
7. The Agent is bound by his acceptance to carry out the agency, and is liable for the damages which, through his non-performance, the principal may suffer. He must also finish the business already begun on the death of the principal, should delay entail any danger. (Article No. 1884, CCP)
8. In the execution of the agency, the Agent shall act in accordance with the instruction of the principal. In default thereof, he shall do all that a good father of a family would do, as required by the nature of the business. (Article No. 1887, CCP)
9. Every agent is bound to render an account of his transactions and to deliver to the principal whatever he may have received by virtue of the agency, even though it may not be owing to the principal. Every stipulation exempting the agent from the obligations to render an account shall be void. (Article No. 1891, CCP)
In the event that the Agent (Broker/Salesperson) is tasked or entrusted to handle funds or money owing the Principal, it is inherent for the said person to make an accounting of such funds or money entrusted to him/her. Such funds or money must be property turned-over to the principal once the full amount had been fully collected or is required to turn-over whatever money is he/she has on hand.
Likewise, the Agent is required and must keep a separate bank account for these special funds or money owing the Principal. Any stipulation or agreement exempting the Broker/Salesperson from the obligations to render an accounting shall be void or invalidated.
10. The Principal must comply with all the obligations which the Agent may have contracted within the scope of this authority. As for any obligation wherein the Agent has exceeded his power, the Principal is not bound except when he ratifies it expressly or tacitly. (Article No. 1910, CCP) –
(To be continued next week)
Published in the Sun.Star Baguio newspaper on September 24, 2012.