The Real Estate (Regulation and Development) Bill 2016- The Road Ahead


The Real Estate (Regulation and Development) Bill 2016 is a seminal piece of legislation  which aims at seeking timely deliveries of housing from builders and was recently passed by the Lok Sabha  on 15 March, 2016.  Notably, the Rajya Sabha had already passed the bill on March 10 that intends to promote the interest of consumers and accountability in the real estate sector. Once the President’s assent is received and it is duly notified in the Official Gazette, the Bill will subsume the status of a law, namely the Real Estate (Regulation and Development) Act, 2016. Speculations are also rife that the government is also working on a national rental housing policy that would protect the rights of tenants and incentives individuals to rent out properties.


Teeth to the bill

The following are the salient features of the bill that provide teeth to the bill:

  • The bill covers both commercial and residential real estate projects


  • It provides for mandatory registration of real estate projects with the RERA (Real Estate Regulatory Authority) whose creation is contemplated in the Act itself at the state level.


  • Registration is not required for projects that: (i) are less than 500 square metres, or (ii) entail the construction of less than 8 apartments


  • It also defines the rights and duties of an allottee to do away with any kind of ambiguities.


  • On registration, the details of the project including the site and layout plan, and schedule for completion of the real estate project, details of the promoter, land status, land approvals, agreements along with details of real estate agents, contractors, architect, structural engineer etc have to be displayed on RERA’s website


  • Registration may be revoked after giving 30 days notice to the promoter.


  • Likewise, Real estate agents must register with a RERA in order to facilitate the sale or purchase of property in real estate projects that have been registered. Registered agents must not facilitate the sale of unregistered projects or mislead buyers regarding services offered.


  • The Bill contemplates of establishing fast track dispute resolution mechanisms for settlement of disputes through adjudicating officers and REAT (Real Estate Appellate Authority) which is obligated to dispose the complaint in 60 days.


  • The functions of a RERA include: (i) ensuring that residential projects are registered, and their details uploaded on the RERA website, (ii) ensuring that buyers, sellers, and agents comply with obligations under the Bill, and (iii) advising the government on matters related to the development and progress of real estate.



  • Penalties: The penalties or punishments for contravention of provisions are not really stringent.

(A) In case the promoter fails to register the property, he may be penalised up to 10% of the estimated cost of the project.  Failure to register despite orders issued by the RERA will lead to imprisonment for up to three years, and/or an additional fine of 10% of the estimated cost of the project.

(B) Real estate agents will have to pay a fine of Rs 10,000 for violating any provisions of the Bill, for each day the violation persists

(C) The promoter will have to pay up to 5% of the estimate cost of the project if he violates any other provisions of the Bill.



After critically perusing the bill, it is correct to hold that the bill is well-balanced. One of the most laudable provisions is the one against the delay in completion of projects wherein the developers will have to pay the same interest as the EMI being paid by the buyer to the bank back to the buyer. The bill seeks to address almost all the relevant problems of the Real Estate sector in India grappling with. Nevertheless, one of the pressing issues the sector is facing is poor construction quality or inadequate infrastructural inputs which has not been adequately brought up. Besides, diversion of money collected for one project to another, questionable land titles, speculation in land deals, jacks up land prices, making homes increasingly unaffordable, [1], are other lacunae which need to legislatively examined and bridged. Further, the tall claims and other legislative promises which find place in the bill need to be looked through the prism of implementation.


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