In a major relief to both the property sellers and the buyers, the Haryana’s Real Estate Regulatory Authority (HRERA) has ruled that property dealers and brokers cannot charge more than one per cent commission (combined) from them.
“For real estate registered projects, HRERA has decided to issue restrain orders to all promoters and brokers not to charge commission more than what is prescribed in the Haryana Regulation of Property Dealers and Consultants Rules, 2009 made under the Haryana Regulation of Property Dealers and Consultants Act, 2008. Rule 10 of the said rules provides for one per cent commission on agreed consideration value to be paid by the seller and purchaser of the property — that is 0.5 per cent by each of them — on finalization of the deal as per their agreement entered in the register of the dealer under the valid receipt,” reads the order issued by a RERA bench headed by Chairperson Dr KK Khandelwal and comprising SC Kush as member.
Several cases of arbitrary commission, as high as 5 to 10 per cent of the value of the property, being charged by the agents had come to the notice of RERA.
“HRERA is also in the process of prescribing code of conduct for the property dealers and ensuring that they abide by such norms so that the brokers do not involve in any unfair trade practices,” Khandelwal said.
The HRERA chairperson said that instances have come to the notice of the authority that some of the property dealers are falsely representing the services of a particular standard or grade and making false or misleading representation concerning the services and approvals of the project. “The real estate agents or brokers are also involved in issuing of advertisements of upcoming projects, which are misleading to the general public. The code of ethics will prescribe an additional book of accounts to be maintained by the property dealers so as to check whether the commission is being charged as per law and also keeping a record of transaction, which may be perused by the authority in case of inter se dispute between buyers and brokers,” Khandelwal said.
It is mandatory for the brokers to keep copy of relevant approvals, specifications, or brochures of projects where deals are being facilitated by them. “The property dealers who do not have the necessary documents shall also be penalized including cancellation of their registration with the authority alongwith recommendation to the Deputy Commissioner for withdrawal of the license. In the code of ethics it is proposed to make it mandatory for displaying the details of the real estate project and units at a place where sale is being facilitated by them,” said SC Kush.
Khandelwal added that “the promoters shall also be asked to provide details of brokers in the prospectus and advertisement so that unauthorized brokers do not indulge in malpractice”.
Explaining another modus operandi, Khandelwal said, some brokers get the units in bulk allocated to themselves from the builders at a pre-decided rate then sell them at higher cost. “This kind of sale by the agent is illegal as the real estate project is developed and marketed by the promoter only. In case the agent is also indulging in marketing then he shall also have to register himself as a promoter,” he added.