Introduction

The real estate sector in India has been largely disorganised and for a long
time a need has been felt to regulate and organise the sector. The last few
years have seen tremendous growth in the sector and prices of properties
have gone up accordingly. There has been a spurt in foreign investment as
well. To address the emerging need, Government has been trying for
several years to introduce a Real Estate Bill. Hence, A Bill providing for
setting up a regulator for the real estate sector and having provisions like
a jail term of up to three years for developers who make offences like
putting up misleading advertisements about projects repeatedly was
presented in the Rajya Sabha in the current session of the Parliament.
The Real Estate Regulation and Development Bill, 2013 has been
approved by the Union Cabinet on June 4, 2013, though this bill is yet to
be approved by Parliament i.e. Lok sabha or the lower house of the
parliament and the Rajya Sabha or the upper house of the parliament The
bill will be notified as a statute once it receives the assent of the President
of India for its implementation across all States and Union Territories in
the country.
The passing of this Bill is best stated as a delayed step of the Indian
government towards regulation of real estate sector. This Bill aimed to
create a Real Estate Regulatory Authority and an Appellate Tribunal that
will act as a watchdog for the housing sector, primarily towards
protecting consumer interests while creating an alternative redress
mechanism for any disputes that may arise.
This bill also aims to provide a uniform regulatory environment in the
real estate sector which is laced with black money, corruption, red tapism,
land mafias and corruption. The core objective of this Bill is twofold i.e.

to ensure sale of immovable properties in an efficient and transparent

manner and to protect the interest of consumers in the real estate sector.
Applicability

of

the

Real

Estate

Regulation

and

Development Bill, 2013

The proposed Bill has limited its applicability to residential real estate
only i.e. housing and any other independent use ancillary to housing. The
Bill defines1. "real estate project" as the development of a building or a building
consisting of apartments, or converting an existing building or a
part thereof into apartments, or the development of a colony into
plots or apartments, as the case may be, for the purpose of selling
all or some of the said apartments or plots or buildings and
includes the development works thereof.
2. ''apartment" whether called dwelling unit, flat, premises, suite,
tenement, unit or by any other name, means a separate and selfcontained part of any immovable property located on one or more
floors or any part thereof, in a building or on a plot of land, used or
intended to be used for residential purposes, or for any other type
of independent use ancillary to the purpose specified and includes
any covered garage, whether or not adjacent to the building in
which such apartment is located which has been provided by the
promoter for the use of the allottee for parking any vehicle, or as
the case may be, for the residence of any domestic help employed
in such apartment.

Need for The Real Estate Regulation and Development Bill,

2013.
Currently, the real estate and housing sector is largely unregulated and
opaque, with consumers often unable to procure complete information, or

enforce accountability against builders and developers in the absence of

effective regulation. The Bill is expected to ensure greater accountability
towards consumers, and to significantly reduce frauds and delays. The
Bill aims at restoring confidence of the general public in the real estate
sector; by instituting transparency and accountability in real estate and
housing transactions which in turn will enable the sector to access capital
and financial markets essential for its long term growth.
The Bill is also expected to promote regulated and orderly growth
through efficiency, professionalism and standardization. It seeks to ensure
consumer protection, without adding another stage in the procedure for
sanctions.
Salient features of the bill
i. Residential ProjectsThe Bill aims to promote transparency in the real estate sector and
to establish mandatory governance standards pertaining to all
private residential projects of more than 4,000 square meters. There
is no prescribed limit on the number of dwelling units. The Bill
only seeks to cover large residential projects; commercial projects
are not covered.
ii.

RegulatorsA two-tier dispute resolution mechanism is proposed comprising a

Real Estate Regulatory Authority (the Authority) and adjudicating
officers at state-level and a central Real Estate Appellate Tribunal
to adjudicate upon matters relating to residential projects covered
under the Act. Currently real estate transactions are largely
governed by the agreements between the parties, which are
considered generic contracts relating to immoveable properties
with remedies including specific relief (if applicable) and damages
for breach available under civil and criminal law. Pursuant to

enactment of the proposed legislation, civil courts shall not have

jurisdiction in respect of any matter covered under the Act.
iii.

Advisory councilA Central Advisory Council is proposed to advise the Central

Government on implementation of the Act, with a mandate to make
recommendations on major questions of policy, to protect
consumer interests and to foster growth and development of the
real estate sector. The proposed Council will possibly take over the
role of The National Real Estate Development Council, which was
set up in 1998 by the Housing Ministry as an autonomous selfregulatory body to assure transparency and ethics in the real estate
business, and seeks to formulate real estate policies through
advisory and consultative processes with both Industry and

iv.

Government.
Mandatory Registration
Developers would be required to upload information and
documents on the Authoritys website relating to land title,
encumbrances over land, number and carpet area of units, layout
plan, proposed facilities, proposed completion date, etc. These
provisions have been introduced to ensure that customers are able
to procure complete information and there is no ambiguity with
respect to the status of approvals and stage of construction of the
project. This will also substantially reduce disputes between the
parties that largely arise due to lack of transparency. Presently
consumers are unable to procure complete information or hold
developers to account in the absence of effective regulation.

v.

Project launch after approvals

Developers would also be required to provide to the Authority
proposed advertisements relating to the project, formats of the

agreements to be executed with buyers and lists of bookings in the

project on the basis of the agreements with proposed buyers. This
will further protect the interest of the buyer and avoid hardship due
to one-sided agreements.
vi.

Mandatory disclosure
Developers would be required to upload information and
documents on the Authoritys website relating to land title,
encumbrances over land, number and carpet area of units, layout
plan, proposed facilities, proposed completion date, etc. These
provisions have been introduced to ensure that customers are able
to procure complete information and there is no ambiguity with
respect to the status of approvals and stage of construction of the
project. This will also substantially reduce disputes between the
parties that largely arise due to lack of transparency. Presently
consumers are unable to procure complete information or hold
developers to account in the absence of effective regulation.

vii.

Agreements
Developers would also be required to provide to the Authority
proposed advertisements relating to the project, formats of the
agreements to be executed with buyers and lists of bookings in the
project on the basis of the agreements with proposed buyers. This
will further protect the interest of the buyer and avoid hardship due
to one-sided agreements.

viii.

No pre-launh bookings
The practice adopted by developers to commence sale of units in
pre-launch booking before obtaining mandatory approvals for the
project and at times even before acquisition of the land is to be
curbed. Issuance of advertisements or booking of units in a project
would be permissible only pursuant to registration of the project.

ix.

Use of funds
The Bill proposes acceptance of an advance/deposit for the
proposed sale of a unit in a project by developers only pursuant to
execution of a written agreement with the buyers. Further, 70 per
cent or a lower percentage (as prescribed by the Authority) of the
funds received are to be deposited in a separate bank account to be
used only for the relevant project. This provision was introduced to
the Bill to ensure that funds collected for a particular project are
not diverted for other purposes.

x.

Adherence to approved plans

Developers under the proposed Bill must adhere to approved plans
and project specifications and are liable to rectify, at their own cost,
any major structural defect or deficiency in the unit or services
incidental thereto for one year from the date of handing over
possession. If developers fail to rectify such defects within a
reasonable time, they shall be liable to pay appropriate damages or
compensation to the buyers as may be determined by the Authority.

xi.

Transparency
Developers would be required to make available information and
documents to proposed buyers to ensure transparency in
development of the proposed project such as approvals, site plans,
structural designs, specifications, construction schedule, etc.

xii.

Delayed Possession
The Bill provides that if the developer is unable to complete
construction to give possession of the flat to the buyer, the
developer would be liable to refund the deposit received along with
interest at the rate prescribed by the Authority. Correspondingly,
the buyer must make payments in a timely manner and would be

liable to pay prescribed interest in case of delayed payment. These

provisions in the Bill have been introduced to ensure timely
delivery of possession/completion of the project. The Bill also
strives to strike a balance by ensuring that the buyer makes timely
payment to the developer.
xiii.

Punishment
The provisions for punishment in case of contravention and/or noncompliance with the provisions of the proposed Act currently
include imprisonment for a term of up to three years, or a penalty
of up to 10 per cent of the estimated cost of the real estate project,
or both.

Benefits or Advantages of Real Estate Bill, 2013

The Bill will bring about standardization in the sector leading to healthy
and orderly growth of the industry through introduction of definitions
such as apartment, common areas, carpet area, advertisement, real
estate project, prospectus etc. Introduction of the concept of using only
carpet area for sale which has till now been ambiguously sold as super
area, super built up area etc., will curb unfair trade practices.
The Bill like other sectors such as telecom, electricity, banking, securities,
insurance etc. provides for specialized regulation and enforcement which
includes both curative and preventive measures, with powers to enforce
specific performance, not available under the consumer laws. The
Authority has powers to give directions for specific performance powers
to impose penalty for non-registration of projects including imprisonment
for continuous violation upto 3 yrs and impose penalty in case of other
contraventions.
The Bill proposes to register real estate agents which have hitherto been
un-regulated, with clear responsibilities and functions, thereby leading to
money trail and curbing money laundering.

The Bill aims to ensure consumer protection, by making it mandatory for

promoters to register all projects, prior to sale; and only after having
received all approvals from development/municipal authorities thereby
protecting buyer investments.
The Bill will promote transparency and fair and ethical business
practices, relating to transactions, through disclosure of project details
and contractual obligations vis--vis the project and the buyer, promoting
informed choice for the buyers. This will substantially reduce the power
asymmetry prevalent in real estate transactions. The Bill seeks to
establish a regulatory oversight mechanism, through Real Estate
Authority(s) and Appellate Tribunal in the States, to enforce
accountability norms for the promoter buyer and the real estate agents.
The Bill will infuse professionalism and promote planned development of
the real estate sector through the promotional role of the Regulatory
Authority. The Bill will ensure timely completion of projects, and prevent
fund diversion.
The Bill provides for a speedy and specialized adjudication mechanism to
settle disputes between the promoter, buyer and real estate agents, thereby
de-clogging the civil courts and consumer forums, from disputes in the
real estate sector.
The Bill will catalyze domestic and foreign investment into the sector,
thereby contributing to enhanced activity, and increase in GDP growth.

Real Estate Regulatory Authority

According to sec 18(1) this bill 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.
Provided that the appropriate Government of two or more States or Union
territories may, if it deems fit, establish one single Authority:

Provided further that the appropriate Government may, if it deems fit,

establish more than one Authority in a State or Union territory, as the case
may be.
According to sec 18(2) The Authority shall be a body corporate by the
name aforesaid having perpetual succession and a common seal, with the
power, subject to the provisions of this 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.
Establishment of one or more Real Estate Regulatory Authority in each
State/UT, or one Authority for two or more States/UT, by the Appropriate
Government, with specified functions, powers, and responsibilities to
exercise oversight of real estate transactions, to appoint adjudicating
officers to settle disputes between parties, and to impose penalty and
interest.
The Authority will act as a nodal agency to co-ordinate efforts regarding
development of the real estate sector and render necessary advice to the
appropriate Government to ensure the growth and promotion of a
transparent, efficient and competitive real estate sector.
The authority shall ensure compliance of the obligations cast upon the
promoters and the allottees and to cause an inquiry to be made into
compliance of its orders or directions made in exercise of its powers.
Powers & functioni. The authority shall ensure compliance of the obligations cast upon
the promoters and the allottees and to cause an inquiry to be made
into compliance of its orders or directions made in exercise of its
ii.

powers.
To host and maintain a website of records of all real estate projects
within its jurisdiction as database, with all details as provided in
the application for registration under the Act, for projects, for

which registration has either been granted or cancelled as the case

iii.

may be.
To make recommendations on protection of interest of the allottees,
measures to improve the processes and procedures for clearance
and sanction of building plans and development projects from the
Competent Authority; and construction and maintenance of
structurally safe, environmentally sustainable, and low cost
buildings, apartments and properties and any other form of
assistance or advocacy to promote competition and efficiency in

iv.

the real estate sector.

Regulatory Authority shall have the power to call for information,
conduct Investigations, and make inquiry in the affairs of

v.

promoters where it considers expedient so to do it.

Regulatory Authority has the power to Issue directions to
promoters and allottees from time to time and such directions are

vi.

binding on all concerned.

Powers of the Regulatory Authority consequent upon lapse of or
cancellation of registration of the promoter to recommend to the
Competent Authority to have the remaining development works,
carried out from the proceeds of the enforcement of bank guarantee
and recover charges incurred on the said development works due

vii.

from the promoter.

The RERA shall have powers to regulate its own procedure and
shall be guided by the principles of natural justice and shall have
all the powers as are vested in a Civil Court under the Code of
Civil Procedure, 1908.

Penalties
i.

Any promoter who fails to register in accordance with the

provisions of the Real Estate (Regulation and Development) Bill,
2013 shall be punishable with imprisonment for a term which may

extend to three years, or a penalty which may extend to ten per cent
ii.

of the estimated cost of the real estate project, or with both.

If any promoter contravenes any other provisions of this bill, other
than that provided above, or the Rules or Regulations made, he
shall be liable to a penalty which may extend to five percent of the

iii.

estimated cost of the real estate project..

Any promoter who wilfully fails to comply with orders of the
Authority shall be liable to a minimum penalty of one lakh rupees
for every day during which such default continues, which may
extend to five percent of the estimated cost of the real estate

iv.

project.
Any promoter who wilfully fails to comply with the orders of
Appellate Tribunal shall be punishable with imprisonment for a
term which may extend to one year or with a penalty which may
extend to ten percent of the estimated cost of the real estate project,
or with both.

Critical analysis
The Real Estate Regulation and Development Bill, 2013 is a giant step in
the field of real estate sector. This bill includes many good features to
secure the consumer rights and interest. This bill enacts real estate
regulatory authority and appellant tribunal to safeguard the rights of
consumer and protect them from misleading advertisement and
promoters. On other hand this bill also contains certain practical problems
in implementation.
i. One may question Parliaments jurisdiction to make laws related to
real estate as land is in the State List of the Constitution.
However, it may be argued that the primary aim of this Bill is to
regulate contracts and transfer of property, both of which are in the
Concurrent List.

ii.

Some states have enacted laws to regulate real estate projects. The
Bill differs from these state laws on several grounds.

It will

override the provisions of these state laws in case of any

iii.

inconsistencies.
The Bill mandates that 70% of the amount collected from buyers
of a project be used only for construction of that project. In
certain cases, the cost of construction could be less than 70% and
the cost of land more than 30% of the total amount collected. This
implies that part of the funds collected could remain unutilized,
necessitating some financing from other sources. This could raise

iv.

the project cost.

The Standing Committee examining the Bill has made several
recommendations. These include: (a) the Bill should also regulate
commercial real estate, (b) smaller projects should also be

v.

covered, and (c) all real estate agents must be required to register.
The real estate sector has some other issues such as a lengthy
process for project approvals, lack of clear land titles, and
prevalence of black money. Some of these fall under the State
List.

Conclusion
Bill has only been approved by the Union Cabinet, and has to be
approved by the Parliamentary Standing Committee, passed by both
houses of the Indian parliament, and then submitted for approval of the
president pursuant to which it can be enacted as legislation. There are
likely to be many more discussions and changes to the Bill following the
recommendations of the Standing Committee and debate in the
parliament.

The impact of the proposed regulatory Bill can be only assessed over
time as to whether it is able to effectively address the issues facing the
housing sector including standardization of sale agreements, efficacy in
resolution of complaints and encouragement of private equity through
effective regulations. This would also depend on the extent to which the
major players are able to find loopholes, the Governments resolve to
plug them and its commitment to regulate growth of the real estate
housing sector.

 Bibliography
1. The Real Estate (Regulation and Development) Bill-2013- A Giant
Step in Real Estate Sector. By Anurag Tiwari (advocate)
2. Prsindia.org- bill track
3. Press Information Bureau of Government of India- Ministry of
Housing and Urban Poverty Alleviation.
4. Slideshare.

Declaration

I hereby declare that the project entitled The Real Estate Regulation and
Development Bill, 2013 submitted by me to Amity Law School-II, Amity
University, Noida in partial fulfilment of the requirement for the award of the
degree of B.A. L.L.B(Hons) is a record of bonafide project work carried out by
me under the guidance of Mr. Manish Yadav. I further declare that the work
reported in this project has not been submitted and will not be submitted, either
in part or in full, for the award of any other degree or diploma in this institute or
any other institute or university.

Date: 7 October, 2014

Approved By:

Gurpreet Singh

Mr. Manish Yadav

A11911111029

Semester 7
Section A

Certificate

This is to certify that Project entitled the Real Estate Regulation and
Development Bill, 2013 which is submitted by Gurpreet Singh, in partial
fulfilment of the requirement for the award of degree B.A. L.L.B (hons) in
Amity Law School-II, Amity University, Noida is a record of the candidate own
work carried out by him under my supervision. The matter embodied in this
thesis is original and has not been submitted for the award of any other degree.

Date: 7 October, 2014

Mr. Manish Yadav

Supervisor

TABLE OF CONTENT
1. Introduction
2. Applicability of the Real Estate Regulation and Development Bill, 2013
3. Need for Real Estate Regulation and Development Bill, 2013.
4. Salient Features
5. Benefits or Advantages of the Real Estate Bill, 2013.
6. Real Estate Regulatory Authority
7. Penalty
8. Critical Analysis
9. Conclusion
10.Bibliography

PROJECT WORK SUBMITTED ON BEHALF OF PARTIAL

FULFILMENT OF REQUIREMENT OF THE DEGREE OF
B.A. L.L.B(H)

REAL ESTATE LAW PROJECT WORK

THE REAL ESTATE REGULATION AND DEVELOPMENT BILL,
2013

Submitted toMr. Manish Yadav

Real estate Law faculty

LIST OF ABBREVATIONS
1. i.e.- that is
2. etc- etcetera
3. sec- section

Submitted by
Gurpreet Singh
A11911111029,
Section A
Semester 7

4. cpc- Civil Procedure Code

5. RERA- Real Estate regulator Authority
6. UT- Union Territory