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Unorganised property agents to come under proposed real estate regulatorís ambit
Source: ET Bureau Sep 13, 2012
The government plans to bring unorganised property agents and brokers under the ambit of the proposed real estate regulator, imposing stringent penalties including imprisonment on those who dupe buyers or operate without a valid registration.

"We have added a chapter on real estate agents in the Real Estate (Regulation and Development) Bill. This will bring in the much needed order in the segment," a senior official in the ministry of housing and urban poverty alleviation said on condition of anonymity. He said the bill will be sent to the Cabinet next week.
The draft bill already includes a provision for imprisonment of up to three years, or a penalty of up to 10% of the cost of project, for builders selling projects without registration. "The imprisonment clause will be invoked in extreme and deliberate violations," the official said.
Real estate industry bodies have termed the bill draconian and made representations against the provisions of imprisonment and penalty, but the official said that the imprisonment clause has been retained.
The bill has been prepared after several rounds of consultations with state governments and stakeholders like builder associations and consumer forums. The official said it has now been cleared by the law ministry and will be sent to the cabinet next week. The government plans to table the bill in the winter session of Parliament.
Unlike most nations, property brokers in India do not need to register or operate through a license. A few organized brokerage firms have come up in the last few years, trying to bring in some order in the sector, but most agents are unregulated and operate out of temporary premises.

In the past, homebuyers have reported of being cheated by agents who have misinformed them about projects, pricing and sellers. In many cases property agents have issued credit notes to buyers at the time of signing up the property, but these notes are not honoured.
"Licensing would help as it would take away fly-by-night operators and people with a malicious intent or low understanding of the market, and allow more credible people to operate," said Mudassir Zaidi, regional director at property advisory firm Knight Frank. "There is also a need to have minimum basic qualifications to become an agent." In Australia and in all states of the US, real estate agents need to acquire a licence from the government. These licences are issued only to those who have a certain minimum education and experience in the field. In the UK, the National Association of Estate Agents issues licence to real estate agents. Japan introduced licence for property agents after widespread complaints of unscrupulous practices in the 1980s.


Tag: Indian real estate, property in india, real estate brokers, real estate agents
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