Liability of broker is Rs.10,000/- per day or 5% of deal if builder fails the promise : New RERA Bill

lawBy Dr Sanjay Chaturvedi

Accommodation Times News Services

Liability of Real Estate Brokers caste  in new Housing Regulatory Bill as proposed by Rajya Sabha. Under the bill, Sec. 33, Housing Regulatory Authority will have prerogative to impose penalties. The section says :

33. (1) The Authority shall have powers to impose penalty or interest, in regard to any contravention of obligations cast upon the promoters, the allottees and the real estate agents, under this Act or the rules and the regulations made thereunder.

Further, the Bill say a penalty of Rs.10,000/- or 5% of transaction cost will be imposed if the builder default or broker misrepresent the builder. Sec. 53 say :

54. If any real estate agent wilfully fails to comply with or contravenes the provisions of section 9 or section 10, he shall be liable to a penalty of ten thousand rupees for every day during which such default continues, which may cumulatively extend up to five per cent. Of the 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 as determined by the Authority.


And Section 9 and 10  say :

9. (1) No real estate agent shall facilitate the sale or purchase of or act on behalf of any person to facilitate the sale or purchase of any plot, apartment or building, as the case may be, in a real estate project or part of it, being the part of the real estate project registered under section 3, being sold by the promoter in any planning area, without obtaining registration under this section.

(2) Every real estate agent shall make an application to the Authority for registration in such form, manner, within such time and accompanied by such fee and documents as may be prescribed.

(3) The Authority shall, within such period, in such manner and satisfying itself of the fulfilment of such conditions, as may be prescribed—

(a) grant registration to the real estate agent;

(b) reject the application for reasons to be recorded in writing, if such application does not conform to the provisions of this Act or the rules or regulations made there under:

Provided that no application shall be rejected unless the applicant has been given an opportunity of being heard in the matter.

(4) Whereon the completion of the period specified under sub-section (3), if the

applicant does not receive any communication about the deficiencies in his application or the rejection of his application, he shall be deemed to have been registered.

(5) Every real estate agent who is registered as per the provisions of this Act or the rules and regulations made thereunder, shall be granted a registration number by the Authority, which shall be quoted by the real estate agent in every sale facilitated by him under the Act.

(6) Every registration shall be valid for such period as may be prescribed, and shall be renewable for a period in such manner and on payment of such fee as may be prescribed.

(7) Where any real estate agent who has been granted registration under this Act commits breach of any of the conditions thereof or any other terms and conditions specified under this Act or any rules or regulations made thereunder, or where the Authority is satisfied that such registration has been secured by the real estate agent through misrepresentation or fraud, the Authority may, without prejudice to any other provisions under this Act, revoke the registration or suspend the same for such period as it thinks fit:

Provided that no such revocation or suspension shall be made by the Authority unless an opportunity of being heard has been given to the real estate agent.

10. Every real estate agent registered under section 9 shall—

(a) not facilitate the sale or purchase of any plot, apartment or building, as the case may be, in a real estate project or part of it, being sold by the promoter in any planning area, which is not registered with the Authority;

(b) maintain and preserve such books of account, records and documents as may be prescribed;

(c) not involve himself in any unfair trade practices, namely:—

(i) the practice of making any statement, whether orally or in writing or by visible representation which—

(A) falsely represents that the services are of a particular standard or grade;

(B) represents that the promoter has approval or affiliation which such promoter does not have;

(C) makes a false or misleading representation concerning the services;

(ii) permitting the publication of any advertisement whether in any newspaper or otherwise of services that are not intended to be offered;

(d) facilitate the possession of all documents, as the allottee is entitled to, at the

time of booking of any plot, apartment or building, as the case may be;

(e) discharge such other functions as may be prescribed.

The same section 9 and 10 have been incorporated in Maharashtra Housing Regulatory Act 2012. Now if the Bill is passed, respective governments will be issuing license to brokers. No broker can do real estate brokering business if there is no license. All names included by builder on his account of HRA website or names appearing on project details of HRA website as a broker are only eligible for commission and brokerage. Liability of builder is also imposed on brokers and he will be equally liable for misdeeds of builders.

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