Overview and Key Provisions of Real Estate (Regulation and Development) Act of 2016.

The Real Estate sector inevitably forms the backbone of any healthy economy. Following the approaches of liberalization, privatization and globalization, Indian economy has grown at a healthy rate during the last decade with the average being 7.2%. Including all fields of the real estate sector i.e.,housing, retail, hospitality and commercial, the entire sector ranked 3rd out of 10 major contributors to the Indian economy. With a rapid growth rate as well as contemporary challenges, the government of India came out with Real Estate (Regulation and Development) Act, 2016, to specifically highlight and help the challenges before the real estate sector. The act was much welcomed and much needed keeping in mind the significant rights and liabilities that are involved in any real estate transaction.


Due to the large number of litigation in the industry, the Lok Sabha cleared the Real Estate bill on March 15th, 2016. The bare act of Real Estate (Regulation and Development) 2016 consists of 10 chapters, with a total of 92 sections, all of which deal with explanations, basic definitions, registration processes, rights and duties of promotors and allottees, regulatory authority, central advisory, council, appellate tribunal, offences and penalties, all financial orders and other miscellaneous clauses.

OBJECTIVE: The main objectives of the enactment of Real Estate Act of 2016 were to protect home-buyers and alongside boost the investments in the industry. Bringing about more transparency is essential to ensure the interest of the buyers and also provide an environment wherein more and more people can be encouraged to invest in real estate. Therefore, the act focuses on transactions between promoters and buyers of real estate projects.

REGULATORY AUTHORITY: The act directs for the development of a forum specializing in real estate for the advantage of buyers who purchase real estate, to be known as “Real Estate Regulatory Authority”. The authority is not just limited to resolving complaints, they are also empowered to undertake measures to better boost the real estate industry.

REGISTRATION: In order to curb corruption by dubious promoters, all promoters are now required to register with the Regulation Authority. To register a project with RERA, specific list of documents is required to be submitted. The following documents are the essential in regards to the same:

  • Project details i.e. name, address, type, details of promoters, layout and plans, details of facilities that are made available.
  • Location of project
  • Allotment of sale and conveyance deed to be signed by buyers
  • Number and type of carpet areas and garages in the project
  • Details of all engineers, contractors, architects and intermediaries
  • Details of previous projects by the developer in the last 5 years
  • Undertaking from the developer


TRIBUNAL: The Act provides for the establishment of tribunals in all states so as to decide in regards to all appeals against the orders of Regulatory Authorities. All tribunals are supposed to consist of not less than two whole time members alongside a Chairperson. (See Section 45 of RERA Act)

CARPET AREA:The act clarifies that only area which comprises of net usable floor of the apartment shall be sold by developers. All areas covered by external walls, service shafts, exclusive balconies or terraces, are not included in this definition. That is to say, to protect the buyers only those areas which are enclosed within walls of the room/apartment shall be included in the sale.

WEBSITE: The act makes it necessary for the promoter to register himself with the Regulating Authority and update the status of the project on the website regularly. This is a key point in the act since it largely effects the transparency in real estate projects.

RESTRICTION ON MODIFICATION OF PLANS: Content of allottee is mandatory for the promoter to make any addition or changes in structural designs, specifications, and amenities of the property. In cases of large number of allottee’s the promoter specifically needs the permission of at least 2/3rd members to many any addition or alteration in regards to structural, design or specification changes,


The act of 2016 has been pivotal in clarifying and thereby ensuring the rights and duties of buyers of properties in India to a great extent. Section 19 of the Act enlists all the necessary rights and liabilities that each person who engages in any property transaction as per the real estate act shall benefit from.

As per Section 19 of RERA Act: Every consumer has a right to receive any and all information in regards to the layout plan, schedule of project completion and amenities that are promised by the developer. A consumer is also entitled to keep with himself any documents that he/she deems necessary in regards to the project after physical possession of the land has been completed.

In any cases where the developer dost not fulfill his promises in terms of the amenities, time of completion, etc., every consumer has all rights to claim refund along with interest and compensation for the same. In cases where the consumer does not wish to withdraw from the project, he/she shall be entitled to receive interest for every month of delay until the promoter provides for the possession. If any case of transfer of defective land title occurs the promoter has to compensate the allottee with no time barred restriction of limitation.

Whenever an agreement for sale has been executed, no rights of the allottee will be affected in case the promoter violates the agreement and creates any charge in the property by means of mortgage or any other such activity. The allottee always has the right to approach RERA in any and all cases where the promoters cancel the bookings in an unusual manner which does not comply with provisions of the sale deed.


Every consumer has a liability to make payments on time and in accordance to the agreement of sale. All charges that are included i.e. those of registration, maintenance, rent, electricity, water and other services are also to be paid on time and only as per the sale agreement mentions.

In all cases of default the consumer is liable to pay the due amount along with interest in regards to the same.

As soon as the certificate of occupancy is issued every consumer must take possession within a time period of two months and also be part in registration of conveyance deed. In cases where there are any structural defects in quality or services by promoters the allottee must specifically mention to the promoter within 5 years of possession, after which it is mandatory for the promoter to rectify the same without charging any further for such services. In such cases if the promoter fails to provide for rectification of services, the allottee is entitled to receive appropriate compensation.

Every buyer of such properties must actively participate in formation of association, society or federation of consumers so as to better regulate the society and make their own rules of service and conduct.


Since the act instructs all appropriate governments to set up an appellate tribunal within one year, RERA is the very first body where the dispute is lodged. RERA is responsible for enlisting the violation and providing appropriate penalties or punishments in RERA in regards to the same. As per the act, RERA is try with maximum efforts to dispose of all complaints within 60 days and only take further time after duly noting about the causes of delay. In cases where the parties are not content with RERA’s decisions or Judgments, they may appeal to the Real Estate Appellate Tribunal. This system is majorly put into place to avoid the cumbersome procedure of existing legal procedures of CPC and fast track all real estate disputes. As per the usual legal hierarchy, in cases where the parties are not content with the decisions of the Tribunal, they may approach the High Court within 60 days of the judgement.


Real estate transactions have always been easier for developers as compared to buyers. Due to the nature of real estate sector and the hardships that are generally associated with it, the government wanted to ensure consumer morale and provide a platform for fair transactions between sellers and buyers. Although being a highly contributing factor in economy, the real estate industry lacked a regulator and therefore through this act the government has strived to make this much competitive market an equitable space for all parties. This act ensures that all states form their own bodies for regulation and to frame state specific rules that shall govern the same.

Important compliance features have been added to ensure better rights of the purchasers of real estate. Consent of allottees in order to proceed with any addition or alteration, consent for transferring any major rights to 3rd parties, compulsory registration before advertisement of property, sharing of all information in regards to plans, layouts, approvals and parties to the project, etc are some of the key features of this Act. The act also thoroughly mentions all definitions, for example, carpet area, so as to avoid any disconnect between the advertisements and the real properties of the project, thereby providing the buyer clarity which was not existing before. Strict penalties, which may amount to 10% of the project cost, and imprisonment, have been provided as measures to ensure that all sections of the act are thoroughly followed.



  • Standardized Carpet Area
  • Rate of interest on default
  • Reduces the risk of builder of insolvency / bankruptcy
  • Right of buyer in case of false promises
  • Regulation of Advance Payment
  • Right of buyer in case of defect after purchasing within 5 years
  • Right of buyer delay in possession
  • Right of buyer in case defect in title
  • Right of information about the fair details of project
  • Significant amount of protection is available with strict penalties to defaulters.
  • All products will hereby be timely delivered.
  • Carpet area will ensure there is no discrepancy in the sale.
  • Monetary safety and transparency in all real estate contracts.
  • Establishment of Authority For Grievance Redressal


  • Provides for a better platform to resolve all disputes and increase efficiency.
  • Better regulation warrants public trust thereby ensuring higher investment.


  • Mandatory state registration ensure that the sector will be consolidated.
  • By adopting efficient practices litigation can be avoided and disputes can be fast tracked.


Due to the immense effect of the real estate sector on the overall well being of the economy, a specific body for providing consumer protection that promotes transparency, safety and confidence to all the stakeholders is a necessary and welcomed change. To ensure the continuity of sustainable growth while still maintaining the benefits that result from a high rate of infrastructure growth, a just regulatory authority at all state levels is essential. A common man cannot be expected to know all details of the real estate business and very few people are aware of all the financial and legal knowledge in such cases, therefore the presence of a specific law which can be accessed by anyone is a major step towards providing confidence to general public and encourage better engagement.

Though every law has its own challenges, the presence of a Regulatory Authority will surely provide a better mechanism to regulate and assist in sale and purchase of property for future real estate projects and parties. Such an act can provide for a better platform and change the dynamics of the real estate industry for the better. With strict penalties, state specific regulatory bodies, and new-age developments like website enlisting of progress details, the Real Estate Act of 2016 provides for all necessary means to achieve better coordination and development of the entire industry.

~~~~~~Our best RERA lawyers / Advocates in Chandigarh are appearing before the RERA authority of Punjab and Haryana as well appellate tribunal of RERA at Mohali and against the decision of appellate authority our lawyers / advocates are also appearing in High Court Chandigarh in relation to RERA cases.