RERA & Broking
Real-estate brokers play an important role in real estate market. The buyer trusts them to guide him in getting the right property for the best price in a professional and a transparent manner. This is not much to ask for, but more often than not the brokers fail on all accounts.
Real-estate broking sector till now was an unorganized segment that required no qualification, training or licensing for the brokers. Many a times the brokers are paid high commissions to sell flawed projects by the developers. The unorganized brokers taking advantage of the ignorance of clients, would sell them the same and then disappear.
“The real-estate agent upon being engaged by the promoter under clause (f) of sub-section (2) of section 4 for a real estate project shall maintain and preserve books of accounts, records and documents separately for each such real-estate project.”
Now with such a provision in RERA, mandatory registration to do business and strict penalties ensures that brokers will not be able to promote inferior properties or misguide property buyers in buying property from a developer with a dubious track record.
With RERA coming in, brokers are bound to maintain their commitment to the client and be accountable for their promises and obligations or else be heavily punished for violating the commitments.
Some feel that the penalties prescribed in RERA are harsh as brokers cannot be held responsible for changes a developer makes in his projects. But, it is the duty of the broker to mindful of any alterations in the project and update & advise his client accordingly.
Trust is the Foundation
Buying or selling a home is a major financial and emotional decision. The buyer does not have access to as many properties on sale or purchase which a broker would have. Many people depend on the broker to give information of specific project, locality or city. They also trust them to transparently and professionally negotiate on their behalf for the best price. Buying-Selling agreements too are tough to handle for property buyers and they look upon the broker to direct them to manage the same as well as deal with the proper authorities for any compliances and registrations.
Given the faith a customer puts in his broker, it makes his role central to any property transaction. A breach of trust on his part, more than the financial setback is a serious emotional pain for the buyer or seller. Therefore an accreditation will enable client to make an informed choice as well as have recourse to take action in case of default or fraud by the broker.
The broker acts as a liaison between buyers and sellers and that makes his position also precarious and subject to exploitation by the client. There have been instances where clients have either paid minimal, not paid brokerage or delayed payments. With due processes in place, such unfair practices can be addressed.
RERA will definitely bring a lot of positivity in the brokerage segment ensuring only the organized and registered brokers are able to practice. The move will also bring respectability to the profession, the trained manpower and attract young talent.
Real-estate agent body NAR-India predicts that around 75% of total brokers may close down business in the next three years as regulatory reform sweeps over the real-estate market. Similarly, CREDAI also anticipates that almost 50% of local property agents may not exist as the sector becomes more competitive.