The real estate market of India is estimated to grow to USD 1 trillion by the year 2030. India is also on its way to becoming the world’s most populous country. It is natural that the housing and residential real estate market is booming and builders and developers are trying to keep pace with the demand . With such phenomenal growth, however, comes concerns about consumer protection and this can be ensured only by a robust legal framework.
The Indian legal system has some of the most sturdy yet diverse laws protecting the rights of land and property owners, developers, and buyers. It is important to remember that land and property issues can be governed by Central laws, State laws and rules, regulations, and guidelines of local bodies such as the Village Panchayat or Municipal Corporation. The nature of land ownership, transfer, inheritance, construction, and property sales makes real estate fall under the jurisprudence of several administrative and judicial bodies. To understand this better, let us take a look at some of the key legislations that you should know about as an investor.
Real Estate (Regulation and Development) Act, 2016
The Real Estate (Regulation and Development) Act 2016 is one of India's newest and most salient real estate laws. Passed by the central legislature, it aims to promote the real estate sector while protecting the rights of the end consumers or the home buyers at the same time.
The RERA Act makes provisions for establishing a Real Estate Regulatory Authority at the state level to ensure transparency and efficiency in the sale of land, buildings, and flats. It protects the buyers from delays in project completion, deviation from sanctioned plans, and disputes. This is done through a mechanism that provides complete transparency in terms of pricing, quality, and project delivery timelines. The RERA act aims to promote transparency, accountability, and efficiency in the real estate sector.
This central act provides the framework that states can adopt and customise to suit local conditions. It makes provisions for establishing a regulatory authority and legal recourse in case of disputes. RERA-registered properties have taken the stress out of home buying. Investors can now undertake this major financial decision and remain assured that the property shall be delivered in time without any delays or fear of fraud.
Some of the key points of the RERA Act -
- Developers or builders launching residential projects with more than eight apartments or a 500 sq. m. area must register the project with RERA.
- Complete details, including the number of units, layout, pricing and payment slabs, and timeline of completion, must be uploaded and updated regularly.
- Real estate agents who work with RERA-registered projects must also be registered.
- Any delay or grievance of the consumer can be lodged with the RERA authority, and in case of a failure to address the grievance in 60 days, the matter can be referred to the state Appellate Tribunal.
Other Real Estate Laws
- Indian Contract Act, 1872 - Since all buying and selling of real estate properties are undertaken through a legally binding contract, the relevance of the Indian Contract Act of 1872 cannot be overlooked. This Act pertains to the nature and execution of the contract and offers recourse in case of a breach. The law also examines the circumstances and competence of the parties entering into a contract.
- Transfer of Property Act, 1882 – The Transfer of Property Act lays down the general guidelines regarding the transfer of movable and immovable properties. This includes the sale, mortgage, rent, lease, mortgage, sale, or gift of property. Along with the Indian Contract Act, the Transfer of Property Act offers the framework for selling and transferring real estate in India.
- Indian Stamp Act, 1889 and Registration Act, 1908 - The legal sale of any property is not complete till the sale is registered and stamp duty paid. Each state has its own stamp duty guidelines, but the Indian Stamp Act of 1889 lays the groundwork for this process. It is complemented by the Registration Act of 1908, which consolidates and compiles the laws relating to the registration of immovable property.
Now depending on the location of the property, you will also want to learn more about state laws related to real estate and property sale and transfer. For example, the Co-operative Societies Acts and Rent Control Acts relate to the establishment of co-operative societies and renting or leasing your property.
Local governments like the Municipal Corporation or Village Panchayat also have regulations about the documentation and registration of land and real estate. It is always a good idea to learn more about these.
As a homebuyer in Mumbai, if you are looking for clarity on real estate laws, you have expert guidance available. Your Blox relationship manager will help you understand more about the stamp duty applicable in Mumbai, and also help you understand the registration process after you book your home.
