RERA & Real Estate Agents

Adhweat Gupta a 5th-year Law Student specializing in Corporate Law at the School of law, Lovely Professional University has written this article ” RERA & Role of Real Estate Agents “

INTRODUCTION

The Indian real estate sector has been plagued by several issues such as a lack of transparency, delays in the delivery of projects, and fraudulent practices. To address these issues, the government introduced the Real Estate (Regulation and Development) Act, 2016 (RERA)[1], which came into effect on May 1, 2017. RERA aims to bring transparency, accountability, and efficiency to the real estate sector. It aims to do so by regulating the activities of developers and real estate agents. The Act has set forth various obligations and responsibilities on real estate agents.

Real estate agents play a crucial role in the real estate sector by acting as intermediaries between developers and home buyers. They assist developers in marketing and selling their projects and help home buyers find suitable properties. Real estate agents can influence the home-buying decision of buyers by providing them with accurate information and guidance. However, there have been instances of unethical practices by real estate agents, which have led to the need for regulations to ensure their accountability.

Under RERA, real estate agents are obligated to register with the regulatory authority and comply with its provisions. The Act mandates real estate agents to disclose all relevant information about the project to the home buyer. As well as maintain records of transactions, and ensure compliance with RERA by the developers they represent. RERA also imposes penalties on real estate agents for non-compliance, which highlights the significance of their role in the sector.

OVERVIEW OF RERA

RERA aims to protect the interests of home buyers by regulating the real estate sector. The Act has mandated the registration of all real estate projects with the regulatory authority and made it compulsory for developers to disclose all relevant information about the project. It includes the timeline for completion, the status of approvals, and the carpet area of the units. RERA has also introduced several provisions to ensure the timely delivery of projects, such as penalties for delays and provisions for the refund of money in case of non-delivery of the unit.

ROLE OF REAL ESTATE AGENTS:

Real estate agents play a critical role by bridging the gap between developers and home buyers. RERA has put forth several obligations on real estate agents, such as mandatory registration with the regulatory authority, maintaining records of transactions, and providing accurate information to home buyers. Real estate agents are also responsible for ensuring compliance with the provisions of RERA by the developers they represent.

Real estate agents are professionals who act as intermediaries between developers and home buyers. They assist developers in marketing and selling their projects and help home buyers find suitable properties. Real estate agents play a crucial role by providing guidance and assistance to both developers and home buyers. Real estate agents act as a bridge between the developer and the home buyer. They provide developers with valuable insights into the market demand and help them price their properties competitively. They also assist developers in marketing their projects to potential buyers, which is essential in a highly competitive real estate market.

On the other hand, real estate agents help home buyers navigate the complex process of home buying. They help buyers find properties that match their requirements, provide them with information about the property and the surrounding areas, and assist them in negotiating the price and completing the legal formalities. Real estate agents also play an important role in ensuring transparency and accountability in the real estate sector. They are obligated to register with the regulatory authority under RERA. Moreover, obligated to disclose all relevant information about the project to the home buyer. They are also required to maintain records of transactions and ensure compliance with RERA by the developers they represent.

Real estate agents are also responsible for providing after-sales services to home buyers. They assist buyers in obtaining necessary approvals and documentation and help them resolve any issues that may arise after the purchase.

RESPONSIBILITIES OF REAL ESTATE AGENTS UNDER RERA

Real estate agents have several responsibilities under RERA, such as:

Registering with RERA:

The Real Estate (Regulation and Development) Act, 2016 (RERA) mandates that all real estate agents must register with the regulatory authority. Real estate agents are required to provide their details, including their name, address, contact details, and registration number.

Disclosing project details:

Real estate agents are responsible for providing accurate information about the project to the home buyer. They must disclose all relevant information about the project. It includes the title of the property, layout, and development plans, land status, approvals, and completion timeline.

Assisting in property selection:

Real estate agents must assist the home buyer in selecting a property that meets their requirements. They must provide the buyer with information about the available properties. In addition, help them compare the features and prices to make an informed decision.[2]

Maintaining records:

Real estate agents must maintain records of all transactions, agreements, and contracts related to the sale of the property. These records must be available for inspection by the regulatory authority.

Assisting in the documentation:

Real estate agents must assist the home buyer in completing the legal formalities related to the purchase of the property. They must ensure that the buyer has all the necessary documents, including the sale deed, possession letter, etc.

Resolving disputes:

Real estate agents must assist in resolving disputes that may arise between the developer and the home buyer. They must facilitate negotiations and mediation to reach an amicable resolution.

CHALLENGES FACED BY REAL ESTATE AGENTS

Real estate agents face several challenges in complying with the provisions of RERA, such as:

Compliance with RERA regulations:

Real estate agents need to comply with the provisions of RERA, which include registration, disclosure of project details, and maintenance records. Compliance can be challenging, especially for smaller real estate agents who may not have the resources to comply with all the regulations.

Managing client expectations:

Real estate agents need to manage the expectations of their clients, which can be challenging, especially when clients have unrealistic expectations. Agents need to balance the expectations of the buyer with the realities of the market to provide accurate advice.

Dealing with the high competition:

The real estate sector is highly competitive, with numerous agents vying for clients. This competition can make it difficult for real estate agents to differentiate themselves and stand out in the market.

Staying updated with the market trends:

Real estate agents need to stay updated with the latest market trends, including property prices, demand, supply, and changes in government regulations. Keeping up with the latest trends can be challenging, especially in a fast-changing market.

Maintaining client relationships:

Maintaining relationships with clients is essential for the success of a real estate agent. However, managing multiple client relationships can be challenging. As agents need to invest time and effort in building and maintaining these relationships.

Real estate agents face several challenges, including compliance with regulations, managing client expectations, dealing with high competition, staying updated with market trends, generating leads, maintaining client relationships, and managing legal issues. Agents need to develop strategies to overcome these challenges and build a successful real estate business.

MEASURES TO OVERCOME CHALLENGES:

To overcome the challenges faced by real estate agents in complying with the provisions of RERA, the following measures can be taken:

Awareness programs:

The government can conduct awareness programs for real estate agents to educate them about the provisions of RERA and the obligations it places on them.

Professionalism and training:

Real estate agents can be encouraged to adopt a more professional approach to their business and undergo training to keep themselves updated with the latest developments in the sector.

Managing client expectations:

Real estate agents can manage client expectations by providing accurate and realistic advice based on market trends and conditions. They can also communicate clearly with clients about the process and timelines involved in property transactions.

Dealing with competition:

Real estate agents can differentiate themselves from the competition by offering unique services or specializing in a particular niche. They can also leverage digital marketing and social media platforms to reach a wider audience.

Maintaining client relationships:

Real estate agents can maintain client relationships by providing excellent customer service and following up with clients regularly. They can also personalize their services to meet the unique needs of each client.

Dealing with legal issues:

Real estate agents can manage legal issues by partnering with experienced lawyers and ensuring that all transactions are legally compliant. They can also invest in training and education to understand the legal framework better.

Real estate agents can overcome the challenges they face by investing in training and education, leveraging digital marketing, networking with other professionals, offering unique services, and providing excellent customer service. By adopting these measures, real estate agents can build successful businesses that meet the needs of their clients and contribute to the growth of the real estate sector.

SUGGESTIONS

Here are some suggestions that could be considered to improve the functioning of real estate agents and enhance the implementation of RERA:

Education and Training:

Education and training should be provided to real estate agents to ensure that they understand the provisions of RERA and are aware of the ethical and legal obligations of their profession.

Strict Enforcement of Regulations:

RERA should be strictly enforced to ensure compliance by real estate agents. This would require effective monitoring mechanisms and penalties for non-compliance.

Enhanced Digital Platforms:

Digital platforms can be enhanced to provide a more transparent and efficient system for property transactions. This could include creating an online portal for real estate agents to register, and submit documentation.

Consumer Education:

Consumers should be educated about their rights and obligations when dealing with real estate agents. This could include information on how to verify the credentials of real estate agents, and what to look for in a property transaction.

By implementing these suggestions, the functioning of real estate agents could be improved, and the implementation of RERA could be enhanced. This would contribute to a more transparent and efficient real estate sector that benefits all stakeholders, including buyers, developers, and real estate agents.

CONCLUSION

The Real Estate (Regulation and Development) Act, of 2016 (RERA) has brought about significant changes in the real estate sector, including the regulation of real estate agents. Real estate agents play a crucial role in the sector, acting as intermediaries between buyers and developers. However, real estate agents face several challenges in complying with the provisions of RERA. The government, developers, and real estate agents need to work together to create a transparent and efficient real estate sector that benefits all stakeholders.

To ensure transparency and accountability in the sector, RERA has mandated that real estate agents register with the regulatory authority and comply with regulations, including disclosure of project details, maintaining records, and providing accurate information to buyers. While these provisions have increased transparency in the sector, they have also presented several challenges for real estate agents. Real estate agents face challenges in complying with regulations, managing client expectations, dealing with competition, staying updated with market trends, generating leads, maintaining client relationships, and managing legal issues.

Real estate agents play a crucial role in the real estate sector, and RERA has brought about significant changes in the regulation of their activities. While the provisions of RERA have presented several challenges for real estate agents, they can overcome these challenges by adopting measures to ensure compliance, differentiate themselves from the competition, and provide excellent customer service. By doing so, real estate agents can contribute to the growth and development of the real estate sector and build successful businesses that meet the needs of their clients.

What to know as a First Time Home Buyer in India: Click Here

REFERENCE/ FOOTNOTES

• Chandrasekaran, S. “Challenges and Opportunities for Real Estate Agents in India.” Journal of Commerce and Management Thought, vol. 10, no. 2, 2019, pp. 459-471.

• Kishore, K. “Challenges Faced by Real Estate Agents in India.” International Journal of Engineering Research and General Science, vol. 5, no. 3, 2017, pp. 190-194.

• Ramamurti, R., and Singh, A. “The Role of Real Estate Agents in the Indian Housing Market.” Urban Studies, vol. 55, no. 12, 2018, pp. 2672-2688.

[1] Real Estate (Regulation and Development) Act, 2016, available at

Ministry of Housing and Urban Affairs, Government of India, 2016, https://mohua.gov.in/cms/real-estate-regulation-and-development-act-2016.php.

(Last visited: 25 March 2023)

[2] Role of Real Estate Agents in Property Transactions, available at http://www.legalserviceindia.com/legal/article-1261-role-of-real-estate-agents-in-property-transactions.html.

(Last visited: 25 March 27, 2023)