Frequently Asked Questions (FAQs), Real Estate (Regulation and Development) Act, 2016

What the guidance covers

The Frequently Asked Questions issued by the Ministry of Housing and Urban Poverty Alleviation explain how the Real Estate (Regulation and Development) Act, 2016 was intended to protect allottees, improve transparency, reduce fraud and delays, standardise practices and provide regulatory oversight and faster dispute resolution.

The Act received Presidential assent on 25 March 2016 and was published in the Official Gazette on 26 March 2016. The guidance states that specified provisions came into effect on 1 May 2016, while other provisions awaited the establishment of the Regulatory Authority and Appellate Tribunal.

Who is affected

The Real Estate (Regulation and Development) Act, 2016 applies to participants in residential and commercial real estate, including:

• Private and public promoters developing projects for sale, including Development Authorities and Housing Boards.
• Both the developer and seller in a joint development arrangement, where they are different persons. Both are treated as promoters and are jointly liable.
• Allottees, including people acquiring an apartment or plot through a transfer or secondary sale. Tenants are not included in this definition.
• Real estate agents and web portals involved in selling registered plots or apartments.
• Ongoing or incomplete projects without a completion certificate, as well as future projects.

Project and property provisions

The Ministry of Housing and Urban Poverty Alleviation guidance highlights these requirements and definitions:

• Projects within a planning area require registration with the Regulatory Authority.
• A promoter must apply using the form and fee prescribed by the appropriate Government’s rules, and provide the required documents, information and undertaking.
• A compliant project must be registered by the Regulatory Authority within 30 days after receiving the application.
• Open parking areas are common areas and cannot be sold to individual allottees.
• Community and commercial facilities forming part of the common areas must be handed over to the Association of Allottees.
• A garage may be sold independently of an apartment.
• Advertisements include solicitation through email and SMS.
• The interest rate payable on default must be the same for a promoter and an allottee, with the rate specified in the appropriate Government’s rules.

Government responsibilities

For a State, the Real Estate (Regulation and Development) Act, 2016 defines the appropriate Government as the State Government. Its responsibilities include notifying implementation rules, establishing the Regulatory Authority and Appellate Tribunal, appointing staff, providing infrastructure and constituting a Real Estate Regulatory Fund.