Real estate owners and developers may now be liable on their advertisements if they fail to deliver it; unregistered real estate dealers, brokers and sales persons are prohibited to engage in selling, based on new rules released by Housing and Land Use Regulatory Board (HLURB), published in major newspapers last January 30, 2015.

The agency has updated the implementing rules and regulations (IRRs) for Presidential Decree 957 or the “Subdivision and Condominium Buyer’s Protective Decree” to protect prospective buyers of real estate properties from possible fraud and other malpractices in the industry.

It said all representations in an advertisement shall form part of the sales warranties enforceable against the owner or developer, jointly and severally.

“Such owner or developer shall be answerable and liable for the facilities, improvements, infrastructures, or other forms of development represented or promised in an advertisement and failure to timely and completely fulfill these representations shall constitute breach of contract and warranties,” the IRR stated.

The amended IRRs were contained in Board Resolution 921 and 922, signed by Vice President Jejomar Binay on Dec. 2 last year. He is the chair of the Housing and Urban Development Coordinating Council or HUDCC.

Board Resolution 921, also known as the Revised IRR on Advertisements, stated that any announcement about a project, or about its operations or activities, must reflect the real facts and must be presented in a manner that will not tend to mislead or deceive the public.

The IRR states that the owner, developer, dealer, authorized broker or salesperson shall be allowed to advertise about the project only after the issuance of the project’s license to sell and after the HLURB has approved the advertisement material.

“To enable the public or prospective buyers to make an informed choice on their purchase or acquisition, any advertisement about a project must indicate material facts…” it said.

Meanwhile, Board Resolution 922 or the “2014 Revised IRR on Dealers, Brokers and Salesmen” stated that all brokers and salespersons must be registered and licensed or accredited by the Professional Regulatory Board of Real Estate Service before they can engage in the practice of real estate services.

Also under the revised IRR, all business firms shall likewise first register with the HLURB in accordance with its existing rules and guidelines before they can engage in the practice of real estate service.

photo of money and handcuffed person

Any dealer, broker, salesperson and business firm who engages in real estate practice without registering the project with the HLURB or using an expired HLURB permit will be fined P10,000 and P5,000 respectively, the IRR said.  Or based on PD 957, Any person who shall violate will be punished by a fine of not more than twenty thousand (P20,000.00) pesos and/or imprisonment of not more than ten (10) years. Provided, that in the case of corporations, partnerships, cooperatives, or associations, the President, Manager or Administrator or the person who has charge of the administration of the business shall be criminally responsible for any violation of this Decree and/or the rules and regulations promulgated pursuant thereto.


IRR, Presidential Decree 957

HLURB Board Resolution No. 921 series of 2014

HLURB Board Resolution No. 922 series of 2014

Philstar Article by Helen Flores January 15, 2015

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