final real estate bill _clean

7/31/2019 Final Real Estate Bill _Clean

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Draft Model Bill for Real Estate Management - (NAREDCO)

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REAL ESTATE MANAGEMENT

(REGULATION, CONTROL AND PLANNED DEVELOPMENT)BILL, 2009

CONTENTS

Introduction

Sections

CHAPTER I

PRELIMINARY

1. Short title, extent and commencement2. Interpretations

CHAPTER IIREAL ESTATE MANAGEMENT & REGULATORY AUTHORITY

3. Constitution of Real Estate Management & Regulatory Authority4. Term of office of Chairperson and other Members5. Powers of the Chairperson6. Removal of Chairperson and Members from office in certain circumstances7. Officers of the Regulatory Authority8. Powers and functions of Regulatory Authority9. Powers of Regulatory Authority to call for information, conduct investigations

etc.10. Powers of Regulatory Authority to Issue Directions11. Powers of the Regulatory Authority consequent upon cancellation of the License

of the Developer

12. Functions of the Regulatory Authority for planned Land development andpromotion of the real estate sector

CHAPTER III

LICENSE TO THE DEVELOPER

13. No development of Land into Colony or construction of Apartment for Marketingwithout a License

14. Conditions for grant of License by Regulatory Authority15. Cancellation of License16. Appeal against the order of the Regulatory Authority

CHAPTER IV

REGISTRATION OF REAL ESTATE AGENT AND CONTRACTOR

17. Registration Compulsory18. Conditions for registration19. Terms and renewal of registration


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20. Refusal to grant or renew registration21. Cancellation of certificate of registration22. Notice before cancellation of registration

CHAPTER V

ROLE AND RESPONSIBILITIES OF STAKE HOLDERS

23. Role of Developer24. Issuing of advertisement or prospectus25. Responsibility of Stake Holder regarding veracity of the advertisement or

prospectus26. No deposit or advance to be taken by Developer without first entering into an

Agreement for Allotment.27. Responsibility of the Developer regarding the account of sums taken from any

source28. Responsibility of Developer for outgoings till transfer29.

Refund of amount / Payment of Interest30. Responsibility of the Developer to the Allottee during project period

31. Handing over of Apartment, common areas and documents to the Association32. Association of the Allottee33. Adherence to approved plans and project specification by the Developer34. Supply of essential services35. Responsibilities of Allottee36. General liabilities of Allottee37. Responsibilities of a Contractor38. Responsibilities of Development Authority39. Responsibilities of Financial Institutions40. Responsibilities of Real Estate Agent and Contractor

CHAPTER VI

INFRASTRUCTURE DEVELOPMENT CHARGES

41. Infrastructure Development Charges collected from DeveloperCHAPTER VII

MAINTENANCE OF ACCOUNTS, REGISTERS AND RECORDS AND AUDIT

42. Maintenance of Accounts and Records43. Audit44. Inspection of Accounts or Records of Business

CHAPTER VIII

APPELLATE TRIBUNAL

45. Establishment of Appellate Tribunal46. Term of office of Chairperson and other Members47. Removal of Chairperson and Members from office in certain circumstances48. Officers of the Appellate Tribunal


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49. Appeals to the Appellate Tribunal50. Powers and Functions of Appellate Tribunal51. Order passed by the Appellate Tribunal to be executable as a Decree52. Penalty for willful failure to comply with orders of Appellate Tribunal53. Appeals to the High Court

CHAPTER IX

OFFENCES & PROSECUTION

54. Contravention of Section 23, Section 24, Section 26, Section 27 Section 28,Section 29, Section 3, Section 32

55. Contravention of Section 27 (2)56. Contravention of Section 3057. Contravention of Section 35 and 3658. Contravention of Section 38, 39 and 4059. Contravention of other provisions of this Act or Rules made there under60.

Offences by companies61. Other Offence

62. Jurisdiction of Courts63. Prosecution of Companies64. Compounding of offences

CHAPTER X

MISCELLANEOUS

65. Civil Court not to have jurisdiction66. Power to make Rules67. Delegation of Powers68. Protection of acts done in good faith69. Act to have overriding effect

FIRST SCHEDULEForm of the Agreement & accompanying documents

SECOND SCHEDULEMeasures for protection and safety of Property to be taken by the Developer

THIRD SCHEDULEDeveloper's responsibility to form Association


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REAL ESTATE MANAGEMENT (REGULATION, CONTROL AND PLANNEDDEVELOPMENT) ACT, 2009

INTRODUCTION

Before the Real Estate Management (Regulation, Control and Planned Development) Act cameinto existence in ______, there was no specific statutory provision of law to govern themanagement and control of real estate sector in India, specially conduct of developers,

contractors, real estate agents, consumers and other persons engaged in allied services, regardingdevelopment of real estate sector in India. In the absence of any specific statutory provisions the

responsibilities and liabilities of developers, contractors, real estate agents, consumers and otherpersons engaged in allied service could not be properly fixed and governed by the authorities.

To remedy these confusions and regulate, control and promote planned and healthy development

and management of real estate sector, including promotion of construction, sale, transfer andmanagement of Building, Apartment and other similar properties with a view to protecting, on

the one hand the public interest in relation to the conduct of developers, consumers and otherpersons engaged in the development of real estate sector and on the other facilitating smooth and

speedy construction of such Building, Apartment and properties and ensuring that theirconstruction and maintenance is in accordance with the prescribed structural safety norms and

for matters connected therewith or incidental thereto, a draft Bill was prepared by ________ inthe year 2001 and was introduced in the Parliament in the year 2001. The Bill was redrafted by

___________ in the year 2009.

Act __ of _____

The Bill pertaining to Real Estate Management (Regulation, Control and Planned Development)Act was prepared not less than ______ times before the final Bill was passed and it came into

force with effect from ____ day of ________, _____ as the Real Estate Management(Regulation, Control and Planned Development) Act, _____.


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REAL ESTATE MANAGEMENT (REGULATION, CONTROL AND PLANNEDDEVELOPMENT) BILL, 2009

A BILL

An Act to promote growth of real estate industry in the country in order to boost the economy,improve quality of life and attract investment by enhancing business opportunities, increasingtransparency and insuring safety while protecting interest of all Stake Holders including those of

Allottees. This Act will strive to facilitate and smoothen the process of adoption of best practicesin order to evolve a credible and reliable system. The Act will create a level playing field

between public, private and other such persons involved in real estate development.

Be it enacted by the State Assembly in the Sixtieth Year of the Republic of India as follows:

CHAPTER IPRELIMINARY

1. Short title, extent and commencement (1) This Act shall be called the Real EstateManagement (Regulation, Control and Planned Development) Act, 200-.(2) It extends to the State of -------.(3) It shall come into force on such date as the Government may, by notification in

the Official Gazette, appoint.

2. Interpretations - In this Act, unless the context otherwise requires:(1) "Advertisement" means visible representation made to the general public either

through announcement or display or in any other manner whatsoever -(a) offering for sale, lease or license a Building or Apartment or inviting

persons who intend to take such Building or Apartment to make advancesor deposits for such purpose; and

(b) for any other matter incidental to the aforesaid purposes;(2) "Allottee(s)" means the person(s) to whom any Building(s) or Apartment(s) has

been allotted, sold or given on lease or license or otherwise transferred by theDeveloper and includes -

(a) its legal representatives,(b) successors in title or permitted assignees.

(3) "Apartment(s)" means a block, chamber, dwelling unit, flat, premises, suite, plot,tenement, unit or known by any other name, and includes a separate and self-

contained part of any Property located in a basement or cellar or on one or morefloors or any part thereof, in a Building or on a plot of Land or a Colony, used or

intended to be used as a residence and in case of an Integrated Township an office,shop, showroom, or go-down or for carrying on any business, industry,

occupation, profession or trade or for any other type of independent use ancillaryto the purpose specified above and includes any garage or room, whether or not

adjacent to the Building in which such Apartment is located provided by theDeveloper for the use of the Allottee for parking any vehicle, or as the case may

be, for the residence of any domestic servant employed in such Apartment;(4) Agreement means a concurrence in an engagement that something shall be done


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any other Act for the time being in force or agreed upon by theAssociation / Developer, as Common Expenses;

(c) the Government and municipal taxes including ground rent and propertytax, which is not assessed separately for each Apartment;

(16) "Company" means a Company formed and registered under the Companies Act,1956 and includes -(a) a corporation established by or under a Central, State or Provincial Act;(b) a Development Authority or public authority established by the

Government in that behalf under any law for the time being in force;(17) Development Authority means the local authorities or any other authority

notified by the Government for granting Permissions and Approvals under this Actand any other Act as may be applicable for time to time and the Rules made there

under;(18) Completion Certificate means the Completion Certificate / Occupancy

Certificate to be issued by the Development Authority certifying completion or theDevelopment of the Building / Real Estate Project and permitting occupation of

the same;(19) "Contractor" means a person who has entered into a contract with the Developer orany other person authorized by him, for execution of any work, supply of goods,services, materials or equipment and includes -

(a) its legal representatives;(b) successors in title or permitted assignees;

(c) unless otherwise excluded, all sub-Contractors who have similararrangement with the Contractor for execution of any work, supply of

goods, services, materials or equipments;(20) "Developer" means, -

(a) a person who individually or collectively takes the business risk associatedwith conceptualizing, getting Permissions and Approvals, constructing,

transferring and maintaining an Apartment or Building in terms of thisAct;

(b) a person who constructs or causes to be constructed or proposes toconstruct a Building consisting of Apartment, or converts an existing

Building or a part thereof into Apartment, for the purpose of transferringall or some of the Apartment to other persons and includes its assigns; or

(c) a person who develops or intends to develop a Colony, whether or not itconstructs structures thereupon for the purpose of transferring all or some

of the plots of Land in a Colony to other persons;

Explanation: For the purposes of Sub-section (a) and (b) where the person whoconstructs or converts a Building into Apartment or develops a Colony and the

person who sells Apartment or plots of Land in a Colony are different persons,both of them shall be deemed to be the Developers.

(d) any Development Authority or any other public body so notified by the

Government, in respect of Allottee of-(i) Building or Apartment constructed by them on Lands owned by

them or placed at their disposal by the Government; or(ii) plots of Land owned by them or placed at their disposal by the


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Government.(e) an Apex State Level Cooperative Housing Finance Society and a Primary

Cooperative Housing Society or a Development Authority whichconstructs Apartment or Building for its Members, in respect of the

Allottee of such Apartment or Building;

(f) any other person who styles himself as a builder, colonizer, Contractor,Developer, estate developer or by any other name or claims to be acting assuch by virtue of a Power of Attorney from the owner of the Land on

which the Building or Apartment is constructed or Colony is developed;(g) such other person who constructs any Building or Apartment for sale,

lease, license, etc. to general public or for its own use as the Governmentmay, by notification in the Official Gazette, specify;

(21) "Development" means the carrying out of building, construction, development,engineering or other operations in, on, over or under the Land or making any

material change in any Building or Apartment or Land and includesredevelopment;

(22)

"Development Charges" means the charges for carrying out Internal DevelopmentWorks as well as External Development Works;

(23) "Development Works" means the Internal Development Works as well as ExternalDevelopment Works;

(24) "Director" means a designated partner in the firm and in relation to a DevelopmentAuthority means the person who takes decisions on matters of policy in its office

or designated as such by the said authority;(25) "Engineer or Structural Engineer" means a person who possesses a Bachelor's

degree or equivalent from an institution recognized by the All India Council ofTechnical Education and / or is registered as an Engineer under any law for the

time being in force in the State requiring registration of an Engineer;(26) "External Development Works" means water supply, sewerage, drainage systems,

roads and electrical works and other necessary works to be executed in theperiphery of or outside a Colony for its benefit and / or joint benefit of two or more

colonies;(27) Financial Institutions means Scheduled Banks, Housing Finance Companies,

Co-operative Banks and Non Banking Financial Institutions performing the role offacilitating real estate development by providing the necessary funds;

(28) "Government' means the Government of -----;(29) "Internal Development Works " means:

(a) metalling of roads and paving of footpaths;(b) turfing and plantation with trees of open spaces;(c) street lighting;(d) adequate and wholesome water supply;(e) sewers and drains both for storm and sullage water and necessary

provisions for their treatment of a Real Estate Project;

(f) any other work that the Developer may think necessary in the interest ofthe proper Development of the Real Estate Project;

(30) Integrated Township means and includes serviced housing, commercialpremises, hotels, resorts, institutional areas, city and regional level urban

infrastructure facilities;(31) "Joint Family" means a Hindu Undivided Family and in the case of other person, a


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group the Members of which are by custom jointly in possession of residence;(32) "Land' means a portion of the surface of the earth, composing the ground or soil

and everything under it or over it, and things which are attached to the earth, suchas Building, structures and trees, things which are permanently fastened to the

earth or to things attached to the earth, easements, rights and appurtenances

belonging to them and the benefits arising out of them;(33) Lawyer means a person admitted to practice law in a jurisdiction, authorized toperform both civil and criminal legal functions for clients. These functions include

drafting of legal documents, giving legal advice, and representing clients beforeCourts, administrative agencies, boards, etc;

(34) "Development Authority / Local Body" means the Corporation/Municipality/LocalBody constituted under any law for the time being in force;

(35) License means License obtained by the Developer under Sub-section (1) ofSection 13 of this Act.

(36) "Limited Common Areas and Facilities" means those Common Areas andFacilities which are designated in writing by the Developer before the allotment,

sale or transfer of any Apartment, as reserved for use of certain Apartment to theexclusion of the other Apartment;

(37) "Marketing" means (a) to sell, (b) to offer to sell and (c) to engage in anytransaction or other activity that will or is likely to lead to a sale, lease or license;

(38) "Member" means the Member of the Real Estate Management and RegulatoryAuthority appointed by the Government under Section 3 and includes the

Chairperson; and in relation to Real Estate Appellate Tribunal means the Memberof the Appellate Tribunal appointed by the Government under Section 45;

(39) "Natural Calamity" includes damage through earthquake, cyclone, landslide,drought, flood, fire, tornado, volcano and any other calamity as may be notified by

the Government through a notification published in the official Gazette;(40) Permissions and Approvals means pre-construction and post-construction

approvals including but not limited to Zoning Approvals / Non-agricultural useapprovals / Change of Land Use Certificate (CLUs), Layout plan approvals /

License, Building Plan Approvals, Construction Permissions, Environmentalclearances, Completion Certificate, and safety approvals, other no-objection

certificates from concerned authorities and / or any other Permissions andApprovals required from Competent Authorities of the Government for

development and completion of Real Estate Projects;(41) "Person" means and includes, -

(a) a Company,(b) a Partnership Firm,

(c) a Limited Liability Partnership (LLP),(d) a Development Authority, an Association of persons or a body of

individuals, whether incorporated or not,(e) a Development Authority, notified public body, trusts, society and co-

operative housing society,(f) Joint Family, and / or any other entity which the Government may, by

notification in the Official Gazette, specify in this behalf;(42) "Prescribed" means Prescribed in this Act or Rules made there under;(43) Principal means the person who is commissioning/appointing any Real Estate

Agent for undertaking any real estate transaction on its behalf;


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(44) "Property" means the Land, the Building, all improvements and structuresthereupon, and all easements, rights and appurtenances belonging thereto, and

includes every type of right and interest in Land which a person can have to theexclusion of other persons, such as possession, use and enjoyment free from

interference, right of disposition and franchises;

(45)

"Real Estate Agent" means a person including Land or housing agent, Property orreal estate consultants, Property dealers/realtors or known by any other name, whonegotiates or acts on behalf of the Principal in a transaction of transfer of its

Property, whether by way of sale, lease, license, mortgage, purchase or otherwise,with another person, and receives remuneration for its services in the form of

commission, and also includes a person who introduces for negotiation suchperson or their agents;

(46) "Real Estate Management" means and include includes activities of-(a) development of colonies and their management;

(b) promotion of construction, sale, transfer and management of Building,Apartment or other similar properties;

(47)

"Regulatory Authority" means the Real Estate Management and RegulatoryAuthority established under Sub-section (1) of Section 3;

(48) Stake Holder means any person, Company or entity either involved or havinginterest/stake in the real estate sector. These include Developers including Land

owners, Development Authority, Contractors, Financial Institutions, Real EstateAgents, specialized service providers like Architects, Engineers, valuers and

Lawyers and Allottee;

CHAPTER IIREAL ESTATE MANAGEMENT & REGULATORY AUTHORITY

3. Constitution of Real Estate Management & Regulatory Authority (1) With effectfrom such date as the Government may, by notification decide, there shall be established,for the purposes of this Act, an authority to be called the "Real Estate Management &

Regulatory Authority".(2) The Regulatory Authority shall be a body corporate by the name beforesaid having

perpetual succession and a common seal, with power, subject to the provisions ofthis Act, to acquire, hold and dispose of Property, both movable and immovable

and to contract, and shall, by the said name, sue or be sued.(3) The Regulatory Authority shall consist of a seven Member team drawn from

public, private players and industry bodies, consisting of:(a) A Chairperson (appointed by the Government)(b) One Member Secretary (appointed by the Government)(c) Five whole time Members to be drawn from a pool of industry experts in

order to ensure equal representation of:(i) Developers;(ii) Financial Institutions;(iii) Real Estate Agents;(iv) Consumer rights specialists;(v) Specialized service providers Architects, Engineers, Lawyers,

valuers etc.Provided that a person, who is, or has been, in the service of Government shall not be


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appointed as a Chairperson unless such person(s) has held the post of Secretary orAdditional Secretary to the Government of India or any equivalent post in the

State/Central Government.Provided further that a person shall not be appointed as Member Secretary unless such

person has held the post of Joint Secretary to the Government of India or equivalent post

in the Central Government or the State Government.

4. Term of office of Chairperson and other Members (1)The Chairperson and otherMembers shall hold office for a term not exceeding three years, from the date on whichthey enter upon their offices or until they attain the age of sixty five years, whichever is

earlier.(2) The employee of the Government on its selection as Member shall have to retire

from service before Joining as a Member.(3) The salary and allowances payable to and the other terms and conditions of service

of the Chairperson and other Members shall be such as may be Prescribed andshall not be varied to its disadvantage after appointment.

(4) The Chairperson, Members of the Regulatory Authority shall be deemed to bepublic servants within the meaning of Section 21 of the Indian Penal Code.

(5) The Chairperson or Member may relinquish its office by giving in writing to theCentral Government/State Government notice of not less than three months; or be

removed from its office in accordance with the provisions of Section 6 of this Act.

5. Powers of the Chairperson (1) The Chairperson shall have powers of generalsuperintendence and direction in the conduct of the affairs of Regulatory Authority and it

shall, in addition to presiding over the meetings of the Regulatory Authority, exercise anddischarge such powers and functions of the Authority as may be Prescribed.

6. Removal of Chairperson and Member from office in certain circumstances (1)TheGovernment shall remove a Chairperson / Member in case it ceases to be eligible to holdsuch office of Chairperson or Member of the Regulatory Authority, if it:

(a) has been adjudged as insolvent, or(b) has been convicted of an offence, which, in the opinion of the Government

involves moral turpitude; or(c) has become physically or mentally incapable or acting as a Chairperson /

Member; or(d) has acquired such financial or other interest as is likely to affect

prejudicially its functions as a Chairperson / Member; or(e) has so abused its position as to render its continuance in office prejudicial

to the public interest.(2) No such Chairperson or Member shall be removed from its office under clause

(iv) or clause (v) of Sub-section (1) unless it has been given a reasonableopportunity of being heard in the matter.

7. Officers of the Regulatory Authority (1) The Governments shall provide theRegulatory Authority with such officers and employees as it may deem fit.(2) The officers and employees of the Regulatory Authority shall discharge their

functions under the general superintendence of its Chairperson.


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8. Powers and functions of Regulatory Authority (1) The functions of RegulatoryAuthority shall be to;

(a) ensure compliance of the obligations cast upon the Stake Holders underthis Act, the Regulations and the Rules framed there under;

(b) make recommendations on-(i)

protection of the interest of the Allottee; and(ii) measures to facilitate expeditious clearance/approval of projectsfrom the concerned Development Authority and/or the Local Body

of competent jurisdiction, construction and maintenance ofstructurally safe Building, Apartment and Properties and any other

form of assistance/advocacy to promote competition and efficiencyin the real estate sector;

(c) render advice to the Government in matters relating to the Development ofreal estate industry; and perform such other functions as may be entrusted

to the Regulatory Authority by the Government as may be necessary tocarry out the provisions of this Act;

(d)

monitor the process of collection and timely deployment of DevelopmentCharges collected by the Development Authority for a particular area by

the means of Scheduled Bank Account opened under Section 41. TheAuthority may at its discretion demand information and or scrutinize the

fund deployment planning and ensure the prioritization of deployment forthe area it has been collected;

(e) monitor the performance of the state authorities in development of thesocial infrastructure;

(f) make provisions for transparency in the fund deployment of DevelopmentAuthority, by making it compulsory for them to share key information

through periodical publishing of income and expenditure account;(g) take charge of the Scheduled Bank Account and utilize the funds towards

the completion of the Development Works and infrastructure developmentof the area by appointment of a suitable replacement, in case of default by

the Development Authority to complete the Development Work within theprescribed time;

(h) formulate a set of detailed guidelines for grant of all the statutoryPermissions and Approvals. These guidelines shall include recommended

standard approval forms and checklist of information and documentaryproof to be submitted by the Developer to the Development Authority.

Such guidelines shall stipulate the maximum period allowed to theconcerned authority to give its decision on the application for approval,

failing which the Developer shall be free to approach the RegulatoryAuthority for a decision;

(i) hear appeal from rejection application by a Local Body / Authority fromgranting any permission or approval;

(j) direct Development Authority / Local Body or any other authority to issuePermissions And Approvals as required by the Developer;

(k) None of the Permissions and Approvals granted by DevelopmentAuthority can be withdrawn / cancelled / suspended by the Development

Authority without obtaining permission form the Regulatory Authority;


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(l) in consultation with the Government / the Development Authority / UrbanLocal Bodies, the Regulatory Authority may evolve a consensus and

facilitate migration to a framework of revised simplified procedures andnorms, requiring the Developers to only indemnify adherence to broad

parameters of Land use, FSI, ground coverage, density, and height

restrictions, rather than seeking a detailed approval from LocalAuthorities;(m) formulate sets of model sample Agreements between:

(i) an Allottee and a Real Estate Agent;(ii) an Allottee and a Contractor;(iii) an Allottee and a Financial Institution;(iv) a Developer and a Financial Institution;(v) a Developer and a Contractor;(vi) a Developer and other service providers like Lawyers, Architects,

Engineers, valuers etc..(n) perform all other functions as mentioned in this Act.

(2) Upon receiving a complaint in this behalf or suo motto or otherwise, theRegulatory Authority shall adjudicate any dispute between various Stake Holdersregarding failure on either part to meet the obligations cast upon them under this

Act, the Rules and the Regulations framed there under generally and pass an orderwithin a period of 3 months and an order passed by the Regulatory Authority shall

be binding on all parties.

Provided that every such order passed by the Regulatory Authority shall be inwriting and passed after having provided an opportunity to both parties to be

heard.Provided further that an order may be passed by the Regulatory Authority after a

period of 3 months in exceptional cases provided the reasons are recorded inwriting.

9. Powers of Regulatory Authority to call for informat ion, conduct Investigations, etc (1)Where the Regulatory Authority considers it expedient so to do, it may, by order inwriting-

(a)call upon any Stake Holder at any time to furnish in writing such informationor explanation relating to its affairs as the Authority may require; or

(b)appoint one or more persons to make an inquiry in relation to the affairs ofany Stake Holders; and

(c)direct any of its officers or employees to inspect the books of accounts orother documents of any Stake Holder.

(2) Every Stake Holder shall be bound to produce before the Authority making theinquiry, all such books of accounts or other documents in its custody or power

relating to, or having a bearing on the subject matter of such inquiry and also tofurnish to the Regulatory Authority information relating thereto.

10. Power of Regulatory Author ity to Issue directions (1) The Regulatory Authority may,for the discharge of its functions under Sections 8 and 9, issue such directions from timeto time to various Stake Holders, as it may consider necessary and such directions shall be


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binding on all concerned.

11. Powers of the Regulatory Authority consequent upon cancellation of the License ofthe Developer (1) In case of cancellation of the License by the Regulatory Authority

under Section 15, the Regulatory Authority may upon receiving an application in this

behalf from the Allottee or a request from the Government, arrange to have the remainingDevelopment Work, carried out from the amount of money deposited and available in theEscrow Account, and further recover the charges incurred on the said Development Works

from the Developer and the Allottee in the manner Prescribed as arrears of Land revenue.(2) The liability of the Developer for payment of charges for the said Development

Works shall not exceed the amount actually recovered by the Developer from theAllottee less the amount actually spent by it on such Development Works. The

Developer shall also be liable to pay interest at the rate Prescribed by thegovernment on the amount payable by him.

(3) The liability of the Allottee shall not exceed the amount, which it would have topay to the Developer towards the expenses of the said Development Works under

the terms of the Agreement for Allotment or transfer entered into between them.Provided that the Regulatory Authority may recover from the Allottee, with their

consent, an amount in excess of the amount payable by them under the aforesaidterms of Agreement for Allotment or transfer.

(4) After meeting the expenses on Development Works the balance amount shall bepayable by the Regulatory Authority, to the Developer or as the case may be, to

the Allottee.(5) Notwithstanding anything contained in the foregoing provisions of this Section,

the Regulatory Authority may, with a view to enabling the Developer to transferthe possession of, and the title to, the Land or Building or Apartment to the

Allottee within a specified time, after the Development Works have been carriedout, authorize the Developer by an order to receive the balance amount, if any,

due from the Allottee, after adjustment of the amount which may have beenrecovered by the Regulatory Authority towards the cost of the Development

Works and also transfer the possession of, and the title to, the Land or Building orApartment to the Allottee within aforesaid time and if the Developer fails to do

so, the Regulatory Authority shall, on behalf of the Developer, transfer thepossession of, and the title to, the Land or Apartment to the Allottee on receipt of

the amount which was so due from them.

12. Functions of the Regulatory Authority for planned Land development andpromotion of the real estate sector (1)The Regulatory Authority shall generally take

all possible measures for the growth and promotion of healthy, transparent, efficient andcompetitive real estate sector. To achieve this objective, the Authority shall, in particular,

take the following steps:(a) Evolve a consensus among the Central Government / State Governments,

the Bureau of Indian Standards (BIS), urban local bodies, builders,Developers and colonizers, Associations of Engineers and Architects and

other Stake Holders to follow, on mandatory basis, the structural safetynorms Prescribed for the area concerned by the National Building

Code/BIS/statutory provisions of the local Building bye-laws etc.


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(b) In consultation with the Government/the Development Authority/theurban Local Bodies, establish a framework of standard procedures and

norms for speedy processing and grant of Permissions and Approvals bythe Local Bodies/the Development Authority for Real Estate Projects

proposed to be taken up by Developers.

(c)

On behalf of the real estate sector, take up, with the Government,Financial Institutions, Local Bodies, Development Authority and otherconcerned Stake Holders, advocacy of issues like prompt and easy access

to credit/home loans, credible and reliable Land title certification system,speedy and transparent registration of Properties, effective institutional

arrangements for proper upkeep and maintenance of built-up properties,statutory framework for equitous and balanced relationship between land-

lord and tenant and the like.(d) Promote construction of LEED rated environment friendly/green Building

and measures for conservation of water and its re-cycling.(e) With a view to encouraging construction of structurally safe but low-cost

housing particularly for the weaker sections, promote standardization anduse of appropriate construction materials, fixtures and fittings.

CHAPTER III

LICENSE TO THE DEVELOPER

13. No development of Land into Colony or construction of Apartment for Marketingwithout a License (1)No Developer shall develop Land into a Colony of plots of Land

or construct a Building or Apartment or convert any existing Building or part thereof intoApartment, for the purpose of Marketing all or some of the Apartment, (hereinafter

referred to as a Real Estate Project) without obtaining a License from the RegulatoryAuthority to develop such Real Estate Project.

Provided that no License shall be required when the area of Land proposed to bedeveloped into a Colony does not exceed 1000 (One Thousand) square metres or the

number of Apartment proposed to be Marketed does not exceed 4 (Four) or the CarpetArea of the Apartment proposed to be sold does not exceed 400 (Four Hundred) square

metres.

Explanation: A Developer shall require separate permission of the Regulatory Authorityfor development of each Colony or construction of each Building or Apartment or

conversion of existing Building or part thereof into Apartment. However, if developmentof each Colony or construction of each Building or Apartment or conversion of existing

Building or part thereof into Apartment is to be carried out on a contiguous piece of Landthan only one License shall be required.

14. Conditions for Grant of License by Regulatory Authority (1) For obtaining suchLicense as required under Section 13, the Developer shall be required to make anapplication in the Prescribed form to the Regulatory Authority, along with the Prescribed

fee and detailed information relating to the number and size of Apartment, layout plan,Carpet Area and plinth area of the Apartment and the facilities provided / to be provided

and such other information as may be Prescribed. The information to be submitted in theapplication is indicated in Second Schedule of this Act.


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(2) On receipt of the application under Sub-section (1), the Regulatory Authority,

after making enquiry into the title of the Developer to the Land, extent andsituation of the Land, and such other matters as it may deem fit, and after having

ascertained that valid Permissions and Approvals have been obtained by the

Developer from the Local Body of competent jurisdiction/ DevelopmentAuthority, shall pass an order in writing, within a period of thirty days grantingthe License subject to such terms and conditions as may be specified therein or

refusing to grant such License indicating in writing the reasons for such refusal.

Provided that if no License is provided by the Regulatory Authority within a period ofthirty days, it shall be deemed that a License has been granted to the Developer for the

purposes mentioned under Section 13 of this Act.Provided further that no order refusing the grant of License under Sub section (2) shall

be passed without affording the applicant a reasonable opportunity of being heard.

(3) The Regulatory Authority shall grant a License to the Developer in the Prescribedform, only after:

(a) the Developer has entered into an Agreement in the Prescribed form with theRegulatory Authority concerned for completion of the Development Works of

the Real Estate Project in accordance with the conditions of the license and topay proportionate External Development Charges as estimated by the

Development Authority for External Development Works to be carried out bythe Government or a Development Authority.

(4) The License granted under Section 3 shall be valid for a period of five years. On

receipt of an application from the Developer for renewal of the License on theground that delay in completion of the project was for reasons beyond its control,

the Regulatory Authority, if satisfied after making such inquiries as it mayconsider necessary, renew the License for a period of one year at a time on

payment of Prescribed fee.

Provided that license for Integrated Township projects shall be valid for a periodof ten years.

15. Cancellation of License (1)Upon receiving a complaint in this behalf, or suo-moto,the Regulatory Authority may cancel any License issued by it, after being satisfied thatthe conditions of the License have been violated in such a manner that warrant such

cancellation and the Developer has failed to rectify such defect/violations within suchperiod as may be notified by the Regulatory Authority in the notice given to the

Developer, after giving an opportunity of being heard to the parties concerned includingthe Developer and the complainant.

Provided that before cancellation of License the Regulatory Authority shall give a showcause notice to the Developer and ask the Developer to rectify such defect/violation.

(2) Every such order of cancellation shall be in writing and shall be disposed offwithin three months of receipt of the complaint or initiation of proceedings,

whichever is earlier, under intimation to the Local Body in whose jurisdiction theLand is located.


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(3) Upon cancellation of the License, the Regulatory Authority may cease the EscrowAccount opened by the Developer under Section 27 and use the same in the

manner provided under Section 11 of this Act.(4) When a License is cancelled under Sub-section (1) of this Section the Regulatory

Authority may cause the balance of the Development Works to be carried out, in

terms of Section 11 of this Act.

16. Appeal against the order of the Regulatory Authority (1)Any person aggrieved byan order of the Regulatory Authority under Section 14 or 15 of this Act may, within aperiod of thirty days of the date on which the order sought to be appealed against is

communicated to it, prefer an appeal in writing to the Appellate Tribunal in such formand in such manner as may be Prescribed;

Provided that an appeal may be entertained after the expiry of the said period of thirtydays, if the applicant satisfies the Appellate Tribunal that it had sufficient cause for the

delay in filing the appeal within the prescribed time.

CHAPTER IVREGISTRATION OF REAL ESTATE AGENT AND CONTRACTOR

17. Registration compulsory (1) From such date as may be fixed by the Government bynotification in the Official Gazette in this behalf, no Real Estate Agent and a Contractorshall carry on the business of real estate development, or represent or hold itself out as

carrying on such business, except under and in accordance with the terms and conditionsof the certificate of registration granted under this Act.

(2) An application for registration under Sub-section (1) as Real Estate Agent andContractor shall be made along with a Prescribed fee to Regulatory Authority. On

receipt of the application the Regulatory Authority shall, subject to fulfillment ofthe conditions prescribed in the Rules and Regulations by the Regulatory

Authority and / or Government, enter the name of the applicant in the register ofReal Estate Agent and Contractor, as the case may, be, maintained under this Act

in the Prescribed form and grant a certificate of registration in the Prescribedform, to such person for the conduct of its business in accordance with the terms

and conditions of the certificate of registration and the provisions of this Act andthe Rules made there under.

Provided that if a Real Estate Agent and Contractor is registered under any lawfor the time being in force in a State for the purpose of regulating its activities in

Real Estate Projects, it shall submit its registration number and other details toRegulatory Authority under whose jurisdiction it proposes to work.

18. Conditions for registration - (1) Before registering and granting a certificate ofregistration to a Real Estate Agent and Contractor under the provisions of Section 17, theRegulatory Authority shall satisfy itself that the Real Estate Agent and / or the Contractor

possess the necessary qualifications as may be prescribed by the Regulatory Authority.(2) The name of the Real Estate Agent and Contractor shall not be registered if it-

(a) is of unsound mind and stand so declared by a Regulatory Authority; or(b) is an undischarged insolvent; or


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(c) being a discharged insolvent, has not obtained from the Court havingjurisdiction a certificate that its insolvency was caused by misfortune

without any misconduct on its part; or(d) has been convicted of an offence of criminal breach of trust, or(e) is otherwise incompetent to make any contract under any law for the time

being on force.

19. Term and renewal of registration (1) Every certificate of registration of a Real EstateAgent and Contractor under Section 17 shall be valid for a period of five years and, onthe expiry of such a period, it may be renewed for another period of five years by the

Regulatory Authority, on an application along with the Prescribed fee by the Real EstateAgent and Contractor in that behalf;

Provided that the conditions referred to in Section 18 continue to be fulfilled and theapplication has been made at least three months before the expiry of the certificate of

registration granted under Sub-section (1) of this Section.

20.

Refusal to grant or renew registration (1) If, after giving the applicant an opportunityof being heard, the Regulatory Authority refuses to grant or renew a certificate of

registration, it shall record its reasons in writing and communicate the same to theapplicant.

21. Cancellation of certificate of registration (1) A certificate of registration grantedunder Section 17 shall be liable to be cancelled by the Regulatory Authority on thegrounds mentioned in Sub-section (2) hereinbelow and by an order made in writing

recording the reasons for such cancellation.(2) A certificate of registration is liable to be cancelled, if a Real Estate Agent and /

or a Contractor, as the case may be:(a) surrenders the certificate of registration as it does not wish to continue

carrying on the business; or(b) has applied to be adjudicated or has been adjudicated an insolvent or is an

undischarged insolvent; or(c) has been applied to be adjudicated to be of unsound mind by a competent

Court; or(d) has contravened any of the terms or conditions of the certificate of

registration or any of the provisions of this Act or the Rules made thereunder.

22. Notice before cancellation of registration (1) Before cancelling a certificate ofregistration under Section 21, the Regulatory Authority shall give notice to the RealEstate Agent and / or Contractor specifying the grounds and calling upon him to show

cause why the certificate of registration should not be cancelled.(2) After considering the explanation, if any, offered by Real Estate Agent and / or

Contractor, the Regulatory Authority may cancel the certificate of registration, orpass such orders as it may deem fit.

(3) Notwithstanding anything contained in Sub-section (1) and (2) the RegulatoryAuthority may suspend the certificate of registration of a Real Estate Agent and /

or Contractor, as the case may be, pending decision on the matter of cancellationof the certificate of registration.


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(4) Where any certificate of registration is suspended or cancelled under this Act, noperson shall be entitled to any compensation or the refund of any fee paid in

respect thereof.

CHAPTER V

ROLES AND RESPONSILITIES OF STAKE HOLDERS

23. Role of Developer (1)After obtaining a License specified in Chapter II, a Developerwho develops or intends to develop a Real Estate Project, shall be liable to makeavailable or cause to be made available for inspection, to all persons taking or intending

to take a Building or an Apartment on ownership basis, the following information anddocuments:

(a) details of the License issued by the Regulatory Authority;(b) a full and true disclosure of the nature of its title to the Land on which the

Real Estate Project is developed or intended to be developed (such title tothe Land should be supported by a Land title search report carried out by a

Lawyer in accordance with the applicable laws);Provided that if such Land is owned by another person, the consent /

relevant documents of the owner of such Land for the development of theReal Estate Project should also be furnished;

(c) details of all encumbrances on such Land, including any rights, title, interestor claim of any party in or over such Land;

(d) the layout plan of the Real Estate Project;(e) the plan of Development Works to be executed in the Real Estate Project as

approved by the Development Authority;(f) the plan and specifications of the Building or Apartment constructed or to be

constructed on the Land, common areas and facilities proposed includingsupply of electricity and water, sewerage and drainage systems, lifts, fire-

fighting equipment as required/ approved by the Development Authorityconcerned in accordance with the provisions of the Building Regulations in

force;(g) the details of the parts of the Colony/Apartment and the appurtenant areas

that are intended to be kept as Common Areas and Facilities;(h) the estimated cost of the Building/Apartment proposed to be constructed, or

of the Colony to be developed;(i) the names and addresses of the Architect, Engineer and Contractor engaged

for construction of the Building or Apartment;(j) commitment to provide a lien release letter, for the Apartment, Building etc,

in question, from the financial institution which has provided projectconstruction loan (if any), prior to completion of transaction.

(k) such other information and documents and in such manner as may bePrescribed.

24. Issuing of advertisement or prospectus (1)No Stake Holder shall issue or publish anadvertisement or prospectus, offering for sale, lease, license, etc. of any Building orApartment, or inviting persons who intend to take such Building or Apartment to make

advances or deposits without filing a copy of the advertisement or prospectus in the officeof the Regulatory Authority, before its issue or publication;


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(2) The advertisement or prospectus issued or published under Sub section (1) shallcontain true statement and disclose the details of the License issued under Section

13, the extent and situation of the Land, the area of Building or Apartment offeredfor sale, lease, license, etc. nature of title to the Land, and the cost payable and

such other matters as may be Prescribed by the Regulatory Authority.

(3)

The advertisement or prospectus shall be available for inspection at the office ofthe Developer and at the site where the Building is being constructed or the Landis being developed into a Colony, along with the documents specified in Section

23.

25. Responsibility of Stake Holders regarding veracity of the advertisement orprospectus (1) When any person makes an advance or deposits on the basis of the

information contained in the advertisement or prospectus issued by any Stake Holder andsustains any loss or damage by reason of any untrue statement included therein, it shall be

compensated by the responsible Stake Holder in the manner as may be Prescribed in theconditions of the License or as may be determined by the Regulatory Authority.

26. No deposit or advance to be taken by Developer without first entering into anAgreement for Allotment (1)Notwithstanding anything contained in any other law forthe time being in force, a Developer shall not accept any sum of money as advance

payment or deposit, from a person who is to take a Building or Apartment, as the casemay be, without first entering into a written Agreement for Allotment with each such

person, as provided for in First Schedule, which shall be admissible as evidence under theIndian Evidence Act, 1872.

(2) The Agreement referred to in Sub section (1) shall be in the form as prescribed byRegulatory Authority and shall specify inter alia, the schedule of the development

of the project including the construction of Building and Apartment, along withspecifications, the dates and manner by which payments towards the cost of the

Building or Apartment are to be made by the Allottee and the date on which thepossession of the Building or Apartment is to be handed over, as detailed in

Second Schedule.Explanation: Where only a refundable application fee is collected from the

applicant before draw of lots for specific allotment, such Agreement will berequired only after such allotment.

(3) The Developer shall not cancel unilaterally the Agreement for Allotment enteredinto under Sub-section (1) and if it has sufficient cause to cancel it, it shall give

due notice to the Allottee to the Agreement and tender a refund of the amountcollected by the Developer in terms of the Agreement for Allotment alongwith

simple interest, at such rate as may be mutually agreed between the Developerand Allottee in the Agreement for Allotment.

Provided that if the Allottee commits a default or breaches any of the terms andconditions of the Agreement entered between him and the Developer under this

Section, the Developer shall refund the amount collected after deducting suchamount, as may be agreed between the Allottee and the Developer as per

Agreement for Allotment.

27. Responsibility of the Developer regarding the account of sums taken from anysource (1)The Developer shall maintain a separate account in any Scheduled Bank (to


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(2) The interest referred to in Sub-section (1)(a) shall be computed on the installments/ monies received by the Developer from the date it received such installment /

monies from the Allottee till the date the amount or and interest thereon isrefunded in full. The interest referred to in Sub-section (1)(b) shall be chargeable

from the due date of handover of possession in terms of the Agreement for

Allotment or such extended date till the handover of possession by the Developerto the Allottee.

30. Responsibility of the Developer to the Allottee during project period (1)Once theDeveloper enters into an Agreement for Allotment or lease or license with the Allottee for

transfer of the ownership by sale or lease or license of the Building or Apartment, it shallbe responsible to make available or cause to be made available, in addition to the

information specified in Section 23, the following information to the said Allottee inrespect of the Real Estate Project:

(a) to display plans along with structural designs and specifications, approved bythe Development Authority, at the site or such other place as may be

specified in the License before and during construction of the Building orApartment and make them available for inspection to persons taking a

Building or Apartment on ownership basis;(b) to disclose the nature of fixtures, fittings and amenities, including the

provision for one or more lifts, provided or to be provided;(c) to disclose on reasonable notice or demand, the Prescribed

particulars/specifications in respect of the design and the materials to be usedin construction; and

(d) to display certificate signed by the owner of Land, Architect and StructuralEngineer regarding the compliance of statutory provisions related to the

relevant revenue, planning, Building and structural safety laws;(2) The Developer shall also be responsible to furnish on demand and on payment of

Prescribed charges, true copies of such of the documents mentioned above, to theAllottee individually or collectively.

(3) The Developer shall also prepare and maintain a list of Apartment with theirnumbers, the names and addresses of the persons, who have taken or agreed to

take Apartment, the price charged or agreed to be charged and the terms andconditions, if any, on which the Apartment are taken or agreed to be taken:

Provided further that the Developer shall provide for Apartment belonging toweaker Sections of the society, as per the Government orders/policy guidelines in

this regard, who may be rendering certain services to the Allottee or occupiersthereof, or allotted in such manner as the Government may specify in this behalf.

(4) It shall be the responsibility of the Developer to obtain Completion Certificate ofthe Building or Apartment from the concerned Development Authority as per

Building Regulations in force and make it available to the Allottee individually orto an authorized collective of Alottees as the case may be. The Regulatory

Authority, on being satisfied that the Real Estate Project is constructed to itssatisfaction, shall assist and help the Developer in obtaining the Completion

Certificate. If, after the construction of the Building or Apartment, the Developerdoes not apply, within a reasonable time, or is unable to so apply, for an

Completion Certificate from the concerned Development Authority, the Allotteeof the Building or Apartment may apply for such certificate to the said authority


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and such authority shall grant the required certificate. The cost incurred by theAllottee in obtaining the above certificate shall be recoverable from the

Developer.

31. Handing over of Apartment, common areas and documents to the Association (1)After obtaining the Completion Certificate the Developer shall submit a copy thereof tothe Regulatory Authority and thereafter take all necessary steps to complete its title andconvey the exclusive ownership of the Apartment/Building and the undivided interest in

the Common Areas and Facilities to such Apartment /Building to the person in whosefavour it had executed an Agreement for Allotment of that Apartment / Building.

(2) For the purposes specified in Sub-section (1) the Developer shall execute aconveyance deed of the Property containing such particulars as may be

Prescribed, within three months from the date of giving possession of theApartment/Building and also deliver all documents of title relating to that

Property which may be in its possession. The Developer shall not reserve anyright in that Property except to the extent of the Apartment which it is taking up in

its own name and the Apartment which are meant for sale, lease, license but areyet to be sold or leased or licensed.

(3) If either party fails to execute and register the conveyance deed of Apartment andother relevant documents within a period of three months as specified in Sub-

section (2), the Regulatory Authority may, either on a complaint or suo motoimpose for each Apartment for which there is a default, a penalty up to five

percent of the price of the Apartment to maximum of one lakh rupees, plus afurther minimum penalty of one thousand rupees for each day for which the

default continues and the penalty may be recovered as an arrear of Land revenue.(4) The penalty imposed under Sub-section (3) shall be in addition to any action that

may be taken under the Indian Stamp Act, 1899 or the Registration Act, 1908.(5) After obtaining the Completion Certificate as specified in Sub-section (4) of

Section 30 and handing over physical possession of the Building / Apartment tothe Allottee in terms of this Section, it shall be the responsibility of the Developer

to hand over the possession of the Common Areas and Facilities and also theoriginals of the plans and documents to the Association formed and registered

under the provisions of this Act or any other Act in force (Third Schedule).Provided that such handing over of physical possession of the Common Areas

and Facilities shall be completed within a period of one year from the date ofissue of the Completion Certificate or the date by which at least 75% of the

Building or Apartment have been handed over to the Allottee, whichever eventoccurs earlier, subject to the condition that the Developer shall be responsible for

the sale, lease, license, etc. and transfer of the balance Building or Apartment andfor the expenditure on the maintenance of the Common Areas and Facilities,

which it shall have the right to charge as Common Expenses from the Allottee, tillsuch time as 75% of the Building or Apartment are not sold or transferred by the

Developer

32. Association of the Allottee (1)It shall be the responsibility of every Allottee of a RealEstate Project to take the Membership of an Association of the said project at the time of

entering into the Agreement for Allotment specified in Section 26 and to make suchpayments towards this Association and discharge such duties and responsibilities as may


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be Prescribed by the Regulatory Authority in this behalf.Provided that till such time as specified in Section 31 of this Act, the Developer shall be

responsible for registration and management of the said Association.(2) If the Developer fails to take steps to form an Association, the Allottee shall apply

to the Regulatory Authority for registration of the Association.

33. Adherence to approved plans, and project specifications by the Developer (1)Afterthe layout plan of the Colony or the plans and Permissions and Approvals, as the case may

be, are approved by the Development Authority and the same are disclosed or furnished tothe person who agrees to take the Building or Apartment, the Developer shall not make

any alterations in the structures described therein without the previous consent of theDevelopment Authority.

Provided however that after the possession of the Building or Apartment is handed overto the Allottee, the Developer shall not be responsible if additions and alterations are

done in the Building or Apartment by the Allottee in violation of the BuildingRegulations and without the consent of the Developer, project Architect and project

Engineer.(2) Subject to the provisions of Sub-section (1), the Building or Apartment shall be

constructed and completed in accordance with the Permissions and Approvals,plans and structural designs and specifications as aforesaid and if any defect in the

Building or Apartment or in the material used in the construction is brought to thenotice of the Developer within a period of one year from the date of handing over

possession, it shall, wherever possible, be rectified by the Developer withoutfurther charge to the Allottee who have taken the Building or Apartment and in

other cases such Allottee shall be entitled to receive reasonable compensation forsuch defects.

(3) Where there is a dispute as regards any defect in the Building or Apartment ormaterial used in the construction, or the reasonable possibility for the Developer

to rectify any such defect or the amount of reasonable compensation payable inrespect of any such defect, which cannot be or is not rectified by the Developer,

the disputes shall, on payment of such fee as may be Prescribed and within aperiod of two years from the date of handing over possession, be referred for

decision to the Regulatory Authority and the Regulatory Authority shall, aftergiving a reasonable opportunity of being heard to the parties and after making

further enquiry, if any, record its decision.(4) A Developer who fails to comply with the provisions of Sub-section (1) and/or

(2), shall be punishable with fine, to be decided by the Regulatory Authority,which may extend to a maximum of rupees one lakh.

Provided that the Developer shall be fully entitled to recover the entire amountspaid by it to the Allottee under Sub-section (4) hereinabove, from any Stake

Holders incase the penalty levied upon the Developer was due to the negligenceof such Stakeholder(s) and not due to actions attributable to the Developer.

34. Supply of essential services (1) It shall be the responsibility of the Developer toprovide essential services such as water supply, electricity, light in passages andstaircases, lifts and sanitary services as per Agreement for Allotment to the Allottee of the

Building or Apartment or to any person in authorized occupation thereof till such time andin such manner as specified in the Agreement for Allotment or otherwise Prescribed by


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the Regulatory Authority in this behalf, and such services shall not, except with just andsufficient cause/notice, be cut off, withheld, curtailed.

(2) The details of the essential supplies and services referred to in Sub section (1)shall be kept by the Developer in the form of a statement and shall be made

available on demand to the Allottee or Association or the Regulatory Authority.

(3) In case of the failure of the Developer to provide and maintain the supply andservices as provided for in terms of this Section, the Regulatory Authority shallupon receipt of an application in this behalf or suo moto, make an enquiry into the

matter and make such order as may be required for the compliance with theprovisions of this Section.

(4) If the supply or service is not restored before the date specified in the order madeunder Sub-section (3), the Developer or the person responsible for the

management and maintenance of the Building or Apartment shall, upon a furtherdirection by the Regulatory Authority, be liable to a penalty which may extend to

one thousand rupees for each day during which the default continues after the datespecified in the said order.

35. Responsibilities of Allottee (1) An Allottee who enters into a transaction for thepurchase relating to a Property shall:

(a) make a well informed decision with reference to purchase;(b) ensure that it has acted knowledgeably, prudently and without compulsion;(c) arrange for and make timely payments of the installments, as agreed with

the Developer;(d) ensure true disclosure in respect of informations provided by it;(e) fulfill all its part of the Commitments as agreed upon in the Agreement for

Allotment with the Developer.

36. General liabilities of Allottee (1)Every Allottee who has entered into an Agreementfor Allotment to take an Apartment under Section 26 shall be responsible to makenecessary payments in the manner as specified in the said Agreement for Allotment and

shall after taking over the possession of the Apartment or Building under Section 31 payat the proper time and place, the proportionate share of the municipal taxes, water and

electricity charges, ground rent, if any, and other charges, in accordance with suchAgreement for Allotment.

37. Responsibilities of a Contractor (1) A Contractor who enters into a contract for theconstruction of a Property, Building or Apartment with a Developer or a Allottee shall;

(a) ensure adherence to all the general and special conditions of contract andensure that all constructions taking place are in accordance with thestipulated quality standards; and

(b) ensure that all constructions taking place are in accordance with thestipulated safety standards, mentioned under this Act and adhere to the

agreed construction timelines; and(c) maintain the stipulated professional liability cover, so as to insure the

ongoing construction from any loss on account of its actions.

38. Responsibilities of Development Authority (1) A Development Authority in whosejurisdiction any Development activity for the transfer relating to a Property is taking place


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shall be responsible to;(a) ensure that all constructions taking place have all the necessary Permissions

and Approvals with in the time stipulated under this Act and Rules madethere under;

(b) communicate the queries within a stipulated time frame, in case thesubmissions from Developers are found to be short of this actualrequirement;

(c) ensure that all External Development Charges and Internal DevelopmentCharges collected from the Developer are utilized towards the DevelopmentWorks for which they have been collected;

(d) adhere to Development Works and infrastructure development timelines, inorder to support the real estate Development in the area and monitor actual

construction taking place and their compliance with the Permissions andApprovals;

(e) inform general public and take remedial action on unapprovedconstructions;

(f)

grant Completion Certificate to the Developer after necessary inspectionswith in the time stipulated under this Act and Rules made there under.

39. Responsibilities of Financial Institutions (1)Notwithstanding anything contained inany other law for the time being in force, a Financial Institution, which extends financialassistance to Developer, builder, Company, individual to develop a Colony, Building or

Apartment and who constructs or intends to construct a Building or Apartment, shall in alltransactions;

(a) ensure adherence to credit policies and norms of Reserve Bank of India /National Housing Bank;

(b) ensure due diligence of the Real Estate Project including but not limited to;(i) legal due diligence with respect to its title being clear, marketable

and without any encumbrance;(ii) technical due diligence with respect to all statutory Permissions and

Approvals of the Real Estate Project being in place;(iii) credit appraisal of the Developer with respect to their ability to

repay;(c) ensure that the loans granted to Developers for development of a Real Estate

Project are utilized for the purpose, for which they were granted;(d) ensure and monitor construction of the Real Estate Project and ensure

subsequent disbursement as per the agreed terms and conditions;(e) ensure that the charge created on a project are only for those portions of the

project, which are unsold by the Developers as on date of loandisbursement, and further ensure No Objection Certificates (NOCs) / charge

release letters are issued for all the subsequent sale of Apartment orBuilding by the Developer;

(f) ensure safe custody of original Property documents, if collected from theDeveloper, and their timely return on completion of loan repayment.

(2) Notwithstanding anything in any other law for the time being in force, a Financial

Institution, which extends financial assistance to persons taking or intending totake an Apartment or Building on ownership basis, shall in all transactions;


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(a) ensure complete transparency in loan appraisal process, conditions imposedon the Allottee as a part of the loan Agreement, rate of interests, nature ofinterest rates (Fixed / Floating), tenure of loan etc;

(b) ensure legal and technical conditions related to Property to be fulfilled priorto loan disbursement;(c) disclose payment terms, stages at which loan disbursements would takeplace, along with the process of ascertaining these stages;

(d) communicate deviations observed during legal and technical due diligenceprocess.

(e) ensure safe custody of Property documents if collected from the Allottee andensuring their return on completion of mortgage repayment.

40. Responsibilities of Real Estate Agent and Contractor (1)Notwithstanding anythingcontained in any other law for the time being in force, a Real Estate Agent and Contractorshall;

(a)

obtain a certificate of registration for business in the real estate sector fromthe Regulatory Authority;

(b) not act on behalf of Principal without a mandate;(c) act in the best interest of the Principal, in accordance with the instructions

from the Principal;(d) not advertise any Property without the written consent from the Principal;(e) act fairly and honestly without misleading any party in a negotiation and

transaction;

(f) properly supervise the agency business being carried out by its employees /sales representatives, and ensure that they abide by the code of conduct,

Rules and Regulations applicable;(g) not use or disclose any confidential information obtained while working on

behalf of the Principal;(h) communicate all written offers to Principal as soon as possible;(i) not demand and accept any commission from any person other than the

Principal;

(j) disclose its relationship with the parties concerned (if any) in case the sameis likely to result in a conflict of interest;

(k) do all other acts as may provided under this Act and Rules made thereunder.

CHAPTER VIINFRASTRUCTURE DEVELOPMENT CHARGES

41. Infrastructure Development Charges collected from Developers (1) TheDevelopment Authority shall maintain a separate account in any scheduled bank (to bereferred as Scheduled Bank Account), of sums taken by them from Developers intending

to develop or developing Real Estate Project involving construction of Apartment orBuilding, as charges towards Development Works and the Development Authorities shall

hold the said moneys for the purposes for which they were collected and shall disburse thesame for those purposes including but not limited to the construction of roads, storm water


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drains, water supply and sewerage network, street lighting and other Development Works,and shall on demand, in writing, by the Regulatory Authority make full and true

disclosure of all transactions in respect of that account and shall not utilize for any otherpurpose or in any other area the amounts so collected for a particular purpose, prior to

completion of infrastructure development of the area.

CHAPTER VIIMAINTENANCE OF ACCOUNTS, REGISTERS AND RECORDS AND AUDIT

42. Maintenance of accounts and records (1)A Developer who has taken a License underSection 13 of this Act shall maintain such accounts, registers and records in such form andmanner, as may be Prescribed and make them available for inspection or audit as may be

required by the Regulatory Authority.(2) The Regulatory Authority shall maintain such a register as may be Prescribed

showing relevant particulars of all cases in which License under Section 13 isgranted or refused by it and the said register shall be available for inspection,

without any charges.

43. Audit (1)The Developer or Real Estate Agent or Contractor, as the case may be, shallget its accounts audited within six months after the close of every financial year by a

chartered accountant, and shall produce a statement of accounts duly certified and signedby such chartered accountant in the manner Prescribed and it shall be verified during the

audit that the amounts collected for a particular purpose have been utilized for thatpurpose.

44. Inspection of accounts or records of business (1) The Regulatory Authority mayinspect or cause to be inspected, at any time during business hours, any accounts orrecords of a Developer or an Real Estate Agent or a Contractor, as the case may be,

relating to its business in order to satisfy itself that the requirements of this Act and theRules made there under or the terms and conditions of the License granted under Section

13 to it are duly complied with.

CHAPTER VIIIAPPELLATE TRIBUNAL

45. Establishment of Appellate Tribunal (1) The Government shall, by notification,establish an Appellate Tribunal, to be known as the Real Estate Appellate Tribunal to hearand dispose off appeals against a recommendation or an order issued by the Regulatory

Authority under Section 8 or a direction issued under Section 10.(2) The Appellate Tribunal shall consist of a Chairperson and not more than two

Members to be appointed by the Government and the selection of Chairperson ofthe Appellate Tribunal shall be made by the Government in consultation with the

Chief Justice of ----.(3) A person shall not be qualified for appointment as the Chairperson or a Member

of the Appellate Tribunal unless it -(a) in the case of Chairperson, has been a Judge of a High Court;

(b) in the case of a Member, has held the post of Secretary to the Governmentor any equivalent post in the Government or a person who is well versed in


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the field of urban development, finance, law or management.

46. Term of office of Chairperson and other Members (1)The Chairperson and otherMembers shall hold office for a term not exceeding three years, from the date on which

they enter upon their offices or until they attain the age of sixty eight years, whichever is

earlier.(2) The employee of the Government on its selection as Member shall have to retirefrom service before joining as a Member.

(3) The salary and allowances payable to and the other terms and conditions ofservice of the Chairperson and other Members shall be such as may be Prescribed

and shall not be varied to its disadvantage after appointment.(4) The Chairperson, Members and other officers and employees of the Appellate

Tribunal shall be deemed to be public servants within the meaning of Section 21of the Indian Penal Code.

(5) The Chairperson or Member may relinquish its office by giving in writing to theGovernment notice of not less than three months; or be removed from its office in

accordance with the provisions of Section 47.

47. Removal of Chairperson and Member from office in certain circumstances (1)TheGovernment may remove from office, the Chairperson or any Member of the Appellate

Tribunal who (a) has been adjudged an insolvent; or(b) has been convicted of an offence which, in the opinion of the Government

involves moral turpitude; or

(c) has become physically or mentally incapable of acting as the Chairperson ora Member; or

(d) has acquired such financial or other interest as is likely to affectprejudicially its functions as the Chairperson or a Member; or

(e) has so abused its position as to render its continuance in office prejudicial tothe public interest.

(2) Notwithstanding anything contained in Sub-section (1), the Chairperson orMember of the Appellate Tribunal shall not be removed from its office on the

ground specified in clause (d) or (e) of that Sub-section unless the ---- High Courton a reference being made to it in this behalf by the Government, has, on an

enquiry, held by it recommended that the Chairperson or a Member ought to beremoved on such ground or grounds.

(3) The Government may suspend from office, the Chairperson or a Member of theAppellate Tribunal in respect of whom a reference has been made to the ---- High

Court under Sub-section (2), until the Government has passed an order on receiptof the report of the High Court on such reference.

48. Officers of the Appellate Tribunal (1) The Government shall provide the AppellateTribunal with such officers and employees as, it may deem fit.(2) The officers and employees of the Appellate Tribunal shall discharge their

functions under the general superintendence of its Chairperson.

49. Appeals to the Appellate Tribunal (1)The Government or Development Authority orany person aggrieved by any direction or decision of the Regulatory Authority may prefer


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an appeal to the Appellate Tribunal.(2) Every appeal under Sub-section (1) shall be preferred within a period of thirty

days from the date on which a copy of the direction or order or decision made bythe Regulatory Authority is received by the Government or the Development

Authority or the aggrieved person and it shall be in such form, and accompanied

by such fee as may be Prescribed;Provided that the Appellate Tribunal may entertain any appeal after the expiry ofthirty days if it is satisfied that there was sufficient cause for not filling the appeal

within the prescribed time.(3) On receipt of an appeal under Sub-section (1), the Appellate Tribunal may, after

giving the parties to the dispute or the appeal an opportunity of being heard, passsuch orders thereon as it thinks fit.

(4) The Appellate Tribunal shall send a copy of every order made by it to the partiesto the dispute or the appeal and to the Regulatory Authority, as the case may be.

(5) The appeal preferred under Sub-section (1) shall be dealt with by it asexpeditiously as possible and endeavour shall be made by it to dispose of the

appeal finally within ninety days from the date of receipt of appeal.Provided that where any such appeal could not be disposed of within the said

period of ninety days, the Appellate Tribunal shall record its reasons in writing fornot disposing of the appeal within the said period.

(6) The Appellate Tribunal may, for the purpose of examining the legality orpropriety or correctness of any direction or order or decision of the Regulatory

Authority referred to in the appeal preferred under Sub-section (1), on its ownmotion or otherwise, call for the records relevant to disposing of such appeal and

make such orders as it thinks fit.

50. Powers and functions of Appellate Tribunal (1) The Appellate Tribunal shall beguided by the principles of natural justice and, subject to the other provisions of this Act,

the Appellate Tribunal shall have powers to regulate its own procedure.(2) The Appellate Tribunal shall have, for the purpose of discharging its functions

under this Act, the same powers as are vested in a Civil Court under the Code ofCivil Procedure, 1908 while trying a suit in respect of the following matters,

namely:(a) summoning and enforcing the attendance of any person and examining him

on oath;(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavits;(d) requisitioning any public record or document or a copy of such record or

document, from any office;(e) reviewing its decisions; and

(f) dismissing an application for default or deciding it ex parte.

51. Order Passed by Appellate Tribunal to be executable as a Decree (1) An orderpassed by the Appellate Tribunal under this Act shall be executable by the Appellate

Tribunal as a decree of Civil Court, and for this purpose, the Appellate Tribunal shall haveall the powers of a Civil Court.

(2) Notwithstanding anything contained in Sub-section (1), the Appellate Tribunalmay transmit any order made by it to a Civil Court having competent jurisdiction


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and such Civil Court shall execute the order as if it were a decree made by thatCourt.

52. Penalty for willful failure to comply with orders of Appellate Tribunal (1) If anyperson willfully fails to comply with the orders of the Appellate Tribunal it shall be

punishable with fine which may extend to one lakh rupees and in case of a second orsubsequent offence with fine which may extend to two lakh rupees and in the case ofcontinuing contravention with additional, fine which may extend to fifty thousand rupees

for every day during which such default continues.

53. Appeals to the High Court (1) Notwithstanding anything contained in the Code ofCivil Procedure, 1908 or any other law, an appeal shall lie against any order, not being an

interlocutory order, of the Appellate Tribunal to the High Court on one or more of thegrounds specified in Section 100 of that Code of Civil Procedure, 1908.

(2) No appeal shall lie against any decision or order made by the Appellate Tribunalwith the consent of the parties.

(3) Every appeal under this Section shall be preferred within a period of ninety daysfrom the date of the decision or order appealed against.

(4) Provided that the High Court may entertain the appeal after the expiry of the saidperiod of ninety days, if it is satisfied that the appellant was prevented by

sufficient cause from preferring the appeal within the prescribed time.

CHAPTER IXOFFENCES AND PROSECUTION

54. Contravention of Section 23, Section 24, Section 26, Section 27, Section 28, Section29, Section 31, Section 32 - (1)Any Developer who, without reasonable cause, fails tocomply with, or contravenes, the provisions of Section 23 or Section 24 or Section 26 (1)

& (2), Section 27 (1), Section 28 (1), Section 29 (1) & (2), Section 31 (1) & (2), Section32 shall be punishable with fine which may extend to rupees one lakh.

55. Contravention of Section 27 (2) (1)Any Developer who contravenes the provisions ofSection 27 (2) by misusing any amount advances or deposited with him for any purpose,other than the purposes mentioned in Section 27, shall be punishable with fine which shall

not less than rupees two lakhs and which may extend to rupees ten lakhs or the amount somisused, whichever is higher.

56. Contravention of Section 30 (1)Any Developer or Architect or Engineer who, withoutreasonable cause, fails to comply with or contravenes, any of the provisions of Section 30or the Building Regulations, shall be punishable with fine which may extend to rupees one

lakh.

57. Contr avention of Sections 35 and 36 (1)Any Allottee who, without reasonable cause,fails to comply with or contravenes the provisions of Section 35 or 36 shall entitle the

Developer to the following remedies:a. charge simple interest on the amounts due; orb. charge penalty upto the extent of Rupees one lakh; orc. cancel the Agreement


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First Schedule

Form of the Agreem

final real estate bill _clean

Documents