The government plans to bring unorganised property agents and brokers under the ambit of the proposed real estate regulator, imposing stringent penalties including imprisonment on those who dupe buyers or operate without a valid registration.
“We have added a chapter on real estate agents in the Real Estate (Regulation and Development) Bill. This will bring in the much needed order in the segment,” said a source in the ministry of housing and urban poverty alleviation. The bill will be sent to the Cabinet next week.
The draft bill already includes a provision for imprisonment of up to three years, or a penalty of up to 10% of the cost of project, for builders selling projects without registration.
The government has so far maintained that the imprisonment clause will be invoked in extreme and deliberate violations.
Real estate industry bodies have termed the bill draconian and made representations against the provisions of imprisonment and penalty, but the official said that the imprisonment clause has been retained.
The bill has been prepared after several rounds of consultations with state governments and stakeholders like builder associations and consumer forums. The official said it has now been cleared by the law ministry and will be sent to the cabinet next week. The government plans to table the bill in the winter session of Parliament.
Unlike matured property market across the world, property brokers in India do not need to register or operate through a licence. A few organised brokerage firms have come up in the last few years, trying to bring in some order in the sector, but most agents are unregulated and operate out of temporary premises.
In the past, homebuyers have reported of being cheated by agents who have misinformed them about projects, pricing and sellers. In many cases property agents have issued credit notes to buyers at the time of signing up the property, but these notes are not honoured.
In countries like Australia and the US, real estate agents need to acquire a licence from the government. These licences are issued only to those who have a certain minimum education and experience in the field.
In the UK, the National Association of Estate Agents issues licence to real estate agents. Japan introduced licence for property agents after widespread complaints of unscrupulous practices in the 1980s.
