The Real Estate (Regulation and Development) Act, 2016 (RERA) is best known for what it requires of builders, but it also regulates real estate agents. Many independent brokers and sub-agents assume RERA is only the developer's concern. For deals in registered projects, it is not. This guide sets out what the Act itself says about agents, section by section.
1. Who counts as a real estate agent
Section 2(zm) defines a real estate agent widely: any person who negotiates or acts on behalf of one person in a transfer of a plot, apartment or building in a real estate project and receives remuneration or fees "whether as a commission or otherwise". It includes a person who introduces prospective buyers and sellers to each other for negotiation, and it names "property dealers, brokers, middlemen by whatever name called".[1]
2. When you need registration
Section 9(1) says no real estate agent shall facilitate the sale or purchase of any plot, apartment or building in a real estate project, or part of one, that is registered under section 3 and being sold by the promoter in any planning area, without obtaining registration under section 9.[1]
- Apply to your state Authority. The application is made in the form and manner, within the time, and with the fee and documents that your state's rules prescribe (section 9(2)). The Authority grants a single registration for the entire State or Union territory (section 9(3)(a)).[1]
- Quote your number. A registered agent is given a registration number, which "shall be quoted by the real estate agent in every sale facilitated by him" (section 9(5)).[1]
- Validity and renewal. The Act does not fix the period itself. Section 9(6) says registration is valid for the period the rules prescribe and is renewable in the manner and on the fee the rules prescribe, so check your state's rules for both.[1]
- Revocation. The Authority can revoke or suspend a registration for breach of its conditions, or if it was obtained by misrepresentation or fraud, after giving the agent an opportunity to be heard (section 9(7)).[1]
Not every project has to be registered. Section 3(2)(a) exempts projects where the land to be developed does not exceed 500 square metres, or the apartments do not exceed eight across all phases, although the appropriate Government may lower that threshold.[1] Whether your state expects agents to register for other deals, such as the resale of an older flat, is a question for your state's rules and Authority.
3. Advertising and what you tell buyers
- Only registered projects. A registered agent must not facilitate the sale or purchase of any plot, apartment or building in a project being sold by the promoter in any planning area that is not registered with the Authority (section 10(a)).[1]
- What a project advertisement must carry. Section 11(2) requires the promoter's advertisement or prospectus to mention prominently the website address of the Authority, where the project's details are entered, and to include the project's registration number.[1] If you pass on a builder's material, keep those details on it. Your own number must be quoted in every sale you facilitate (section 9(5)), and your state's rules may require more.
- No false or misleading statements. Section 10(c) bars an agent from unfair trade practices, which it describes as statements that falsely represent services as being of a particular standard or grade, that claim an approval or affiliation the promoter or the agent does not have, or that make a false or misleading representation about the services; and permitting the publication of advertisements for services that are not intended to be offered.[1]
- Check before you repeat. Section 11(1) requires the promoter to enter the project's details on its page on the Authority's website.[1] Check specifications and timelines there before you repeat them to a buyer.
4. Records and documents
- Books and records. A registered agent must maintain and preserve the books of account, records and documents that the rules prescribe (section 10(b)). The Act does not list them; your state's rules do.[1]
- The buyer's documents. An agent must facilitate the possession of all the information and documents the allottee is entitled to at the time of booking of any plot, apartment or building (section 10(d)).[1]
5. The penalty
Under section 62, an agent who fails to comply with or contravenes section 9 or section 10 is liable to a penalty of ten thousand rupees for every day the default continues, which may cumulatively extend up to five per cent of the cost of the plot, apartment or building for which the sale or purchase was facilitated, as determined by the Authority.[1]
Practical steps
- Check the project first. Section 34(b) requires each Authority to publish a website of records of all registered projects. Look a project up there before you share it with a buyer.[1]
- Check a broker you have not worked with. Section 34(d) requires each Authority to keep a public database of real estate agents who have applied and registered, including those whose registration was rejected or revoked.[1]
- Carry your registration number. Section 9(5) requires you to quote it in every sale you facilitate. Having it on your card and your listings also lets a buyer check you.
Conclusion
For deals in registered projects, RERA applies to the broker as well as the builder: registration under section 9, the functions in section 10 and the penalty in section 62. The details, such as fees, validity and records, come from your state's rules, so read those alongside the Act.