The Real Estate (Regulation & Development) Act, 2016 (RERA), which came into force on Monday, is set to make brokers more accountable towards homebuyers.
Brokers play an important role in real estate transactions but they have never been under the ambit of a regulatory authority. According to analysts, the Act will certainly bring professionalism in real estate broking.
Here’s how RERA will impact real estate brokers:
Accountability And Standards
Earlier, brokers could not assure that developers will stick to the timelines promised at the time of selling a property. But now, like developers, they will have to register with the state-level real estate regulatory authority. This will make them accountable for their commitments.
“Under RERA, all real estate brokers will have to obtain a brokerage licence from state governments. After taking that licence, they will have to undergo certain courses to become a certified broker. And to maintain that licence, every year they will have to undergo such courses,” said Nishant Singhal, promoter and director (strategy), Investors Clinic.
In case a broker does not meet commitments, it is now a punishable offence.
Brokers in the unorganised space will also have to get a licence or they will go out of the market. This will help real estate broking business become more mature and evolved like in the developed countries.Nishant Singhal, Promoter & Director (Strategy), Investors Clinic
Central Advisory Council
The Act also calls for forming a Central Advisory Council that will help the government understand issues of the real estate sector. Real estate agents have also been included in this council, which will help them organise official groups to represent their view. It will also help them build a better reputation among builders and homebuyers.
Code Of Conduct
The regulator has made it mandatory to set up a code of conduct for agents. They will have to make all their transactions official, which will cut down unfair trade practices.
If a real-estate broker is marketing a project, the agent has to declare that information. If the promoter has not registered the project in compliance with all necessary regulations, real estate agents would not be allowed to facilitate such transactions. The real estate regulator has the right to reject the application of an agent for registration.
“Brokers should do a diligence about the information of the project they are working on,” said Neeraj Bansal, head of real estate and construction at KPMG. “Any information they are printing or publishing should be RERA-compliant. They should ensure that whatever they are saying to the customer is not false.”
Since the developer has to file the status of various approvals and information on the status of a piece of land on which housing units are coming up, brokers will also know these details. This will help them avoid making false claims to the buyer.