Real Estate (Regulation and Development) Act, 2016

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Real Estate (Regulation and Development) Act, 2016
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An Act to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment of building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating officer and for matters connected therewith or incidental thereto.
Citation No. 16 of 2016
Enacted by Parliament of India
Date passed 15 March 2016
Date passed 10 March 2016
Date assented to 25 March 2016
Date signed 25 March 2016
Date commenced 01 May 2016 (69 of 92 sections notified)
Legislative history
Bill Real Estate (Regulation and Development) Bill, 2016
Bill citation XLVI-C of 2013
Bill published on 14 August 2013
Introduced by Dr. Girija Vyas, Minister of Housing and Urban Poverty Alleviation
Committee report

Standing Committee Report

Select Committee Report
Status: In force

The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016. The Act came into force from 1 May 2016 with 69 of 92 sections notified.[1] The Central and state governments are liable to notify the Rules under the Act within a statutory period of six months.[2]


Real Estate Regulatory Authority (RERA) Bill was introduced by the Indian National Congress government in 2013.[3] In December 2015, the Union Cabinet of India had approved 20 major amendments to the bill based on the recommendations of a Rajya Sabha committee that examined the bill.[4] The Bill had been referred to a select committee, which had given its report in July 2015.[5] However, Congress, Left and AIADMK had expressed their reservations on the report through dissent notes.[5] The bill got approval of the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016.[6][7]



The Real Estate Act makes it mandatory for all commercial and residential real estate projects where the land is over 500 square metres, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution. For on-going projects which have not received completion certificate on the date of commencement of the Act, will have to seek registration within 3 months. Application for registration must be either approved or rejected within a period of 30 days from the date of application by the RERA. On successful registration, the promoter of the project will be provided with a registration number, a login id and password for the applicants to fill up essential details on the website of the RERA. For failure to register, a penalty of up to 10 percent of the project cost or three years' imprisonment may be imposed.[6] Real estate agents who facilitate selling or purchase of properties must take prior registration from RERA. Such agents will be issued a single registration number for each State or Union Territory, which must be quoted by the agent in every sale facilitated by him.[citation needed]

Protection of buyers[edit]

The Act prohibits unaccounted money from being pumped into the sector and as now 70 per cent of the money has to be deposited in bank accounts through cheques.[8] A major benefit for consumers included in the Act is that builders will have to quote prices based on carpet area and not super built-up area, while carpet area has been clearly defined in the Act to include usable spaces like kitchen and toilets.[6]

Real Estate Regulatory Authority and Appellate Tribunal[edit]

It will help establish state-level Real Estate Regulatory Authorities (RERAs) to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover.[8] Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose of complaints in 60 days while no time frame was indicated in earlier Bill.[8]

RERA Rules[edit]

The Act under S.84 [9] contemplates that within 6 months of the RERA Act being enforced, State Governments shall make rules for carrying out the provisions of Act. The said Rules are to be notified by the respective State Government.

As late as October 31, 2016, Central Government, released the Real Estate (Regulation and Development) (General) Rules, 2016, vide Notification by the Ministry of Housing & Urban Population (HUPA).[10] The Rules so issued by the Central Government are applicable to the five Union Territories without Legislature viz., Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep and Chandigarh. The Rules have been issued after prior release of Draft for comments.[11]

For Delhi, the Ministry of Urban Development is in the process of finalisation of rules while the state governments have to notify the rules on their own.[12]

States like Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu tag behind in implementation of the Rules, with their Rules still not notified.[13] The saving grace being that they are at the advanced stages of finalising the Rules. Maharashtra and West Bengal has issued Rules for consultation also.[14][15]

Uttar Pradesh[16] is the one of the first States to publish Rules for its respective State.

Implementing states[edit]

State/UT Date of notification Rules
Uttar Pradesh 27 October 2016 Example
Chandigarh 31 October 2016 Example
Daman & Diu 31 October 2016 Example
Andaman & Nicobar 31 October 2016 Example
Lakshadweep 31 October 2016 Example
Daman and Diu 31 October 2016 Example
Madhya Pradesh 22 October 2016 Rules
Karnataka Rules
Maharashtra Draft Rules [1]
West Bengal Draft Rules [2]


  1. ^ Commencement Notification
  2. ^ "Real Estate Bill is an act now, may protect home buyers". Economic Times. Retrieved 2 May 2016. 
  3. ^ "Rahul Gandhi assures home buyers of a strong Real Estate bill", The Economic Times, 3 March 2016 
  4. ^ "Will press for Real Estate Bill in Rajya Sabha, says Rahul Gandhi", The Economic Times, 5 March 2016 
  5. ^ a b "Modi government puts real estate bill on priority list to pass it in Budget session", The Economic Times, 27 February 2016 
  6. ^ a b c "Lok Sabha takes up real estate bill, Congress assures support", The Economic Times, 15 March 2016 
  7. ^ Sharma, Ravi Teja (15 March 2016). "Cheer for home buyers! After Rajya Sabha, real estate regulatory bill cleared by Lok Sabha as well". Economic Tilmes. Retrieved 20 March 2016. 
  8. ^ a b c "Big cheer for homebuyers! Rajya Sabha passes Real Estate Bill", The Economic Times, 10 March 2016 
  9. ^, page 34
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