MahaRERA’s New Clause 15A in Property Sale Agreements: What Homebuyers and Sellers Need to Know

The Maharashtra Real Estate Regulatory Authority (MahaRERA) recently introduced a new clause in its model sale agreement, which has implications for homebuyers, sellers, and real estate agents across the state. For the first time, MahaRERA’s model property sale agreements now includes a specific provision, Clause 15A, addressing the fees and commissions owed to registered real estate agents. This clause explicitly acknowledges the broker’s right to receive payments and formalizes the process within the sales agreement itself.

This adjustment brings both benefits and potential complications for all parties involved, making it important to understand how this new requirement might impact property transactions.

Key Highlights of MahaRERA’s Clause 15A

Clause 15A, introduced by MahaRERA in its October 22, 2024 order, states that if a real estate transaction between a promoter (builder) and allottee (buyer) is facilitated by a registered real estate agent, the agreed commission or fee must be paid as outlined in the transaction agreement. This clause mandates that all payments, including taxes, be completed according to the agreed terms, with both the buyer and promoter responsible for honoring the financial arrangement.

This model agreement serves as a guide for many builders drafting their property sale agreements. Including this provision means that both buyers and sellers must acknowledge the broker’s fees within the sale contract, reducing future ambiguity.

How Will This Impact Homebuyers?

For homebuyers, Clause 15A brings both clarity and potential financial considerations. Recognizing the broker’s fees within the contract means that buyers and promoters are bound to pay the agreed commission, formalizing the transaction and minimizing the possibility of misunderstandings regarding broker payments.

However, the clause may present some challenges. If a buyer fails to pay the agreed amount to the agent, the agent could file a complaint with MahaRERA or take legal action to recover the fees. This potential for legal disputes could add a layer of complexity to property sales and may impact the ease of reselling a property, particularly if there are unresolved broker-related disputes.

Implications for Sellers and Builders

For builders, Clause 15A necessitates a more transparent approach when involving brokers in transactions. Promoters must ensure they accurately document broker fees within the agreement, creating transparency and reducing the potential for conflicts. They will also be required to keep records of all payments made to agents, minimizing future conflicts and providing legal protection in case disputes arise.

Builders who fail to include this clause may face penalties, adding regulatory importance to this update. Including broker payments in sale agreements could potentially increase the overall cost of transactions, as builders may seek to recoup broker fees in the property’s pricing, impacting affordability for buyers.

Advice for Buyers and Sellers to Safeguard Their Interests

Given this new requirement, here are some steps that buyers and sellers can take to protect their interests:

1. Verify Agent Registration: Before agreeing to any broker fees, buyers and sellers should verify that the real estate agent is registered with MahaRERA.
2. Include Clear Payment Terms: Both parties should ensure that payment terms, amounts, and timelines are explicitly included in the agreement.
3. Retain Payment Proof: Retaining proof of broker fee payments is crucial, as failing to do so could lead to legal complications.
4. Consult Legal Assistance: Given the potential for disputes, buyers and sellers should consider consulting a legal expert to fully understand the terms and conditions outlined in Clause 15A.

Conclusion

While Clause 15A aims to streamline real estate transactions by formalizing broker payments within sale agreements, it could also bring challenges for buyers and sellers. By providing clear documentation and upholding payment terms, all parties can benefit from a more transparent process, but due diligence will be essential to avoid potential disputes.