Real Estate buyers entitled to relief under the Act from May 1st this year



Centre cautions Chief Ministers of vacuum if Real Estate Act timelines not met by April 30
States also asked to comply with the spirit of the Act of Parliament
Buyers entitled to relief under the Act from May 1st this year
Only four States and 6 UTs notify Real Estate Rules; alleged violations of Act referred to Parliament Committee

With buyers entitled to seek relief under the Real Estate (Regulation & Development) Act,2016 with effect from the first of May this year, the central government has cautioned the States of a serious situation of vacuum arising if necessary institutional mechanisms, as required under the Act were not put in place before that.


In the context of only four States and six Union Territories so far notifying the final Real Estate Rules and complaints of violation of some of the provisions of the Act by some States, Minister of Housing & Urban Poverty Alleviation Shri M. Venkaiah Naidu last week urged the Chief Ministers to take personal interest in ensuring implementation of the Act in letter and spirit. In a letter dated February 9, 2017, to all the Chief Ministers of States, he stressed that “Real Estate Act is one of the most important reforms for the sector, which would bring benefits to all stakeholders. It is therefore, my sincere request to please bestow your personal attention to this matter so that the Act is implemented in time and in the spirit with which it was passed by the Parliament”.

Shri Naidu also cautioned the Chief Ministers stating “Appropriate Governments are required to establish the Real Estate Regulatory Authorities and the Appellate Tribunals, maximum by 30th April, 2017. The timelines are important as the Act would commence its full operation from 1st May, 2017and in the absence of Rules and Regulatory Authority and Appellate Tribunal, the implementation of the Act would be affected in your State, leading to a vacuum in the sector”.

The Minister in his two page letter to the Chief Ministers said that the Real Estate Act, 2016 was one of the most consumer friendly laws passed by the Parliament and its timely implementation is the responsibility of both the Central and State Governments and this would not only provide the much needed consumer protection, but would also give a fillip to the sector, benefitting all the stakeholders.

Ministry of HUPA had organized a consultative workshop with all the States/UTs on the 17th of last month to review the progress made by them and apprise them of their responsibilities under the Act and the timelines to be met to enable the consumers take benefits of the Act from the first of May this year and the need to ensure that the Rules were not in variance with the spirit of the Act.
Over 60 Sections of the Act were notified by the Ministry of HUPA on May 1st last year, including Section 84 under which States were required to notify Real Estate Rules by October 31st last year thereby setting the ground for implementation of the Act.

So far, Rules have been notified by only four States and for six Union Territories. Ministry of HUPA, mandated with the responsibility of making Rules for UTs without legislatures has done so for Andaman & Nicobar Islands, Chandigarh, Dadra & Nagar Haveli, Daman & Diu and Lakshadweep while the Ministry of Urban Development has done so for Delhi. A few other States have been reported to have notified only Draft Rules seeking views and suggestions from stakeholders.

States that have notified final Rules are: Gujarat, Madhya Pradesh, Kerala and Uttar Pradesh. The Ministry has received some complaints of violations of some of the provisions of the Act by some of these States resulting in dilution of the spirit of the Act. The Ministry has referred the complaints to the Committee on Subordinate Legislation of Rajya Sabha. In this back drop, Shri Venkaiah Naidu urged the Chief Ministers to ensure compliance with the Act, as passed by the Parliament.

From May 1st this year, under the provisions of the Act, both buyers and developers of real estate property can approach Real Estate Regulatory Authorities seeking relief against the other for violation of the contractual obligations and other provisions of the Act. For this to happen, Real Estate Rules including the General Rules and the Agreement for Sale Rules, Real Estate Authorities and Appellate Tribunals were required to be in place and in a position to start functioning.

**********

STATUS:
What is the status of the Act?
1.
The Real Estate Bill was passed by the Rajya Sabha on 10th
 March, 2016 and the Lok
Sabha on 15
th
 March, 2016. The Bill as passed by the Parliament was assented to by the
Hon’ble President on 25
th
 March, 2016. The Act as assented to by the Hon’ble President
was published in the Official Gazette on 26
th
 March, 2016 for public information.
When did the Act come into force?
2.
Section 2, sections 20 to 39, sections 41 to 58, sections 71 to 78 and sections 81 to 92
were notified by the Central Government to come into effect from 1st May, 2016.
Why have some sections of the Act not been notified yet?
3.
Some sections of the Act have not been notified yet, as the institutional structures, namely
the establishment of the Regulatory Authority and the Appellate Tribunal are necessary
prior to their enforcement. For e.g. projects can only be sold after they are registered with
the Authority, thus, in the absence of the same there would be a vacuum.
When would the remaining sections of the Act come into force?
4.
Sections 20 and section 43 provides that the Authority and the Appellate Tribunal need to
be established within 1 year of the commencement of the Act. As the said sections were
notified for commencement on 1
st
 May, 2016 the Authority and the Appellate Tribunal are
required to be established maximum by 30
th
 April, 2017. Sections of the Act which have
not been notified yet, would be notified maximum upon the expiry of that period.
OBJECTS AND REASONS:
What was the need for a regulatory law for the real estate sector?
5.
The real estate sector has grown in the recent years but has largely been unregulated
from the perspective of consumer protection. Though, consumer protection laws are
available, the recourse available therein are only curative, but not preventive. This has
affected the overall potential growth of the sector due to absence of professionalism and
standardization
.
What are the objects and reasons for which the Act has been framed?
6.
The Real Estate Act is intended to achieve the following objectives:
ensure accountability towards allottees and protect their interest;
a)
infuse transparency, ensure fair-play and reduce frauds & delays;
b)
introduce professionalism and pan India standardization;
c)
establish symmetry of information between the promoter and allottee;
d)
imposing certain responsibilities on both promoter and allottees;
e)
establish regulatory oversight mechanism to enforce contracts;
f)
Real Estate (Regulation and Development) Act, 2016 – Frequently Asked Questions (FAQ)
5
apartments are also covered under the Act and are required to comply with the duties
and responsibilities as provided therein including under the Rules and regulations made
thereunder.
What happens in case a term is used under the Act but has not been defined?
22.
Section 2(zr) is an omnibus definition which provides that terms which have not been
defined under the Act or the Rules and Regulations made thereunder, would have the
same meaning as respectively assigned to them under the relevant Municipal laws or
under any law for the time being in force.
CHAPTER II - REGISTRATION OF PROJECT AND AGENTS
Does the Act cover both residential and commercial real estate?
23.
The Act covers both residential and commercial real estate. Section 2(e) defines ‘apartment’
and section 2(j) defines ‘building’ which include both residential and commercial real
estate.
Does the Act cover ongoing / incomplete projects?
24.
As regards the ambit of the Act, there is no distinction between an ongoing project and
a future project, i.e. both ongoing / incomplete projects and future projects are covered
under the Act.
Section 3(1) first proviso provides that promoters of ‘all ongoing projects which have
not received completion certificate will need to register their project with the Regulator
Authority, within 3 months of its commencement’.
Does the Act cover all projects in urban areas and in rural areas?
25.
Section 3(1) provides that all projects within a ‘planning area’ will require to be registered
with the Authority. ‘Planning Area’ has been defined under section 2(zh).
However, section 3(1) second proviso gives powers to the Authority ‘in the interest of
allottees’ to order / direct the promoter to register projects beyond the planning area,
which has the requisite permission of the local authority.
Which projects are exempt from the ambit of the Act?
26.
As per section 3(2) the following projects do not require to be registered under the
Act:
(a) where the area of land proposed to be developed does not exceed five hundred
square meters or the number of apartments proposed to be developed does not exceed
eight, inclusive of all phases;
(b) where the promoter has received completion certificate for a real estate project prior
to commencement of this Act;
(c) for the purpose of renovation or repair or re-development which does not involve
marketing, advertising selling or new allotment of any apartment, plot or building, as the
6
case may be, under the real estate project.
At what stage can a promoter start to advertise his project for sale?
27.
The promoter can advertise his project for sale after the project has been registered with
the Regulatory Authority as provided in section 3(1).
What  are  the  details  to  be  furnished  at  the  time  of  application  for  registration  of
28.
real estate project with the Regulatory Authority?
Section 4 of the Act provides for details / information and undertaking to be provided by
the promoter to the Authority for registration of the project. The mechanism for registration
i.e. the requisite forms to be filled, the fees to be paid etc. are to be determined by the
Rules made by the appropriate Government. 
What  are  the  formalities  for  the  registration  of  a  real  estate  project  with  the
29.
Regulatory Authority?
The promoter is required to make an application as per Form and fees prescribed by the
Rules made by the appropriate Government, along with the documents / information and
undertaking specified in section 4 to the Authority for registration of the project. In addition,
the promoter is also required to append other / additional documents / information as
specified in the Rules.
In how many days is the Regulatory Authority required to register the real estate
30.
project?
The Regulatory Authority is required to register the project, if in compliance with the Act
and the Rules and Regulations, within 30 days of the application having been received
by the Authority.
What   in   case   the   application   for   registration   of   the   real   estate   project   is
31.
incomplete?
If  the  application  for  the  registration  of  the  project  is  not  complete  as  required  under
the  Act  or  the  Rules  and  Regulations  made  thereunder,  the  Authority  may  grant  an
opportunity to the promoter to complete the application in all respects. However, in case
of non-compliance the Authority has the power to reject the application, only after giving
an opportunity to the promoter of being heard.
Is  there  a  provision  for  deemed  registration  of  a  real  estate  project  in  case  the
32.
Regulatory Authority does not respond to the application?
Section 5 of the Act provides that the Authority has to decide on the application within
30 days of its receipt. It further provides that in case the Authority fails to take a decision
within the said period of 30 days the project shall be deemed to be registered.
Real Estate (Regulation and Development) Act, 2016 – Frequently Asked Questions (FAQ)
7
What is the period of validity of registration granted to a real estate project by the
33.
Regulatory Authority?
As per section 4, the validity of the registration granted to a project shall be the period
declared by the promoter under section 4(2)(l)(C), at the time of making the application
for registration, within which he would complete the project.
Is the promoter required to maintain an ‘escrow account’ or a ‘separate account’?
34.
Is a ‘separate account’ to be maintained for every project or it can be for one or
more projects? What are the purposes for which the promoter can withdraw the
money from the separate account?
Section 4(2)(l)(D) provides that the promoter shall maintain a ‘separate account’ for every
project undertaken by him wherein seventy percent of the money received from the
allottees shall be deposited for the purposes of construction and land cost. The account
has to be self maintained and is not an escrow account requiring the approval of the
Authority for withdrawal.
Section 4(2)(l)(D) clearly provides that the funds can only be used for construction and
land cost.
On what basis is the promoter required to withdraw the money from the separate
35.
account?
As per section 4(2)(l)(D) first and second proviso, the promoter is required to withdraw
the amounts from the separate account, to cover the cost of the project, in proportion
to the percentage of completion of the project. In addition, the promoter is permitted to
withdraw from the separate account after it is certified by an engineer, an architect and a
chartered accountant in practice that the withdrawal is in proportion to the percentage of
completion of the project:
Is the promoter required to get his accounts audited?
36.
As per section 4(2)(l)(D) third proviso, the promoter is required to get his accounts
audited within six months after the end of every financial year by a chartered accountant
in practice, and shall produce a statement of accounts duly certified and signed by such
chartered accountant and it shall be verified during the audit that the amounts collected
for a particular project have been utilized for the project and the withdrawal has been in
compliance with the proportion to the percentage of completion of the project.
Is the application for registration of a real estate project, proposed under the Act is
37.
manual or it can also be done online?
Section 4 envisages that for a period of one year the application process can be both
manual and online based, however, after one year it is mandatory to make the entire
process online.
However, for the purposes of project information to the prospective consumers, it would
8
help in establishing the web portal at the earliest.
Can  the  period  of  registration  granted  to  a  real  estate  project  by  the  Regulatory
38.
Authority be extended? What is the definition of force majeure?
Section 6 envisages two situations within which the registration granted to a project
can be extended. Extension of registration can be granted in case of force majeure, in
addition, it can also be granted under reasonable circumstances, without the fault of the
promoter, which shall not be more than a maximum period of 1 year.
Explanation to section 6 has defined force majeure to mean ‘a case of war, flood, drought,
fire, cyclone, earthquake or any other calamity caused by nature affecting the regular
development of the real estate project’.
What are the terms and conditions for extension of registration?
39.
The  terms  and  conditions,  the  application  form  and  the  fees  payable  for  extension  of
registration shall be in the manner as prescribed by the Rules.
Can the registration of a project be revoked?
40.
As per section 7 the Authority has the powers to revoke registration of a project, for
violations  specified  under  the  said  section.  However,  revocation  of  registration  of  a
project is envisaged as a last resort and can only be done after providing a reasonable
opportunity of being heard.
What  are  the  next  steps  that  can  be  taken  for  project  completion  in  case  of
41.
revocation of a project?
In case a project is revoked, section 8 provides for various mechanisms in which the
project can be completed. However, in such a scenario, the association of allottees shall
have the first right of refusal for carrying out the remaining development works.
Does the Act also cover real estate agents? What are the duties and responsibilities
42.
of the real estate agents?
Section 9 of the Act provides that real estate agents which engage in selling projects
registered under the Act, can only do so after registering themselves with the Authority.
The mechanisms for registration, the fees payable, the period of registration, subsequent
renewal etc. are matters to be detailed vide the Rules.
Section 10 of the Act provides for detailed functions and duties of real estate agents.
Real Estate (Regulation and Development) Act, 2016 – Frequently Asked Questions (FAQ)
9
CHAPTER III - FUNCTIONS AND DUTIES OF PROMOTER
What  are  the  important  functions  and  responsibilities  of  the  promoter  after
43.
registration of the project with the Authority?
As per section 11 of the Act, the promoter is required to update all project information as
furnished at the time of application (as provided under section 4) on the website of the
Authority. In addition, section 11 also provides for certain information, which needs to be
regularly (quarterly) updated by the promoter, in order to make an informed choice by the
buyer.
In addition, the promoter is required to carry out all the responsibilities as envisaged under
section 11 at various stages of development of the project and upon its completion.
What are the disclosures to be made on the website of the Regulatory Authority?
44.
Section 4 and section 11 provide for a detailed list of disclosures on the website of the
Authority by the promoter for public viewing. Also, the detailed list is required to be
specified in the Rules.
What  is  the  promoter’s  obligations  regarding  veracity  of  the  advertisement  or
45.
prospectus?
As per section 12 the promoter is responsible for the veracity of all information contained
in the advertisement and the prospectus. In case of any loss sustained by any person
due to false information contained therein, the promoter is liable to make good the loss
sustained due to the same.
Can the promoter collect any amount of money towards booking of the apartment
46.
/ plot?
Section 13 provides that the promoter cannot accept a sum more than 10 percent of the
apartment / plot cost as an advance payment / application fees. For any further collection
towards the apartment / plot cost, the promoter is required to enter into an ‘Agreement
for Sale’ with the allottee.
What  is  the  ‘Agreement  for  Sale’  and  is  it  binding  on  the  ‘promoter’  and  the
47.
‘allottee’?
As per section 13(2) the appropriate Government is required to specify through Rules
the ‘Agreement for Sale’ to be entered into between the promoter and the allottee. This
Agreement is binding on the parties, however, internal flexibility could be provided in
the said Agreement for Sale, for determination / insertion of other provisions as decided
between the parties.
10
Can the promoter modify / amend the sanctioned plans or project specifications
48.
after  having  been  approved  by  the  competent  authority  and  disclosed  to  the
allottees?
As per section 14 of the Act the promoter can only modify / amend the sanctioned plans
or project specifications, after the approval of the competent authority and its disclosure
to the allottees, in case of minor additions or alterations.
However,  in  case  of  major  modification  /  alteration,  the  promoter  can  modify  the
sanctioned plans or project specification only after having taken approval from two-third
of the allottees. In addition, for arriving at the number of two-third allottees, the number
of apartments held by the promoter will be excluded. Also, irrespective of the number of
apartments held by an allottee he/she shall only be entitled to one vote.
What is the period for which the promoter is liable for any structural defects etc. in
49.
the project / apartment etc.?
As per section 14(2) the promoter shall be liable for 5 years form the date of handing over
of possession to the allottee towards structural defect or any other defect as specified
therein.
What is the obligation of the promoter as regard transfer of the project to a third
50.
party?
As per section 15 the promoter is not entitled to transfer or assign his majority rights and
liabilities in the project to a third party, without obtaining the prior written consent of two-
third of allottees and the Regulatory Authority.
In addition, for arriving at the number of two-third allottees, the number of apartments
held by the promoter will be excluded. Also, irrespective of the number of apartments
held by an allottee he/she shall only be entitled to one vote.
What  is  the  obligation  of  the  promoter  as  regards  insurance  of  real  estate
51.
project?
As per section 16 the promoter is required to seek an insurance of the real estate project
towards title of the land and towards construction of the project.
However, the said section provides that this provision shall only come into effect after and
in the manner as may be notified by the appropriate Government.
What is the obligation of the promoter as regards transfer of title of the apartment
52.
/ plot?
Section  17  of  the Act  provides  for  detailed  provisions  regarding  transfer  of  title  of
the  apartment  and  the  project  to  the  allottee  and  to  the  association  of  the  allottees
respectively.
Real Estate (Regulation and Development) Act, 2016 – Frequently Asked Questions (FAQ)
11
What is obligation of the promoter towards return of amount and compensation to
53.
the allottee?
Section 18 of the Act provides for provisions as regards various situations in which the
allottee would be compensated by the promoter due to delay in completion of the project
etc.
CHAPTER IV - RIGHTS AND DUTIES OF ALLOTTEES
What are the rights and duties of the allottees under the Act?
54.
Section 19 provides for the various rights of the allottees. This section specifies various
rights which the allottees have against the promoters including those which the promoters
are liable to fulfill based on the agreement entered into with the allottees, namely – stage-
wise schedule of completion of the project and the services, claim timely possession of
the apartment / plot, entitlement to necessary documents and plans etc.
Section 20 provides for the various duties of the allottees, which provide for matters
relating to payment regarding the apartment / plot, liability towards interest for delay in
payment, responsibility to take possession, participate in formation of association etc. 
CHAPTER V - THE REAL ESTATE REGULATORY AUTHORITY
What is the timelines for establishment of the Regulatory Authority?
55.
As per section 20 the Regulatory Authority is required to be established within 1 year of
the commencement of the said section. As section 20 has been notified with effect from
1
st
 May, 2016, the Authority is required to be established maximum by 30
th
 April, 2017.
However, for speedy implementation of the Act, section 20 empowers the ‘appropriate
Government’ to appoint an interim Regulatory Authority, until the establishment of the full
time Authority.
How   are   the   Chairman   and   the   Members   of   the  Authority   required   to   be
56.
appointed?
As per section 22 the Chairman and the Members of the Authority are required to be
appointed  by  the  appropriate  Government  on  the  recommendations  of  a  Selection
Committee comprising of the Chief Justice of the High Court (or his nominee), the Housing
Secretary and the Law Secretary. The section also provides for the qualification etc. that
are required for the appointment of the Chairman and the Members.
What are the important responsibilities of the ‘Regulatory Authority’?
57.
Apart from the day to day implementation of the Act and the Rules and Regulations made
thereunder the immediate responsibility of the Regulatory Authority are:
Registration of the real estate project and the real estate agent;
a)
Extension of registration of the real estate project and its revocation;
b)
12
Renewal of registration of the real estate agent and its revocation;
c)
As per section 34 the Authority is responsible to to maintain a website of records for
d)
public viewing of –
all projects registered with the Authority including details of projects as specified

in the Act and the rules and regulations - to be disclosed on the website;
details of promoters with photographs of promoters;

details of projects in case of revocation of registration or where any project

penalized under the Act;
details of agents registered under the Act including his photograph and also of

those agents whose registration has been revoked.
As per section 71 the Authority is required to appoint one or more ‘adjudicating
e)
officer’ in consultation with appropriate Government.
As per section 85 the Regulatory Authority is required to notify Regulations within 3
f)
months of establishment.
As per section 32 the Regulatory Authority is also required to make recommendations
g)
on various matters for the growth and promotion of a healthy, transparent, efficient
and competitive real estate sector.
How can a complaint be filed with the Authority for any violations under the Act?
58.
Section 31 of the Act provides for filing of complaint by an aggrieved with the Regulatory
Authority. The form and manner and the fees payable for filing the complaint are to be
specified by Rules to be made by the appropriate Government.
What  is  the  time  period  within  which  the Authority  is  required  to  dispose  of  any
59.
matter that is brought to it for consideration?
Section 29 provides that the Authority should endeavour to dispose of the questions /
complaints as expeditiously as possible but not later than sixty days from the date of filing
the same. However, where it could not be disposed of during the said period the Authority
is required to record its reasons for the same.
CHAPTER VI - CENTRAL ADVISORY COUNCIL
What is the composition of the Central Advisory Council?
60.
The Central Advisory Council, to be headed by the Union Minister for Housing, is a
multi-member body comprising of representatives of specified Central Ministries, five
representatives of State Governments to be selected by rotation, five representatives
of Regulatory Authorities to be selected by rotation and any other central government
department as notified.
The Central Advisory Council is also required to have representatives of consumers,
real estate industry, real estate agents, construction labourers, NGOs, and academic /
research institutions.
Real Estate (Regulation and Development) Act, 2016 – Frequently Asked Questions (FAQ)
13
What is the role and responsibility of the Central Advisory Council?
61.
The Central Advisory Council is required to advise the Central Government on matters
relating to implementation of the Act, questions of policy, protection of consumer interest,
foster growth and development of the real estate sector, and other matters as may be
assigned to it by the Central Government.
CHAPTER VII - THE REAL ESTATE APPELLATE TRIBUNAL
What is the timelines for establishment of the Appellate Tribunal under the Act?
62.
As per section 43 of the Act, the Appellate Tribunal is required to be established within 1
year of of the commencement of section 43. As section 43 has been notified with effect
from 1
st
 May, 2016, the Appellate Tribunal is required to be established maximum by 30
th
April, 2017.
However, for speedy implementation of the Act, section 43 empowers the ‘appropriate
Government’ to designate an existing Appellate Tribunal (under any other law in force) to
function as an Appellate Tribunal under the Act.
What are the important responsibilities of the Appellate Tribunal?
63.
The Appellate Tribunal is a quasi-judicial body, which is empowered to hear appeals from
the orders / decisions / directions of the Regulatory Authority or the Adjudicating Officer,
as the case may be. The form and manner and the fees payable towards filing the appeal
and the manner for hearing and disposing the appeal are to be provided by Rules to be
made by the appropriate Government.
Can  an  appeal  be  filed  against  the  decision  or  the  orders  of  the  Appellate
64.
Tribunal?
Any person aggrieved by the decision or order of the Appellate Tribunal can file and
appeal with the High Court.
What is the time period within which the Appellate Tribunal is required to dispose
65.
of the appeal?
Section 44 provides that the Appellate Tribunal should endeavour to dispose of the appeal
as expeditiously as possible but not later than sixty days from filing the appeal. However,
where the same could not be disposed of during the said period the Appellate Tribunal is
required to record its reasons for the same.
How are the Chairman and the Members of the Appellate Tribunal required to be
66.
appointed?
As per section 46 the Chairman of the Appellate Tribunal shall be a sitting or retired Judge
of the High Court. Section 46 also provides that the Appellate Tribunal shall comprise of
at-least two Members one of whom shall be a Judicial Member and the other shall be a
14
Technical or Administrative Member.
As per section 46 the Members of the Appellate Tribunal are required to be appointed
by  the  appropriate  Government  on  the  recommendations  of  a  Selection  Committee
comprising of the Chief Justice of the High Court (or his nominee), the Housing Secretary
and the Law Secretary. The section also provides for the qualification etc. that are required
for the appointment of the Judicial / Administrative Members.
CHAPTER VIII - OFFENCES, PENALTIES AND ADJUDICATION
What  is  the  punishment  prescribed  for  non-registration  of  a  project  under  the
67.
Act?
As  per  section  59,  where  under  the Act,  it  is  obligatory  for  the  promoter  to  register  a
project with the Authority, and the promoter fails to do the same, he shall be liable to a
penalty upto ten percent of the estimated cost of the real estate project.
However, in case the promoter consistently defaults or does not comply with the directions
/ orders of the Authority as regards registration of the project with the Authority, he shall
be liable to additional fine of ten percent of the estimated cost of the real estate project or
imprisonment upto 3 years or both.
What  is  the  punishment  prescribed  for  violation  of  section  4  which  provides  for
68.
application for registration of the project?
As per section 60 if the promoter defaults as regards matters covered under section 4,
he shall be liable to a penalty upto five percent of the estimated cost of the real estate
project.
What is the punishment prescribed for violation of other provisions of the Act by
69.
the promoter?
As per section 61 if the promoter defaults any other provision of the Act or the Rules
and Regulations made thereunder, he shall be liable to a penalty upto five percent of the
estimated cost of the real estate project.
What  is  the  punishment  prescribed  for  non-compliance  of  the  orders  of  the
70.
Authority by the promoter?
As per section 63 if the promoter fails to comply with the orders of the Authority, he shall
be liable to a penalty for every day of default, which may cumulative extend upto five
percent of the estimated cost of the real estate project.
What  is  the  punishment  prescribed  for  non-compliance  of  the  orders  of  the
71.
Appellate Tribunal by the promoter?
As per section 64 if the promoter fails to comply with the orders of the Appellate Tribunal,
he shall be liable to a penalty for every day of default, which may cumulative extend upto
Real Estate (Regulation and Development) Act, 2016 – Frequently Asked Questions (FAQ)
15
ten percent of the estimated cost of the real estate project or with imprisonment for a term
which may extend upto three years or with both.
What is the punishment prescribed for non-registration of by a real estate agent
72.
under the Act?
As per section 62, where under the Act, it is obligatory for the real estate agent to register
himself  with  the Authority,  and  the  real  estate  agent  fails  to  do  the  same,  he  shall  be
liable to a penalty upto of rupees ten thousand per day of default, which may cumulative
extend upto five percent of the cost of the plot / apartment, for which the sale has been
facilitated by him. 
What  is  the  punishment  prescribed  for  non-compliance  of  the  orders  of  the
73.
Authority by the real estate agent?
As per section 65 if the real estate agent fails to comply with the orders of the Authority,
he shall be liable to a penalty for every day of default, which may cumulative extend upto
five percent of the cost of the plot / apartment, for which the sale has been facilitated by
him. 
What  is  the  punishment  prescribed  for  non-compliance  of  the  orders  of  the
74.
Appellate Tribunal by the real estate agent?
As per section 66 if the real estate agent fails to comply with the orders of the Appellate
Tribunal, he shall be liable to a penalty for every day of default, which may cumulative
extend upto ten percent of the cost of the plot / apartment, for which the sale has been
facilitated by him or with imprisonment for a term which may extend upto one year or with
both.
What  is  the  punishment  prescribed  for  non-compliance  of  the  orders  of  the
75.
Authority by the allottee?
As per section 67 if the allottee fails to comply with the orders of the Authority, he shall be
liable to a penalty for every day of default, which may cumulative extend upto five percent
of the cost of the plot / apartment. 
What  is  the  punishment  prescribed  for  non-compliance  of  the  orders  of  the
76.
Appellate Tribunal by the allottee?
As per section 68 if the allottee fails to comply with the orders of the Appellate Tribunal,
he shall be liable to a penalty for every day of default, which may cumulative extend upto
ten percent of the cost of the plot / apartment or with imprisonment for a term which may
extend upto one year or with both.
Can an offence which provides for imprisonment be compounded?
77.
As per section 70 if any person is punishable with imprisonment under the Act, the same
may be compounded on such terms and conditions which may be prescribed by Rules
16
made by the appropriate Government. In addition, the fine payable in lieu of imprisonment
needs to be specified by the said Rules, which cannot be more than the maximum fine
payable for that offence.
What is the role of the Adjudicating Officer?
78.
The Adjudicating Officer is a quasi-judicial person who is mandated to adjudicate on
disputes arising under section 12, 14, 18 and section 19. The Adjudicating Officer shall
be a person who is or has been a District Judge.
What are the factors that need to be taken into account by the Adjudicating Officer
79.
while deciding a dispute under sections 12, 14, 18 and 19 of the
Act?
The Adjudicating Officer shall, while deciding the disputes under section 12, 14, 18 and 19
of the Act, have regard to – the amount of disproportionate gain or unfair advantage, the
amount of loss, repetitive nature of the default and such other factors that the Adjudicating
Officer may consider necessary in furtherance of justice.
CHAPTER IX - FINANCE, ACCOUNTS, AUDITS AND REPORTS
What is the mechanism to finance the functioning of the Authority?
80.
The Central Government or the State Government as the case may be, may through due
appropriation make grants and loans to the Authority.
Who  is  required  to  constitute  the  Real  Estate  Regulatory  Fund?  What  are  the
81.
purposes for which the Fund is supposed to be used?
The appropriate Government is required to constitute the Real Estate Regulatory Fund,
which is to be administered by a committee of such Members of the Authority as may be
determined by the Chairperson.
The said Fund is required to be used towards payment of salary and allowances to the
Chairperson and the Members of the Authority and the Appellate Tribunal and such other
expenses of the Authority in connection with the functions and purposes specified under
the Act.
Can the penalties imposed under the Act be deposited in the Real Estate Regulatory
82.
Fund?
As per section 76 penalties recovered under the Act are to be deposited in the Consolidated
Fund of India (in case of Authority established by the Central Government) and in the
State Account (in case of Authority established by the State Government).
However, as per section 75, grants received by the Authority, fees received under the Act
/ Rules and the interest accrued thereon shall be credited to the Real Estate Regulatory
Fund.
Real Estate (Regulation and Development) Act, 2016 – Frequently Asked Questions (FAQ)
17
Is  the Authority  required  to  prepare  a  budget  and  maintain  proper  accounts  and
83.
other relevant records? Are the accounts of the Authority required to be audited?
As  per  section  77  the  Authority  is  required  to  prepare  a  budget  and  maintain  proper
accounts and other relevant records and also prepare an annual statement of accounts
in the manner as may be prescribed by Rules made by the appropriate Government.
In addition, section 77 provides that the accounts of the Authority are required to be
audited by the Comptroller and Auditor General of India.
The accounts of the Authority as certified by the Comptroller and Auditor General of India
(audit report) is required to be forwarded to the appropriate Government for it to be laid
before the Parliament or the State Legislature, as the case may be.
Is the Authority required to prepare an Annual Report?
84.
As per section 78 the Authority is required to prepare an Annual Report in the manner as
may be prescribed by Rules made by the appropriate Government.
In  addition,  the  said  Annual  Report  is  required  to  be  forwarded  to  the  appropriate
Government for it to be laid before the Parliament or the State Legislature, as the case
may be.
CHAPTER X - MISCELLANEOUS
Are the civil courts and consumer forums barred from entertaining disputes under
85.
the Act?
As per section 79 of the Act civil courts are barred from entertaining disputes (suits or
proceedings) in respect of matters which the Authority or the adjudicating officer or the
Appellate Tribunal is empowered under the Act to determine. However, the consumer
forums (National, State or District) have not been barred from the ambit of the
Act.
Section 71 proviso permits the complainant to withdraw his complaint as regards matters
under section 12, 14, 18 and section 19, from the consumer forum and file it with the
adjudicating officer appointed under the Act.
Can a complainant approach both the Regulatory Authority / adjudicating officer
86.
and the consumer forums for the same disputes?
The laws of the country do not permit forum shopping, thus, an aggrieved can only
approach one of the two for disputes over the same matter.
Can the Authority delegate any of its functions under the Act?
87.
As per section 81, the Authority is empowered to delegate such of its powers and functions
under the Act to any Member, officer or any other person subject to conditions specified in
the order issued for the same. However, the Authority cannot delegate the responsibility
of making Regulations under section 85 under the Act.
18
What is the timeline for notification of the Rules by the appropriate Government
88.
under the Act?
As per section 84 of the Act, Rules are required to be prepared by the “appropriate
Government” within 6 months of the commencement of the Act. As section 84 commenced
with effect from 1
st
 May, 2016, Rules were required to be prepared by the ‘appropriate
Government’ by 31
st
 October, 2016. 
What is the timeline for notification of the Regulations by the Authority under the
89.
Act?
As per section 85 of the Act, Regulations are required to be notified by the ‘Regulatory
Authority’ within 3 months of its establishment.
Are the Rules, Regulations etc. notified required to laid before the Parliament or
90.
the State Legislature?
As  per  section  86  every  Rule,  Regulation,  notification  issued  by  the  appropriate
Government or the Authority, is required to be laid before the Parliament or the State
Legislature, as the case may be.
Does  the  Government  have  the  power  to  issue  Orders  towards  Removal  of
91.
Difficulties while implementing the Act?
The  Central  Government,  under  section  91,  has  been  empowered  to  notify  Orders
towards removal of difficulties while implementing the Act. However, such removal of
difficulties Order cannot be issued after the expiry of a period of two years since its
commencement.
Why   was   section   92   repealing   the   Maharashtra   Housing   (Regulation   and
92.
Development) Act, 2012 provided under the Act?
The Maharashtra Housing Act, 2012 was received for seeking presidential assent under
Article 254(2) of the Constitution of India, when the Real Estate Bill was not enacted.
For the sake of uniform application across the country, the said State Act, was repealed
under Article 254(2) proviso of the Constitution of India.
Ministry of Housing & Urban Poverty Alleviation
Government of India
Real Estate (Regulation and Development)
Act, 2016
FREQUENTLY ASKED QUESTIONS (FAQs)
Joint Secretary (Housing)
Ministry of Housing & Urban Poverty Alleviation, Government of India
Room No.114-C, Nirman Bhawan, New Delhi - 110011
Tel: 011-23061665; Fax: 011-23061497
E-mail: jshousing-mupa@gov.in
Website: http://mhupa.gov.in

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