Property dealers, brokers can charge only 1% commission

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Tribune News Service

Chandigarh, October 27

The Haryana Real Estate Regulatory Authority (HRERA) has decided to issue restraint orders to all promoters and brokers to not charge commission more than prescribed in the rules.

Acting on the complaints that property dealers were charging arbitrary commission from both sellers and buyers, a Bench headed by Haryana Real Estate Regulatory Authority Chairman KK Khandelwal and comprising member SC Kush took the decision.

For registered real estate projects, it has been decided to issue restraint orders to all promoters and brokers to refrain from charging commission more than what is prescribed as per the Haryana Regulation of Property Dealers and Consultants Rules, 2009, under the Haryana Regulation of Property Dealers and Consultants Act, 2008.

Rule 10 provides one per cent commission on agreed consideration value to be paid by the seller and purchaser of the property, i.e. half per cent by each on the finalisation of the deal as per their agreement entered in the register of the dealer under valid receipt.

Talking to The Tribune, Khandelwal said property dealers or brokers were indulging in malpractices in connivance with promoters and charging more than prescribed commission from both sellers and buyers.

“Some property dealers were charging commission as high as five to 10 per cent of the property value in connivance with the developers and ultimately the allottees were bearing the burden,” Khandelwal said.

Accordingly, all real estate agents have been cautioned not to charge commission more than what was prescribed in the rules. Doing so would be deemed as an outright violation of the provisions of the law, he added.

He said the Haryana Real Estate Regulatory Authority was in the process of prescribing a code of conduct for property dealers to make sure that they abide by such norms so that there are no unfair trade practices.

Furthermore, instances have come to the notice of the authorities that some property dealers were falsely representing services of a particular standard or grade and making false or misleading representation concerning approvals for various projects. The real estate agents and brokers were also involved in issuance of misleading advertisements for upcoming projects. The code of ethics would prescribe not only additional books of accounts to be maintained by property dealers to commission charged as per the law and also records of transactions which may be perused by the authority in case of inter se dispute between buyers and brokers.