Is RERA Bad News For Brokers?
With all its clauses, conditions and penalties, the real estate law aims to set things right in the property market. In a way, every unstructured seller and facilitator is sure to lose out. However, for genuine real estate sale-purchase brokers, the Real Estate Regulatory Authority (RERA) is not bad news at all. Let's see why you would need a broker in the present scenario more than ever before:
It is not very easy to deal with the variety
Without a doubt, the real estate law would ensure that every prospective homebuyer has access to structured sellers and their projects. However, the world of real estate is vast and guidance of an expert would be needed more than ever. You need someone to walk you through the entire process. Reading through piles of deal-related papers is not easy. Like they say, two heads are better than one.
Genuine brokers at your disposal promise better service
All real estate advisors will now have to register themselves with state regulatory bodies, and will be held responsible for all their dealings. Therefore, a home buyer can now be at peace regarding the authenticity of these brokers. Do ask your agent to provide his registration number –which would generally be valid for a limited period--before you proceed with the deal. For instance, in Maharashtra, the validity is this registration number would be for five years.
The Maharashtra Real Estate Regulatory body clearly states: “Where any real estate agent who has been granted registration certificate number commits breach of any terms and conditions specified under these rules or regulations made there under, or where the authority is satisfied that such registration has been secured by the real estate agent through misrepresentation or fraud, the authority may, without prejudice to any other provisions under the Act, either suo-motu or on an application or complaint from the promoter or allottee or revoke the registration or suspend the same for such period as the Authority thinks fit and inform all the promoters.”
Learning from other countries
By 2006, there were about 2.5 million licensed brokers in the United States. This led to a lot of research and debate about the need to give proper training to these brokers. All 50 states of the country and the District of Columbia require real estate brokers and salespersons to be licensed. All state licensure laws include requirements and proscriptions concerning the business practices of licensees. Requirements in most states include disclosure of important information about price, services, and representation.
Ireland, too, has a Property Services Regulatory Authority or PSRA. In the United Arab Emirates, the respective authority provides transparency and backs with a legal framework. Dubai, too, has managed to come up with an online authority for all stakeholders – investors, promoters, auctioneers, buyers, banks, law firms and insurance companies. This authority manages licensing and media circulations, researches and studies regarding updates and amendments as well. We have enough and more reason to learn from countries who have championed the cause of real estate.
Small brokers just need to tweak their style
The assumption that organised brokers while thrive small players will have a hard time under the new regime is ill-founded. All genuine brokers would need to work on their visibility. Going online is the only way out for any structured facilitator.
Recently, a report by Internet and Mobile Association of India and market research company IMRB International declared that the number of internet users in India may reach 465 million by June 2017. Small brokers, working independently, should step into the game and provide a platform for active real estate buyers across the country.
The role has just got bigger
Under the real estate law, an advisor's role has become even more significant.
- Every registered real estate agent will have to maintain and preserve books of accounts, records and documents as he may be required in accordance with the provisions of the Income Tax Act, 1961, or the Companies Act, 2013.
- If a developer is misleading and the same is not backed by the broker, he, too, will be penalised.
- A broker will be responsible for all trade practices- in speech, writing or visible representation.
- He will also be responsible for the quality or standard he assures homebuyers of.
- Facilitate possession of all information/documents at the time of booking.