Category Archives: real estate law

Draft Real Estate Rules

Minister of Housing & Urban Poverty Alleviation has formulated Draft Real Estate Rules within two months of some sections of the Real Estate (Development and Regulation) Act,2016 coming into force on first of May this year. With the approval of the Minister of HUPA Shri M.Venkaiah Naidu, the draft rules were hosted on the Ministry’s website ( seeking suggestions and objections from the public within two weeks.

If fulfillment of its responsibility towards five Union Territories without legislatures, the Ministry of HUPA has come out with the ‘Union Territories of Chandigarh, Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep’ Real Estate (Regulation and Development) Rules, 2016.

The Rules provide for payments to be made for registration of projects and real estate agents with the Regulatory Authority, documents and information to be furnished by developers, procedures to be followed for registration,  extension and  renewal of registration, procedures for filing and hearing of complaints and appeals, appointment and service conditions of the Chairpersons and Members of Real Estate Regulatory Authorities and Appellate Tribunals and their powers etc.

Under the Rules, promoters can’t discriminate against anyone in the allotment of any apartment, plot or building on any ground. This has been incorporated further to the assurance of Shri Venakaiah Naidu during the debate on the Real Estate Bill in the Parliament.

Rules require the Real Estate Regulatory Authority to be set up in States/UTs to ensure availability of information in respect of 60 aspects relating to the promoters and the projects. These relate to the profile of developer of group, track record of promoter, details of past or ongoing litigations relating to real estate projects, apartment and garage related details, location, details of registered agents and consultants, development plan, financials of the promoter, status of project along with that of approvals, contact details , copies of legal title deed, details of encumbrances etc.

The promoter will be required to upload updates on the webpage of the project, within seven days from the expiry of each quarter, regarding number and types of apartments or plots booked, garages booked, status of construction of each floor with photographs, status of approvals, modifications if any issued by the competent authority with regard to any license, permit or approval for the project.

Fee proposed for registration of projects with the Regulatory Authority is Rs.10 per if the plot area is below 1,000 and Rs.20 if the area for development is more than that for residential projects and Rs.50 and  Rs.100 per for commercial projects.

Upon the notification of sub-section (1) of section 3, promoters of all ongoing projects which have not received completion certificates shall apply for registration of projects within three months and disclose all relevant information including the size of the apartment based on carpet area.

Functions prescribed for real estate agents include assisting the allottee and promoter to exercise their respective rights and fulfill their respective obligations at the time of booking and sale of any plot, apartment or building.

Draft Real Estate Rules also provide for payment of 10% of the estimated cost of the project for compounding of imprisonment of promoter for non-registration of the project or violation of the order of the Real Estate Appellate Tribunal. Imprisonment of real estate agent and buyer for violating Tribunal’s Order can be compounded upon payment of 10% of the estimated cost of the plot, apartment or building. However, the reasons for imprisonment shall be complied with in one month.

For any delay in payment by the promoter and buyer has been proposed to be the State Bank of India Prime Lending Rate plus 2%.

Selection Committee headed by the Chief Justice of respective State/UT or his nominee with Housing and Law Secretaries as members will recommend names for appointment as Chairperson and Members of Real Estate Regulatory Authorities and Appellate Tribunals.

After eliciting public comments/suggestions over the next two weeks, the draft rules will be discussed with officials of the five Union Territories and further to revision if required, the rules will be sent for legal vetting. Thereafter, the rules will be notified.


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Real Estate Act comes into force

PIB press release dated 30th April, 2016.

The much awaited and widely acclaimed Real Estate (Regulation and Development) Act, 2016 comes into force tomorrow i.e May 1, 2016 setting in motion the process of making necessary operational rules and creation of institutional infrastructure for protecting the interests of consumers and promoting the growth of real estate sector in an environment of trust, confidence, credible transactions and efficient and time bound execution of projects.   

Ministry of Housing & Urban  Poverty Alleviation has notified 69 of the total 92 sections of the Act on Wednesday this week bringing the Act into force from May 1,2016 culminating the eight year long efforts in this regard. A proposal for a law for Real Estate was first mooted at the National Conference of Housing Ministers of States and Union Territories in January, 2009.

As per the notification announcing the commencement of the Act on May 1,2016, Rules under the Act have to be formulated by the Central and State Governments within a maximum period of six months i.e by October 31,2016 under Section 84 of the Act. Ministry of HUPA would make Rules for  Union Territories without legislatures while the Ministry of Urban Development would do so for Delhi.

Section 84 of the Act stipulates that “The appropriate Government shall, within a period of six months of the commencement of this Act, by notification, make rules for carrying out the provisions of this Act.”

Early setting up of Real Estate Regulatory Authorities with whom all real estate projects have to be registered and Appellate Tribunals for adjudication of disputes is the key for providing early relief and protection to the large number of buyers of properties.

Section 20 of the Act says “The appropriate Government shall, within a period of one year from the date of coming into force of this Act, by notification establish an authority to be known as the Real Estate Regulatory Authority to exercise the powers conferred on it and to perform the functions assigned to it under this Act”. These Authorities decide on the complaints of buyers and developers in 60 days time.

Section 20 of this Act also empowers appropriate Governments to designate any officer preferably Secretary of the Department dealing with Housing, as the interim Regulatory Authority until the establishment of Regulatory Authority under the provisions of the Act.

Regulatory Authorities, upon their constitution get three months time to formulate regulations concerning their day to  day functioning under Section 85 of the Act.

Likewise, under Section 43 of the Act, Real Estate Appellate Tribunals shall be formed within a maximum period of one year i.e by April 30,2017. These fast track Tribunals shall decide on the disputes over the orders of Regulatory Authorities in 60 days time.

Under the directions of the Minister of Housing & Urban Poverty Alleviation Shri M.Venkaiah Naidu, a Committee chaired by Secretary (HUPA) has already commenced work on formulation of Model Rules under the Act for the benefit of States and UTs so that they could come out with Rules in quick time besides ensuring uniformity across the country. The Ministry will also will come out with Model Regulations for Regulatory Authorities to save on time.

The time limits of six months for formulation of Rules and one year for setting up Regulatory Authorities and Appellate Tribunals are the outer limit and the States willing to act quickly could do so and the Ministry of Housing & Urban Poverty Alleviation would notify the remaining Sections of the Act to enable relief to the buyers under the Act as quickly as possible, as desired by Shri M.Venkaiah Naidu.

The remaining 22 Sections to be notified relate to functions and duties of promoters, rights and duties of allottees, prior registration of real estate projects with Real Estate Regulatory Authorities, recovery of interest on penalties, enforcement of orders, offences, penalties and adjudication, taking cognizance of offences etc.


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