Press Release
October 10, 2014

REAL ESTATE TRANSACTIONS; AND THE CURIOUS CASE OF THE PNP CHIEF By SENATOR MIRIAM DEFENSOR SANTIAGO
(Guest speaker at the annual national convention of the Philippine Association of Real Estate
Boards, Inc. [PAREB] on 10 October 2014, at the Bellevue Hotel, Alabang, Muntinlupa)

A. Complexity of Real Estate Transactions

Real estate transactions in the Philippines are governed by a complex system of laws and regulations. Under the Philippine Constitution, there are key prohibitions on the ownership and disposition of lands. Outside of the Constitution, the system that governs real estate transactions consists of scattered laws and regulations. In addition, at the local level, specific ordinances also regulate the ownership and disposition of real estate. Hence, legal complexity arises from the absence of a unified system of laws and regulations, making real estate transactions difficult. Let me outline the typical real estate transaction structure. As brokers, you have to exhibit due diligence in dealing with: registered owners; liens and encumbrances attached to real property; other legal requirements for transfer of land; documenting the transaction; and dealing with taxes and other expenses. As a lawyer, I can see that one of your onerous problems is the corruption affecting title registration in our country. To register any real estate transaction, the broker has to pay a bribe, on pain of denial or delay in the issuance of title.

Hence, I call on the Land Registration Authority to exercise stricter scrutiny over the provincial offices of the registry of deeds. I am motivated by the concern that those registers of deed can be bribed to issue fake certificates indicating title or ownership. Further, registers of deeds should be required to adopt higher standards of scrutiny, to avoid issuance of title by the submission of fake documents by bogus claimants.

Today, real estate transactions are governed by R.A. No. 9646, aka the Real Estate Service Act, or RESA Law of 2009. The Supreme Court recently upheld the constitutionality of the RESA Law in the 2014 case of Remman Enterprises, Inc. v. Professional Regulatory Board of Real Estate Service. The Supreme Court paid tribute to residential brokers by stating "that real estate developers at present constitute a sector that hires or employs the largest number of brokers, salespersons, appraisers, and consultants due to the sheer number of products they advertise and sell nationwide."

However, after the RESA Law of 2009, the need for amendments is growing acute. I humbly suggest that PAREB should draft a bill amending the RESA Law, dealing with the following concerns:

  • The law provides for the creation of what it calls the Accredited and Integrated Professional Organization. It now exists as the Philippine Institute of Real Estate Service or PHILRES. Let me raise a warning point. The accreditation of PHILRES will expire in November this year.

One of the main problems that militate against the effectivity of PHILRES is the vagueness about who are its members. Under the RESA, the members include "all real estate service associations." By contrast, under the Implementing Rules and Regulations, the members are "natural persons." The law should make a clear choice on who the members are.

  • Under the law, a broker is limited to a maximum of 20 salespersons, despite the fact that the number of brokers is continually increasing. This indicates that there might be a need to raise the ceiling of 20 to perhaps 25 or 30 accredited salespersons.

  • Previously, the Department of Trade and Industry required an applicant for real estate salesperson to be only a high school graduate. Today, that requirement has been raised to "at least two years of college."

Why do we require mere salespersons to finish at least two years of college? The Constitution does not even require any years of college at all from candidates for national office, including the president, vice-president, and senators. With the present K to 12 program in education, high school education should suffice.

  • As a previous trial judge, I strongly advocate an amendment, so that the RESA Law and its penal provisions will impose not only the minimum, but also the maximum penalty.

  •  PAREB should adopt the Real Estate Professionals' Bill of Rights, which has been adopted in the United States. It provides for a government office that will govern real estate activity, and ensure an essential degree of accountability over information published, referring to people who publish proprietary listing data owned by real estate brokers and agents. It shall apply to all online and print media that publish listing information, including desktop and mobile appliances.

  •  In particular, I advocate an amendment that will require online classified ads, as already required by the RESA Law, to be posted in the licensed broker's place of business, to be required for online selling, by including:

1. Complete name of the licensed broker

2. His certificate of registration

3. Professional ID card

4. Professional tax receipt number, and

5. The date of issuance and the duration of the validity of the documents he signs or uses or issues in connection with the practice of his profession.

If PAREB can adopt my humble proposals and submit to me a draft bill proposing amendments to the RESA Law of 2009, I shall be happy to file it in the Senate.

But even before that, I have already filed Senate Bill No. 2428, aka "An Act to Provide Additional Protection to Buyers in Real Estate on Instalment Payments." My bill includes the following provisions:

  • Require the subdivision owner to secure an individual title for every lot before offering it for sale;

  • Prohibit any mortgage, lien or encumbrance on the title;

  • Make it mandatory to make the annotation on the title of the contract to sell or sale;

  • Make it compulsory that upon completion of installment payments, the owner shall execute a deed of absolute sale and deliver the title to the buyer.

I challenge PAREB to draft a bill providing that online publishers must first acquire accreditation from the PAREB adhering to the following rights:

1. The right to listing attribution and a direct link to the listing owner's website.

2. The right to bar brokers and agents from advertising on a listing they do not own.

3. The right to comprehensive reporting with audit capabilities.

4. The right to prohibit unauthorized use of listing data.

5. The right to ensure that the publisher implements anti-screen mechanisms.

6. The right to unbiased and comprehensive data display of all listings.

7. The right to accuracy.

8. The right to prohibit automated property valuations

9. The right to ensure that ratings, titles and superlative designations are based on accreditation and objective criteria.

10. The right to be free from questionable sales practices.

B. The Curious Case of the PNP Chief, Etc.

The present PNP chief is facing an entire avalanche of plunder and corruption cases, including the following:

  •  Plunder over his alleged involvement in a license delivery deal worth some P100 M. It is said that PNP entered into a contract with a bogus company which had not yet registered with the Securities and Exchange Commission.

  •  Allegedly accepted money donations to build an official residence inside a military camp.

  •  Allegedly bought an SUV worth some P3 M in the market, but paid only some P1.5 M.

  •  Allegedly engaged in a so-called trucking business and poultry farm, and claiming that both are worth P90 M.

  •  Alleged use of a bulletproof Land Cruiser vehicle that is not registered in his name.

  •  Owning in San Leonardo, Nueva Ecija, an estate of some five hectares containing a two-story house with separate guest house and separate gazebo, not to mention a swimming pool in the middle of landscaped gardens, and arguing heatedly that that the premises cost only P3.75 M.

  • Mr. Purisima has no defense, except that his alleged political enemies are exaggerating his unexplained wealth. Exaggerated or not, the question is: Where did he source all that wealth?

I have to be impressed with the defense made by Mr. Purisima. I have never before met someone who seems to have such a small mind inside such a big head. I watched him fleetingly on TV, while he tried to brazen off his defense against what appear to be the facts. As a trial judge, I was trained to study what the law calls "the demeanor of the witness." Judging from his demeanor during the Senate hearing, I have to wonder whether a respondent works that hard to be a jerk, or whether it just comes naturally. Today, after that televised hearing, people say he is the perfect jerk. I tell them that he is not perfect, but he is doing all right.

What should we do about Mr. Purisima? He refuses to go on leave of absence, thus igniting suspicions that he will use all the powers and prerogatives of a PNP chief to silence his critics. He can be placed on preventive suspension, but only after the Ombudsman conducts a preliminary investigation and files a complaint for plunder against him with the Sandiganbayan.

I have a humble suggestion. President Aquino should appoint Purisima as a member of the National Police Commission, or as assistant secretary of either the DILG and DND, or to some other position which is incompatible with his present office as PNP chief. That's the best way, under the circumstances, to get rid of a suspicious character.

Let me cite a classic authority on the subject of incompatible office, Floyd Mechem, author of A Treatise on the Law of Public Offices and Officers. According to Mechem, any person "who, while occupying one office, accepts another incompatible with the first, ipso facto, absolutely vacates the first office and his title is thereby terminated without any other act or proceeding." The rule means that another office is incompatible, when the nature and duties of the two offices are such as to render it improper, from considerations of public policy, for one person to retain both offices. For example, two incompatible offices are: judge and clerk of the same court; claimant and auditor; landlord and tenant.

In other words, President Aquino, please kick Purisima upstairs so that he will leave the PNP alone.

C. An Epidemic of Elephantiasis

What we are seeing is an epidemic of people in high government office who possess the epidermis of pachyderms. Those guys are thick-skinned! It used to be said in ancient Rome that Caesar's wife must be above suspicion. But today, the criminals in high public office consider themselves to be above suspicion, even when testimonial and documentary evidence is presented, and they have no defense but to cry that the charge is "politically motivated." I have news for them. Anything that happens in politics is "politically motivated," so it is no defense at all.

This epidemic of scandals began with the plunder charges against three senators, including an ex-Senate president. The epidemic continued with the airing of documented dirty linen against the incumbent vice-president and his family. The epidemic continues further with present allegations of profligate abuses by no less than the person who heads the agency which enjoys a monopoly of sanctioned legal force against the civilian population.

All of these highly publicized public officers charged by or with the Ombudsman should bear in mind the fate of the prominent and powerful Chinese Communist Party official called Bo Xilai. He was king of the headlines for some 20 months. Then he was convicted, and handed a life sentence by a Chinese court for bribery, embezzlement, and abuse of power. Just like Bo, the accused public officers in today's epidemic of scandals are very arrogant in their defense, denying all charges, and blaming the corruption on other people in their own inner circles.

In all of these and probably in the forthcoming cases, the five-centavo lawyers will claim that their clients enjoy the presumption of innocence. I repeat: ignorance can be cured, but stupid is forever. When I read the asinine remarks of these cheap lawyers, I am fully convinced that they possess unparalleled mediocrity.

Let me emphasize that the most basic defense - even in the charge of the most egregious corruption - is the presumption of innocence. This legal phrase simply means that the burden of proof is on the prosecutor. I have to emphasize that there is a basic distinction in criminal law between a presumption of law on the one hand; and a presumption of fact on the other. A presumption of law can be rebutted by the facts. A presumption of fact can be rebutted by another, stronger fact.

Hence, with the facts as reported by the media - even accounting for inaccuracies not based on malice, but on the news cycle - the persons accused have lost the presumption of innocence. We are no longer dealing with the burden of proof, but with the burden of evidence. It is true that the burden of proof lies on the prosecutor. But while the trial progresses, after the presentation of facts by the prosecutor, the burden of evidence now shifts to the defense. After the defense presents its case, the burden of evidence again shifts to the prosecutor.

Thus, the burden of evidence shifts between prosecutor and accused in the course of the trial. In the light of the presumptions of fact raised by media accounts of the charges constituting plunder and corruption, the burden of evidence is on the accused. They should stop exhibiting the epidermis of pachyderms and the intestinal fortitude of man-eating anacondas.

It is doubly complicated to fight corruption, when the accused pretend to be the champions of honesty and then resort not only to shameless propaganda, but also to all forms of unethical character assassination carried out by expensive and unconscionable media syndicates. But the Filipino people have no choice; we have to keep on fighting. We have to remain adamant in the belief that good will triumph over evil, and that good governance will triumph over corruption.

Therefore, ladies and gentlemen of the PAREB, I remind you:

In the beauty of the lilies Christ was born across the sea, With a glory in His bosom that transfigures you and me; As He died to make men holy, let us die to make men free, While God is marching on.

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