AHMEDABAD: With the implementation of the Real Estate (Regulation and Development) Act, 2016 last week, most real estate agents and brokers are a worried lot about their businesses. The new realty law provides for a penalty on real estate agents for non-compliance. Brokers feel they have no control over delays in handing over possession or even quality of the project and but will yet be penalised for no fault of theirs.
According to the Act, real estate agents who falsely represent a certain quality or service are liable for a penalty of Rs 10,000 per day for as long as the default continues, which can extend up to 5% of the cost of the plot or apartment or real estate project concerned.
“Brokers usually earn between 1% and 2% of the property value in a given deal. A 5% penalty will result in hefty revenue losses, especially for small-scale brokers. It is impossible to cope with such a penalty for something that isn’t deliberate on the part of real estate agents,” said Brijesh Patel, a former president of the Ahmedabad Realtors Association.
“Real estate agents have no control over the quality and pace of the project and if a developer does not deliver the promised quality, the agent will unnecessarily suffer a major loss,” said Abhijit Bhagwat, president, Vadodara Realtors Association. “With RERA, there won’t be any pre-launch sales which have been common with brokers of late,” he added.
Another worry for small brokers is the registration and necessary compliance by July 1. “No regulatory body has been formed to and there is a serious lack of clarity on how the new rules will be executed. Even after the body is formed, it will take time to get the registration done after necessary compliances. This will affect the business overall for at least 3-4 months, as deals cannot be sealed without registration from now onwards,” said Hitesh Shah, CEO of a city-based space management company.
Despite this, most real estate agents have welcomed the new law, saying that it will regularize the primary real estate market to a great extent.