Real Estate Agent, its Roles & Responsibilities under RERA

Introduction:

This article discusses in details who is real estate agent under RERA, his registration and his roles and responsibilities under the RERA (Real Estate Regulation and Development Act, 2016) and penalties on him.

Main Points for consideration

1. As per RERA (Real Estate Regulation and Development Act, 2016), only registered real estate agents can facilitate the sale/purchase of properties in a real estate projects registered u/s 3 of the Act.

2. Now, no real estate agent can facilitate the sale/purchase of properties in a real estate projects registered u/s 3 of the Act without obtaining registration under section 9.

3. If he does so, there are hefty penalties on him.

Who is “Real Estate Agent”?

As per section 2(zm) “Real Estate Agent“ – means any person:

i. who negotiates or acts on behalf of one person in a transaction of transfer of his plot, apartment or building, as the case may be, in a real estate project, by way of sale, with another person or transfer of plot, apartment or building, as the case may be, of any other person to him; and

ii. receives remuneration or fees or any other charges for his services whether as commission or otherwise; and

iii. includes a person who introduces, through any medium, prospective buyers and sellers to each other for negotiation for sale or purchase of plot, apartment or building, as the case may be; and

iv. includes property dealers, brokers, middlemen by whatever name called.

So as per point (iii), all the websites like Magicbrickscom, Tigerprop.com, 99acres.com shall come within the definition of Real Estate Agent.

Registration of Real Estate Agent – Sec. 9

No real estate agent can facilitate the sale/purchase of properties in a real estate projects registered u/s 3 of the Act without obtaining registration under section 9.

Every real estate agent shall make an application to the Authority for registration in such form, manner within such time and accompanied by such fee and documents as may prescribed in respective State’ s rules.

The Authority shall grant a single registration to real estate agent for the entire State or Union territory.

Every registered real estate agent shall quote his registration number in every sale facilitated by him under this Act.

The Authority shall display following information about registered real estate agent at its website:

A. For real estate agents registered with the Authority

i. Registration No. & its validity period;

ii. Brief details of his enterprise including name, registered address, type of enterprises;

iii. Particulars of registration as proprietorship, society, partnership, company etc. Including bye-laws, MOA, AOA etc.;

iv. Name, address, contact details and photograph of the real estate agent;

v. Authenticate copy of PAN card;

vi. Authenticate copy of address proof, contact number, email Id of real estate agent & its officials;

B. In case of applicants whose application for registration as a real estate agents have been rejected or real estate agent whose registration has been revoked by the Authority

i. Registration No. & its validity period;

ii. Brief details of his enterprise including name, registered address, type of enterprises;

iii. Name, address, contact details and photograph of the real estate agent;

C. Any other information as may be specified by the Act, rules or regulation made there-under.

Functions of Real Estate Agent – Sec. 10

Every real estate agent registered u/s 9 shall:-

a) Not facilitate the sale or purchase of any plot, apartment or building, in a real estate project or part of it, being sold by the promoter in any planning area, which is not registered with the Authority,

b) maintain and preserve such books of account, records and documents as may prescribed,

c) not involve himself in any unfair trade practices,

d) facilitate the possession of all the information and documents, as the allottee, is entitled to, at the time of booking of any plot, apartment or building,

e) Discharge such other functions as may be prescribed.

“Unfair trade Practice” means a practice of:

A. Making any written or visible or oral statement which:

i. Falsely represents that services are of particular standard or grade;

ii. Represents that promoter has approval or affiliation which he does not have;

iii. Makes false or misleading representation concerning services.

B. Allowing publication of any advertisement or prospectus in newspaper or otherwise of services that are not intended to be offered.

Penalty for non registration and contravention u/s 9 & 10 – Sec. 62

If any real estate agent fails to comply with or contravenes the provisions of section 9 or 10, then he shall be liable to a penalty of:

• 10,000 Per Day during which default continues cumulatively which may extend to 5% of the cost of the property of which sale / purchase has been facilitated by him.
  

Penalty for failure to comply with orders of the Authority by Real Estate Agent – Sec. 65

If any real estate agent fails to comply with or contravenes the orders or directions of the Authority, then he shall be liable to a penalty of:

• Any amount Per Day during which default continues cumulatively which may extend to 5% of the cost of the property of which sale / purchase has been facilitated by him.
  

Penalty for failure to comply with orders of the Appellate Tribunal by Real Estate Agent – Sec. 66

If any real estate agent fails to comply with or contravenes the orders or directions of the Appellate Authority, then he shall be punishable with:

i. Imprisonment up to 1 year; or

ii. Fine for every day during which default continues, which may cumulatively extend up to 10% of estimated cost of the property as determined by the authority, or

iii. With both.

The above offence is compoundable by the court as per section 70 of the Act.

Compounding of offences by Court –Section 70

Notwithstanding Code of Criminal Procedure, 1973, if any person is punished with imprisonment under this Act:

1. The court may compound the offence on paying 10% of estimated cost of the property.

2. The promoter shall comply with orders of Appellate Tribunal within period of not more than 30 days of compounding orders of court.

3. On such payment and compliance of court order, the promoter who is in custody shall set at liberty and no proceeding shall be instituted or continued against such person.

4. The acceptance of such money for compounding shall be deemed to be an acquittal order.

Offences by Company

1. In case of offence by company or partnership firm, Officer in charge as well as company shall be deemed to be guilty of the offence and be liable to be proceeded accordingly.

2. Such person shall not be liable for punishment if he proves that offence was committed without his knowledge or that he exercise all due diligence to prevent such offence.

3. Where an offence under this Act has been committed by company or partnership firm, and it is proved that the offence was committed with the consent or connivance of or due to neglect of any director or partner, manager, secretary or any other officer of the organisation, then such person shall also be deemed to be guilty of that offence and be liable to be proceeded against and punished accordingly.

The author is a practising CA and is registered Insolvency Professional. He can be reached at [email protected], Mob. +91 9953587496.