Compliance of broker under Real Estate Regulation Act, 2017

The Real Estate (Regulation and Development) Act, 2016[1] came into force on 1stMay 2016 with 59 of 92 sections and rest of the provisions came into force on 1stMay 2017, under this Act state can enforce their state law within the light of the central act.

The purpose to enforce this act by the parliament is to regulate the Real Estate sector which was earlier totally unaccountable and uncontrolled by the government of India. With the enactment of this act now the unorganized sector is now organized according to the laws and regulations which are enforced in the territory of India.

Considerable legal compliances are enforced for the key components of the real estate sector i.e. Promoter, Agents at last the home buyers. The main component for whose this act has been enforced is to safeguard the interest of home buyers.

The purpose of the research is to make the readers aware about the legal compliance enforced on a real estate broker with the enforcement of The RERA,2016.

Introduction
The Government of India recently introduced The RERA, 2016 which is been welcomed by all the discouraged consumers or home buyers whose money is been struck in real estate projects for many years and they not have a hope handing over the possession of the project or the date of completion of the project.

The real estate sector is the major contributor in the growth of the nation it contributes 8.53% in total GDP of the nation. Major performance of the industry with the major rights and liabilities involved in the transactions has made or able to made governments attention for appropriate regulations and policy of the real estate sector. This lead to deep-seated legal renovation in the practice of Real Estate (Regulation and Development) Act, 2016.

This act also bring changes under the regulations and compliance of the promoter and the brokers the key components which force the Government of India to take a good step for enforcement of the act and restrict them to take benefits of the innocent home buyer.

Under this research division of the article made into three parts first it talks about thebroker, second part talks about compliance of broker under RERA and last part talks about rationale of research.

Who is Real Estate Broker?

A real estate agent is person who is given a license to negotiate sell and arrange real estate projects. Negotiation can lead to showing property to interested buyers; listing property under the individual is working upon, filling the contracts and listing agreements of the property or project whose sale is been initiated or the interested person is ready to purchase. Real estate broker are licensed by clearing the exam of the broker organised by the particular state government[2].

Real estate agents are working across the globe for the purpose and requirement of buying and selling homes and property this process will always be there for ever and will be continued for ever, it is worthy industry if you are honest and trustworthy or devoted to their client[3].Real Estate Agent has been defined in Section 2(zm)of RERA,2016.[4]

Legal Compliance for Broker under RERA, 2016

Real estate broking is the relaxed business in territory of India as to be a broker there is no need of any specific stipulation or knowledge requirement as well as there are no standards of practice which establishes any accountability, clearness or transparency and professional standards. Henceforward to bring further accountability, clearness or transparency, agents have now been covered under the scope of RERA,2016 and a mandatory requirement of registration is set under section 9 of the said Act.

If without procurement of formal registration as prescribed under the Act, no real estate agent should facilitate or ease the sale or purchase or performance done by him or behalf of any being for any plot, apartment or building as the event may be, in any project comes under the ambit of RERA, even sold by the promoter of particular planning area.

Every person under the profession of the real estate broking should make an application to the appropriate authority for the formal registration in prescribed manner, within time, fee mentioned under the schedule and all relevant document as prescribed.

Once the application made to the authority and getting satisfied with all the conditions or pre-requisites within such period of time may prescribe:

  1. Grant a registration to the agent for the entire state or territory of India, as the case may be.
  2. May reject the application for the certain reasons which shall be recorded in wiring, if such application made doesn't follow the provisions of the Act or rules or regulation mention under the Act.

once the period prescribed under the act is completed and the applicant doesn't receive any further message about the paucity of information under the application made by the applicant or any massage for rejection of his application than the application made is presumed to be registered[5].

Each and every broker who got registered as per the mentioned requirements or provisions under this act is granted with a registration number by the appropriate authority and the number issued by the authority should be refer by broker in every purchase or sale transaction facilitated by him[6]under the compliance of this act. The registration identity of the broker is valid for particular period of time as prescribed under the act, once the time is collapsed than the broker need to apply again to appropriate authority for renewal of registration number on payment of prescribed fee with the particular period of time prescribed under the Act[7].

once a registration number is approved to any agent who applied under the Act if done any fraud or breach in any service provided by him are against the rules and regulation of the Act or there might be a situation that if any of the agent is granted registration number and later the authority is satisfied that the registration is taken through the medium of fraud and misrepresentation than the concerned authority can cancel such registration which came under their vision shall be suspended[8].

Further such registration shall not be revoked until and unless a reasonable opportunity to be heard is given to such individual who commits such fraud or misrepresentation[9].

Registration process of Real Estate Broker

Rule 8[10]when read under the light of Section 9 (2)[11]recites that each and every real estate broker is required to get registered by making an application in written form to the appropriate authority established under the Act by attaching Form ‘G' with said application.

Documents for registration[12]:

The registration once made is last for 5 years from the date the registration took place.

Functions of Real Estate Broker

Every broker who has registered themselves under RERA shall facilitate the sale or purchase under their name and with specified registration number. Along with this they have to do some function in accordance or in the light of the benchmark settled by the Act as defined in Section 10 of RERA, 2016[13].

Punishment for non-compliance and non-registration

The real estate broker who has not registered themselves under the Act has be liable to a penalty up-to Rupees ten thousand per day from the day of default, which may be extended up-to 5% of the cost of the project for the sale was facilitated by the broker.

Penalty for non-registration and contravention under sections 9 and 10-If any real estate agent fails to comply with or contravenes the provisions of section 9 or section 10, he shall be liable to a penalty of ten thousand rupees for every day during which such default continues, which may cumulatively extend up to five per cent. of the cost of plot, apartment or buildings, as the case may be, of the real estate project, for which the sale or purchase has been facilitated as determined by the Authority.[14]

The real estate broker who has failed to comply according to the order passed by the authority shall be liable to a penalty every day form the date of default is been committed which may be extended accumulatively up-to 5% of the cost of the project for which the sale was facilitated by the broker.

Penalty for failure to comply with orders of Authority by real estate agent, If any real estate agent, who fails to comply with, or contravenes any of the orders or directions of the Authority, he shall be liable to a penalty for every day during which such default continues, which may cumulatively extend up to five per cent., of the estimated cost of plot, apartment or building, as the case may be, of the real estate project, for which the sale or purchase has been facilitated and as determined by the Authority".[15]

Conclusion
As the real estate market is very emerging market and directly contributes in development of the nation, if the infrastructure of a nation is good and attractive it leads upwards in race to being developed nation. The research discuss about the real estate broker and its compliance and regulation under the RERA Act, 2016 which are made mandatory to practice a profession of broker in nation. If a broker works with good intention and his motive is not only to earn money but also providing better and satisfying services to his service taker than he will not only earn money but good reputation in the market and his service will indirectly will lead India from developing nation to developed nation.

  1. Hereinafter referred asRERA,2016
  2. What do Real Estate Agents Do?, The Balance (2018), https://www.thebalance.com/what-real-estate-agents-do-2866370 (last visited Jan 20, 2018).
  3. Real Estate Agent, Sokanu.com (2018), https://www.sokanu.com/careers/real-estate-agent/ (last visited Jan 20, 2018).
  4. real estate agent means any person, who negotiates or acts on behalf of one person in a transaction of transfer of his plot, apartment or building, as the case may be, in a real estate project, by way of sale, with another person or transfer of plot, apartment or building, as the case may be, of any other person to him and receives remuneration or fees or any other charges for his services whether as commission or otherwise and includes a person who introduces, through any medium, prospective buyers and sellers to each other for negotiation for sale or purchase of plot, apartment or building, as the case may be, and includes property dealers, brokers, middlemen by whatever name called.
  5. Section 9 RERA, 2016
  6. The real estate broker.
  7. The Real Estate (Regulation and Development ) Act, 2016
  8. Section 9 RERA, 2016
  9. Ibid.
  10. National Capital Territory of Delhi Real Estate (Regulation and Development) (General) Rules, 2016
  11. Real Estate ( Regulation and Development) Act,2016
  12. India: Registration of Real Estate Agents Under RERA, (2017), http://www.mondaq.com/india/x/624914/real+estate/Registration+of+Real+Estate+Agents+Under+RERA (last visited Jan 24, 2018).
  13. *
    1. not facilitate the sale or purchase of any plot, apartment or building, as the case may be, in a real estate project or part of it, being sold by the promoter in any planning area, which is not registered with the Authority;
    2. maintain and preserve such books of account, records and documents as may be prescribed;
    3. not involve himself in any unfair trade practices, namely:
      1. the practice of making any statement, whether orally or in writing or by visible representation which
        1. falsely represents that the services are of a particular standard or grade;
        2. represents that the promoter or himself has approval or affiliation which such promoter or himself does not have;
        3. makes a false or misleading representation concerning the services;
        This article has been Awarded Certificate of Excellence for Original Legal Research work by our Panel of Judges

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