Real Estate Regulatory Bill

Real Estate Regulatory Bill

Why Is The Real Estate Bill 2016 Needed?

  • Projects being endlessly delayed.
  • Possession of property not given on time.
  • Builders not compensating for delayed possession.
  • Penalties on buyers for delayed payments.
  • Land Hoarding
  • Buyers avoid getting into legal battles with developers.
  • Arbitrary changes in layout plans

Impact Of The Bill On The Real Estate Industry

  • Ensures efficiency and transparency in all property related transactions.
  • Improves accountability of the developers and protects consumer interest.
  • Promotes fair-play and timely execution of the projects.
  • Helps in differentiating a good developer from a bad one.
  • Single window clearance will aid faster execution of the projects.
  • Boosts positive sentiments among the buyers and will in turn bring more FDI.
  • Timely completion will result in increase in supply of homes and help bring down prices.
  • Overall boost to the economy as housing sector has many backward and forward linkages with other industries.
    • Backward Linkages: steel, cement and other building materials
    • Forward Linkages: furniture and furnishings, electrical and electronics, interior decoration.
  • Creation of more employment opportunities.
  • It will help achieve government’s ambitious plan of ‘Housing for All by 2020’.
  • It will help curb black money as real estate sector constitutes about 11% of GDP and is particularly vulnerable to black money through underreporting of transaction prices while paying taxes.

Key Features Of The Bill
General Points of the bill

  • Regulation of both commercial and residential real estate projects.
  • Setting up of  Real Estate Regulatory Authority (RERA)
  • Establishment of state-level RERAs.
  • Registration of real estate projects and real estate agents mandatory.

Rules for Builders/Promoters

  • All commercial and residential real estate projects with land over 500 square metres,
  • or have 8 apartments
  • Must be registered to RERA.
  • Builders must maintain 70% of the amount collected for the project in a separate escrow account that can be used for the construction of the said project.
  • Builders need to specify a timeframe of the project, or else they have to pay penalties.
  • Builders to be responsible for fixing structural defects for 5 years after transferring the property to a buyer.
  • No changing plans and design without consent of 2/3 of the consumers.

Dispute Settlements

  • Establishment of fast track dispute resolution mechanisms via adjudicating officers and Appellate Tribunal.
  • Bars civil courts from taking up real estate matters.
  • Consumer courts are allowed to hear such matters.


  • Allow RERAs to direct state govt. to establish a single window system for providing clearances for projects.
  • A time limit should be specified for state and local authorities to issue completion certificates.


Failure of Promoter to


register his property

Penalty up to 10% of the project cost

dodges order issued by the RERA

  • Imprisonment for up to 3 years,
  • and/or
  • an additional fine of 10% of the estimated project cost

false information

Penalty up to 5% of the estimated project cost

violates any other provision of the act

Penalty up to 5% of the estimated project cost


These articles are given unreservedly as general aides. While we do our best to ensure these aides are useful, we don't give any assurance that they are exact or proper to your circumstance, or assume any liability for any misfortune their utilization may cause you. Try not to depend on data given here without looking for experienced legitimate guidance first. If all else fails, please dependably counsel a lawyer and fill the query box or call us at +91-8521228202 or drop us a mail at