The second largest job provider, Real Estate in India, is expected to boom further, about 30% in the next decade. While the real estate sector isn’t something new that had gained the attention, it is only now that that India seeks to put the much needed regulatory mechanisms. The introduction of RERA or Real Estate Regulatory Act has been a much welcome move from the government and buyers can now be more at peace with their investments.

RERA also levies some fundamental changes to the role and responsibilities of a real estate agent/broker. Covered under Sections 9 and 10 of the Act, it offers real estate agent a formal and legal recognition, while defining their responsibilities, duties, power in the property buying/selling process. According to the provisions of RERA, every real estate agent/broker needs to register himself/herself to be a part of any kind of transaction.

In India, the property broker segment is believed to be a US$ 4 billion industry, with more than 9,00,000 brokers/agents. Traditionally, and until May 1st, 2017, there was however nothing that registered their job/business profile. However, a lot many issues with brokerage are still left unaddressed. If one goes on through the RERA Act, it looks like the regulations licensing is only limited to agents associated with promoters or are a part of the sale process for new projects. To sum it up, the scope of RERA for real estate agents needs to be widened, especially with respect to rent, lease and resale transactions.

How does RERA impact real estate brokers?

Brokers and real estate agents have always played an important role in property transactions. However, they have never been under regulatory provisions until RERA came into effect. Here’s how the Act changes things:

• Standards and Accountability: Brokers in the past have always been seen to miss their timelines. They had no way to assure that the transactions will be done according to strict deadlines. Now, that brokers will have to register themselves with state-level regulatory authorities, they also will become accountable to their commitments. RERA demands that brokers get certified and licensed and this requires participating in state-organized courses. Also, to be able to hold on to the license, brokers will need to regularly update themselves with such trainings. It has become a punishable offense if registered brokers fail on their commitments.

• Code of Conduct: RERA makes it mandatory to set up a code of conduct from brokers. All transactions need to be made official and their count is no more on word of mouth promises. This will help cut down unfair trade practices.

• Central Advisory Council: A Central Advisory Council set up under the provisions of the Act will help the Government understand the work process and the issues concerning the sector. Several real estate agents too have been inducted into the group to represent their views. These, the government hopes will help reinstate the trust of homebuilders.

• Transparency: Along with the developers filing the details of approvals and other information on every piece of plot/property, brokers also get to know the details. This will ensure that they don’t make false claims based on wrong information.

• Customer-centric behavior: Anytime and every time that a real estate broker markets a project, he/she will also have to declare the complete information. In case the promoters involved aren’t registered, registered real estate brokers will not be able to facilitate the transactions. Also, the real estate regulator has all the right to reject the application for registration of an agent. This ensures that any information agents declare are RERA complaint and nothing that has been communicated to the customer is false.

However, a lot is still left unsaid and unaddressed by the act. It is also necessary for the regulator to understand that a broker is a mere facilitator in the process and pegging too many regulations would both be counterproductive and unfair. The act should also specifically address deals that happen between states or between multiple parties. Just a registration fee isn’t enough if we are trying to regulate the multi dimensional real estate businesses and transactions that exist in the Indian market.