Haryana RERA brings good news for property buyers and sellers
Last week, Haryana RERA passed a first-of-its-kind order by fixing a cap on the brokerage commission charged while making a land deal. After the announcement of this order, real estate agents can charge no more than 0.5% commission from any buyer or seller in a property deal.
After undergoing a massive hit due to the Covid pandemic disruption, the realty sector is back in business. The decision to crack down on agents and brokers was taken by Haryana’s Real Estate Regulatory Authority to curb inordinate amounts of money from property buyers and sellers in the name of brokerage or commission.
Furthermore, the order states that for all registered realty projects, RERA has chosen to issue restraining orders to all brokers and agents. Agents should not levy a commission of more than 1% on mutually accepted consideration value, paid for the property. They cannot charge more than 0.5% from both the buyers and sellers after the deal is finalised through the agreement followed by the valid receipt.
This order applies only to property agents registered under the Haryana Regulation of Property Dealers and Consultants Act, 2008. However, if RERA finds any unregistered person acting as an agent, or if a buyer or seller complains to RERA regarding an unregistered property dealer or agent, the person shall be answerable for penal action.
SC Kush, a RERA member, said that if the buyer, seller, and property dealer all are mixed up, then there is nothing much that RERA can do. He stated, "If they do not have any problem in exchanging money that is more than the permissible rate, RERA cannot do anything. " However, he emphasised that if a buyer or seller feels cheated by such an arbitrary commission and raises it with RERA, they will take action. Kush further said that it is the right of both the property seller and buyer to claim the receipt of the commission paid in cash to the property agent. The agent cannot deny giving the receipt of the cash transactions.
If any realty agent breaches RERA orders, he or she shall be liable to pay a fine every day during which the default has been made. The cumulated fine will be 5% of the estimated cost of the property for which they charged commission. The brokers need to maintain their cash books and present them to RERA annually. “If they don’t, their registration can be cancelled. In case of any complaint or if we have sufficient reasons to suspect the dealings of a property dealer, we can summon the cash-book records at any time during the year too,” Kush added.
The real estate developers allocate units to various brokers and sub-brokers at a pre-decided rate, and by the time the property is purchased, the unit’s cost increases by at least 15-20 %. The additional money is shared between the broker and sub-broker as a part of the commission. The Real Estate (Regulation and Development) Act, 2016 forbids such practices. The real estate project should be marketed and developed by the promoter only.
As per RERA’s website, there are 1,319 realty agents registered across Haryana. The registration is valid for five years. After every five years, the agents must get the registration renewed.