There is lesser chance of being conned by a property dealer now if you planning to buy a house in Gurgaon.

In a first in the country, Haryana has passed a law to make it a must for all real estate agents to have a licence to operate. They have also been made accountable for any property deal in which they mediate. The government will also approve the rate of commission they charge from clients.

So far, any dealing with a property dealer was off-therecord and in case of disputes they simply would wash their hands off the deal after taking a cut.

The new set of rules to regulate property dealers in Gurgaon - where almost 60 per cent of fraud cases registers are related to property - are contained in the Haryana Regulation of Property Dealers and Consultants Bill, 2008, passed by the assembly late on Tuesday Finance Commissioner (revenue) K.S. Bhoria said the new rules aim at protecting property buyers from fraudulent deals. Those flouting rules could be imprisoned and penalised - Rs 50,000 for first offence.

The agents have also been barred from buying properties, which they can later sell off for a hefty commission a practice that created an artificial shortage leading to a price jump in Gurgaon.

A Bill passed by the Haryana Assembly on Tuesday that, when signed into law, will require realtors in the state to register themselves with the government spells good news for the common man.

Now, dealers do not take responsibility if buyers discover that the property they have bought belongs to somebody else and was sold to them fraudulently.

This fraud is rampant, which the new law hopes to check.

PREVALENT PRACTICE: Any dealing with a property dealer remains off-therecord. Property dealers charge hefty commission from buyers or sellers, sometimes from both
NOW: They will operate only if they have a licence. The government will decide the rate of commission

PREVALENT PRACTICE: In case of disputes, property dealers simply shrug off responsibility and back out of the deals even after taking commission
NOW: Dealers will stand wit ness on paper for each and every deal they conduct for their clients. If they cheat, you can complain to the licensing authority. The property dealer will have to pay a heavy fine if found guilty.

PREVALENT PRACTICE: There is no fixed rate of commission charged by the property dealers
NOW: Government will fix the rate of commission

PREVALENT PRACTICE: Property dealers, supported by businessmen and politicians with black money, purchase prime properties and wait till the time the market turns favorable. They, in a way, control property prices in the real estate market
NOW: Dealers would not be allowed to purchase the property on which they charge commission without the permis sion of the collector

The law would require a property dealer to obtain a government licence to operate. (Now they do not require a licence.) The licence would be renewed every year.

Property agents will also be accountable for every deal they help seal and charge commission for.

The government will fix the commission slab.

Under the law, a property dealer will have to stand as a witness at every stage of a property transaction.

This way they would be held accountable for any fraudulent deal.

Government officials clarified there would be no cap on the number of dealers who can operate in a particular city.

Haryana desperately needed a law to regulate the activities of its real estate dealers, particularly Gurgaon.

Property-related frauds, riding a housing boom, have zoomed in recent years in the city.

For the record, there are nearly 45,000 property dealers in Haryana. Fifty per cent of them have their offices in Gurgaon.

Indeed, Gurgaon, with its booming housing sector, has come up as an ideal destination for investment in north India, said Col. Prithvi Nath, a governing council member of the National Association of Real Estate Developers and Construction Companies.

The Haryana Urban Development Authority is developing 58 new sectors on 14,800 hectares, offering a fertile ground for fraud.

That there is a strong need for a regulated property market in Gurgaon needs no emphasis.

Experts said the bill would help arrest zooming property prices blamed on hoarding and the con and racket that goes on in the name of property deals.

Sanjay Dutt, joint managing director of property consultancy firm Cushman and Wakefield, said the bill would protect the interests of property buyers.