Legal basis of Realty Brokerage Practice (III)

THIS last discourse on the topic ends with these matters:

11. The Agency agreement between the Principal/Seller and the Real Estate Broker/Agent is terminated or extinguished under these instances:

(1) By its revocation;

(2) By the withdrawal of the agent;

(3) By the death, civil interdiction, insanity or insolvency of the Principal or of the Agent;

(4) By the dissolution of the firm or corporation which entrusted or accepted the agency;

(5) By the accomplishment of the object or purpose of the agency; and

(6) By the expiration of the period for which the agency was constituted.

(Article 1919, CCP)

It is inherent, therefore, for the contracting parties to be aware of the mentioned circumstances where they will freed of any obligation from each other resulting from the termination of the Agency agreement or contract.

To practice real estate brokerage, one must be licensed by the Professional Regulatory Board of Real Estate Service (PRB-RES) and the Professional Regulation Commission (PRC). Pertinent provisions of the Real Estate Service Act (RESA) – Republic Act No. 9646, spell out what constitute real estate brokerage by defining what a Real Estate Broker and Real Estate Salesperson is:

“REAL ESTATE BROKER is a duly registered and licensed natural person who, for a professional fee, commission or other valuable consideration, acts as an agent (underscoring supplied) of a party in a real estate transaction to offer, advertise, solicit, list, promote, mediate, negotiate or effect the meeting of the minds on the sale, purchase, exchange, mortgage, lease or joint venture, or other similar transactions on real estate or any interest therein.” [Article I, Section 3 (4) – RESA (R.A. No. 9646]

On the other hand, a “REAL ESTATE SALESPERSON is a duly accredited natural person who performs service for, and in behalf of, a real estate broker who is registered and licensed by the Professional Regulatory Board of Real Estate Service (PRB-RES) for or in expectation of a share in the commission, professional fee, compensation or other valuable consideration.” [Article 3, Section 3 (5) – RESA (R.A. No. 9646]

The LISTING CONTRACT/AGREEMENT serves as a link between the Broker and Owner/Seller of the real property whereby the Owner/Seller authorizes the Broker to negotiate for the sale, purchase, lease, joint venture, exchange or mortgage of his real property for a commission, professional fee or any other valuable consideration.

In this regard, the LISTING CONTRACT/AGREEMENT should be clearly spelled out, free from uncertainty, vagueness and ambiguity especially as to its meaning, purposes and intents. Should there arise a conflict between the Owner/Seller and the Broker and it requires the latter to institute legal action to prosecute a claim for compensation or commission/professional fee in a court of law, the affirmative burden of proof is upon the plaintiff Broker to prove that:

1. He was properly licensed;

2. The Broker has a contract of employment from the Owner/Seller or authorized in writing by the latter;

3. That he complied with their agency agreement; and

4. That he was the “efficient and procuring cause” of the sale, lease or other real estate transaction involved.

In the absence of any of the abovementioned requisites or elements, such legal action may not prosper in a court of law. This will be to the disadvantage of the so-called illegitimate or “colorum” Brokers or Agents whose action to prosecute the case may boomerang on them, due to the requirement that that such person must be properly licensed and registered as real estate service practitioner with PRC and PRB-RES.

Finally, the Agency agreement cannot be revoked at the Principal’s/Seller’s will when: 1. A bilateral contract depends on the agency. (Article 1927, CCP)

2. The agency is the means of fulfilling an obligation already contracted. (Article 1927, CCP)

3. If a partner is appointed manager of a partnership in the Contract of Partnership and his removal from the management is unjustifiable. (Article 1927, CCP)

4. The Principal is obligated not to revoke (because if he does, he can be held liable for damages).

5. The revocation is made in bad faith and with intent to defraud.

Hopefully, the discussions helped practitioners realize the importance of their functions, do their role conscientiously and properly and the Principal/Seller appreciated the legalities of their action especially on any contracts or agreements they enter into with legal and legitimate professional realty practitioners.