RERA set to rein in real estate agents

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When realty prices hit the roof in Bengaluru and other major cities in the past two decades, small time brokers and agents had a free run as they became indispensable in the sector. But now with property brokerage coming under the ambit of the Karnataka Real Estate (Regulation and Development) Act (RERA), tough times are ahead for them.

Under the recently implemented Act, not only real estate projects, even agents have to be registered with the regulatory authorities in three months from July 10, 2017. Brokers and agents are now punishable if they do not comply with the regulator's ruling. Earlier, they had a free run, especially when it came to the residential marketplace, and many of them thrived on high commission, fleecing their customers. "By registering themselves with the regulator, real estate agentsbrokers now need to effectively declare themselves and be accountable for their business activities and practices. The registration and rejection forms of the agents have been published as part of the rules,'' said housing secretary Kapil Mohan. In Bengaluru alone, some industry experts say around 70% of total brokers and agents may close down business or merge with larger brokerage firms in 2-3 years.

"It has been tough for brokers to sustain themselves for the past two years because of the sluggish real estate market, especially in Bengaluru. Now, with RERA coming in, it will become more difficult because of the penal factor and credibility issues.Only serious brokers who register will survive in the market,'' said a senior executive working with a leading realty brokerage firm.

According to estimates, there are around 10 lakh brokers in the state, who are neither registered nor regulated. "Many of them are unqualified and inexperienced.More often than not, agents tend to drive their own agenda to earn higher commissions.Even politicians have doubled up as real estate brokers in many cities. There have been numerous instances of real estate agents taking customers for a ride by selling the same property to one or more persons. Lack of adequate regulations and certifying bodies for real estate agents is one of the reasons for unprofessionalism in the sector," said Madhusudhan S, a property consultant.

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