This year, the market for real estate has got completely silent showing no signs of continuous transactions as was the case last year. Nowadays, it has become almost impossible for the sales individuals in the field of real estate to meet their targets of selling properties. The problems that the developers and realtors are facing are getting significant with their businesses capped at less than half of what they capped in the previous years.
Why are the realtors going through this situation?
The demonetization that has taken place recently is being blamed by many realtors for the positions they are in at the present times while there are other realtors blaming the reforms of the government for their present condition. Nevertheless, there are even some realtors who are not blaming the government and the system but their competitors for using unprofessional and unfair business practices. Finally, realtors tend to feel suffocated when the government comes up with stringent reforms in the industry for real estate in order to make it more professional, transparent and reliable.
One of the most popular government reforms of the modern times is RERA or Real Estate (Regulation and Development) Act. This is a one-of- its-kind reform in the real estate industry of India enforced by the Central Government of India for enhancing professionalism and infusing transparency in the real estate industry of India. RERA was imposed by the Central Government of India on 1st May, 2016 instructing all the Indian states to enforce the same as per their individual land reforms within 1st August, 2016. This deadline was further extended to May 1, 2017. However, as of now, there are many states that have imposed RERA rules while the others are making good progress in this field.
Taking into account the RERA rules enforced by the Central Government of India, this Act makes it mandatory for developers to register upcoming and under construction real estate development projects. In addition to this, it is also mandatory for the real estate agents to register themselves under Real estate regulatory Authority and get a brokerage license. Besides the property developers, the Act makes even the real estate agents responsible for different problems faced by the buyers in relation to concerned property development projects.
There are a large number of real estate agents that have asked several questions to the RERA consultants like “What are the consequences of failing to comply with RERA rules and not being able to deliver as per promises made to the buy4ers during the bookings? Will the agents be held responsible for this? There was this another real estate agent who asked, “What is the advantage of being registered with RERA when we know that we will be punished for an issue that we are not responsible for? Will the real estate agents become scapegoats?
This is one of the most important points to be pondered on. By having a close look at this matter, our professionals came to the conclusion that the answers were available in the questions itself.
As per RERA, real estate agents need to present proper and right information in relation to respective real estate assignments to the interested buyers. To be explained in other words, it is important for an estate agent to refrain from promoting a real estate development project falsely for closing the deal. This is something that is generally done by the brokers. What the real estate agents need to do is they should try and have a clear understanding of the development project. This way they will be providing relevant information about the project, information that is properly published in the prospectus, website or brochure of the development project. These are the rules that real estate agents need to comply with and if, in any circumstances, an agent fails to comply with these rules, he or she will have to make a payment of around 5% of the total project value or Rs. 10, 000 per day as fine depending on the level of the misdemeanor.
How RERA has an Impact on Real Estate Agents?
RERA or Real Estate Act is one of the first government reforms in India which will be taking the real estate agents under the domain of a certain regulatory authority. It is necessary for the real estate agents to follow an outline of prescribed rules for bringing structure and maturity in the method in which the business of real estate is conducted in India. This is one of the most important purposes served by RERA.
The tagline saying "RERA registered agent" shall enhance the trust of the buyers along with the investors. This will further help in increasing in the sales and the revenue generation of the real estate industry.
Complete Filtration of Unprofessional and Inexperienced brokers
With the strict RERA rules in place for infusing professionalism and transparency in the business of real estate brokerage, RERA will force the fly-by-night, unprofessional and inexperienced brokers to immediately leave this business or comply with RERA’s institutional structure. This is turn will help the industry in becoming an indefensible marketplace for the part time operatives which will further increase the business of the dedicated and sincere real estate agents.
Proper Transparency with Developers
Most of the times, it has been found that the developers provide the brokers with wrong information about a development project in order to get increased leads from them. However, post RERA implementation, it has become mandatory for the developers to upload appropriate information along with all related project documents on the respective RERA websites of their states. Thus, it has now become easier for the agents to go through the details of the projects entailing them to get a clear understanding of a certain project. This will help in preventing the spread of false and fake information among the buyers. Furthermore, buyers have the flexibility of crosschecking the authenticity and the reliability of the information that they get from the agents. They can do this by having a close look on the official website of RERA. Finally, by making the effective use of the RERA website, agents can know more about the brokers that they are working with on the sales of a development project.
So, it can rightly be said that with the RERA rules in place, soon there would be no room left to operate for the real estate agents who do not work while adhering to the RERA rules. So, the ones into this business and the ones following the prescribed RERA rules shall not be treated as scapegoats. Instead, RERA will give them a shield that they will only receive through improved business practices.