Setting up a real estate brokerage in India is a natural next step for many builders and entrepreneurs in the construction industry. With increasing demand for property advisors and intermediaries, having a brokerage wing can help connect potential buyers with builders. But before the business begins, it’s essential to understand the legal framework.

In this blog, we break down the key legal requirements, agreements you need, and the process of setting up a real estate brokerage.

Legal Agreements You Need to Start a Brokerage

Starting a brokerage is not just about connecting people. It involves working relationships, money, and legal responsibilities. You need proper agreements to make everything official and legally sound.

Builder-Broker Agreement

This agreement defines how you’ll work with the builder or developer. It protects your rights as a broker and helps avoid confusion later on.

What should be included?

• Scope of Work: What services you’re offering (site visits, marketing, lead generation)
• Commission Structure: How much, when, and how you’ll be paid
• Exclusivity Clause: Whether you’ll be the only broker or one of many
• Termination Clause: Conditions under which either party can exit the agreement
• Confidentiality Clause: Ensures sensitive details about the project are not disclosed without permission

Broker-Customer Agreement

While not always mandatory, this agreement helps avoid issues between you and the buyer or customer. It sets expectations on both sides.

Key clauses may include:

• Services offered
• Commission or fees
• Responsibility of each party
• Limitations and disclaimers
• Dispute resolution process

Having separate agreements—one for builders and one for customers—keeps things clear and reduces the risk of confusion or conflict.

How to Start a Real Estate Brokerage in India

Starting a real estate brokerage involves a few legal and strategic steps. Here’s a 8-step guide to help you set up your business the right way.

1. Decide Your Business Model
   Determine whether you’ll operate independently, under a franchise, or alongside a construction business (like a builder-broker setup).
2. Register Your Business Entity
   Choose a suitable business structure—sole proprietorship, partnership, LLP, or private limited company. Register it with the MCA (for LLP or Pvt Ltd) or your local municipal authority.
3. Obtain RERA Registration
   Apply for registration as a real estate agent with your State’s RERA authority. You’ll need:
   • PAN card
   • Address proof
   • Business registration certificate
   • Photograph and contact details
   • Fee payment (varies by state)
4. Apply for GST Registration
   If your turnover is above ₹20 lakh, you’ll need to register for GST and issue proper tax invoices.
5. Draft Legal Agreements
   Work with a property lawyer to draft:
   • A Builder-Broker Agreement
   • A Broker-Customer Agreement 

These documents define your role, protect your interests, and ensure compliance.

1. Build a Database of RERA-Registered Projects
   Only deal with projects and properties that are registered under RERA. Ensure you have verified property documents before listing.
2. Promote Your Services Legally
   Avoid false claims or misrepresentations in advertisements. Follow RERA’s code of conduct for brokers.
3. Maintain Records and Renewals
   Keep client details, agreements, and payment records safely. Renew your RERA licence as required—typically every 5 years.

Real Estate Brokerage Regulation

Real estate brokerage is a regulated business under Indian law. There are two main laws you need to know about:

1. The Real Estate (Regulation and Development) Act, 2016 (RERA)

RERA was introduced to bring more transparency and accountability into the real estate sector. It applies to developers, agents, and even individual property sales under certain conditions.

If you want to operate as a real estate broker:

• You must register with your State’s RERA Authority.
• You can only deal in properties that are registered under RERA.
• You are required to maintain records and assist both builders and buyers during the transaction.

What if you don’t register? The penalty for operating without RERA registration can go up to ₹10,000 per day of default, and even 5% of the cost of the property involved.

2. The Indian Contract Act, 1872

Every agreement you sign—whether with a builder or a buyer—needs to follow the rules of a valid contract under this law. The contract must have:

• Free and informed consent from both parties
• A lawful purpose
• Clear terms
• Reasonable consideration (payment or service)

Without a valid contract, you may struggle to enforce terms or protect your interests in case of a dispute.

Real Estate Agent vs Property Lawyer: Who Does What?

While both professionals play a role in real estate deals, their responsibilities and powers are very different.

If the agent helps get the deal through, the lawyer ensures the deal stands on strong legal ground.

Need for a Property Lawyer for Your Brokerage

Starting a brokerage isn’t just a business step—it’s a legal one too. A Real Estate Transactional lawyer plays a vital role in making sure your business is protected from legal risks.

Here’s why you need one:

1. Drafting Legally Strong Agreements

A property lawyer will help create agreements that clearly define your role and protect you in case of payment disputes, delays, or service issues.

2. Ensuring Compliance with RERA

The lawyer will check that your agreements and processes comply with the local RERA rules, avoiding heavy penalties or suspension of your registration.

3. Verifying Property Titles

If your brokerage offers property recommendations, a lawyer can help check if the builder owns the land legally and has obtained the required approvals.

4. Handling Legal Disputes

Whether it’s a commission conflict or a disagreement with a buyer, a lawyer can help settle the matter legally before it escalates.

In short, while a broker may know how to close a deal, only a property lawyer can make sure that the deal is legally secure.

Case in Point: Building a Brokerage Legally

A client with an existing construction company approached us to set up a real estate brokerage branch in Kanpur. They wanted to deal with both builders and customers, and needed guidance on the legal agreements required for such a venture. Our property lawyer explained the importance of having two separate agreements: a Builder-Broker Agreement and a Broker-Customer Agreement, each addressing key aspects such as scope of services, commission structure, exclusivity, termination, and confidentiality.

The client asked for a clear, professional legal framework to protect both parties involved. With expert legal support, the client was able to move forward with confidence, knowing that their agreements would be legally sound and enforceable.

How Zolvit Can Support You

If you’re setting up a real estate brokerage or expanding an existing construction business, legal paperwork and compliance can’t be an afterthought. Zolvit provides:

• Professionally drafted builder and customer agreements
• Support with RERA registration and legal compliance
• Title check and property document verification
• Access to legal experts for consultation and review

Zolvit’s legal assistance ensures your brokerage runs on secure and compliant foundations, while giving you the flexibility to focus on the business side.

Conclusion

Starting a real estate brokerage in India can open new income streams and help expand your presence in the property market. But without the right legal base, a single mistake could cost you your reputation—or worse, your business.

By making the legal setup part of your first steps and working with Zolvit professionals, you can build a business that’s legally sound, trustworthy, and ready to grow.

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