News Analysis

How RERA registration of agents is important to home buyers?

Bavadharini KS BL Research Bureau | Updated on November 26, 2019 Published on November 26, 2019

 

Five years ago, the purchase of a house property through agents or brokers would have you back-off from a deal due to their unprofessionalism. But this is not going to be the case any more.

With the implementation of Real Estate (Regulation and Development) Act (RERA), registration has been made mandatory for real estate agents/brokers, thereby protecting the interest of the buyers and sellers from unscrupulous brokers/agents.

Here is how RERA registration helps:

Benefits due to registration

To boost the confidence among home buyers and to assist them in the purchase of suitable property, real estate agents are often the first point of contact.

About 40 to 65 per cent of residential property sales in India is through agents or brokers. Agents/brokers, here, are those who arrange property transactions between buyers and sellers by acting as their representatives to negotiate deals. However, in India, real estate broking or agency doesn’t require specific qualifications or experience. But, now, with RERA registration made compulsory, one can expect to see professional conduct from both individual agents and companies.

Ritesh Mehta, Senior Director & Head, West India, Residential Services, Developer Initiatives India, JLL says, “Mandatory registration is set to address existing issues that buyers and sellers have with agents in terms of accountability, transparency, proper communications and other information related to a property.”

With RERA, now it has become compulsory for an agent who wants to continue with his/her business operations to register with the respective State RERA and obtain license to practice. The Act also binds an agent in dealing only with RERA registered properties. Such agents should also maintain books of accounts and documents related to business operations and client dealings.

As of November 15, 2019, there are 36,823 agents registered with RERA across the country. The number is increasing with a rise in awareness among agents, developers and buyers.

If an agent fails to register under RERA, he/she is liable to pay penalty (to the authority) of Rs 10,000 per day during which the default continues. This penalty may cumulatively extend up to 5 per cent of the cost of the property or plot, apartment or buildings for which sale/purchase has been facilitated.

In case of continuous failure to comply with the orders, agents/brokers would be punished with imprisonment up to one year, or will be fined every day during which default continues, which may cumulatively extend up to 10 per cent of estimated cost of the property as determined by the authority or both.

While RERA doesn’t specify any qualification requirements for agents, related courses could be designed by education board of the States and mandated by authority for people looking to develop their career in this field to stay competitive and relevant.

How it helps home buyers?

With RERA in place, home buyers can now have recourse in case of any unethical practices from agents or brokers. You can verify the agent’s registration or validity of licence. This should usually be displayed at the brokers/agents’ work place as well as in the documents and advertisements.

You can also check in the respective State RERA’s website which would provide the necessary details about agents. For instance, if you check Maharashtra RERA’s website for say Estatemint, a real estate consultant in Pune, you will get details such as address, past experiences along with projects handled, contact number, website details (if available), area of operations, branch details, registration number and the validity of the same. This gives an assurance of authenticity of such agents.

Published on November 26, 2019
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