Taming the White Elephant !

Realtors or channel partners are the medium between a buyer and a developer and play an important role in the marketing of any project. The Real Estate Regulation Authority (RERA), not only brings within its ambit the developers, but also includes brokerage firms and real estate agents as well.

Over the past few weeks, there has been confusion among many on whether it is permissible to sell or purchase property until it is registered with RERA, as a large majority of transactions in the country are for properties under-construction with an occupation certificate or approvals awaited.

RERA has given a 90 day window that is until July 31, to all ongoing projects to complete the registration formalities. However, Brokers need to register themselves immediately and only then continue to market the project in hand. For the purpose of educating the broker community, leading industry players are launching initiatives such as helplines and registration desks, with the objective of empowering the community with the required knowledge. With only a limited window available, these initiatives are being welcomed and are much appreciated by the broker community.

The code of conduct for Agents by the regulator is expected to bring in accountability and prevent unfair practices and also ensure that only registered brokers are able to carry out their businesses. The broker community therefore, will now have a much larger and responsible role to perform because under RERA, they are expected to inform the buyer if the project is RERA compliant or not. They will not be allowed to facilitate transactions for non-RERA compliant properties. Brokers will also be required to maintain all the records and documents of all real-estate projects and developers they work with.

In a bid to ensure transparency and transform the sector from an age old unorganised business into an organised model, this move by the government is a much welcomed initiative. Anyone, be it a broker or a developer, who cannot comply with the Real Estate Act, will be held accountable for their own actions. Those who do not follow the Act, can face mild to severe penalties depending on the rules and responsibilities. These measures may seem harsh, but they are expected to bring in a more transparent outlook towards the business of Real Estate in India.

On the other hand, to address the concerns of the brokers and hear their points of view, the Act also calls for forming of a Central Advisory Council that will help the government understand issues of the real-estate sector including property brokers. At the moment, the Act is confined to the best interest of a consumer, however it is necessary for the Authorities to also consider the benefits for the intermediaries such as the broker community. With higher penalty and lower income, a broker is confined and limited in their business decisions. A broker or any business, requires to feel protected and therefore, the community is in process of sharing constructive feedback with the Government in order to avail better benefits.

With the advent of RERA, it is evident that the real estate market is consolidating itself and every agent, broker or developer has their own role to play within the RERA regime. Until now, real-estate brokers were only considered the facilitators who brought together the buyers and the seller, but with the changing rules and regulations, Brokers will now have a larger and more responsible role in the industry. With many businesses intending to work together and many agents / brokers joining hands to form an association or a self-regulatory governing body, one can already see and feel the winds of change in the broking industry.

I am therefore convinced that the implementation of the Real-estate (Regulation and Development) Act 2016 is in fact a win-win situation for all stakeholder s in the real estate industry.

Thanks to ET