HARERA to issue restraint order on commission charged by property dealers

HARERA chairman says property dealers and brokers were indulging in the malpractice in connivance with the promoters and charging arbitrarily more than the prescribed commission both from the sellers and buyers

Haryana Real Estate Regulatory Authority (HARERA), Gurugram, has decided to issue restraint orders to all real estate promoters and brokers, asking them not to charge commission arbitrarily in contravention of law.

Representative Image /HT File

HARERA chairman KK Khandelwal said that promoters and brokers cannot charge commission higher than what is laid down in the Haryana Regulation of Property Dealers and Consultants Rules, 2009, made under the Haryana Regulation of Property Dealers and Consultants Act, 2008.

Taking cognisance of the fact that property dealers were charging arbitrary commission from the sellers as well as the buyers of a property, a bench headed by Khandelwal and member SC Kush said that clause 10 of the Rules provides for 1% commission on agreed consideration value to be paid by the seller and purchaser of the property which is half per cent by each of them on finalisation of the deal.

Khandelwal said that the property dealers and brokers were indulging in the malpractice in connivance with the promoters and charging arbitrarily 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 shared by the allottee,’’ he said.

The licences to the brokers and property dealers are granted by the deputy commissioner under the Haryana Regulation of Property Dealers and Consultants Act, 2008. The registration of the property dealer to negotiate real estate deal of a registered project is done by the Real Estate Regulatory Authority under Section 9 of the Real Estate (Regulation and Development) Act, 2016, and the registration is then granted subject to the condition that the real estate agent shall not contravene the provisions of any other law for the time being as applicable to him.

“Accordingly, 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 said that HARERA, Gurugram, was also in the process of prescribing a code of conduct for the property dealers to ensure that brokers do not indulge in any unfair trade practices.

Instances have come to the notice of the Authority that certain property dealers were 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 are also involved in issuing of advertisements of upcoming projects which are misleading to the public. The 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 law and also keeping record of transaction which may be perused by the authority in case of inter se dispute between buyers and brokers, the chairman said.

Khandelwal said it has also been noticed that some property dealers were indulging in sale of unauthorised colonies. A vigil is being kept on such brokers so that their registrations are cancelled and criminal/civil action, as per law, is initiated against them.