Real Estate (Regulation & Development Act 2016)

Salient Features of the Act: -

Obligation of Promoters

1. Sale of Apartment/Building in efficient and transplant manner to protect the interest of Consumers in Real Estate Sector established the Real Estate Appellate Tribunal from the decisions/directions and order of Real Estate Authority. The Act has ensured greater accountability towards consumers to reduce frauds and delay to avoid the higher cost of the projects and accordingly the greater responsibility has been imposed on the Promoters to bring the transparency.

2. All states shall establish The Real Estate Regulatory Authority within a period of one year from the date of notification of the Act.

3. The Authority shall operationalize the web based online system within a period of one year from its establishment and provide login id to promoters.

4. Act provides as under: -

a) Imposed obligation on the promoters not to book, sell or offer for sell or invite persons to purchase any plot / apartment or building in any Real Estate Project without registering the Real Estate Project with Real Estate Authority.

b) Registration of Real Estate Projects in which area of land proposed to develop exceed 500

c) Imposes obligations on the Real Estate Agents not to facilitate sale or purchase of any plot (Project of the Builder/Promoter without registering himself with the Real Estate Authority).

d) All States will establish Real Estate Regulatory Authority within one year.

e) Any Promoter cannot book super area.

f)  The Promoter shall file an application with the Real Estate Authority thereby giving brief details of his enterprises including his name and registered address, type of enterprise, particulars of registration and names and photographs of the Promoters with the details of past five years projects launched/completed or being developed and current status, delay in completion, pending cases, details of type of land and payment pending with following documents: -

i) Authenticated copy of Approvals and Commencement Certificates from the competent authorities obtained for the Real Estate Project mentioned in the application. Proposed to be developed in phases, an authenticated copy of approvals and commencement certificate from the competent authority, sanction plans, layout plans and specifications of the proposed project approved by competent authority.

ii)  Plan of development work to be executed in the proposed project, proposed facilities viz. fire fighting facilities, drinking water facilities, emergency equation services, use of renewable energy

iii) Location details of project, with clear demarcation of land along with boundaries,

iv) Performa Allotment Letter, Agreement for Sell and Conveyance Deed

v)  Number, type and Carpet Area of Apartment for Sale, exclusive balcony or verandah and terrace.

vi) Number and areas of garage of sales

vii) Names and Addresses of Real Estate Agents for proposed project.

viii) Names and Addresses of Contractors, Architectures, Structural Engineers in respect of development of proposed project.

ix) Declaration supported with Affidavit signed by Promoter thereby mentioning having legal title of land with legally valid documents with authentication, declaration land is free from all encumbrances;

x) Time period undertakes to complete the project

xi) 70% amount realized from allottees be deposited in separate account in Schedule Bank which cannot be withdrawn time to time on completion of the project phased manner certified by the concerned authority.

xii) The Authority shall grant registration which can be extended by the authority on application and even authority may revoke the registration in case of default on the part of Promoter;

g) Promoter shall obtain all insurances of Real Estate Project and premium shall be paid by him.

h) Promoter shall execute a Registered Conveyance Deed in favour of allotteealongwith undivided common area to the association of the allottee and competent authority and handover the physical possession of the plot/apartment of the building to the allottee and common area to the association.

Functions and duties of promoter

1. After receipt of login id prompter will provide on his webpage details of  registration, quarterly update list of numbers and types of apartment or plots ,quarterly update list of number of garages booked, list of approvals taken, Status of project and other information/documents specified in regulation.

2. Advertisement of prospectus published mentioning the website address of authority, details of registered projects, sanctioned plans, layout plans with specification approved by competent authority, display at site, stage wise time schedule of completion of project including facilities.

3. Agreement for sale or association of allottees, obtain completion certificate or occupancy certificate , all clearances of dues before completion of project, maintenance , carpet area  and proportionate common area .

4. Transfer physical possession to the allottees and association, execute the sale deed specifying carpet area, facilities and common area  and will not create any charge.

5.  Promoter shall not transfer his rights to third party without consent of 2/3 allottees of project.

6.  Promoter shall get insurance of project.

Return of the Amount and Compensation

If promoter fails to complete and unable to give possession of the flat to the allottee and discontinue his business he shall refund entire amount along with interest at which rate has been mentioned in the agreement and further compensate on account of defective title. 

Registration & Obligation of Real Estate Agent

i) No Real Estate Agent shall facilitate the sale and purchase of the proposed project of the Promoter without registration from the Real Estate Authority.

ii)  The Real Estate Agents shall provide all the documents viz. Advertisement, Performa Allotment Letter, Authenticated Approvals and Commencement Certificates issued by the competent authority to Promoters with sanction plan, layout plan, specification of the proposed project, development plan, number, type and carpet area of the apartment, title of the promoter, stage wise time schedule of completion of project to the buyer and he shall also maintain all records for booking;

iii) Agent shall not make any false and misleading representation concerning the services;

Remedies for Allottee

1. Allottes entitle to obtain information including title, sanctioned plans, layout with specification approved by competent authority.

2. Entitle to know stage wise time schedule, with facilities.

3. Allottee shall be entitled to claim possession as per agreement.

4. Allottee entitle for refund with interest at the rate of interest on which promoter claims interest in default on the part of allottee.

5.  Allotee entitle for all necessary documents with common area at the time of taking physical possession.

6. Allottee entitle for interest on delay .

7. Every allottee shall participate towards registration.

Allottee can file complaint with the authority for any violation on the part of Promoter or Real Estate Agent. The Authority shall protect the interest of the allottee and pass the order in accordance with law and ensure the compliance of the obligations caused upon the Promoters, Allottees and Real Estate Agents.

Powers of Real Estate Authority

i) The Real Estate Authority can call any information and conduct investigation in the project of the Promoter;

ii) Issue the interim order or any direction. Further impose the interest or penalty or compensation on the Promoter, or Allottee or Real Estate Agent whosoever has violated.

Appellate Authority of the Tribunal

Any person aggrieved by the order of Real Estate Authority can file Appeal before the Appellate Authority.

Appeal to the High Court

Any person aggrieved by the decision or order of the Appellate Tribunal may file the appeal to High Court.

Offences, Penalties and Adjudication

Punishment to Promoter

a) On Account of non-Registration penalty upto 10% of the estimated cost of the project.

b) If Promoter continue to violate he may be imprisonment upto 3 years

c) If Promoter provides false information penalty upto 5% of the estimated cost of the project.

Punishment to Real Estate Agent

a) If Agent fails to contravene the provisions liable to penalty of Rs. 10,000/- of everyday of default or 5% of the cost of Project whichever higher.

b) If Agent fails to comply the orders of Real Estate Authority shall be penalized 5% of the estimated cost of the project;

c) If Agent fails to comply with the order of Appellate Tribunal shall be imprisonment upto one year and fine on every day default upto 10% of estimated cost of the project.

Penalties by Real Estate Authority / Appellate Tribunal.

a) If Promoters fails to comply with any orders every day he will be penalized 5% of the estimated Real Estate Project;

b) If Promoter fails to comply orders of Appellate Tribunal he shall be punished three years imprisonment and fine for every day default upto 10% cost of the Real Estate Project;

Penalty /Punishment to Allottee

a) If allottee fails to comply the order of Real Estate Authority shall be punished 5% of cost of his Apartment / Plot;

b) If allottee fails to comply the order of Appellate Tribunal he can be punished upto one year and with fine of every day default upto 10% cost of his apartment.

Every Officer who is responsible shall be deemed to guilty of offences and proceeded according to the law.

Jurisdiction of Court

No civil court has jurisdiction to entertain and grant injunction.

But Jurisdiction of consumer forum is not barred. If any complainant is interested to withdraw the complaint from consumer forum then he can seek permission from consumer forum to withdraw and file before the Real estate Regulatory Authority

Applicability of ongoing projects

If any promoter has obtained completion certificate of any project then this Act will not applicable but if there are ongoing projects in which promoter has not obtained the completion certificate promoter is required to get the project registered with Authority.


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