1. RAHUL REDDY T
MBA - IFM
REAL ESTATE REGULATION & DEVELOPMENT BILL.,2015
(Industryoriented)
CORE IDEA AND PURPOSE OF THIS BILL:
• 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 are three fold., 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 and to promote investments specially FDIs.
It extends to the whole of India except the State of Jammu and Kashmir.
 The Bill regulates transactions between buyers and promoters of residential real estate
projects. It establishes state level regulatory authorities called Real Estate Regulatory
Authorities (RERAs).
 Residential real estate projects, with some exceptions, need to be registered with
RERAs. Promoters cannot book or offer these projects for sale without registering
them. Real estate agents dealing in these projects also need to register with RERAs.
 On registration, the promoter must upload details of the project on the website of the
RERA. These include the site and layout plan, and schedule for completion of the real
estate project.
 70% of the amount collected from buyers for a project must be maintained in a separate
bank account and must only be used for construction of that project. The state
government can alter this amount to less than 70%.
The Bill establishes state level tribunals called Real Estate Appellate Tribunals. Decisions of
RERAs can be appealed in these tribunals.
“India faces a severe housing shortage and on the other hand, buyers are put off by sky-high Real Estate
prices and the unscrupulous practices of many developers.”
[1] The Real Estate was largely the concern of State institutions till the 1980s because private
promoters were very few. “With the liberalization of the economy, conscious encouragement
was given to the growth of the private sector in construction, with a great deal of success, and the
sector today is estimated to contribute substantially to the country’s GDP.”

2. RAHUL REDDY T
MBA - IFM
[2] Presently, the condition of Real Estate and the housing sector is at its worst because it is
highly unregulated and opaque as it lacks transparency.
Notwithstanding government’s effort, people, are still homeless. Private parties took advantage
of this scenario and have been ruling the real estate business since then, which eventually much
to people’s disappointment led to high rates of the estate, no proper information about the
builders, etc.
[3] The other problem which the buyers encounter is regarding the lack of remedies available to
them. They are compelled to knock on each possible door for some relief. So far, the buyers were
coerced to consent to single sided contract terms as created by their builders because they did not
have any other options.
[4] To overcome this unscrupulous condition, the need for a Bill concerning real estate was felt
and thus, for the first time; the Real Estate (Regulatory and Development) Bill was introduced in
Rajya Sabha in the year 2013.
[5] This Bill was referred to a ’21- Member Committee’.
Real Estate is a term which comprises not only of land and buildings on it but also of the natural
resources of the land which is inclusive of its flora, fauna, crops and minerals.
[6] It comprises of three main categories: 1) Residential 2) Commercial and 3) Industrial. The
Residential Real Estate includes housing, condominiums, townhomes and undeveloped land.
[7] The Commercial, on the other hand, includes offices, warehouses, etc., and the Industrial Real
Estate includes factories, mines and farms.
[8]“An official of Ministry of Urban Development said that the industry figures revealed that the
Residential realty market alone sees an annual investment of Rs 3.50 lakh crore and about 10 lakh
new home buyers every year.”
[9] “There are 17,000 real estate projects that are in progress in 26 major urban agglomerations in
the country which would come under the domain of the proposed Bill.”
[10]The core aim of the Real Estate (Regulation and Development) Bill, 2013 was to protect the
interest of the buyers and to promote fair play in Real Estate markets.
[11] This Bill had been introduced mainly to reach the objective of Government of India to provide
“Housing for All by 2022.”
[12] The measures in the Bill were propounded with the aim to boost the domestic as well as
foreign investment in the sector.

3. RAHUL REDDY T
MBA - IFM
[13]The Real Estate Bill 2013, first and foremost ensured the formation of Real Estate Regulatory
Authority (RERA). This body was created for the registration of Real Estate agents and their
subsequent projects.
[14] This Bill outlines the duties of developers, buyers and agents in the Residential Real Estate
sector.
It also stipulates: [15-23]
 Uniform regulatory environment in this sector,
 Genuine contract between buyers and promoters of Residential Real Estate projects
 Developers are barred from booking or offering the projects of Residential Real Estate for
sale without registering them in RERA,
 The information of promoter should be uploaded with the details of above mentioned point
in the website of RERA,
 50% or less of the money paid by the buyer should be maintained in a separate bank for
the construction of the project.
 The framework must have written agreement with completion certificate and payments.
 A Tribunal of Real Estate was to be devised so that the decisions of RERA could be
appealed.
 Setting up of the Central Advisory Council.
 The regulatory authority had the power to set rules and regulations.
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.

4. RAHUL REDDY T
MBA - IFM
[24] It will help in accessing the financial and capital markets in the long term goals.
“The Bill will promote orderly growth through consequent efficient project execution,
professionalism and standardization.”
[25] Along with guaranteeing speedy trials of disputes and growth to the sector, “it also
ensured to curb corruption and use of black money in the real estate market, the Bill will
include some provisions which will help in tracking down innumerable sources of black
money which currently costs the government Billions of rupees in lost taxable income.”
Drawbacks:
1. It does not enumerate any difference between the Residential Real Estate and Commercial
Real Estate.
2. Some projects in the Real Estate with certain investors or stakeholders do not come under
the category of this Bill.
They are:
Government agencies/authorities at Centre, State and Municipal level.
Financing agencies like Bank/Financial Institutions.
Brokers, Underwriters and Bulk Purchasers.
3. It also does not provide any tool for transferring the booking during the construction
time.
4. It fails to provide any additional securities for the retail purchasers.
Amendments to the bill of Real Estate, 2013
1. Establishment of Real Estate Regulatory Authority: Formation of the body called
Real Estate Regulatory Authority in States as well as Union Territories to regulate Real
Estate projects.
2. Discrimination: There will be no discrimination based on caste, religion, creed, sex, or
gender. The government may bring a non-discriminatory clause to allow anyone to buy a
property in complex even a transgender.
3. Applicability of the Bill: The Bill introduced in 2013 was applicable only to the
Residential Real Estate. Now, it is proposed to cover both Residential as well as
Commercial Real Estate.
“Getamber Anand, National President of the Confederation of Real Estate Developers’
Associations of India (CREDAI), said while builders welcome the changes, the Bill

5. RAHUL REDDY T
MBA - IFM
should not be retrospective in nature as it would lead to a lot of confusion and delays.”
He also said that Commercial Real Estate should be kept out of the ambit of the regulator.
4. Registration: Previously, the developers had to register the Residential projects if the
project was greater than 1000 sq. m. and had more than 10 apartments. But according to
the recommendation, “projects on at least 500 sq. m. of the area or with 8 flats also have
to be registered to the regulatory authority.” It includes registration of Real Estate
projects and agents along with the disclosure of all registered projects as well as the
details of the project, layout plan, etc., the authority.
5. Refund of Money in Case of Misleading Advertisements: Incorrect information, the
false statement contained in the notice, the advertisement may lead to reimbursement of
the money to the buyer.
6. Compulsory Deposit of at least 70% of the Total Cost of the Estate: The amended
Bill makes it compulsory for the buyers to deposit 70% or more of the total cost of the
estate which includes land and construction cost. Earlier, only 50% or less was the
required to be deposited. This 70% of the money should be deposited in another bank
account and should be only for the above-mentioned.
7. Builders are Restricted from Taking More than 10% Advance Without a Written
Agreement: “A builder will not be able to take more than 10% advance money from
buyers without a written agreement. Right now, a lot of dealings happen by paying huge
advances and the agreement part is delayed by many.”
8. Structural Defects: It is suggested that builders will be liable for structural defects with
imprisonment of five years which is more than the earlier prescribed punishment of two
years. “In such cases, the jail term is that of one year or five per cent of the apartment
cost or both. Other pro-developer measures include single window clearance and
digitisation of land records.”
9. Sale of Property as per Prices Linked with Carpet Area: Carpet area is the area
which includes usable spaces like kitchen and toilets, and it should be clearly defined to
impart clarity which earlier was not the case.
10. Resident association: “Formation of resident association has been made compulsory
within 3 months of the allotment of the majority of the units in the project so that buyers
get to utilize facilities such as common hall, club house, reading room.”
11. Payment of Interest: Builders have to pay interest if there is any delay or default in the
home at the same rate as they charge the home buyers.
12. Consumer Courts: the aggrieved customers can now approach to any consumer court at
the district level also instead of the regulatory body given in the Real Estate Bill of 2013.
This Bill also established a fast track dispute resolution mechanism which would solve
the disputes within sixty days through appellant tribunal against ninety days earlier
proposed.
13. Notification for the Act: now the “State has to make rules within six months of
notification of the proposed Act instead of one year, and the allottees shall take the
possession of house within two months of issuance of occupancy certificate.”
14. Additional Benches of the appellate tribunal: For the speedy adjudication of
grievances, an additional bench of the appellate tribunal can be made in a state.
15. Punishment: For promoters, three years of punishment and for agents one year of
punishment has been prescribed for the violation of the orders of the appellate tribunal.

6. RAHUL REDDY T
MBA - IFM
16. Punitive Provisions: “Punitive provisions including de-registration of the project and
penalties in case of contravention of provisions of the Bill or the orders of the Authority
or Tribunal.”
17. The Bill looks to set up administrative bodies at the Central and state level for
responsible and transparent business practices.
The news of the Bill changing to an Act will be a sign of relief to the home buyers who have
suffered from huge losses, delays in delivery of their projects by developers, and discrepancy in
the fulfillment of promises made to them at the time of booking. The changes that have been
inserted in the Bill have been widely accepted by the industrial players.
Specialists say that the improvement is sure and subsequently is a step closer towards setting up
of a land regulation in India. Om Ahuja, the CEO, Residential Services of JLL India stated that
“If the Real Estate Regulatory Bill comes in 2015, it will be the biggest thing for the sector as it
will provide protection to home buyers and it will also result in some non-credible players
exiting the sector because of the checks and balances that will come in place.”
Benefit to the builders
Builders have also been provided with advantages in this Bill 2015. The prime advantage given to
the builders by legislation is that they can also impose a penalty on the allottees for not paying the
dues on time. In the case of any conflicts with buyers, builders also have the opportunity to
approach to the regulator.
Although the Bill has some benefits for builders, it is the builders only who have to pay high
amount imposition of the Bill on them.
“The Bill provides for a penalty, up to 10 percent of the total project cost or even imprisonment,
if builders do not honor their commitment or fail to register themselves with the regulator.”

7. RAHUL REDDY T
MBA - IFM
Conclusion
The Real Estate (Regulatory and Development) Bill, 2013 was introduced in Rajya Sabha and was
referred to Standing Committee on Urban Development for examination by the Speaker of Lok
Sabha. The Bill has been amended by the government numerous times. The amendments revolving
around both Residential Real Estate and Commercial Real Estate must necessarily be taken into
consideration and punishment to the developers, etc. should be deliberated upon. In 2015, the
Union Cabinet gave the permission to amend the Real Estate (Regulation and Development) Bill.
Finally, after the effect of umpteen minds, the Bill had been approved by the Prime Minister,
Narendra Modi, was passed by the Rajya Sabha on 10th March and subsequently by Lok Sabha on
15th March, 2016.
Key Issues and Analysis
 One may question Parliament’s 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.
 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 inconsistencies.

8. RAHUL REDDY T
MBA - IFM
 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 the project cost.
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.
After this the consumer shall be the king as had happened in sectors like telecom after a
regulatory mechanism was put in place. There is an imperative need for consumer to be the king
in real estate sector also.
"When there is a king, there got to be a queen also”. The queen obviously is the developer. And
there shall be a happy marriage between the king and the queen, for both to live happily ever
after.
A total of 76,044 companies which are involved in the real estate sector will come under the
purview of the bill.
A regulation is coming in a field in which this country's money is being pumped in. With the
beginning made today, things will become transparent. Through this bill, there will be no
difference between what the developer shows and what he sells.