Earlier this year, the Real Estate (Regulation & Development) Act, 2016 came into force to revolutionise the Indian real estate sector. The act targets all the problems of the sector in different ways and has many provisions to tackle every problem separately and effectively. Considering that unlawful and fraudulent brokers are one of the major issues that have crippled real estate in India, it is no surprise that RERA has brought in regulations for them to follow.
The Real Estate Regulatory Authority (RERA) wants to bring uniformity and transparency in all real estate dealings, including any action taken by brokers. This will increase the credibility of operations and help to abolish the illegal activities that have plagued this sector for several decades. The ways in which RERA will impact brokers and their activities in India are:
1. Mandatory Registration: This is the clear first step that is necessary to regulate the operations of brokers in the real estate sector. All real estate brokers are now supposed to obtain a brokerage license from state governments by registering themselves. There is a hefty penalty of ₹10,000 a day for an unregistered broker who is involved in a registered project. Due to this rule, brokers who operate in an unorganised manner and space will have to function legitimately or be driven out of the market.
2. Accountability: At every stage of different real estate transactions, RERA has brought in simple procedures to facilitate all parties. Right from registration to maintaining a book of records, a broker has to comply with all rules to legally be a part of the real estate sector. As buyers and customers become aware of these stipulations, they can ensure that they only transact with legal brokers.
3. Legal protection against fraudulent practices: Due to the stipulations of RERA, customers in the real estate sector are now protected from fraudulent practices. They can get their grievances addressed quickly. This fear of being reported will ensure that brokers do not manipulate deals or misinform clients for their benefit.
4. Only associated with registered projects: Till now, brokers were known for being notorious and revealing only the information necessary and getting their customers into illegal real estate transactions. However, real estate agents are not allowed to be involved in unregistered projects. They cannot mislead the consumer or give them false information.
With these new systems of the real estate regulatory act in place, the government is hoping that unlawful and corrupt agents will be filtered out of the market. The multi-faceted approach of the government towards regulating real estate just might work and turn around the functioning of this sector.