RERA impact on Real Estate Brokers

RERA impact on Real Estate Brokers
  • General
  • Friday 9th June 2017
  • Author: Shikha Abrol


  • Any false representation in a certain quality or service makes the broker liable for a penalty of Rs 10,000 per day

  • The Act states that no broker without a RERA certification will be allowed to market any project

  • The local brokers community feels that RERA has been silent on penalties to be imposed on builders and buyers

  • RERA will help the brokers to turn into transaction advisory professionals for Real Estate

Brokers play a significant role in real estate transactions and the Indian real estate has been a home for the small as well as big brokers, where they have done business in an unrestricted environment. The unorganized and unregulated broker segment in India has around 9,00,000 plus brokers operating at various levels. Moreover, around 5, 00, 000 brokers operate out of top 15 cities. As per the information gained from the industry data, local brokers who operate on their own account for as much as 60 to 70  percent transactions in the secondary market and around 20-30 percent in the primary market. Under RERA, the real estate brokers will need to register themselves with the authorities to be able to facilitate a real estate transaction.

The RERA blow for brokers was welcomed by big brokerage houses but put the small brokers in worry because of the several compliances under RERA. Let's have a look at whats in store for them:

  1. Any false representation of a certain quality or service makes the broker liable for a penalty of Rs 10,000 per day for as long as the default continues. It can extend up to 5% of the total cost of the concerned project. While brokers mostly make 2-3 % of the property value in a given deal, a 5% penalty will result in hefty revenue losses, which may or may not be deliberately done on the part of real estate broker.
  2. A broker will get an operating license only after paying registration fees which vary from state to state.In Maharashtra, fees for an individual license is Rs 10,000 and Rs 1,00,000 for other than an individual.This fees in Madhya Pradesh is Rs 10,000 and Rs 50,000 respectively.In addition to it, they have to submit all the business and self-related documents, and ITR forms to the regional office. This is a big step to help the real estate brokerage business become mature and a serious profession. 
  3. Pre-launch sales have been one of the most common phenomena among brokers. RERA has clearly put a NO on the pre-launch of properties and thus a big business loss for them. Brokers who till now were churning profits, based on the ignorance of the clients will now be eradicated from the marketplace.
  4. The Act states that no broker without a RERA certification will be allowed to market any project.
  1. Moreover, the builders will also have to register the brokers as well as agents who will market their projects and have this information uploaded to their website. Read more: Future of Indian Real Estate after RERA



  1. The local broker's community feels that RERA has been silent on penalties to be imposed on builders and buyers who default on their brokerage. They are also looking for clarity on the penal clause against builders who mislead brokers into selling their products. This will force them to eventually pay the buyers for no fault on their behalf. 
  2. On the same hand, this move can also lead to consolidation of brokerage firms, where only honest and long-term players will be a part of this business. 
  3. A regulatory environment will lead to fair deals, which will ultimately lead to clean and early commissions. RERA actually has the ability to re-structure the brokerage system in India, which will be a win-win for all. 

Thus, RERA will help the brokers to turn into transaction advisory professionals for Real Estate. The client will have the access to all information, in terms of actual money spent on construction by the developer, the basic sale price, other charges, construction status, sales representative details, etc. The broker's role will be more of an investment portfolio manager, rather than just a sales professional! 


More Blogs

Have Questions on RERA ? Have free discussion on email .