RERA’s Role in Regulating Real Estate Agents and Brokerage for NRI Clients

India’s real estate market attracts a large number of Non-Resident Indians (NRIs) who wish to invest in property for residence, rental income, or long-term capital growth. However, distance, unfamiliarity with local procedures, and reliance on intermediaries make NRIs especially dependent on Real Estate Agents. This dependency also increases legal risk.

To address long standing issues such as misleading advertisements, unregistered brokers, and opaque brokerage practices, the Government of India enacted the Real Estate (Regulation and Development) Act, 2016 (RERA). RERA is a consumer protection focused law that regulates developers, projects, and importantly, Real Estate Agents and their brokerage activities.

This article explains how RERA governs Real Estate Agents, how brokerage is regulated, and what these rules mean for NRI property investment in India. The goal is to provide clear, factual, and legally accurate information in simple language.

Understanding RERA in Simple Terms

RERA is a central law passed in 2016. Each Indian state and Union Territory has its own RERA Authority and rules under the Act. The law aims to:

• Promote transparency

• Protect homebuyers

• Ensure timely project completion

• Regulate developers and Real Estate Agents

RERA applies to most residential and commercial real estate projects that meet minimum land area or apartment number thresholds. Importantly, the law also regulates anyone who acts as an intermediary in the sale or purchase of property.

Who Are “Real Estate Agents” Under RERA?

Section 2(zm) of the RERA Act defines a Real Estate Agent as any person who negotiates or acts on behalf of one person in a real estate transaction. This includes:

• Property brokers

• Channel partners

• Marketing agents

• Property dealers

• Consultants who facilitate sales or purchases

Even if an agent operates as an individual or through a firm or company, RERA can apply. If the person facilitates sale or purchase of property in a RERA registered project, they fall under the law.

For NRIs, this definition is important because many transactions are handled remotely through brokers or representatives in India.

Mandatory RERA Registration for Real Estate Agents

Legal Requirement

Under Section 9 of the RERA Act, no Real Estate Agent can facilitate the sale or purchase of a property in a RERA-registered project without obtaining RERA registration.

This is a core compliance requirement under the real estate brokerage rules in India.

What Registration Means

When an agent registers:

• Their name, address, and details are recorded with the State RERA Authority.

• They receive a registration number.

• Their details are publicly available on the RERA website of the state.

This system improves accountability and allows buyers, including NRIs, to verify the agent’s legal status.

Validity

RERA registration is typically valid for a fixed period (often five years), subject to state rules. It must be renewed before expiry.

Why RERA Regulation Matters More for NRI Clients

NRIs often face unique challenges:

• They are not physically present during negotiations.

• They may rely fully on the agent’s representations.

• They may not understand local land records or state rules.

Because of this, Real Estate Agents play a critical role. RERA attempts to reduce the risk of:

• False assurances about project approvals

• Misleading statements about possession dates

• Inflated pricing or hidden brokerage

• Sale of units in unregistered projects

Thus, RERA’s regulation provides an added legal safeguard for NRI property investment in India.

Duties of Real Estate Agents Under RERA

RERA does not just require registration. It also imposes specific duties on Real Estate Agents.

1. No Dealing in Unregistered Projects

An agent cannot sell, market, or advertise apartments in a project that is required to be registered under RERA but is not registered. This protects buyers from illegal or unauthorized developments.

2. Providing Accurate Information

Agents must:

• Provide information as available on the RERA website

• Avoid false or misleading statements

• Not conceal material facts

If an agent misrepresents approvals, amenities, or completion timelines, it can lead to penalties.

3. Maintain Records

Agents are required to maintain books of accounts, records, and documents as prescribed under state RERA rules. This supports financial transparency.

4. Assist in Compliance

Agents must assist both buyers and developers in complying with the Act, especially regarding:

• Booking forms

• Agreements for sale

• Allotment letters

This duty is important for NRIs who often sign documents remotely.

Regulation of Brokerage Under RERA

RERA does not fix a uniform brokerage rate. However, it regulates brokerage indirectly through transparency and accountability.

Key Aspects

1. No Hidden Charges
All financial terms should be clearly communicated. Charging undisclosed fees can amount to unfair trade practice.

2. No Misleading Promises Linked to Brokerage
Agents cannot promise guaranteed returns or special schemes unless they are officially part of the project disclosures.

3. Accountability for Misconduct
If a buyer suffers loss due to an agent’s false representation, the agent can face penalties and even cancellation of registration.

For NRIs, this means brokerage practices must align with real estate brokerage rules in India, and agents cannot operate informally in RERA projects.

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Penalties for Real Estate Agents Under RERA

RERA includes strict consequences for violations.

Monetary Penalties

Under Section 62 of the Act, if a Real Estate Agent fails to comply with orders of the RERA Authority, they may face penalties that can extend up to 5% of the cost of the unit involved in the transaction.

Revocation of Registration

RERA Authorities can cancel an agent’s registration if:

• The agent breaches the Act or rules

• Engages in unfair trade practices

• Is involved in fraud or misrepresentation

This can effectively stop the person from legally operating in RERA covered projects.

How NRIs Can Verify Real Estate Agents

Verification is a practical step that reduces risk.

Steps to Check RERA Registration

1. Visit the official website of the concerned State RERA Authority.

2. Look for the “Registered Real Estate Agents” section.

3. Search by agent name or registration number.

4. Check validity status and details.

This process helps NRIs confirm that they are dealing with legally recognized Real Estate Agents.

Role of RERA in Advertising and Marketing

Agents often market properties through digital platforms, emails, or social media—especially for NRIs.

Under RERA:

• Advertisements must include the RERA registration number of the project.

• Agents cannot market a project that is not registered (if registration is required).

• Claims about amenities, area, and completion dates must match RERA disclosures.

False advertising can be treated as a violation of the Act.

Interaction Between RERA and Other Laws

RERA works alongside other Indian laws.

Consumer Protection Act, 2019

Homebuyers may also approach Consumer Commissions for deficiency in service or unfair trade practices. Misleading actions by Real Estate Agents can fall under this law.

Indian Contract Act, 1872

Agreements signed through agents are contracts. Misrepresentation or fraud by an agent may affect contractual rights.

Foreign Exchange Management Act (FEMA)

NRIs must also follow FEMA rules regarding:

• Permissible property types

• Mode of payment

• Repatriation of funds

Agents should not advise actions that violate FEMA guidelines.

Practical Tips for NRIs Dealing with Real Estate Agents

While RERA offers protection, practical caution is still necessary.

1. Always Ask for RERA Registration Details

Do not rely only on business cards or verbal claims.

2. Cross Verify Project Details

Check:

• Project registration number

• Approved plans

• Completion timeline

All of this is usually available on the RERA portal.

3. Keep Written Communication

Emails and messages help in case of future disputes.

4. Understand Brokerage Terms Clearly

Clarify:

• Who pays brokerage

• Percentage or fixed amount

• Stage at which payment is due

5. Avoid Cash Transactions

Use traceable banking channels. This aligns with legal and tax compliance.

Common Issues Faced by NRIs and RERA’s Relevance

Frequently Asked Questions (FAQs)

1. Is RERA registration compulsory for all Real Estate Agents?

It is compulsory for agents dealing in projects that are required to be registered under RERA. Without registration, they cannot legally facilitate such transactions.

2. Can an NRI file a complaint against a Real Estate Agent under RERA?

Yes. If the agent violates the Act, misrepresents facts, or breaches obligations, a complaint can be filed before the State RERA Authority.

3. Does RERA fix brokerage percentage?

No. RERA does not prescribe a standard brokerage rate. However, it promotes transparency and accountability in brokerage practices.

4. Can an agent sell property in a project not registered under RERA?

If the project is required to be registered but is not, the agent cannot legally market or sell units in that project.

5. What if the agent’s RERA registration is cancelled?

A cancelled agent cannot legally operate in RERA-registered projects. Dealing with such an agent increases legal risk.

6. Does RERA protect NRIs differently from resident buyers?

RERA applies equally to all allottees, including NRIs. However, NRIs may benefit more from its transparency features due to remote transactions.

Legal References

• Real Estate (Regulation and Development) Act, 2016

• Relevant State RERA Rules and Regulations

• Consumer Protection Act, 2019

• Indian Contract Act, 1872

• FEMA regulations applicable to NRI property transactions

RERA has significantly changed how Real Estate Agents operate in India. By mandating RERA registration, defining duties, and imposing penalties for misconduct, the law brings structure and accountability to the brokerage ecosystem.

For those involved in NRI property investment in India, these safeguards are especially valuable. NRIs often rely heavily on intermediaries, and RERA reduces the risk of misinformation, unauthorized projects, and opaque brokerage practices.

Still, RERA is a regulatory framework, not a guarantee against all disputes. Buyers should verify agent registration, review project details on official portals, and maintain proper documentation. Understanding the legal framework helps NRIs make informed and safer property decisions in India.