After the implementation of the Real Estate Regulatory Act (RERA) form 1st May, 2017, most of the real estate brokers and agents seem to be anxious about their business. The new laws and rules in RERA declare heavy penalty for those real estate agents who are at default. Brokers are worried that even when they have nothing to do with the possessions getting delayed or even in the standard of the project, they will still have to pay penalties with no mistake.
As per the Act, all real estate agents who are involved in duping the homebuyers by deceivingly showing some kind or service of quality which doesn’t even exist, will be liable to pay Rs.10,000 every day till the default is there. The penalty can even extend to as much as 5% of the total cost of the apartment concerned.
When a deal is sealed, the margin of the brokers is usually 1-2% of the total value of the property. A penalty of 5% will cause heavy loss for them, specifically for the agents who work on a small scale. It can be difficult for them to recover from these penalties without it even intentional on their part.
The real estate agents don’t have any say over the quality and the time at which the developer hands over the possession. Therefore, if a developer shows a delay, the concerned agent will have to suffer in-essentially.
Another part of the worry lies with the small brokers where they are facing the pre-requisite of abiding and registration by 1st July. A proper formation of regulatory body has not been done yet and there is no clarity of the implementation of rules. Even after the formation of the body, the registration formalities will take time and this is more likely to impact the business for at least 3 months.
However, the good part is that despite the disadvantages faced by the real estate agents, they have accepted the new law thinking that it will regulate the real estate market properly.