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

What the guidance covers

The Tamil Nadu Real Estate Regulatory Authority guidance states that the Real Estate (Regulation and Development) Act, 2016 was notified on 26 March 2016 and given full effect from 1 May 2017. Applications to register real estate projects must be made online.

The Act applies to private and public promoters, including Development Authorities, Housing Boards and other government agencies involved in sales. In a joint development, the developer and the person selling the apartments or plots are both treated as promoters and are jointly responsible.

Projects and transactions affected

The Real Estate (Regulation and Development) Act, 2016 covers:

• Residential and commercial real estate, as well as industrial plots.
• Ongoing or incomplete projects that have not received a completion certificate, and future projects.
• Projects in planning and non-planning areas.
• Secondary purchasers who acquire an apartment or plot by transfer or sale. Tenants are not treated as allottees.
• Real estate agents and web portals involved in selling registered projects.

Projects do not require registration where the proposed land area does not exceed 500 square metres or the number of apartments does not exceed eight, including all phases. Registration is also not required for projects that received a completion certificate before the Act commenced, or for renovation, repair or redevelopment without marketing, advertising, sale or new allotment.

Registration and advertising

The Tamil Nadu Real Estate Regulatory Authority requires a promoter to register a project before advertising it for sale. Advertisements, prospectuses and photographs published in any medium must prominently display a readable Tamil Nadu Real Estate Regulatory Authority registration number and website address. Solicitation through email and SMS is also advertising.

A compliant project application must be registered within 30 days after receipt. An incomplete application may be completed after an opportunity is given, and rejection can occur only after the promoter has an opportunity to be heard. A registered general power of attorney holder may apply if the document gives sale power from the landowner.

Money and project completion

The Real Estate (Regulation and Development) Act, 2016 requires promoters to:

• Maintain a separate account for each project.
• Deposit seventy percent of allottee receipts for construction and land costs.
• Withdraw funds in proportion to project completion, supported by certification from an engineer, architect and practising chartered accountant.
• Have project accounts audited within six months after each financial year ends.

Registration may be extended for force majeure or reasonable circumstances without promoter fault, subject to a maximum extension of one year. If registration is revoked, the association of allottees has the first right of refusal to carry out the remaining development work.