H-Rera to take action against property dealers charging more than prescribed commission rate

The Haryana-Real Estate Regulatory Authority (H-Rera) on Tuesday said that the authority will take action against property dealers who are charging more than one percent commission rate on the sale of properties as prescribed by the Haryana Regulation of Property Dealers and Consultants Rules, 2009, made under the Haryana Regulation of Property Dealers and Consultants Act of 2008. Officials of the authority also said that H-Rera will soon formulate a code of conduct for property dealers to ensure that they do not indulge in unfair trade practices.

KK Khandelwal, chairman, H-Rera, said that rules call for one percent commission on agreed consideration value to be paid by the seller and purchaser of the property on finalisation of the deal as per the agreement entered in the register of the dealer under a valid receipt. “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. Misleading advertisements of projects are also being issued by brokers of upcoming projects, violating rules,” he said.

“As such all real estate agents are hereby cautioned not to charge commission more than what is prescribed in the rules. Doing so will be deemed as an outright violation of the provisions of the law,’’ the chairman said.

Khandelwal added that code of ethics will prescribe not only the additional books of accounts to be maintained by the property dealers (so as to check whether the commission is being charged as per the law) but also ask for keeping a record of transaction which may be perused by the authority in case of a dispute between a buyer and a broker.

The authority also observed that the property dealers/brokers were indulging in malpractices in connivance with the promoters and charging much more than the prescribed commission both from the sellers and buyers. It has been reported that commission as high as 5% to 10% of the value of the property is being charged by the agent and the burden of this additional commission is ultimately being shared by the allottee, it said. The authority is also keeping a vigil on brokers, who are developing and selling unauthorised colonies.

SC Kush, member, H-Rera, said that brokers/ property dealers who do not have the necessary documents pertaining to projects in which they deal, shall also be penalised. Penalty might include the cancellation of their registration with the authority and even a withdrawal of the licence. The code of ethics also proposes to make displaying the details of the real estate project mandatory at a place where the sale is being facilitated, he said.

When asked about the proposed code, Ravinder Aggarwal, president, Association of Certified Realtors of India, said that H-Rera has the right to prescribe a code of conduct but it should also put its own house in order. “Most of the orders and directions issued by authority remain unimplemented and the buyers are kept waiting for years. The government needs to appoint judicial officers and empower them so that real intervention can take place,” he said.