Real estate agents play a key role in the marketing of any project, acting as a bridge between the developers and the buyers. These agents are now required to comply with the guidelines of RERA – an Act introduced by the government in 2017 to bring transparency in the market. Let’s find out how this Act has impacted the property agents.
Why was RERA Introduced?
Indian real estate market was mostly an unregulated market until the Real Estate Regulation Authority (RERA) was introduced in May 2017. With the introduction of RERA, all the brokers and builders are required to register themselves with their state authorities, meaning they have to work within a framework of guidelines and rules. The Act was introduced with the aim of bringing transparency to the property market while protecting the interests of the buyers.
How RERA Affects Real Estate Agents
Here are some of the main impacts of this Act on the property agents:
1. Only registered agents can deal in registered properties
RERA has made it mandatory for all property agents to get a brokerage license from their respective state governments in order to deal in any real estate transaction. This means any broker who is not registered with RERA is no longer allowed to deal in a registered property. Also, the registration is not valid for lifetime; agents will have to keep renewing it as required by the Act.
2. Penalty for non-registration
The Act states that any unregistered broker, if found dealing in a registered property, will have to pay a penalty of Rs 10,000 per day for the entire period during which such default continues or a penalty of upto 5% of the value of the deal.
3. Maintaining books of records is now compulsory
The Act requires all the real estate brokers to create and maintain books of accounts, documents, and records as per the country’s Income Tax Act. Furthermore, such accounts must be maintained for every single real estate project that the broker deals in.
4. Registration number be displayed appropriately
RERA requires all the Agents to display their registration number at their place of business at all times. In addition, if they advertise or market any project, the advertisement should also carry their registration number.
5. No more false advertisements
The Act stresses on the need to maintain transparency in the dealings with buyers. Brokers, as well as builders, cannot promote or market a project that’s not in compliance with RERA. Any entity found mis-selling will be penalized.