Registration of Real Estate Agents under RERA Act

The Real Estate (Regulation and Development) Act, 2016 (commonly known as RERA) marked a significant step towards bringing transparency, accountability, and professionalism in the Indian real estate sector. While the Act primarily focuses on protecting homebuyers and regulating promoters, it also puts important obligations on real estate agents. 

Section 9 of the Act makes it mandatory for real estate agents to register with the Real Estate Regulatory Authority (Authority) before facilitating any sale or purchase of properties in RERA-registered projects.

This article explains in detail the registration of real estate agents under the RERA Act. It aims to provide a clear understanding of why registration is necessary, the registration process, duties of agents, consequences of non-compliance, and best practices for agents to operate smoothly in today’s regulated real estate market.

Why is Registration of Real Estate Agents Important?

Before discussing the registration procedure, it is important to understand why the Act emphasises on registering real estate agents.

1. Consumer Protection: Real estate agents play a critical role as intermediaries between promoters and buyers. Their actions can significantly impact the rights and interests of buyers. Registration ensures that only legitimate and accountable agents operate, reducing the risk of fraud and malpractice.
2. Bringing Transparency: Earlier, many agents operated informally without oversight. Registration introduces transparency by bringing agents under the regulatory umbrella, allowing the Authority to monitor their activities.
3. Ensuring Accountability: Registered agents are answerable to the Authority for their conduct. They are required to maintain proper records and adhere to fair trade practices.
4. Uniformity Across States: The Act empowers each State or Union Territory to establish its own Real Estate Regulatory Authority. Registration grants a single licence valid throughout the State/UT, thus standardising operations within the region.
5. Building Trust: Agents who carry a RERA registration number inspire greater confidence among buyers, promoting smoother and more secure transactions.

Who is a Real Estate Agent Under RERA?

The RERA Act defines a real estate agent as a person who, for a fee or commission, facilitates the sale or purchase of any plot, apartment, or building in a real estate project registered under the Act.

Thus, any individual or entity that acts on behalf of promoters or buyers to facilitate bookings, sales, or purchases must register under Section 9 of RERA before carrying out such activities.

Legal Requirement to Register under Section 9 of the RERA

Section 9(1) of the RERA Act explicitly states:

“No real estate agent shall facilitate the sale or purchase of … any plot, apartment or building … in a real estate project … without obtaining registration under this section.”

This means no agent can legally function in connection with any RERA-registered project without first obtaining registration from the Authority. Any violation may attract penalties.

Step-by-Step Procedure for Registration

Submission of Application

• The real estate agent must submit an application to the State’s Real Estate Regulatory Authority in the prescribed form and manner.
• This process is usually done online through the official RERA website of the State or Union Territory.
• The application must be submitted within the time frame specified by the Rules of the respective State. Generally, it is expected before starting any business activities as an agent.
• Along with the application, the agent must pay the prescribed registration fee and submit all necessary documents.

Documents to be Submitted

Commonly required documents include:

• Proof of identity (e.g., Aadhaar card, PAN card, passport)
• Proof of address (e.g., utility bill, passport)
• Business proof such as partnership deed, registration certificate, or incorporation certificate (if the agent is a firm or company)
• Bank details for fee payment and communication
• Any other documents as prescribed by the State Authority

Verification by Authority

• Upon receiving the application, the Authority scrutinises the details and documents submitted.
• If the Authority finds the application incomplete or requiring clarification, it communicates the deficiencies to the applicant.
• The agent is given a reasonable opportunity to rectify or respond.

Grant or Refusal of Registration

• After satisfying itself that all conditions have been met, the Authority grants a single registration valid across the entire State or Union Territory.
• The agent is issued a unique registration number.
• If the Authority rejects the application, it must provide written reasons and grant the agent a hearing before the rejection.

Deemed Registration

• If no communication is received from the Authority within the prescribed period regarding rejection or deficiencies, the application is deemed approved and the agent is automatically registered.
• This provision prevents undue delays in processing

Registration Certificate and Number

Once registration is granted:

• The Authority issues a Registration Certificate specifying the agent’s details, registration number, date of issue, and validity.
• The registration number must be quoted by the agent in every sale or purchase transaction they facilitate.
• It should also be displayed on all advertisements, letterheads, visiting cards, and other promotional materials to assure clients of the agent’s legitimacy.

Validity of Registration and Renewal

• The registration certificate is valid for a prescribed period, commonly three years, but this may vary between States.
• Before expiry, the agent must apply for renewal by submitting an application and paying the renewal fee.
• Renewal application is usually expected to be filed within 60 days before the expiry date. Some States allow renewal with a late fee after the expiry, but it is advisable to renew on time to avoid penalties.
• Failure to renew registration in time may result in suspension or cancellation, and agents will be prohibited from continuing business.

Grounds for Suspension or Revocation of Registration

The Authority holds the power to suspend or revoke registration in certain cases, such as:

• Breach of any conditions of registration or provisions of the RERA Act or Rules.
• Obtaining registration through misrepresentation, fraud or concealment of facts.
• Involvement in unfair trade practices or fraudulent activities.
• Non-maintenance of required records and documents.

Before suspension or revocation, the agent is entitled to receive notice and be given an opportunity of hearing to present their case.

Duties and Responsibilities of Registered Agents under Section 10

Registration comes with important obligations, which agents must strictly observe:

1. Facilitating Sale Only of Registered Projects: Agents must not facilitate transactions in projects that are not registered under Section 3 of the Act.
2. Maintaining Records: Agents are required to maintain books of account, records, and documents as prescribed. These must be preserved and available for inspection.
3. No Unfair Trade Practices: Agents must not engage in false or misleading representations, such as:
   • Falsely claiming certain standards or approvals;
   • Advertising services not actually offered;
   • Misleading statements about promoters or projects.
4. Facilitate Information Access to Allottees: Agents should ensure that prospective buyers receive all documents and information they are entitled to at the time of booking.
5. Other Duties: The Authority may specify further functions or obligations through regulations.

Penalties for Non-Compliance

The RERA Act enforces strict penalties for agents who fail to register or violate other provisions:

• Penalty for Acting Without Registration: Agents conducting business without registration may be fined, and in some cases, the penalty can be up to 10% of the property cost or a specified amount.
• Penalty for Unfair Trade Practices: Engaging in misleading advertising, misrepresentations, or fraudulent acts can attract penalties and even criminal prosecution.
• Revocation of Registration: Serious breaches may lead to suspension or cancellation of registration, effectively banning the agent from legal practice.
• Reputational Harm: Suspension or penalties negatively impact professional credibility and client trust.

Best Practices for Real Estate Agents

To ensure compliance and build a reputable business, agents should consider the following:

• Apply for Registration Early: Register before starting any property dealings to avoid legal issues.
• Maintain Proper Records: Use digital accounting tools and keep updated files of all transactions and communications.
• Stay Updated: Regularly review the latest amendments in RERA Rules and guidelines issued by the Authority.
• Follow Ethical Practices: Avoid false claims, misleading advertisements, and always disclose complete and accurate information to clients.
• Educate Clients: Help buyers understand their rights and the importance of dealing with registered agents and projects.
• Prepare for Renewals: Keep track of registration expiry dates and renew timely to avoid disruption.

Conclusion

The registration of real estate agents under the RERA Act is a vital step towards professionalising the real estate sector in India. Section 9 of the Act mandates agents to register with the State Real Estate Regulatory Authority before facilitating any transactions related to RERA-registered projects.

This legal requirement not only safeguards consumer interests but also enhances transparency, accountability, and trust in the property market. Registered agents must comply with stringent duties and ethical standards while maintaining proper documentation.