Land Law Unit III
Land Law Unit III
Land Law Unit III
LLB 505
Unit – IV
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Real Estate Development
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Real Estate (Regulation and
Development) Bill, 2013
• Core Aim: to protect the interest of the buyers and to
promote fair play in Real Estate markets.
• The main purpose of the Bill is to restore the confidence of
the people in the Real Estate zone by introducing
transparency and accountability in the housing markets.
• The bill also attempts to enable the government to reach its
Objective of “Housing for All by 2022”
• Towards this end, the 2013 Bill attempted to boost domestic
and foreign investments in the real estate sector.
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Real Estate (Regulation and
Development) Bill, 2013
• The Bill creates the Real Estate Regulatory Authority (RERA)
for the registration of real estate agents and their projects;
• Outlines the duties of Developers, Buyers and Agents;
• Creates a uniform regulatory system in the real estate
sector;
• Safeguards interests of Buyers in ongoing real estate
projects;
• Establishes a Real Estate Tribunal to appeal decisions by
RERA; and
• Sets up a Central Advisory Council. 8
Real Estate (Regulation and Development)
Bill, 2013 – Changes Made
• Applicability of the Bill: The Bill introduced in 2013 was applicable
only to the Residential Real Estate. Now it covers Residential as well
as Commercial and Industrial Real Estate.
• Registration: Reduced from 10 apartments or 1000 sq. m. to 8 houses
or 500 sq. m.
• Misleading Information/Advertisements: Penalty plus
Reimbursement.
• Deposit: Increased from 50% to 70% - Includes land and construction
costs.
• Written Agreement: No more than 10% of the total value can be
collected from the buyers without an agreement in writing.
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Real Estate (Regulation and Development)
Bill, 2013 – Changes Made
• Structural Defects: Prison term for builders and
developers in addition to fines.
• Dispute Resolution: Concurrent jurisdiction of
Consumer Courts and RERA. Additionally, REAT to
resolve appeals in 60 days.
• Payment of Interest on any delays in delivery of
possession.
• Carpeted Area (S. 2(k)): Sale Price Linked with
Carpeted Areas.
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Real Estate (Regulation and Development)
Act, 2016 – Definitions
• Promoter [Section 2(zk)] – “promoter” means,— a person
who constructs or causes to be constructed an independent
building or a building consisting of apartments, or converts
an existing building or a part thereof into apartments, for the
purpose of selling all or some of the apartments to other
persons and includes his assignees, or
• a person who develops land into a project, whether or not the
person also constructs structures on any of the plots, to sell
to other persons all or some of the plots in the said project,
whether with or without structures thereon, or
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Real Estate (Regulation and Development)
Act, 2016 – Definitions
• Promoter [Section 2(zk)] –
• any development authority or any other public body in respect of allottees of—
• buildings or apartments, as the case may be, constructed by such authority or body
on lands owned by them or placed at their disposal by the government, or
• plots owned by such authority or body or placed at their disposal by the government,
for the purpose of selling all or some of the apartments or plots, or
• an apex state level co-operative housing finance society and a primary co-operative
housing society which constructs apartments or buildings for its members or in
respect of the allottees of such apartments or buildings, or
• any other person who acts as a builder, colonizer, contractor, developer, estate
developer or by any other name or claims to be acting as the holder of a power of
attorney from the owner of the land on which the building or apartment is
constructed or plot is developed for sale, or
• such other person who constructs any building or apartment for sale to the general
public.
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Real Estate (Regulation and Development)
Act, 2016 – Definitions
• Real Estate Agent [Section 2(zm)] – “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 a
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 a 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.
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Real Estate Regulatory Authority
• Mandatory Registration (Section 3) – Regulatory Authorities require all projects
with a plot size of at least 500 square metres or eight flats to be registered.
• Deposits – Placing 70% of the monies accumulated from the buyer shall be deposited
in a separate escrow account dedicated solely for the construction of that project.
• Penal interest on default (Section 61) – Both the promoter and the buyer are
responsible to pay an equal rate of interest in the event of either party’s default.
• Ceiling on advance payments (Section 13) – Without initially entering into a sale
agreement, a promoter cannot receive more than 10% of the cost of the plot,
apartment, or building as an advance payment or an application fee from a person.
• Punishment (Section 66) – For violations of orders of Appellate Tribunals and
Regulatory Authorities, developers can face up to three years in prison while agents
and buyers can face up to one year in prison or a fine for every day during which the
default continues, which may extend cumulatively extend up to ten per cent of the
estimated cost of the plot, apartment or building of the real estate project.
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Real Estate Regulatory Authority
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Real Estate Regulatory Authority
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Real Estate Appellate Tribunal
• Section 43:
The decision of the Real Estate Regulatory Authorities
can be appealed to the tribunals established for each
state under the Act including its composition,
application for settlement of the dispute, qualifications
for chairperson and members, powers of tribunal and
vacancies of the Appellate Tribunal.
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Real Estate Appellate Tribunal
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Real Estate Appellate Tribunal
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Real Estate Appellate Tribunal
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Real Estate Appellate Tribunal
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Central Advisory Council
• Establishment of the Central Advisory Council (Section 41)
• Functions of Central Advisory Council (Section42):
• The functions of the Central Advisory Council shall be to advise and
recommend the Central Government,—
• on all matters concerning the implementation of this Act;
• on major questions of policy;
• towards protection of consumer interest;
• to foster the growth and development of the real estate sector;
• on any other matter as may be assigned to it by the Central Government.
• The Central Government may specify the rules to give effect to the
recommendations of the Central Advisory Council.
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