“Channel Partners, the weakest link in RERA”

By Dheeraj Dogra MRICS, Chief Sales Officer – International Marketing Omaxe Ltd  Importance of Real Estate: The Real Estate industry itself is very crucial to the economy as it contributes to 11 % of the nation’s GDP, approximately Rs 11 lac crores, and the Broking business is approximately Rs. 18,000 crores per annum. Real Estate Industry is one of the drivers of economic growth in India. This crucial segment of the economy was totally unregulated. Real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13 per cent of the country’s GDP by 2025 as per National Real Estate Development Council (NAREDCO) and Asia Pacific Real Estate Association (APREA) Despite of all these advances in the Real Estate and despite contributing so much to our country’s GDP, neither did the government nor the industry has given channel partner training the importance it deserves. Are Real Estate Agents are Still Relevant: As per National Association of Realtors the largest association of realtors  87% of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69 percent in 2001, goes to prove that relevance of channel partners even in technologically advanced countries. Hence, channel partner usage in our country is probably even higher. There are over two million licensed brokers in America (including licensed agents, licensed brokers and licensed sub brokers). A rough estimate is that there are 9, 00,000 brokers in the market in India and most of them are in the unorganized and unregulated segment of this industry. As per the UPRERA website UP has 2750 agents registered and Haryana has a total of 1158. RERA Shortchanged:       Although RERA did address the position of channel partners in real estate but it has failed miserably in qualifying there credentials. The mechanism is limited to getting there basic personal and financial details along with a registration fee. Getting just the names, addresses, pan numbers, company details, rubber stamp images , copies of letterheads and last three years of income tax returns at no point confirms that the applicant is well versed in the business of real estate and gives him the power to help people invest their life long savings in a once in a lifetime  single transaction. Professional Certifications Across trades: Let’s look at some of the other professions which can leave a lasting impact. To become Life Insurance Agent in India, a candidate should pass IRDAI IC 38 pre-recruitment qualification exam. To become General Insurance Agent in India, a candidate should pass IRDA IC 38 Exam. On behalf of IRDAI (Insurance Regulatory and Development Authority of India) To become high school level teacher, you should be at least graduate with a B.Ed. degree and you should have cleared CTET or STET to be able to teach till grade 8.9 A lawyer needs to have an LLB in India to practice. A doctor needs to be an MBBS or BHMS to practice medicine.

I recently conducted a RERA course for Indian CA’s in Indonesia as part of their mandatory CPD hours required to maintain their license. However, when it comes to real estate the consumer is at the mercy of an untrained non certified channel partners.

Penalties for RERA Non Compliance: As per the RERA act if an agent who fails to comply with, or contravenes any of the orders or directions of the Authority, he shall be liable to a penalty for every day during which such default continues, which may cumulatively extend up to five per cent., of the estimated cost of plot, apartment or building, as the case may be, of the real estate project, for which the sale or purchase has been facilitated and as determined by the Authority. However the act pays no heed to the education and training of real estate agents which could have prevented them from failing any compliances at the first place. Global Process of Becoming an Agent: No matter where you live in the US of A, you’ll have to take a pre-licensing course from an accredited real estate licensing school before you can sit for the real estate license exam to get an agent license. The required number of hours varies by state. In California, for example, applicants must take three real estate classes totaling 135 hours. Licensed Sales agents who have two or more years of experience in their job and want to become brokers can pursue additional training. Broker courses cover some of the same topics that sales agent courses cover, such as taxes and real estate finance. Prospective brokers also learn about the law as it applies to operating a brokerage, real estate investments, construction and development, property management, and business law. Possible Training Partners "Better Late Than Never” In India several institutions which could have acted as nodal agencies to train and license agents.  We has institutions like RICS, NAR or NAREDCOH. RICS for example is a worldwide standard for professional certification and most jobs in real estate across the globe would require for a person to be MRICS to even practice real estate as a profession. Despite of the fact that RICS has been in India for over a decade there membership is still miniscule simply because the government has not supported them as well as they should have by making it mandatory for agents to train, study and pass exams to practice real estate as a trade. The developer community should also have been proactive in only hiring trained and certified talent to better serve the end users who have been at a receiving end all along. No wonder a good percentage of so called real estate professionals are really hospitality graduates. In the interest of all stakeholders specially the consumer, let’s look at training up close & personal.