The document summarizes key aspects of the Real Estate (Regulation and Development) Bill, 2016 in India, including: 1) The objective of the bill is to establish a regulatory authority and appellate tribunal to promote transparency and protect consumer interests in the real estate sector. 2) It defines important terms like "real estate project", "promoter", "allottee", and "real estate agent". 3) A promoter must register projects with the regulatory authority, except small projects. They must maintain 70% of funds from buyers in a separate account for construction. 4) Real estate agents must also register and are barred from unfair trade practices like false representations. 5) The

1. THE REAL ESTATE (REGULATION
AND DEVELOPMENT) BILL, 2016
Presented By-
Vaishali Mahlyan
09-03-2016

2. Background
 Lack of standardisation - constraint to the healthy and orderly growth of industry.
 Consumer Protection Act, 1986 is available as a forum to the buyers in the real estate
market,
 Recourse provided - only curative and not adequate to address the concerns of buyers and
promoters in that sector.
.

3. Objective:
Establish the Real Estate Regulatory Authority for:
 Regulation and promotion of the real estate sector and ensure sale of plot,
apartment or building, in an efficient and transparent manner; and
 Protect the interest of consumers in the real estate sector; and
 Establish the Appellate Tribunal to hear appeals from the decisions, directions
or orders of the Authority.
Applicability:
Extends to the whole of India Except the State of Jammu and Kashmir

4. Definition (Section 2)
‘‘Real Estate Project’’ (S. 2(zi))
 development of a building consisting of apartments, or converting an existing
building or a part thereof into apartments,
 development of a colony into plots or apartments,
for the purpose of selling the said apartments or plots or buildings and includes the
development works thereof;
‘‘Immovable Property’’ includes land, buildings, rights of ways, lights or any other
benefit arising out of land and things attached to the earth or permanently fastened to
anything which is attached to the earth, but not standing timber, standing crops or grass;

5. (whether called block, chamber, dwelling unit, flat, premises, suite, tenement, unit or by any other name)
means a separate and self-
contained part of any
immovable property including
one or more rooms or enclosed
spaces, located on one or more
floors, in a building or on a plot
of land,
used or intended to be used for
residence, office, shop,
showroom or godown or for
carrying on any business,
industry, occupation,
profession or trade of for any
other type of independent use
ancillary to the purpose
specified and
includes any covered garage or
room, whether or not adjacent
to the building in which such
apartment is located 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
‘‘Building’’ includes any structure or erection intended to be used for residential, commercial
or for the purpose of any industry or business, occupation, profession or trade or for any other
type of independent use ancillary to the purpose specified or other related purposes;
‘‘Apartment’’

6.  ‘‘Competent Authority’’
the local authority or any authority created under any law made by the appropriate
Government which exercises authority over land under its jurisdiction, and
has powers to give permission for development of such immovable property;
 ‘‘Local Authority’’
means the Municipal Corporation or Municipality or Panchayats or any other
Local Body constituted under any law, for providing municipal services or basic
services, in respect of areas under its jurisdiction

7. ALLOTTEE (S. 2(c))
Person to whom a plot, apartment or
buildings, has been allotted, sold or
transferred by the promoter
Includes - person who subsequently
acquires the said allotment through
sale, transfer or otherwise
Does not include person to whom such
plot, apartment or building, is given on
rent
REAL ESTATE AGENT (S.2(zh))
Person, who negotiates or acts on behalf of one
person in a transaction of transfer of plot,
apartment or building in a real estate project, by
sale or transfer, with another person and
receives remuneration or fees or any other
charges for his services.
Person who introduces prospective buyers and
sellers to each other for negotiation for sale or
purchase of plot, apartment or building
Includes property dealers, brokers, middlemen
by whatever name called

8. • person who constructs
independent building (or
building consisting of
apartments, or converts
an existing building into
apartments), for the
purpose of selling to
other persons and
• includes his assignees
and
• also includes a buyer
who purchases in bulk
for resale;
• person who develops
land into a project,
(whether or not he also
constructs structure on
any of the plots), for the
purpose of selling to
other persons plots in
the said project, whether
with or without
structures thereon
• any development
authority or any other
public body in respect of
allottees of—
• buildings or apartments,
constructed or plot
owned by such authority
or body on lands owned
by them or placed at
their disposal by the
Government, for the
purpose of selling
PROMOTER (S. 2(zf))

9. • 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 allottees
• any person who acts as
a builder, colonizer,
contractor, developer,
estate developer 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.
• Such other person who
constructs building or
apartment for sale to
the general public.
• Explanation.— where
the person who
constructs or converts a
building into
apartments and the
persons who sells are
different persons, both
of them shall be
deemed to be the
promoters;
PROMOTER (Contd.)

10. Section. 2(zb)
‘‘Person’’ includes,—
◦ an individual;
◦ a Hindu undivided family;
◦ a company;
◦ a firm;
◦ a competent authority;
◦ an association of persons or a body of individuals whether incorporated or not;
◦ a co-operative society registered under any law relating to co-operative societies;
◦ any such other entity as the appropriate Government may, by notification specify in this
behalf;

11. Registration of real estate project with RERA
 where the project is to be developed
in phases, every such phase to be
considered as a stand alone real
estate project, and the promoter
shall obtain registration for each
phase separately.
No promoter to book, sell or offer for sale, or invite to purchase any plot, apartment or building, in any
real estate project, without registering the project with the Real Estate Regulatory Authority
No such registration required:
Area of land
proposed to be
developed does not
exceed one
thousand square
meters or number
of apartments
does not exceed
twelve (inclusive
of all phases)*
Promoter has
received
completion
certificate for
project prior to
commencement of
the Act
For the purpose of
renovation or
repair or re-
development
which does not
involve marketing,
advertising, selling
and new allotment

12. 70% of the amount collected from buyers for a project - maintained in a separate bank account
within a period of fifteen days of its realisation and must only be used to cover the cost for
construction of that project.
The appropriate government can alter this amount to less than 70%.
Mandatory Compliance

13. Registration of real estate agents.
No real estate agent to sale or purchase or facilitate the sale or purchase of any
plot, apartment or building, of the real estate project registered with Authority,
being sold by the promoter in any planning area, without obtaining registration.
 Every agent registered, shall be granted a registration number, which is to be
quoted in every sale facilitated by him.
 Every registration to be valid for such period as prescribed, and shall be
renewable on payment of such fee as may be prescribed

14. Not to facilitate the sale or purchase, in a real estate
project, being sold by the promoter, which is not registered
with the Authority
Maintain and preserve books of account, records and
documents as may be prescribed;
Not involve himself in any unfair trade practices
Facilitate the possession of all information and documents,
which the allottee is entitled to, at the time of booking
Discharge such other functions as may be prescribed.
FUNCTIONS OF REAL ESTATE AGENTS

15. Unfair Trade Practices
Unfair Trade Practices
Practice of making any statement,
whether orally or in writing or by
visible representation
Falsely represents that the services
are of a particular standard or grade
Represents that the promoter has
approval or affiliation which such
promoter does not have
Makes a false or misleading
representation concerning the
services
Permitting the publication of any
advertisement in any newspaper or
otherwise of services that are not
intended to be offered

16. FUNCTIONS AND DUTIES OF PROMOTER
The promoter upon receiving his Login Id and password
Create his web page on the website of the Authority and enter all details of the proposed project:
• details of the registration granted by the Authority;
• quarterly up-to-date status of the project; and
• such other information and documents as specified by the regulations of Authority.
The advertisement or prospectus issued or published by the promoter shall mention the website address of the Authority, where
all details of the registered project have been entered.

17. The promoter, upon entering into an agreement of sale with the allottee, have to make available the information
• site and layout plan, approved by the competent authority, by display at the site;
• stage-wise time schedule of completion of the project
The promoter shall be responsible to
• obtain completion certificate and make it available to the allottees;
• provide essential services - service level agreements, on reasonable charges, till the taking over of the maintenance of
the project by the association of the allottees;
• take steps for formation of association or society or co-operative society, of the allottees.
The promoter may cancel the allotment only in terms of the agreement of sale:
• allottee may approach the Authority for relief, if aggrieved and cancellation is not in accordance with the terms of the
agreement of sale, unilateral and without any sufficient cause
The promoter shall prepare and maintain all such other details as specified by regulations made by the Authority.

18. Obligations of promoter regarding veracity of
advertisement or prospectus.
Where any person makes an advance or deposit on the basis of the information
contained in the advertisement or prospectus; and
sustains any loss by reason of any incorrect, false statement, he shall be compensated
by the promoter:
 If the person affected intends to withdraw from the proposed project – return of
entire investment + interest at rate prescribed

19. No deposit or advance without first entering into
agreement of sale.
 A promoter shall not accept a sum more than ten per cent. of the cost of the apartment, plot, or building, as an
advance payment or application fee, without entering into a written and registered agreement for sale.
Agreement shall specify:
Particulars of development of the project,
Dates and manner of payments towards the cost, to be made by the allottees
Likely date on which the possession is to be handed over and such other particulars, as
prescribed.

20. Adherence to approved plans and project specifications
by promoter.
Proposed project shall be developed and completed in accordance with the plans and structural designs
and specifications as approved by the competent authorities.
The promoter shall not make, any addition or alteration in the plans :
 which are agreed to be taken, without the previous consent of that person
 which are not agreed to be taken, without previous written consent of at least two-third of the
allottees, other than promoter who have agreed to take apartment in such building.
In case any structural defect is brought to the notice of the promoter within a period of two years from
the date of handing over possession
• promoter to rectify such defects without further charge, within reasonable time, and in the event of
promoter's failure within time, the aggrieved allottees to be entitled to receive appropriate
compensation.

21. Transfer of title.
 Promoter to take all necessary steps to execute a registered conveyance deed in favour of
the allottee with undivided proportionate title in the common areas.
 After obtaining the completion certificate and handing over physical possession to the
allottees - promoter to hand over the necessary documents and plans, to the association of
the allottees.
 In the absence of any local law - conveyance deed in favour of the allottee shall be carried
out by the promoter within three months from date of handing over of physical possession.

22. Return of amount and compensation.
If promoter fails to complete or give possession—
 in accordance with the terms of the agreement
 due to discontinuance of his business as a developer on account of suspension or
revocation of his registration or any other reason,
he shall be liable on demand to the allottees, to return the amount received by him with
interest at such rate as prescribed, including compensation in the manner provided under the
Act.

23. RIGHTS AND DUTIES OF ALLOTTEES
Obtain information relating to site and layout plans
Know stage-wise time schedule of completion of the project
Claim possession as per the declaration given by the promoter
Claim refund of amount paid, from the promoter, if he fails to
comply or is unable to give possession, as per agreement
Have the necessary documents and plans, after handing over the
physical possession, to the allottee by the promoter.

24. Every allottee, shall be responsible to make payments in manner and
time specified in agreement
Allottee to pay proportionate share of the registration charges,
municipal taxes, water and electricity charges, maintenance charges and
other charges, in accordance with agreement
Allottee shall be liable to pay interest, at rate prescribed, for any delay
in payment
The obligations of the allottee and the liability towards interest may be
reduced when mutually agreed to between the promoter and allottee
Allottee after taking possession, shall participate towards the formation
of association or society or co-operative society of the allottees
Every allottee after taking possession, shall participate towards
registration of the conveyance deed

25. THE REAL ESTATE REGULATORYAUTHORITY
 The appropriate Government, within a period of one year from the date of coming
into force of the Act, by notification, establish an Authority to be known as the Real
Estate Regulatory Authority.
 The appropriate Government of two or more States or Union territories may, establish one
single Authority or, establish more than one Authority in a State or Union territory.
 Authority - body corporate, having perpetual succession and common seal, with the power
to acquire, hold and dispose of property (both movable and immovable), and to contract,
and shall, by the said name, sue or be sued.

26. Powers of Authority.
 Call for information and conduct investigations
 Issue directions from time to time
 Impose penalty, in regards to any contravention of obligation casted upon
promoters, allottees and real estate agent
 Regulate its own procedure

27. Functions of Authority.
Register and regulate real estate projects and real estate agents registered under the Act
Publish and maintain website of records of all projects for which registration has been given, with
details
Maintain database, on website, and enter the names of promoters as defaulters (project details
with reasons), for access to the general public;
Maintain a database, on its website, and enter the names of real estate agents who have applied and
registered, with details, including those whose registration has been rejected or revoked;
Ensure compliance of the obligations cast upon the promoters, the allottees and the real estate
agents

28. CENTRALADVISORY COUNCIL
The Central Government, by notification to establish a Council to be known as the Central
Advisory Council.
 ex officio Chairperson of the Central Advisory Council shall be the Minister of Government in
charge of the Ministry of the Central Government dealing with Housing.
 Council shall consist of representative of various Ministry
 Not more than ten members to represent the interests of real estate industry, consumers,
construction labourers, non-governmental organisations and academic and research bodies in
the real estate sector.

29. Functions of Central Advisory Council
The functions of Council shall be to advise and recommend the Central Government—
◦ On matters concerning the implementation of the 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 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.

30. THE REAL ESTATE APPELLATE TRIBUNAL
 The appropriate Government, within a period of one year from the date of coming into force of this
Act, to establish an Appellate Tribunal to be known as the ---- (State/Union territory) Real Estate
Appellate Tribunal:
 Appropriate Government of two or more States or Union territories may, establish one single Appellate
Tribunal.
 Person aggrieved by any direction or decision or order of the Authority or by an adjudicating officer may
prefer an appeal before the Appellate Tribunal which shall have jurisdiction over the matter.
Composition of Appellate Tribunal:
The Appellate Tribunal - consist of a Chairperson and two other Members of which one shall be a
Judicial Member and other shall be a Technical or Administrative Member, appointed by the
appropriate Government.

31. Orders passed by
Appellate Tribunal to be
executable as a decree
Order made by Appellate Tribunal shall be executable as a
decree of civil court.
Tribunal may transmit any order made by it to a civil court
having local jurisdiction, and such civil court shall execute
the order as if it was a decree made by that court.
Appeal to High
Court
Any person aggrieved by decision of Appellate Tribunal, may file
an appeal to the High Court, within a period of 60 days from the
date of communication of the decision,
No appeal shall lie against any decision made by the Appellate
Tribunal with the consent of the parties

32. OFFENCES AND PENALTIES
 Liable to a penalty which may extend up to ten per cent. of the estimated cost of the real estate project
as determined by the Authority.
 If promoter does not comply with the orders, decisions or directions issued - punished with
imprisonment up to three years or with fine which may extend to a further ten per cent. of the
estimated cost of the project, or with both.
Punishment for non-registration
Penalty for contravention of section
4 (Application to Authority.)
If promoter knowingly provides false information or
contravenes the provisions of section 4 - liable to a
penalty up to five per cent. of the estimated cost of the
real estate project, as determined by the Authority

33. Penalty for contravention of other
provisions of this Act.
If promoter contravenes any other provisions (other than
under section 3 or section 4) - liable to a penalty up to five
per cent. of the estimated cost of the real estate project as
determined by the Authority
Penalty for non-registration
and contravention under
sections 9 and 10 (Function)
If any real estate agent wilfully fails to comply with or contravenes the
provisions - he shall be liable to a penalty of ten thousand rupees for
every day during which such default continues;
which may cumulatively extend up to five per cent. of the cost of plot,
apartment or building, of the real estate project, for which the sale or
purchase has been facilitated.

34. Penalty for wilful failure to comply with orders or directions by Promoter
• Authority - penalty for every day during which default continues, which may
cumulatively extend up to five per cent, of the estimated cost of the real estate project.
• Appellate Tribunal - penalty for every day during which default continues, which may
cumulatively extend up to ten per cent. of the estimated cost of the real estate project
Penalty for wilful failure to comply with orders or directions by Allottee
• Authority - penalty which may cumulatively extend up to five per cent. of the plot,
apartment or building cost
• Appellate Tribunal - penalty which may cumulatively extend up to ten per cent. of the
plot, apartment or building cost
Penalty for wilful failure to comply with orders or directions by Real Estate Agent
• Authority - penalty which may cumulatively extend up to five per cent. of the plot,
apartment or building, for which sale or purchase has been facilitated
• Appellate Tribunal - penalty which may cumulatively extend up to ten per cent. of the
plot, apartment or building, for which sale or purchase has been facilitated

35. Where an offence has been committed by a company:
 Every person in charge or responsible at the time of commission of offence; and the company,
shall be liable to be proceeded against and punished accordingly.
 No such person is liable to any punishment, if he proves that the offence was committed without
his knowledge or that he had exercised all due diligence to prevent the commission of such
offence.
Where it is proved - offence has been committed with the consent or due to any neglect on
the part of any director, manager, secretary or other officer , such officer shall be deemed to
be guilty of that offence and shall be liable to be proceeded against and punished
accordingly.
Offences by Companies

36. Power to Adjudicate
For the purpose of adjudging compensation, the Authority to appoint officer not below the rank of Joint
Secretary to the State Government to be an adjudicating officer for holding an inquiry.
Application for adjudging compensation, shall be dealt as expeditiously as possible and dispose of the same
within a period of 60 days from the date of receipt of such application:
 Where any application could not be disposed of within 60 days, the officer shall record reasons in writing
for not disposing of the application within that period.
While holding inquiry - power to summon, enforce the attendance of any person acquainted with the facts and
circumstances to give evidence, or produce any document relevant to the matter of the inquiry and if, on
inquiry, he is satisfied that the person has failed to comply, he may direct to pay such compensation or interest,
as he thinks fit.

37. Sums realised by way of penalties
◦ amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a
result of the default;
◦ amount of loss caused as a result of the default;
◦ repetitive nature of the default;
◦ Such other factors which the officer think necessary to the case in furtherance of justice.
(Section 62) Factors to be taken into account by adjudicating
officer for quantum of compensation
• All sums realised, by way of penalties, imposed by the Appellate Tribunal or the Authority,
in the Union territories, shall be credited to the Consolidated Fund of India.
• All sums realised in a State, shall be credited to such account as the State Government
specify.

38. FDI Policy in Real Estate Business
FDI is not permitted in an entity engaged or proposes to engage in real estate
business.
“Real estate business” as per FEMA Notification means,
dealing in land and immovable property with a view to earning profit or earning
income therefrom; and
It does not include development of townships, construction of residential/ commercial
premises, roads or bridges, educational institutions, recreational facilities, city and
regional level infrastructure, townships.
 For Construction- development projects - 100% FDI through Automatic route.

39. Major Highlight of the Bill
 Registration of real estate project and real estate agent
 Prior approval before launch and advertisement
 Mandatory deposit of fund
 Disclosing of mandatory information
 Restriction on taking advance
 Liability/ Penalty
 Real estate regulatory authority

40. The End…