By Rajiv N Jain
The recent MahaRERA order in Complaint No. CC12504580 (Anil Kumar Agarwal v. Aman Yadav) has set a concerning precedent for the real estate brokerage community. In this ruling, the Authority directed a registered real estate agent to pay a homebuyer 1% of the transaction value as a “kickback” or commission pass-through that had been promised via email before the sale was executed.
While the intent to protect homebuyers is understandable, the order raises fundamental questions about the correct interpretation of RERA and the limits of MahaRERA’s jurisdiction.
Misapplication of Section 10(c)
Section 10(c) of the Real Estate (Regulation and Development) Act, 2016 prohibits registered real estate agents from engaging in unfair trade practices or making false or misleading representations concerning the services they offer. Typically, this provision addresses misleading claims about the quality, standards, approvals or features of a real estate project.
A private commercial arrangement between a buyer and an agent regarding the sharing of commission does not, in my view, amount to a “misleading representation of services” under the Act. Stretching Section 10(c) to enforce a voluntary commission-sharing promise converts a contractual understanding into a statutory violation. This interpretation expands the scope of the provision far beyond what the legislature appears to have intended.
Jurisdictional Overreach
Under Section 31 of RERA, MahaRERA’s jurisdiction is confined to violations of the Act, the Rules and the Regulations framed under it. Private monetary disputes — such as whether an agent should share a portion of the brokerage earned from the developer with the buyer — are essentially civil contractual matters governed by the Indian Contract Act, 1872.
By entertaining and deciding such a claim, and by attaching the threat of penal action under Section 65, the Authority has stepped into the domain of a civil court. This raises a serious question of jurisdiction.
Impact on Registered Agents
RERA recognises real estate agents as a statutory stakeholder under Sections 9 and 10. The registration and certification framework was introduced to professionalise the sector and bring accountability. Forcing agents to return a portion of their hard-earned brokerage under the threat of regulatory penalty undermines the financial viability of genuine, tax-paying brokers and could discourage professionals from remaining in the formal system.
Concerns Over Ex-Parte Proceedings
Although notice was issued, the order was passed ex-parte. Enforcing a private monetary claim with the backing of statutory penalty provisions, without a full determination of whether MahaRERA even had jurisdiction over the dispute, raises issues of natural justice.
Way Forward
The real estate brokers’ associations should take this matter seriously. A formal representation should be submitted to the Housing Minister, the Principal Secretary (Housing), and the Chairman of MahaRERA seeking clarity on the scope of Section 10(c). Associations may also consider supporting an appeal before the Maharashtra Real Estate Appellate Tribunal under Section 44 of RERA, primarily on the ground of lack of jurisdiction.
The professionalisation of real estate brokerage was one of the stated objectives of RERA. Orders that convert voluntary commercial understandings into regulatory liabilities risk undermining that very objective.
About the Author Rajiv N. Jain of Ruchika Shelters, is a Real Estate Agent based out of South Mumbai
Disclaimer: The views expressed in this article are the personal opinions of the author and do not represent the views of Square Feat India.
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