A short summary of what the Real Estate Regulation and Development Act of 2016 entails, its purpose, scope and provisions

1. THE
REAL ESTATE
(REGULATION AND DEVELOPMENT)
ACT, 2016
[CENTRAL ACT NO. 16 OF 2016]
________________________________________________________
A brief on the act and it’s features
By
Anirudh Murali
School of Law, Christ University

2. DATES
• Introduced by Dr. Girija Vyas, Minister of Housing and Urban Poverty Alleviation
• Passed by Rajya Sabha on 10th Mar, 2016 and by Lok Sabha on 15th Mar.
• Assented to by the Hon’ble President on 25th Mar, 2016
• Published in Official Gazette on 26th Mar, 2016
• Section 2, Sections 20-39, Sections 41-58, Sections 71-78 and Sections 81-92, notified
with effect from May 1st, 2016
• Remaining Sections to come into power on May 1st, 2017.

3. PURPOSE OF ACT:
• The legislature’s intent was to establish an -
“An Act to establish the Real Estate Regulatory Authority for regulation and
promotion of the real estate sector and to ensure sale of plot, apartment or building,
as the case may be, or sale of real estate project, in an efficient and transparent
manner and to protect the interest of consumers in the real estate sector and to
establish the Appellate Tribunal to hear appeals from the decisions, directions or
orders of the Real Estate Regulatory Authority and the Adjudicating officer and for
matters connected therewith or incidental thereto.”

4. SALIENT FEATURES OF THE ACT
a. Applicability.
• Units - >1000 sq. m or number of apartment at 12 units.
b. Establishes of Real Estate Regulatory Authority.
• State-wise establishment
c. Registration of Real Estate Projects and Registration of Real Estate Agents.
• Parties required to register
d. Mandatory public disclosure of all project details.
• All registered products information to be accessible to public/purchasers.

5. SALIENT FEATURES OF THE ACT
e. Functions and duties of promoter.
• Full disclosure and remedial provisions
• Adherence to specifications and rectification
• Information Symmetry
f. Compulsory deposit of 70%.
• Coverage of cost of construction

6. SALIENT FEATURES
g. Function of Real Estate Agents.
• Sale of registered property
• Maintenance of records
• Fair trade practice
h. Rights and Duties of Allottees.
• Stage-wise schedule
• Claim of possession
• Obtain remedy in case of default
• Allottees to honour terms of purchase

7. SALIENT FEATURES OF THE ACT
i. Functions of Real Estate Regulatory Authority.
• Executive
• To carry out the implementation of the Act
j. Fast track dispute settlement mechanisms.
• Appointment of adjudicatory officers
k. Establishment of central advisory council.
• Advisory body recommends policy measures and analyses of real estate
sector

8. SALIENT FEATURES OF THE ACT
l. Establishment of real estate appellate tribunal.
• Primary Appellate body to hear appeals against order or Reg. Auth
m. Punitive provisions.
• Penalties for offences provided under the act, if any non-compliance with provisions
n. Bar on jurisdiction of courts.
• Courts barred from trying complaints in matters related to the Act
o. Power to make rules and regulations.
• Appropriate government empowered to make rules over subjects specified

9. REAL ESTATE REGULATORY AUTHORITY
• Establishes the Authority under Section 20, and a deadline of April 30th provided.
• Their powers as listed under Section 20(2) is a “body corporate by the name
aforesaid having perpetual succession and a common seal, with the power subject to
the provisions of the act, to acquire, hold, and dispose of property, both movable and
immovable, and to contract and shall. By the said name, sue or be sued.”
• List of all powers provided under Sections 35 to 40, namely power to call for
information, conduct investigation, issue interim orders, directions, rectification of
orders, issue and recovery of interest or penalty.
• Govt. to appoint officers and other employees of RA in consultation with the
authority.

10. REAL ESTATE REGULATORY AUTHORITY
(CONTD.)
• Power to appoint adjudicating officer for dispute resolution (S. 71)
• RA to make regulations within 3 months of establishment

11. CENTRAL ADVISORY COUNCIL
• Advisory body to advise and recommend the Central Government on matters
concerning implementation of Act and questions of policy. (S. 41)
• 10 members, to represent the interests of real estate sector and parties involved in
in. (S. 42.)

12. APPELLATE TRIBUNAL (CHAPTER VII S.43 – S.58)
• The Appellate tribunals to hear appeals from the decrees and orders of the
regulatory authority and adjudicating officer. ( S. 43(5) )
• Headed by a sitting or a retired Judge of the High Court with one Judicial and one
Administrative member. ( S. 45(i) and (ii) )
• 5 year terms (S.47)
• Has powers of a civil court as listed under Code of Civil Procedure of 1908
• Employment restriction provisions with entities that might cause a conflict of
interest on the part of the (S. 50)

13. DUTIES OF PROMOTERS (CHAPTER III, S.11-S.18)
• Full disclosure of information to public, such as –
• Details of promoters, layout plan, plan of development works, land status, status
of the statutory approvals, number of parking, time period for project
completion, with quarterly updates on them.
• Proforma of agreements to be entered into with the buyers
• Names and addresses of agents, contractors, architect, engineer etc.

14. DUTIES OF PROMOTERS (CONTD.)
• Compliance with the following –
• Adherence to approved plans and project specifications.
• Obligations regarding authenticity of the advertisement or prospectus.
• Rectify structural defects.
• Refund money in cases of default.
• Compulsory deposit of 70% of the amount realized from Allottees in a separate
account to cover the cost of construction and land cost.

15. PROCEDURAL PROVISIONS AND ASPECTS
CHAPTER 2 OF RULES – REAL ESTATE PROJECT
• Information and documents to be furnished by the promoter for registration of
project – In addition to documents provided in Act – Rule3
• PAN Card, annual report (P&L account, BS, cash flow statement ,directors report,
auditors report), number of parking areas, copy of land title, details of
encumbrances etc.
• File details as per Form ‘A’ with Authority
• Pay application fees
• Group Housing Project – Rs.5/Rs.10for1000sqm/above1000sqm,maximum5lakhs
• Mixed Development – Rs.10/Rs.15for1000sqm/above1000sqm,maximum7lakhs

16. CHAPTER 2 OF RULES – REAL ESTATE
PROJECT
• Commercial Projects – Rs.20/Rs.25 for 1000 sq. m/above 1000 sq. m, maximum 10 lakhs
• Plotted Development- Rs.5 per sq. m, maximum 2 lakhs.
• Declaration to be submitted as per section 4(2)(l)–time for completion of project,
deposit funds in separate account etc.–as per Form ‘B’.
• Declaration to be given that promoter shall not discriminate on any grounds
whatsoever – as part of Form ‘B’ (Parliament Assurance).

17. CHAPTER 2 OF RULES – REAL ESTATE
PROJECT
• Additional disclosure by promoters of ongoing projects –Rule4(Disclosure in addition
to those under Rule 3) (Parliament Assurance)
• Original sanctioned plan, layout plan etc. including modifications and existing plans
• Money collected–spent on project and balance lying with promoter
• Status of project–extent of development, original time to complete, time period required
to complete etc.

18. CHAPTER 2 OF RULES – REAL ESTATE
PROJECT
• Promoter disclose size of apartment based on carpet area-but shall not affect validity of
agreement to that extent
• In case of plotted development disclose area of plot
• Deposit 70% of funds collected (minus the amount already spent on land & construction)
in separate account
• Grant or rejection of registration of the project – Rule 5 –provides for forms in which
registration shall be granted or rejected – Form ‘C’ and ‘D’.

19. CHAPTER 2 & 3 OF RULES – REAL ESTATE
PROJECT
• Extension of the project – Rule 6
• Extension of registration shall be granted on an application before 3months of expiry of
registration Form ‘E’ and ‘F’–Extension fees of half the registration fee–along with explanatory
note, however, where due to Vis Major no extension fees
• Revocation of registration of the project – Rule7 –Provides for form in which revocation
is to be communicated – Form ‘D’
• Real Estate Agent
• Application for registration – Rule 8 – apply with details such as - enterprise details, PAN,
photographs, address for business etc. – Form ‘G’- Fees – Rs.10000 for individual Rs. 50,000
for other than individual

20. CHAPTER 2 & 3 OF RULES – REAL ESTATE
PROJECT
• Grant of registration – Rule9 - to be issued in a particular form, valid for 5 years–Form
‘H’
• Renewal of registration – Rule10 – submit afresh all documents, pay fees, renewal for 5
yrs.– renewal only if agent in compliance with Act and rules – Form ‘J’ and ‘K’-Fees – Rs.
5000 for individual, 25000 for other than individual
• Revocation of registration – Rule 11 – provides for form for intimation – Form ‘I’
• Maintenance of books of accounts – Rule12 - as provided under Income Tax Act.
• Other functions – Rule 13 – provide assistance to promoter and buyer

21. CHAPTER 4, 5, 6, 7, 8 OF RULES
• WEBSITE OF AUTHORITY, RATE OF INTEREST, AUTHORITY, CAC,
TRIBUNAL
• Details to be published on the website of the Authority – Rule14
• Provides all details to be captured on the website vis-à-vis the project and the agent etc.
• Prepare a monthly backup of all data
• Rate of interest payable by promoter and allottee – Rule15
• SBI highest Marginal Cost of Lending Rate (MCLR)+2percent

22. CHAPTER 4, 5, 6, 7, 8 OF RULES (…CONTD)
Time lines for refund – Rule16 – within 45 days of amount due.
Real Estate Regulatory Authority – Rule17 to Rule23
• Manner of selection, salary and allowances of members, administrative powers of
chairperson, salary of employees, functioning of authority, additional powers of
authority, manner of recovery of interest/penalty etc.
Manner of giving effect to recommendations of Central Advisory Council – Rule24 –
make rules to give effect

23. CHAPTER 4, 5, 6, 7, 8 OF RULES
Real Estate Appellate Tribunal–Rule 25 to 32
• Form ‘L’ for filing appeal with fees of Rs.5000, manner of selection, salary and
allowances to members, procedure for inquiry of charges, salary and allowances of
employees, additional powers of tribunal, administrative powers of chairperson,
functioning of Tribunal etc.

24. CHAPTER 9, 10, 11 OF RULES
• OFFENCES AND PENALTIES, FILING COMPLAINT, FINANCE
• Offences and penalties – Rule33 – terms and conditions and the fine payable for
compounding of offence
• Imprisonment for non-registration - compounding fee of 10% of project cost

25. CHAPTER 9, 10, 11 OF RULES
• Imprisonment for non-compliance of order of Tribunal by promoter-compounding fee of
10% of project cost
• Imprisonment for non compliance of order of Tribunal by agent - compounding fee of 10%
of apartment cost for which sale facilitated
• Imprisonment for non-compliance of order of Tribunal by allottee - compounding fee of
10% of apartment cost purchased

26. CHAPTER 9, 10, 11 OF RULES
• Comply with reasons for punishment within 30 days of compounding
• Compounding deemed to be acquittal of accused
• Manner of filing complaint with authority and adjudicating officer provided–Rule 34
and 35 – Form ‘M’ and ‘N’– fees payable Rs.1000
• Manner in which Authority shall prepare budget, maintain accounts and prepare
annual statement provided – Rule36 – Form ‘O’
• Manner in which Authority shall prepare annual report – Rule 37 – Form ‘P’

27. CURRENT DEVELOPMENTS AND
EFFECTIVENESS
Notifying the rules
• From the date of its implementation (1 May 2016), the Act required all state governments
to notify their rules within 6 months, i.e., 31 October 2016.
• Establishing the authority
• The Act stipulated that regulatory authorities had to be set up by 30 April 2017.
However, till now, none of the state governments or UTs have established a permanent
regulatory authority.
The appellate tribunal
 The Act also mandates the states to establish a real estate appellate tribunal. The
deadline for this was 30 April 2017. However, till now, it is not in place.

28.  Registration of projects
• The central Act requires developers to get all the ongoing projects, which have not
received completion certificate (CC), registered with the regulatory authorities
before 31 July.
 Registration of estate agents
• Real estate agents are also required to get registered with the authority before 31
July.
 Web-based system
• According to Act, within 1 year from the establishment of a regulatory authority,
there needs to be a web-based online system for various purposes. It is one of the
most prominent clauses of the Act.

29. THANK YOU
I thank you for this opportunity to intern at your office and present this act to you.
All information on this slide is thoroughly researched and accurate to a fault.