Bringing Brokers Under the Legal Umbrella
For decades, property brokers and real estate agents in India operated in a largely unregulated environment. They frequently marketed dubious projects and walked away with their commissions when the builder defaulted, leaving the homebuyer stranded.
The Real Estate (Regulation and Development) Act, 2016 (RERA) fundamentally changed this by legally recognizing real estate agents as key stakeholders, making them fully accountable for the properties they sell.
Mandatory Registration (Section 9)
Under Section 9 of the RERA Act, it is illegal for any person to act as a real estate agent without first obtaining a registration certificate from the State RERA Authority.
- The RERA Number: Once registered, the agent is issued a unique RERA registration number. The law mandates that agents must explicitly quote this number in every single property sale they facilitate and display it on all their marketing materials and advertisements.
- Validity: The registration is typically valid for five years and must be actively renewed.
Strict Duties Under Section 10
Section 10 of RERA lays down the statutory functions and obligations of a registered real estate agent. If an agent violates these rules, their license can be suspended or revoked, and they can face massive financial penalties.
1. No Selling Unregistered Projects
An agent is strictly prohibited from facilitating the sale or purchase of any plot or apartment in a real estate project that is not registered with the RERA Authority. If a builder is operating illegally, the agent cannot help them sell the units.
2. Prohibition of Unfair Trade Practices
Agents cannot make false or misleading statements. They are legally barred from:
- Falsely representing that a project is of a particular standard or grade.
- Claiming that the promoter has approvals or affiliations which they do not actually possess.
- Publishing advertisements for services or amenities that are not intended to be offered.
3. Facilitating Information
The agent has a legal duty to facilitate the possession of all the information and documents that the homebuyer is entitled to at the time of booking. They cannot hide negative facts about the property to secure their commission.
Penalties for Non-Compliance
If an agent facilitates the sale of an unregistered project or operates without their own RERA license, the Authority can impose a penalty of ₹10,000 for every single day during which the default continues. Cumulatively, this fine can extend up to 5% of the total cost of the plot or apartment whose sale they illegally facilitated.