Regulation of Real Estate Brokers will bring Transparency

Recently, the Central Govt. indicated plans to regulate the real estate sector by regulating the real estate brokers in order to keep a control and check over the cases of fraud and cheating which are frequently reported. The Govt. plans to regulate brokers by making registration mandatory for real estate agents. The registration shall be done under the purview of proposed Real Estate Regulatory Authority with the aim of protecting the interest of buyers in all kinds of property purchases.

In the month of February 2014, The Uttar Pradesh (UP) government had also decided to enact a new law with the objective of regulating real estatebrokers and agents which will ensure better services to home buyer across the entire state. Haryana was the first state to have made registration ofbrokers mandatory. However, the three year old drive has failed to move beyond papers. The state government's drive to charge a fee from brokersin the city for the license certificate has failed because even those without the certificate are able to do business.

Out of my experience in real estate industry as a professional consultant, I understand that the task of convincing a buyer is a tough one as it involves huge monetary investment. As the transaction value is high, the risk accompanied in the transaction should be reduced to a minimum. Most of the property transaction involves real estate agents or brokers who facilitate the deals. These brokers have become the intermediate medium for different types of property transactions viz. sale, resale, purchase, transfer, lease, auction, etc. The risk associated with the property transaction can be reduced if the credibility of the broker can be ascertained, verified and authenticated. A Quick guide for buyers while selecting real estate brokersis as follows:

·         Check registration of broker and cross check with developer.

·         Do visit the office and analyze their working.

·         Contact only on professional id and mobile no and prefer to be in touch with seniors of the organization.

·         Always prefer paper work with stamp and authorized signatory.

·         Check the office of broker and associated developer

There is a dire need of broker’s registration and a regulator or nodal agency which can register the brokers. Quick suggestions for broker’s registrationand monitoring are as follows:

1.      Connect broker’s registration with their PAN card for unique identification like Service Tax No. which will bring highest level of transparency.

2.      Establish a central body who can offer all information about registeredbrokers like;

·         Transactions done in a financial year,

·         Complaints received

·         Registration no.,

·         Email id and Contact No.

·         Associated developers,

·         Separate window for consumer grievances with status of resolution

·         Number of team members and total tenure of operation,

·         Ranking or rating based on years of operation, complaints, area of operations and endorsement by developers.

Buyers should be able to check authorized brokers with their ratings, office location, official ids on an open platform like dedicated web portal. The monitoring by regulatory body will instill fear in the minds of errant brokersand there will be lesser cases of fraud and cheating by brokers. There should be a defined time frame by which actions investigations will be done on the complaints and the errant brokers can be penalized through different means like cancellation of license, payment of compensation or damages to the customer, etc. There can also be a provision of ratings of brokersbased on certain defined parameters like years of operation, no complaints, area of operations and endorsement by developers.

An important question is who should be the nodal agency responsible forregistering the brokers. Even if a real estate regulator is constituted, who will be managing the operations of registration and issue a license at district level. A district level officer, say a DM or ADM should be entrusted with the task of carrying out the operations for registering the brokers, issue of license and addressing customer complaints. For brokers who operate in more than one city, a single window registration should be possible so that they do not have to approach the nodal agency across multiple cities and regions.

I firmly believe that registration and licensing of real estate dealers will bring accountability and transparency in the industry and make them more responsible for their commitments. Real estate dealers are key partners of developers and buyers. The decision of registration of real estate dealers is a much needed step in the sector to raise overall credibility and protect buyers from property related frauds.

Author 

Mr. Pawan Jasuja

Director 

Finlace Consulting Pvt. Ltd.

Canvass

•      Position – Director, Finlace Consulting Pvt. Ltd.

•      Claim To Fame – In a short span of 2 years, Finlace has become a strong brand in real estate in Delhi-NCR. Finlace has been awarded with a number of real estate awards for establishing itself as one of the foremost companies in real estate consulting. It is the hard work and dedication of all stakeholders that has helped us achieve this. However, this is just the starting and many more milestones have to be achieved.

•      Management Mantra – The core principles or mantra are as follows:

o   Increasing customer satisfaction

o   Transparency

o   Developing Leaders

o   Employee Engagement and satisfaction

• Biggest Challenge – Maintaining sustainable growth in a down market is the biggest challenge. It involves continuous hard work, dedication and perseverance to brave the down market. Luckily, we have been able to achieve this till now.

•  Life Outside Profession – I try to maintain a healthy work-life balance. Work is important but family is equally important. I also take time to meet my friends and pursue my hobbies which rejuvenates me.