by 99Realty 
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has introduced a key regulation that mandates the inclusion of real estate agents’ fees, including commissions and brokerage charges, in the model property sale agreement. This regulation results from consultations between MahaRERA and the National Association of Realtors (NAR)-India. Their partnership reflects a push for a professionalized and organized real estate sector in Maharashtra. These reforms by MahaRERA are pivotal in making the real estate sector more buyer-friendly, ensuring ethical practices, and enhancing transparency in the financial aspects of property transactions. The introduction of such guidelines is a step forward in creating a robust framework for real estate dealings in India.
Key Provisions in the Guidelines
- Mandatory Mention of Brokerage Fees: Developers and sellers must clearly specify the brokerage fees in the property sale agreements. This ensures buyers are aware of all costs upfront, reducing ambiguity during property transactions.
- Responsibility on Builders: Builders are now liable for fulfilling promises made by real estate agents, even if the agents are independent of their organization. This aligns with broader consumer protection measures in the real estate sector.
- Brokerage Fee Limits: There is now an emphasis on capping brokerage fees to ensure fair practices. For example, a 2% brokerage fee cap is becoming a standard in some cases, such as recent MahaRERA rulings.
- Transparency in Commission Structure: All stakeholders, including agents, builders, and buyers, must mutually agree on the brokerage percentage, promoting fair practices and reducing disputes.
- Accountability for Delayed Deliveries: Developers must now adhere to promised delivery timelines for amenities and construction, ensuring accountability if delays occur.
- Additional Reforms: MahaRERA has also mandated detailed disclosures about project amenities, parking allocations, and common area layouts to address ambiguities and enhance buyer trust.
Also Read: Benefits of the RERA Act for Homebuyers
Understanding MahaRERA’s New Regulation
The integration of agents’ fees into formal agreements is expected to minimize conflicts, promote trust, and establish standardized practices across the sector. With this change, Maharashtra’s real estate market is likely to see a shift toward greater professionalism and reduced transactional ambiguities.
Mandate Details:
- Real estate agents’ fees, including commissions and brokerage charges, must now be clearly documented in sale agreements.
- The directive ensures that agents receive timely payments and legal recognition for their services.
- This mandate formalizes agents’ roles in property transactions, reducing payment disputes and ambiguities.
Objective:
- To foster transparency in financial dealings during property sales.
- To strengthen the legal framework protecting real estate agents and their contributions.
- To build trust among buyers, developers, and agents.
Additional Requirements:
- Detailed disclosures on parking allocations and amenities in agreements.
- Comprehensive information about common areas, layouts, and facilities must be included.
Impact on Stakeholders
This regulation is a collaborative effort between MahaRERA, NAR-India, and industry leaders, reflecting a shared commitment to professionalizing the sector. As developers, agents, and buyers adjust to these changes, the Maharashtra real estate market is poised for a transformation that prioritizes fairness, transparency, and trust.
| Entity | Benefits | Challenges |
|---|---|---|
| For Real Estate Agents | 1. Legal recognition of their work. 2. Reduction in conflicts over commissions. 3. Enhanced trust in their services. | Agents need to ensure accurate documentation of their fees in agreements. |
| For Developers | 1. Increased accountability fosters a trustworthy reputation. 2. Standardized practices reduce operational ambiguities. | Additional compliance requirements may necessitate adjustments to existing documentation processes. |
| For Buyers | 1. Transparent financial dealings enable informed decision-making. 2. Greater trust in transactions due to clearly defined cost structures. |
Also Read: Tripartite Sale Agreement: New Noida Registration Rules for Apartment Buyers
Realtors’ Views
- Rohit Gera, MD, Gera Developments:
- Gera applauded the regulation, stating that it is a “step toward professionalizing the real estate industry.” He highlighted that documenting commissions will minimize disputes and create a fair playing field for agents.
- Anuj Puri, Chairman, ANAROCK Property Consultants:
- Puri believes that this move will ensure transparency for homebuyers and help streamline transactions. However, he emphasized the need for extensive awareness campaigns to educate stakeholders about the new norms.
- Pramod Vyas, Vice-Chairman, RERA Committee, NAR-India:
- Vyas called the mandate a “milestone in protecting agents’ rights.” He emphasized that it acknowledges agents’ integral role in transactions and paves the way for more standardized industry practices.
- Jaxay Shah, Chairman, CREDAI:
- Shah welcomed the regulation, asserting that it aligns with CREDAI’s vision for increased transparency. He noted that this step would elevate India’s real estate standards and foster trust among buyers.
Challenges Highlighted by Realtors
- Implementation Hurdles:
- Realtors noted that developers might find it challenging to adapt quickly to the new compliance requirements.
- Educating smaller developers and agents about the specifics of the mandate is essential to ensure smooth implementation.
- Buyer Perception:
- Some buyers may resist the inclusion of commissions in agreements due to a lack of understanding about their necessity.
Long-Term Implications
- Professionalization:
- The regulation is expected to formalize and standardize the role of real estate agents, ensuring their rightful place in the industry.
- Transparency:
- With clearly defined terms in sale agreements, buyers and developers are likely to face fewer disputes, fostering trust and reliability.
- Growth in Buyer Confidence:
- Enhanced transparency and professionalism may attract more buyers to the market, bolstering the real estate sector in Maharashtra.
- Better Agent-Developer Relations:
- By minimizing misunderstandings and payment delays, the regulation could improve the overall working relationship between agents and developers.
MahaRERA’s decision to include real estate agents’ fees in sale agreements is a significant step toward modernizing the real estate market in Maharashtra. By promoting transparency and accountability, the regulation not only protects the rights of agents but also builds confidence among buyers and developers. While implementation challenges remain, the long-term benefits of this move are expected to strengthen the foundation of the real estate industry in India.
