RERA Could Strengthen The Role Of A Broker In India
On Quora, a certain question reads, “How many brokers are there in India?”
It is difficult to ascertain feels Pounacha BM who says there are millions of people 'doing real estate' and shares a rough estimate of three to four lakh brokers. Swapnil Pillai points out a competent list of International Property Consultants (IPC) in India and yet another reply to this question was that about five to six per cent of the country's population has been engaged in brokerage in one form or the other. Therefore, we do not know how many brokers are there in India.
While to become a broker in the US one has to be a trained professional with a Broker License, in Dubai, brokers are classified into four distinct categories depending upon their experience, number of transactions and quality, commitment to the rules, corporate social responsibility and even on the grounds whether his firm has a dedicated website. But, in India, many brokers are not trained professional rather they have entered the business because it is profitable or found that they have the right skill sets to successfully convince prospective buyers and sellers. A mediator between the developer firm and the prospective buyer, brokers help the buyer cut time and expense dealing with the many potential buyers or sellers. Hence, they have to be credible, which is still not well-instilled among the buyers as well as the sellers. But,now the Real Estate (Regulatory and Development) Act, 2016, has made provisions that will make the business of brokerage organised and ensure the brokers are credible:
All brokers will now have to be mandatorily registered with the state-level regulatory authorities. How does this help? This ensures that a broker is bound to follow a set of rules and this will make buyers/sellers rely on the professionalism of the broker. It will bring about transparency in the market which is otherwise is known to be unorganised.
More security and clarity
The law also establishes that the role of a broker is that of a facilitator only. Hence, he will have only that much information about the timelines of the project construction as is put out in public or agreed upon by the buyer and seller. However, there are rules that will bind the developer to stick to the timelines. In the past, many brokers have had a bad experience when their clients settle on a developer and the developer failed to keep up to the timelines or when developers have kept finances hanging and it was rolled out only when a prospective buyer had paid a certain percentage of property's cost. The law would ensure that there is an authority that is above the developers that will be a protector of consumer rights and hence, the broker can make reasonable commitments to a buyer.
A cleaner collar
As a broker, one may have had to run around for every bit of information that was not easily available, to impress a potential buyer. So invariably, a broker had to run around to ascertain that what has been advertised is true. It also required him to predict the timelines on the basis of a developer's past record. The real estate law makes these things simpler. If a developer does not stick to his timelines, he will have to compensate the buyer and that in itself is a guarantee. Moreover, about the developer and the project's credibility will have to be clearly in the face of the status of the approvals.
Pitch only what sells
The real estate slump can be traced back to reasons such as lack of consumer's confidence in the market. Many were fence sitters for a long time, waiting either for a price correction or lowered home loan interest rates. At such a time, issues such as the legality of the project, the list of approvals and the scope of returns on investment played a big role in decision making.
The law makes sure that brokers can sell only properties that have been registered with the authority. They need to maintain their books of accounts and are answerable. If the broker is picking up properties from within the registered pool of units, he can be sure that these will move in the market because they have the stamp of a regulatory authority.
In order to give no leeway for loopholes, a dissenter in this regard also runs a risk of losing his 'license' to practice.