The Regulation and Development Act, 2016 & the Construction and Demolition Waste Management Rules, 2016 and its implications on Builders, Real Estate Agents, Developers, Ends Users etc.

1. 1
(Regulation and Development) Act, 2016
Construction and Demolition Waste
Management Rules, 2016
Implications on builders; real estate agents; other
developers and end users
CII-LEXPLOSION OMC SERIES
Lexplosion Solutions Private Limited
23rd September, 2016
Private and Confidential

2. 2
Rationale behind the Act
“present beneficiaries are subject to exploitation, deadlines are not met, advances received from
Allottee/s are misused, hidden charges are applied, clauses are amended as per the whims and
fancies etc.”
- National Urban Housing and Habitat Policy “Housing for all by 2022’
“Restrictive legislations and lack of transparency in transactions are other main impediments to the
growth of the Real Estate Sector”
- Planning Commission 10th Report, 2002-2007
Laws governing Real Estate prior to the Act
• Haryana Development and Regulation of Urban Areas act, 1975 with allied rules
• Punjab Apartment and Property Regulation Act, 1995
• Himachal Pradesh Apartment and Property Regulation Act, 2005
• West Bengal Building (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993
• Maharashtra Housing (Regulation and Development) Act, 2012 [ repealed by the Real
Estate(Regulation and Development) Act, 2016]
Provisions notified till Date
• 69 Sections of the Act are effective as on 1st May, 2016
• Sections notified till date are on the procedural provisions i.e. Establishment of Real Estate
Regulatory Authority / setting the Central Advisory Council. The substantive provisions
comprising obligations on the part of the promoters, real estate agents, allottees etc. have
not yet gained effect.
• The State Government/s are yet to come out with the respective State rules under this Act.
As per Section 84 of the Act, the rules are expected within 6 months of the commencement
of this Act i.e. by November, 2016 .

3. 3
A person who constructs or causes to be
constructed building / apartments for the purpose
of selling
A person who converts an existing building or a part
thereof into apartments, for the purpose of selling
A person who develops land into a project for the
purpose of selling to other persons
Any person who acts himself as a builder, colonizer,
contractor, developer, estate developer or goes 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 the plot is developed for sale;
Any person who constructs any building or
apartment for sale to the general public.
In case the person who constructs or
converts a building into apartments or
develops a plot for sale and the person
who sells apartments or plots are
different persons, both of them shall be
deemed as the promoters and will
be jointly liable as such for the functions
and responsibilities under the Act.
OR
OR
OR
OR

4. 4
•Any person, who negotiates or acts on behalf of one person in a
transaction involving transfer of his plot, apartment or building, (as the
case may be), in a real estate project, by way of sale, to another
person or the transfer of plot, apartment or building, (as the case may
be), of any other person to him.
•He receives remuneration or fees or any other charges for his services
as commission or otherwise.
•The definition 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 or any other
name called;
•O n l i n e r e a l t y p o r t a l s s u c h a s m a g i c b r i c k s . c o m a n d
commonfloor.com are included in the net as well.

5. 5
Potential Stages of a Real Estate Project &
its implications under the Act
Upcoming Real Estate Projects
Projects which have started but
are far away from completion
Projects on the verge of completion
but completion certificate is
awaited
Projects being developed in a
phase-wise manner
Projects where completion
certificate is obtained
Repair/renovation work which
does not involve sale/advertising

6. 6
Upcoming Real Estate Projects
Not yet started
Implication:
Should start streamlining processes to
comply with every requirement under this
Act.
Projects which have started but are far
away from completion
Has started but are far away from
completion
Implication:
Should start taking steps to start making
changes in existing projects as per the
requirements of this Act

7. 7
Projects on the verge of completion but completion
certificate is awaited
Projects almost complete but the completion certificate is still
pending.
Implication:
Take steps to expedite and close these projects. Get hold of
the CC before the Act gets notified.
If you do not get the CC before this Act gets notified then
you will have to make an application for registration of the
project within 3 months from the commencement of the Act.
Projects being developed in a phase-wise manner
Some phases are complete while some phases are yet to start / yet to
get completed.
Implication:
For the phases which are complete, take quick steps to obtain the
completion certificate. For the phases which are yet to begin, start
streamlining processes to comply with every requirement under this Act.
Each phase will be treated as a standalone project therefore you would
have to register each phase independently.

8. 8
Projects where completion certificate is obtained
In such projects the completion certificate is received by
the promoter before the commencement of the Act.
Implication:
This is a good situation to be in as obtaining CC prior to the
commencement of this Act would not require you to
obtain registration of the real estate project.
Repair/renovation work which does not involve
sale/advertising
Work which involves renovation or repair or re-
development in a real estate project which does not
involve marketing, advertising, selling or new allotment of
any apartment, plot or building, (as the case may be).
Implication:
No registration requirements are to be followed in such
situations.

9. 9
• Now a Garage has to have a roof and walls on
three sides for parking any vehicle.
• Unenclosed or uncovered parking space such
as open parking areas will not be considered
as a garage.
Carpet Area has been defined to mean only the
net usable floor area of an apartment, excluding
the area covered by the external walls, areas
under services shafts, exclusive balcony or
verandah area and exclusive open terrace area,
but includes the area covered by the internal
partition walls of the apartment.
If the person who constructs or converts a
building into apartments or develops a plot for
sale and the persons who sells apartments or
plots are different persons, both of them will be
deemed to be the promoters and shall be jointly
liable.

10. 10
• Obtain prior registration of the real estate project with the
State Real Estate Regulatory Authority where the area of
land proposed to be developed exceeds five hundred
square meters or the number of apartments proposed to
be developed exceeds eight inclusive of all phases.
• This threshold can be reduced by the State Government, if
it considers it necessary. The registration procedure
requires pieces of information including mandatory
disclosure of project details in the Authority’s website by
entering the details via creating a web-page on such
website for public viewing.
• In case the real estate project is to be developed in
phases, every such phase shall be considered a stand
alone real estate project, and the promoter has to obtain
registration under this Act for each phase separately.
• Projects that are ongoing on the date of commencement
of this Act and for which the completion certificates have
not been issued, need to make an application to the
Authority for registration of the said project within a period
of 3 months from the date of commencement of this Act.
• Needs to obtain prior registration with the State Real
Estate Regulatory Authority to facilitate the sale or
purchase of or act on behalf of any person to facilitate
the sale or purchase of any plot, apartment or building,
(as the case may be), in a real estate project or part of
it, being a part of the real estate project being sold by
the promoter in any planning area.
• A single registration for the entire State of Union territory
will hold good but registration has to be made in each
state.
• The registration number granted by the Authority, will
have to be cited by the real estate agent in every sale
facilitated by him.
• Refrain from facilitating the sale or purchase of any plot,
apartment or building, as the case may be, in a real
estate project or part of it, being sold by the promoter in
any planning area, which is not registered with the
Authority;

11. 11
Fulfill the pre-registration formalities (enclose the prescribed documents along with the
application for registration) and submit to the Authority.
Upon being satisfied, the Authority will grant the registration along with
registration number, including a Login Id and password to the applicant for
accessing the website of the Authority.
Failure to grant/reject the application for registration within 30 days of receiving
the application, the project will be deemed to have been registered, and the
Authority shall within a period of 7 days of the expiry of the said period of 30
days provide a registration number and a Login Id and password to the
applicant for accessing the website of the Authority.
On being granted registration, Promoter to create his web page and upload the details of the
proposed project in the website of the Authority. (pre-registration requirements and post
registration details need to be filled in)

12. 12
Formalities
Following documents to enclose the following along with the application for registration:
1. Details of promoter enterprise and projects launched in the past 5 years, status of the
projects/details of cases/payments pending.
2. Authenticated copy of approvals and commencement certificate/sanctioned plan, layout plan
from the competent authority.
3. Plan of development works/proposed facilities to be provided including firefighting facilities,
drinking water facilities, emergency evacuation services, use of renewable energy;
4. The location details of the project, with clear demarcation of land.
5. Proforma of the allotment letter, agreement for sale, and the conveyance deed proposed to be
signed with the allottees;
6. The number, type and the carpet area of apartments for sale in the project along with the area of
the exclusive balcony or verandah areas and the exclusive open terrace areas apartment with the
apartment, if any;
7. The number and areas of garage for sale in the project;
8. The names and addresses of his real estate agents, contractors, architect, structural engineer, if
any and other persons concerned with the development of the proposed project;
1. A declaration, supported by an affidavit, which shall be signed by the promoter or any person
authorised by the promoter, stating: —
I. that he has a legal title to the land and the land is free from encumbrances/details of the
encumbrances if any.
II. That 70% of the amounts realised for the real estate project from the allottees, from time to time,
shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost
of construction and the land cost and shall be used only for that purpose.
 This amounts should be withdrawn by the promoter only after it is certified by an engineer, an
architect and a chartered accountant in practice confirming that the withdrawal is in proportion to
the percentage of completion of the project.
9. Six-monthly audit of accounts by a chartered accountant in practice.

13. 13
Formalities
Use the Login Id and password provided by the Authority and
create the web page of the real estate project on the
website of the Authority:
Enter all details of the proposed project (comprising the
documents enclosed during pre-registration formalities) for
public viewing, including—
(a) Details of the registration granted by the Authority;
(b) Quarterly up-to-date the list of number and types of
apartments or plots, or garages as the case may be, booked;
(c) Quarterly up-to-date the list of approvals taken and the
a p p r o v a l s w h i c h a r e p e n d i n g s u b s e q u e n t t o
commencement certificate;
(d) Quarterly up-to-date status of the project; and
(e) Such other information and documents as may be
specified by the regulations made by the Authority.

14. 14
Obtain registration from Real Estate Regulatory Authority (“Authority”) for facilitating
sale/purchase in a registered real estate project.
Facilitate the possession of all the information and documents, as the allottee, is entitled to,
at the time of booking of any plot, apartment or building, (as the case may be).
Do NOT indulge in any unfair trade practices such as making any statement which falsely
represents the promoter’s, standard of services provided by the real estate project and
permitting publication of any advertisement of amenities that are not intended to be
offered.
Do NOT facilitate the sale or purchase of any plot, apartment or building, in a real estate
project which is not registered with the Authority;

15. 15
Advertise only those things which you intend to
offer else, you will be charged for Unfair Trade
Practice/s
Beware! while Advertising Real Estate projects
Indicate the website address of the Authority
prominently and the registration number of the
real estate project on every advertisement
Publish correct and true statements , Else
• Prospect can withdraw from the proposed project
• Return entire investment made by the prospect with
the interest
• Pay compensation to any person who makes an advance
based on such false information.
“Advertisement" means any document described or issued
as advertisement through any medium and includes any
notice, circular or other documents or publicity in any form,
informing persons about a real estate project, ………………”

16. 16
Obtain information relating to sanctioned plans, layout plans
along with the specifications, approved by the relevant
Authorities.
Know stage-wise time schedule of completion of the project,
including the provisions for water, sanitation, electricity and
other amenities and services as agreed between the promoter
and the allottee in accordance with the terms and conditions
of the agreement for sale.
Claim the possession of apartment, plot or building, (as the
case may be), and the association of allottees shall be
entitled to claim the possession of the common areas, as per
the declaration given by the promoter. Claim refunds from
promoter in failing to give possession.
Have all the necessary documents and plans, including that of
common areas, after handing over the physical possession of
the
apartment or plot or building as the case may be, by the
promoter.
Make necessary payments in the manner in the said
agreement for sale and pay at the proper time and place,
the share of the registration charges, municipal taxes, water
and electricity charges, maintenance charges, ground rent,
and other charges, if any.
Pay interest, at such rate as may be prescribed,
for any delay in payment towards any amount
or charges to be paid.
Participate towards the formation of an association or
society or cooperative society of the allottees, or a
federation of the same. Allottees should also participate
towards registration of the conveyance deed of the
apartment, plot or building, (as the case may be).
Take physical possession of the apartment, plot or
building (as the case may be), within a period of two
months of the occupancy certificate issued for the said
apartment, plot or building, (as the case may be).

17. 17
On failing to register the property penalty upto 10% of the estimated cost of
the project. Continued violation may lead to imprisonment for a term possibly
extending up to three years or penalized with a fine going up to a further ten
per cent of the estimated cost of the real estate project, or slapped with both.
For providing false information, penalty of up to five per cent of the estimated
cost of the real estate project, as determined by the Authority.
For other contraventions apart from registration, penalty extending up to five per
cent of the estimated cost of the real estate project as determined by the
Authority.
Upon failing to follow the orders or directions of the Authority, he shall be liable to pay a
penalty for every day during which such default continues, which may cumulatively
extend up to five per cent. of the estimated cost of the real estate project as
determined by the Authority.
Penalty imposed on Promoters

18. 18
If a real estate agent fails to obtain registration, he shall be liable to pay a penalty
of ten thousand rupees for every day on which such default continues. It may
cumulatively go up to five per cent of the cost of plot, apartment or buildings, (as
the case may be), of the real estate project, for which the sale or purchase has
been facilitated as determined by the Authority.
On failing to comply with the orders, or directions of the Authority, he shall be
liable pay to a fine for every day on which such default continues. It may
cumulatively extend up to five per cent of the estimated cost of plot, apartment
or building, (as the case may be), of the real estate project, for which the sale or
purchase has been facilitated and as determined by the Authority.
Penalties imposed on Real Estate Agents

19. 19
If any allottee fails to comply with, or
contravenes any of the orders,
decisions or directions of the Authority,
he shall be liable to pay a penalty for
the period during which such default
continues, which may cumulatively
extend up to five per cent of the plot,
apartment or building cost, (as the
case may be), as determined by the
Authority.
Penalties imposed on Allottees

20. 20

21. 21
The Act serves as a defined instrument for regulating the real estate sector
and performs the critical task of identifying, allocating and negating risks
associated with construction and development projects.
The Act extends its purview to different types and sizes of projects and its
implementation will require significant capacity building at the state-level,
within the specific time-limit.
The Act disrupts existing sector practices to raise efficiency of the real estate
market and is likely to benefit all stakeholders by imposing financial and
operational discipline, accountability and diligence.
Concluding Remarks

22. 22Lexplosion’s Regulatory Compliance Platform
Speaker
Indranil Choudhury
Founder & Chief Executive Officer
Lexplosion Solutions Private Limited
indranil.choudhury@lexplosion.in

23. Contact Us
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24. 24
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