Real Estate (Regulation & Development) Act (Herein after known as “RERA”) 2016 has ushered in a new revolution in the Real Estate industry in India. In recent years, a weak market and a situation of oversupply has resulted in the fall of weak developers (Which will be accelerated by RERA 2016) has tarnished the image of the industry. This Act and its implementation will present an opportunity to dominant and well established builders for large scale consolidation. Customers are going to be flocking to mid and large sized businesses for the sense of assurance that their dream homes and offices will be delivered.
One of the largest driving forces of Sales in Real Estate Industry has been referral programs. In one particular large Mumbai Real Estate company the share of referral sales has been upto 60% in any given year. Referral programs are not new to the Real Estate Industry but with the provision of RERA, 2016, it may deem these programs as illegal. Under Section 2 of the RERA, 2016, every customer who is referring potential buyers will be deemed to be a “Real Estate Agent” (Hereinafter known as “REAs”), as defined by
“”real estate agent” means any person, who negotiates or acts on behalf of one person in a transaction of transfer of his plot, apartment or building, as the case may be, in a real estate project, by way of sale, with another person or transfer of plot, apartment or building, as the case may be, of any other person to him and receives remuneration or fees or any other charges for his services whether as commission or otherwise and includes a person who introduces, through any medium, prospective buyers and sellers to each other for negotiation for sale or purchase of plot, apartment or building, as the case may be, and includes property dealers, brokers, middlemen by whatever name called;”
Every REA must be registered under Section 3 of the Act. As per the Act, the penalty of non-registration under Section 3 of the Act, is “he shall be liable to a penalty for every day during which such default continues, which may cumulatively extend up to five per cent., of the estimated cost of plot, apartment or building, as the case may be, of the real estate project, for which the sale or purchase has been facilitated and as determined by the Authority”.
Any sale facilitated by a Referral Program which is identified by the authority for scrutiny could turn into a potential PR nightmare for the company. At a time when on average, almost 30% of a typical project’s sales come from a Referral Program, you will ask yourself “What Now?”
With Loyalie’s extensive background of working with Real Estate companies across the country, we are glad to announce that our platform is RERA, 2016 Compliant and we would be happy to bring to you our advanced tracking and power of the Loyalie Referrals Platform. With our new innovative approach to referrals, we can ensure that while customer data is not lost to any third party, we can harness the limitless power of word of mouth marketing through any medium from Facebook to LinkedIn, from Twitter to Influencing blogs, from your own website to our semi-whitelabelled app.
For any consultation regarding the advanced marketing plans of your company, feel free to reach out to me on my personal email email@example.com and I’d be glad to help you!
– Akhil Saraf
Founder & CEO, Loyalie