1) Why “unlicensed” activity matters in Philippine real estate

In the Philippines, real estate brokerage and related services are treated as regulated professional practice. The law does not view “agenting” as a casual sideline when it involves marketing, negotiating, or facilitating the sale, purchase, lease, mortgage, or other conveyance of real property for a fee, commission, or other compensation. Because the work affects property rights, large sums of money, and public trust, the legal system imposes licensure, registration, and professional accountability requirements.

The practical consequence is straightforward: when a person performs real estate service work without the required license or authority, they expose themselves—and often the transaction participants—to criminal, civil, administrative, and commercial risk.

2) The key Philippine legal framework

A. The Real Estate Service Act (RESA) – the cornerstone rule

The central statute is Republic Act No. 9646 (the Real Estate Service Act of the Philippines or “RESA”). RESA regulates and professionalizes real estate service practice, including:

Real Estate Brokers (commonly the principal licensed professionals in transactions)
Real Estate Salespersons (who generally must operate under a licensed broker and meet registration requirements)
Real Estate Appraisers
Real Estate Consultants

RESA prohibits the practice of real estate service by persons who are not duly licensed/registered, and it provides penalties for violations.

B. PRC regulation and professional discipline

The Professional Regulation Commission (PRC) and the relevant Professional Regulatory Board oversee licensure, registration, and discipline. Even when a transaction “works out,” unlicensed practice can trigger regulatory action if reported.

C. Contract law (Civil Code) and enforceability

Even apart from RESA, Philippine contract law principles—particularly on cause, object, legality, and public policy—affect whether an unlicensed intermediary can demand commissions, enforce agreements, or claim compensation.

D. Consumer protection, fraud, and criminal laws

Unlicensed activity frequently overlaps with:

Fraud/misrepresentation (e.g., claiming to be licensed)
Syndicated or large-scale scams (e.g., collecting reservation fees for nonexistent units)
Estafa-type conduct where deceit and damage occur

3) What counts as “real estate service” activity in practice

Unlicensed risk typically arises when someone does any of the following for compensation (cash, gifts, “tokens,” referral fees, splits, kickbacks, or anything of value):

Solicits listings or offers properties to the public
Shows properties and conducts viewings as part of a sales effort
Negotiates price/terms between buyer and seller or lessor and lessee
Prepares or brokers deals, “connects parties,” or facilitates closing
Collects fees labeled as “processing,” “marketing,” “documentation,” or “finder’s fee”
Represents themselves as an “agent,” “broker,” “property specialist,” “licensed” marketer, or similar

A common misconception is that changing the label (“marketing,” “consultant,” “referral”) avoids regulation. In regulated professions, substance beats form: if the activity is effectively brokerage/salesperson work, the legal exposure remains.

4) Who must be licensed or registered—and how the “salesperson under a broker” model works

Real Estate Broker

A broker is generally the licensed professional authorized to:

Act as principal intermediary in real estate transactions
Supervise salespersons
Receive and lawfully distribute commissions/splits consistent with professional rules

Real Estate Salesperson

A salesperson typically:

Must be registered and affiliated with a licensed broker
Acts under the broker’s supervision and authority
Cannot lawfully operate as an independent “broker” if not licensed as one

Risk trigger: A person calling themselves an “agent” while operating independently, receiving commissions directly, or advertising services without proper broker affiliation is a classic unlicensed-practice scenario.

5) Core legal implications of unlicensed real estate “agent” activity

A. Criminal liability under RESA

Unlicensed practice can be treated as a criminal offense. The statute provides penalties (commonly fines and/or imprisonment) for:

Practicing real estate service without a license/registration
Misrepresenting licensure
Allowing one’s license to be used by others
Aiding and abetting unlicensed practice (in certain fact patterns)

Important practical point: Even if the parties to a sale are happy, a complaint can still be filed. Enforcement often begins with:

A disgruntled buyer/seller
A competing licensed practitioner
A failed deal
A scam complaint involving funds

B. No enforceable right to commissions (and difficulty recovering “fees”)

A major consequence is commercial: an unlicensed intermediary often has no legally enforceable claim to brokerage commissions when the service rendered is considered regulated professional practice. Courts generally do not aid claims grounded on an illegal or prohibited act.

Common outcomes include:

Commission suits dismissed because the claimant lacked authority to practice
Brokerage agreements treated as void/unenforceable when they violate law or public policy
Increased risk of being ordered to return amounts received, especially if fees were collected under misleading representations

C. Civil liability to clients and third parties

Unlicensed actors face potential civil claims for:

Damages due to misrepresentation, negligence, or bad faith
Refunds of collected “reservation,” “processing,” “marketing,” or “documentation” fees if not supported by lawful authority or actual service
Indemnity if their involvement caused deal failure, penalties, forfeitures, or litigation

Civil exposure becomes more severe when the unlicensed person:

Receives client funds
Gives legal-sounding advice (title status, tax implications, “clean title” assurances)
Drafts or dictates contract terms beyond their competence
Pushes parties to sign without proper disclosures

D. Consumer protection and regulatory complaints

Transactions involving the public can attract complaints to:

PRC and the relevant regulatory board (for impersonation or improper use of professional titles)
Local government offices (permits, business licensing issues)
Developers/HOAs (for unauthorized marketing)
Other agencies depending on the scheme and money trail

Even without a full-blown criminal case, regulatory complaints can lead to:

Investigation
Cease-and-desist pressures
Referral to prosecutors

E. Fraud and estafa exposure when deception is present

Unlicensed practice is already risky. It becomes far more dangerous when paired with deceit, such as:

Claiming to be “PRC-licensed”
Using fake license numbers or someone else’s identity
Taking money on a promise of allocation/unit/approval with no authority
Misrepresenting ownership, title status, or ability to sell

In such cases, the unlicensed status is often used as evidence of bad faith and can support broader criminal allegations depending on the facts.

F. Liability of the “licensed broker” or others who enable the unlicensed actor

A licensed broker (or firm) who:

Permits an unregistered person to act as their salesperson,
Allows their license to be “rented,”
Lets someone advertise under their name without supervision,
Or shares commissions with unauthorized persons,

may face:

Administrative discipline (including suspension/revocation)
Possible criminal or civil exposure depending on participation and harm

This is a frequent compliance issue in “informal networks” where commissions are split with unregistered “lead generators” who actually perform regulated acts like negotiation and marketing.

6) Effects on the underlying property transaction

A. Validity of sale/lease vs. validity of the commission arrangement

A critical distinction:

The sale/lease between owner and buyer/tenant may still be valid if the essential requisites of contracts are present.
The commission arrangement with the unlicensed intermediary is the part most directly threatened (often unenforceable/illegal).

So, parties sometimes close the deal successfully, but the unlicensed actor cannot later lawfully compel payment or enforce a “brokerage contract.”

B. Increased risk of defective documentation and due diligence failures

Unlicensed intermediaries often:

Skip proper title verification steps
Miss red flags (liens, adverse claims, inconsistent technical descriptions)
Mismanage tax computations and documentary requirements
Provide incorrect guidance on reservation/deposit handling

Even if the law doesn’t automatically void the property contract, bad process can produce:

Delays in transfer
Unexpected tax/penalty costs
Title registration issues
Litigation exposure

C. Money-handling and trust issues

Unlicensed agents frequently receive funds (earnest money, reservation fees, “processing fees”). Risks include:

Unauthorized receipt of money (lack of clear agency authority)
Disputes over whether amounts were deposits, commissions, or refundable fees
Claims of conversion or misappropriation if money isn’t properly accounted for

Best practice in regulated settings is that client funds, if handled at all, should be managed with transparent documentation and proper authority—something unlicensed practice often lacks.

7) Common real-world scenarios and their legal risk profiles

Scenario 1: “Finder’s fee” for a simple introduction

If a person merely introduces parties—without marketing, negotiating, advising, showing, handling documents, or collecting funds—the risk may be lower. However:

Once the “finder” crosses into typical brokerage functions, it can be treated as real estate service practice.
Repeated, compensated introductions can look like a business of brokerage.

Scenario 2: “Marketing” a condo project without proper authority

Marketing units for compensation can trigger:

RESA issues (if acting as salesperson/broker without registration)
Possible issues with developer accreditation/authorization
Consumer complaints if representations are misleading

Scenario 3: Collecting reservation/processing fees personally

High risk. This is where scams and criminal complaints often arise. Even if not a scam, it creates:

Documentary problems (who received? in what capacity?)
Refund disputes
Higher likelihood of fraud allegations if anything goes wrong

Scenario 4: Using another person’s license or identity

Extremely high risk. This combines unlicensed practice with falsification/misrepresentation issues and tends to escalate quickly into criminal complaints.

8) Practical indicators that activity is likely “unlicensed practice”

A person is likely operating unlawfully if they:

Advertise themselves as “licensed” without verifiable credentials
Cannot name their supervising broker (if acting as salesperson)
Ask for commission/payment directly to them with no broker invoicing
Use vague fee labels (“processing,” “facilitation”) in place of proper compensation documentation
Resist written authority, receipts, or clear paperwork
Pressure clients to pay quickly “to reserve,” “to hold,” or “to avoid losing the deal”
Provide sweeping assurances about title, taxes, or legality without documentary basis

9) Remedies and risk-management for affected parties

For buyers, sellers, landlords, and tenants

Verify credentials: PRC license/registration, broker affiliation, and identity.
Insist on documentation: written authority to act, clear commission terms, proper receipts.
Pay the right party: commissions should flow through the proper licensed broker structure where applicable.
Protect deposits: if earnest money/reservation is needed, structure it transparently (who holds it, under what terms, refund conditions, and how it will be applied).

If you already dealt with an unlicensed person

Options depend on facts, but typically include:

Demand for refund/accounting of amounts paid
Civil action for recovery and damages if misrepresentation or bad faith is provable
Criminal complaint where deceit, misappropriation, or fraudulent inducement occurred
Regulatory complaint for unlicensed practice and misrepresentation

For licensed brokers and legitimate salespersons

Maintain clear supervision and documentation
Avoid “license renting” and commission-sharing with unauthorized persons
Control advertising and use of professional titles
Use written engagement letters and proper receipts/invoicing

10) Key takeaways

Real estate “agent” work in the Philippines is not just a commercial activity; it is regulated professional practice.
Unlicensed practice can trigger criminal penalties, undermine the ability to collect commissions, and increase civil liability.
The underlying property deal may still be valid, but the unlicensed intermediary’s compensation claim is often the most vulnerable.
The highest-risk behaviors are misrepresentation of licensure, handling client funds, negotiating terms, and operating without a supervising broker where required.
Credential verification and clean documentation are the simplest ways to prevent expensive disputes.

11) Suggested article-style conclusion

Unlicensed real estate agent activity is not a harmless shortcut; it is a structural risk that the legal system treats seriously because of the public interest embedded in property transactions. Beyond criminal exposure, the most immediate practical impact is commercial: unlicensed intermediaries often find that the law will not help them enforce commissions or fees derived from prohibited professional practice. For clients and the public, the danger is equally concrete—transactions handled outside the regulated framework are more likely to produce documentation errors, fund-handling disputes, and fraud. The safest posture is to insist that real estate services be rendered only by properly licensed professionals and duly registered salespersons operating under responsible supervision, with transparent written authority, receipts, and clearly defined fee structures.