Puerto Rico House Bill 3705, known as the Real Estate Regulatory Law, has 39 distinct articles covering all aspects of real estate. The legislation would revoke Law 10 of April 26, 1994, or the P.R. Real Estate Brokers & Agents Board Law, and regulate the industry, providing increased consumer protections.
Last week, Law 261 of 2011 was approved, which amends Article 4 of Law 10. The article defines the composition of the real-estate board of directors. The biggest change places limits on the board member designated to represent consumer interests. This member is expected to have some knowledge of real estate; however, the board member can’t have any type of real-estate license or engage in the practice.
Previously, an individual could be appointed to this position and subsequently obtain a real-estate license. With the new law, merely receiving a license would immediately disqualify the individual from serving on the board, who must resign or be relieved of duties.
In addition, Article 4 prohibits any board member from engaging in any real-estate education programs for one year after being on the board. This limitation includes courses for new aspirants to the real-estate profession and continuing education for licensed real-estate professionals.
The House held hearings Feb. 8 on the legislation, with three proposals defining how the new real-estate board should be structured. The first proposal, as reported by CARIBBEAN BUSINESS (Dec. 15, 2011), would revoke the current law and place the real-estate board under the Department of Consumer Affairs (DACO by its Spanish acronym). A second proposal would establish the real-estate board as completely independent from the State Department and DACO. The third proposal would maintain the real-estate board as it currently is, under the control of the State Department.
“I strongly support the approval of a new real-estate law so the Puerto Rico government can regulate those who illegally engage in local real-estate transactions, address consumers’ problems with real-estate transactions and deal with the real-estate board’s internal problems, which are affecting consumers,” stated Michelle Maloy, author of “My Bilingual Real Estate.” “I would also like to see an end to the ongoing discrimination toward non- Hispanics by the real-estate examining board.”
Many proponents of an overhaul of the real-estate board back up their position by pointing to the board’s nebulous finances. In fiscal years 1999 to 2009, the board collected $7.4 million from exam fees, license applications and renewals, and other fees. It is unclear how and where this money was spent, and professionals in the industry recommend an investigation into the use of these funds.