Insights of a Real Estate Attorney


Posted by Atty. Jojo on January 26, 2012

Plan carefully and you will have plenty; if you act too quickly, you will never have enough.

 – Proverbs 21:5, Good News Bible [Today’s English Version]

By Ernesto C. Perez II

You would think that having a creative and distinguished business name as well as an appropriate business vehicle chosen will bring us one step closer to registering our business with DTI and BIR.

Unfortunately, we still have one more step to go. It is a long process but a necessary step to take. The next step is writing a business plan.

You may think that preparing a business plan doesn’t apply to you because of the experience you have in the brokerage business. But for those who are still new and inexperienced or those who are engaged full-time because this is the only source of income they have then preparing and having a business plan is essential.

I am not experienced in preparing business plans. In fact, I have several ventures that have failed mainly because of the lack of such a plan.

There are numerous websites that guide you through the preparation of a business plan. You can hire a professional to assist you in preparing one. No matter what method you choose the important thing is to make a plan that is thoroughly researched.

A final note if you will permit me. In the book of Donald Trump and Robert Kiyosaki entitled “Mida’s Touch: Why Some Entrepreneurs Get Rich And Why Most Don’t” they discussed their failures and how they learned from their numerous failures that made them succeed.

In preparing your business plan, I would suggest that you plan to fail. This is not to say that you have to set small goals for yourself.

By all means, think big! Plan for your outright success. But temper it with the knowledge that the best laid-out plan does not usually go according to what is written.

There will be numerous bumps on the road. I am still on the bumpy part. Therefore, plan to make adjustments so that you will not be heavily frustrated when things do not happen as planned.

Facing disappointments and experiencing failures when you thought you have covered all bases is the worst feeling of all. I am well acquainted with such failures and disappointments.

You need a business plan that is flexible to give you room to adjust your goals accordingly and know what to do when faced with adversities. Once you have made your business plan you are now ready to register your business.

I have outlined what requirements are needed when you are ready to register your business with the various agencies of the local and national government. You can read it in my previous post.

Best of luck to everyone. Kung Hei Fat Choi!!

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Posted by Atty. Jojo on January 25, 2012

“…select the business format that reflects your needs and circumstances. Then… become acquainted with the logistics and procedures for the format you have chosen.

– Steve Marr

By Ernesto C. Perez II

Currently, most licensed real estate service practitioners practice their profession on their own. It’s a form of business called single proprietorship. It is easier to set up and you are your own boss and not accountable to anyone else.

The disadvantage of being on your own is that the growth of the business is limited by your financial capacities. Also, since we all have the same twenty-four (24) hours in a day the deals you can work on are likewise limited to how you can effectively manage your time. The demands on the owner’s personal time is so much more demanding.

But, I want you to consider the possibility of entering into a partnership with fellow licensed real estate service practitioners. Because of RESA, we can now choose to enter into general professional partnerships with our fellow licensed real estate service practitioners and register the same with the Securities and Exchange Commission (SEC). It is the same with that of accounting, engineering and law firms.

Setting up a partnership is also quite easy. You can have more resources – time and financials – depending on how many partners agree to join the partnership. If you choose this form then you must learn the Law on Partnerships under the New Civil Code of the Philippines.

The main disadvantage of a partnership is that a rift between any of the partners may cause the dissolution of the partnership. Another disadvantage is the equal profit sharing despite unequal attention and time given by the partners to the business of the partnership.

The last form of business licensed real estate service practitioners may choose as their vehicle for business is a corporation. If the service that will be provided by the group is more than the usual brokerage or if the professionals would want maximum potential for business growth in the chosen market segment then a corporation may be the best form of business.

In a corporation, you need at least five (5) individuals to form one. The good thing is that the liability of each stockholder is limited to his share in the capital, unlike that of a partnership and most especially that of a single proprietorship.

Furthermore, petty quarrels or differences will not dissolve the corporation unlike that of a partnership. There is an increased chance that the group can all help together to consummate more transactions compared to a single proprietorship and partnership.

Finally, it can be said that a corporation provides a better tax shelter for individuals in comparison to sole proprietorship and partnerships.

However, the process of setting up a corporation is more tedious than the first two business forms we discussed above. Also, earnings from a particular transaction may not be immediately “cashed in” by the stockholders. They need to undergo another tedious process of declaring a cash dividend. For that, a lawyer must be consulted to prepare the necessary documents.

So, whatever particular form of business you choose to practice our profession one thing is certain, the level and quality of service we provide will be the ultimate barometer of success.

For further tips on the choosing the appropriate business type you can read the book of Steve Marr, the Author of “Roadmap to Success: Building Your Business God’s Way.”

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Posted by Atty. Jojo on January 24, 2012

What’s in a name? That which we call a rose by any other name would smell as sweet.

 – William Shakespeare

By Ernesto C. Perez II

If real estate brokerage is your passion then what is the next step on how to register your real estate business? You got to determine the name of your business.

You have to be more deliberate and circumspect when it comes to choosing a business name. Ian Gordon – the Startupdaddy – has this to say about choosing a name for your business:

“While you don’t have to factor in things like people in your past that had that name, in-laws, and what will happen to your business on the playground, with your child, once you decide that you like the name, you’re done. Not so with your business.

“With a business you need to go much further. You need to find out if there are other businesses with that name, and if so, if they are in your industry. Is the trademark available? Is the domain name available? Does it mean the same thing to others as it does to you? The list goes on.”

In short, Mr. Gordon says to choose a name with meaning. But he adds that you want to avoid anything too generic. You need to strike a balance between creative and descriptive, so when people hear the name, they remember it and they have at least a vague idea about what you do.

It is so easy to name your business using your name or the initials of your name. There is nothing striking with “Juan Dela Cruz Realty Brokerage” or “JDC Realty & Marketing Enterprise.”

Hence, I do suggest that you be more creative. You have to think of a name that will stand out to your clients but at the same time means something to you as well as what the business does.

Take the example of the business name “realttorney.” It is a marriage of two professions – licensed real estate broker and lawyer. I am both that is why I came up with such a name.

I think it’s catchy and at the same time descriptive of what I do as well as the service I provide. Moreover, in my opinion, I think it distinguishes me from my fellow licensed real estate brokers who are not lawyers.

Finally, it is very bothersome and also costly to change your business name if you don’t get it right the first time. Once, you register the name you chose with the Department of Trade and Industry (DTI) then there should be no turning back.

I promise you the time you spent on thinking things thoroughly on this step will pay off big dividends in the future as you grow and nurture your business. Try it out.

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The First Step in Starting Your Real Estate Business

Posted by Atty. Jojo on January 19, 2012

“The journey of a thousand miles begins with the first step.”

– Chinese Proverb

By Ernesto C. Perez II

Starting a real estate business is not as easy as it seems. For me, the process of applying for the necessary permits is but a product of a long and tedious process which I will reveal below.

I wrote this article to assist other licensed real estate service professionals and shorten their time in being able to get their business registered at the soonest possible time.

Last August 2011, I went to the Provincial office of the Department of Trade and Industry (DTI) to have my business name registered so that I can have a Certificate of Business Name Registration, which was a requirement for registering with the Municipality of Indang for a Business (Mayor’s) Permit as well as with Bureau of Internal Revenue (BIR).

I thought that as soon as I have that certificate it will be a simple process of submitting documentary requirements to the appropriate government agency. But, I was made wrong. It took a lot of thinking and planning on my before I could register my real estate business with complete confidence.

I chanced upon a document which was published by the DTI in cooperation with the Japan International Cooperation Agency (JICA), entitled “Starting A Small Enterprise.” I got the said document when I was still employed with government in 2005.

When I read it, I learned that prior to registering your business there were SEVEN (7) steps that need to be done first and foremost. I have gone through it and it’s a process that helps a person who doesn’t know yet what business he/she would like to engage in. But for our purposes, all of those reading this will want to know how to set up a real estate business in the Philippines.

But, if you need to go through the Self-Analysis step recommended by the DTI publication, just click the title of the document above.

It goes without saying that prior to starting a business one really needs to set his/her goals so that success or failure can be measured. I also posted an article entitled “Goal Orienting for Real Estate Service Practitioners” previously which tackles goal setting tips for real estate service practitioners.

But before setting lofty and ostentatious goals for the business you are about to start, Ian Gordon suggested that one should define your definite major purpose. In an article he posted last June 15, 2008 in his website ( entitled “Starting A Business: Define Your Definite Major Purpose & Envision Your Desired Outcome” he had this to say, which in mind could be the real first step in starting your real estate business, or whatever business for that matter:

“Before you start doing the things, the tasks, required to start a business, I suggest you spend some time doing some serious thinking and planning. Not just setting specific goals, which is important, but higher plain stuff. The things David Allen call 50,000 feet thoughts – career, purpose, lifestyle.

“There is a very famous book by Napoleon Hill, called Think and Grow Rich. It’s one of those books that most successful people I know have read. In his book, Hill presents his concept of the Definite Major Purpose. It was a challenge to his readers, to ask themselves “in what do I truly believe?” You need to define this, and make sure whatever business you decide to start, is aligned with this purpose. If your business is in some way aligned with your core values, or doing something you truly love, you will have passion in your work. Passion always comes through, and greatly increases your chances for success.

x          x          x

“There are a lot of people who start businesses in a niche because they think it will make them a lot of money. They know nothing about the niche, and have no interest in learning anything about it. This can work, but I highly discourage it, especially for your first, or primary business. LOVE WHAT YOU DO!

x          x          x

“Love what you do, and your passion, your enthusiasm, will come through in your work. People respond to that. So if you are trying to figure out what business you want to start, begin by making a list of things you like to do, and things you know about. You will be surprised how many great business ideas appear on that list.

Once you decide what business you are going to start, envision the outcome you want.  Picture the lifestyle it will bring you.  Imagine what you will do with the money you will earn.  Be as specific as possible.  Don’t think this stuff is important?  Ask any pro athlete or any successful person you know.  This is not only important, it works!  When you picture in your mind, the outcome you want to achieve, you make a connection to the outcome.  It becomes something real, and on a subconcious level, it becomes your reality.  You know you can do it, because it is something you have seen.

In our case, I am assuming that we love brokering. We love go to different places to view the property and get familiarized with its features prior to marketing it. We enjoy the negotiation part, as well as the closing part of the deal. We enjoy dealing the entire process of consummating the deal and receiving our just reward – the professional fee.

However, there may be those licensed real estate brokers who may not feel the same way the majority feel. I suggest that they do some soul searching and determine how they can contribute to the betterment of Philippine society.

You got to have heart. You go to have good or excellent people skills to become an effective broker-entrepreneur. I guess if our core values as a human being are aligned to the business we are engaged in then success will most necessary come. And with success comes a realization that what you are doing is really not work. It is something that you truly enjoy doing – being service to others.

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RA 9904 Can Now Be Fully Implemented

Posted by Atty. Jojo on January 18, 2012

I posted this announcement in my website last October 2011. But, I forgot to post it here.

The HLURB approved last June 24, 2011 the IMPLEMENTING RULES & REGULATIONS of Republic Act No. 9904, otherwise known as the “Magna Carta for Homeowners and Homeowners Association.” For a copy, click on the link above.

To read other articles that I have published recently, kindly go to the REALTTORNEY website.

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