The real estate market has become a silent sea where there are no signs of constant transactions as compared to last year. It is becoming quite difficult for real estate salespeople to achieve their targets of selling units. The pain of realtors is becoming increasingly significant as their businesses are capped at less than half as much as previous years.
Some realtors blame the recent demonetization while others have stated that the government’s reforms were liable for it. Nonetheless, there are some realtors who, instead of blaming the system and the government, are blaming their competitors for adopting unfair and unprofessional business practices. Ultimately, realtors feel suffocated when the government imposes strict reforms in the real estate industry to make it more reliable, professional and transparent.
One such reform known as the Real Estate (Regulation & development) Act alias RERA is gaining popularity. This is the first reform in the Indian real estate industry imposed by the government to infuse transparency and enhance professionalism in the industry. The central government imposed RERA on the 1st of May 2016 and instructed all the states to impose the same as per their land reforms, by the 1st of August 2016; which later was extended to the 1st of May 2017. As of today, half of the states have put the RERA rules into effect and rest are making slow progress.
Considering the RERA rules imposed by the central government, the Act mandates developers to register their projects. Additionally, real estate agents must register themselves under the Real Estate Regulatory Authority and obtain a brokerage license. Along with real estate developers, the Act also makes real estate agents liable for issues faced by buyers, related to the concerned real estate project.
Many real estate agents have asked Apna RERA experts questions such as, “What if the developer fails to comply with the rules and fails to deliver what they promised to the buyers at the time of booking? Will the RERA hold agents responsible for it?”
Another real estate agent asked, “What is the benefit to a real estate agent by registering with the RERA if we will be punished for a problem that we didn’t cause? Will real estate agents become scapegoats?
Well, this is a point of concern, but the looking closely at the matter, our expert found that the answers lie in the questions itself.
According to the RERA, the real estate agents have to provide the correct information related to the respective real estate project; to the buyers. In other words, an agent must not falsely promote the project to close a deal; something often done by many brokers. Instead, he/she should have a broad understanding of the project and should only provide information that is published within the brochure/prospectus or website of the project. If an agent fails to comply with these rules, they will have to pay a fine of up to 5% of the total value of the project or Rs. 10,000 per day depending upon the extent of the misconduct.
The Real Estate Act, 2016 is the first reform by the government, which will take real estate agents under the ambit of a regulatory authority. In order to bring maturity and structure in how real estate business is conducted, the real estate agents must follow a set of prescribed rules; one of the primary purposes of the RERA.
The tagline of a “RERA registered agent” will enhance the trust of buyers, as well as investors which will surely increase the industry’s sales and revenue generation.
With such strict rules to infuse transparency and professionalism in the real estate brokerage business, the RERA will compel the inexperienced, unprofessional and fly-by-night brokers to leave the business or to comply with the institutional framework of RERA. This will make the industry an untenable marketplace for part time operatives and will increase the business of committed real estate agents.
Many times, it has been noticed that in order to get more leads from the broker, the developer provides them the wrong information related to the project. Now, after the implementation of the RERA, the developers will have to upload accurate information and all the documents related to their project on the respective RERA website of their state. Therefore, the agents can now read up on the project details, which will entail them to gain a thorough understanding of the project, thus preventing the spreading of false information to buyers . Moreover, the buyers can crosscheck the authenticity of the information they have received from the agent by looking it up on the official RERA website. Lastly, using the RERA website, an agent can learn about other brokers involved in the sales of the project.
It is for sure, that soon there will be no place for those real estate agents who don’t adhere to the rules of the RERA. Those who are fully into this business and follow the prescribed rules will not be treated as scapegoats instead, the RERA will provide a shield and they will only gain from good business practices.
Click here to know about the RERA rules for various states.
The Real Estate (Regulation & Development Act) popularly known as RERA came into effect on 1st May 2016 after the government of India sought to promote discipline and transparency in the real estate sector of the country.
The government of Uttar Pradesh has notified the UP Real Estate (Regulation & Development) Act (RERA) on 29 October 2016. Counting to regulate the real estate sector in the state
We all have heard a proverb “Tit for Tat” but it seems that this is not true when it comes to the RERA.