LEGALITY OF RESIDENTIAL REAL ESTATE IN INDIA

LEGALITY OF RESIDENTIAL REAL ESTATE IN INDIA

INTRODUCTION

The property is the coincidence word of residence in order to satisfy the basic need of human to lead his life. It is the natural right as well as legal right from ancient era to modern time. In India, it is the constitutional right and protected in the eye of public interest.

The residential real estate has suffered a lot of legal launces and implementation gaps in order to preserve the buyer’s right, causes the more unfair practices in the business of real estate. In reflection, a lot of case-law was instituted and ended with vague legal backings. The government made the RERA Act of 2016, to regulate the relationship between promoter and allotee in the sale of residential and commercial land in relevant to real estate business. The relief of compensation and procedure of registration as may be prescribed in the Act to ensure the property right in the welfare country.
 

DEFINITION

The residential real estate is defined as the land, buildings or structures intended to build or developed for the purpose of human habitation. In order to buy the residential home, the clear title, registration and stamp duty are the pre-cautionary measure, in addition to that the compliance of Real Estate Regulation and Development Act of 2016¹ (herein after referred as RERA Act, 2016).
 

BACKGROUND

In 2000, the real estate business has gained its prominence, the buyer are willing to buy their property/land from big corporation (Promoter). There is no law to regulate the activities and transaction of business in respect of sale of residential house. As a result, the National Housing Development and Municipal Administration has attempted to conduct a conference to provide affordable house to people by implementing the land-welfare scheme.

The government made the Real Estate Bill, 2011 in consideration of urban development and their issue in land valuation, introduced in Rajya sabha and then passed by Lok sabha and get the president assent on 2016. Now, it is the active legislation upon the transaction of residential real estate in our country.²
 

LEGISLATIVE SCOPE

The real estate business has initiated its new way of digital marketing, attracts the large number of buyer as well as promoter to engage in this field. Simultaneously, the government also implementing the policies relevant to it. They are,

1. RERA Act, 2016

The Act aims to protect the rights of homebuyer and enriching investment in real estate sector. It make the provision for dispute resolution authority such as Real Estate Regulatory Authority.

The Escrow account has been made to ensure the transparency and accountability in consideration payable by buyer. It allows to collect only, 70 percent of funds of total cost of building. The establishment of appellate tribunal is made and the advance must be cap with 10 percent of total cost. And the promoter will be responsible for damages of building over 5 years after their sale.³

2. Transfer of Property Act, 1882

The Act regulates the transfer of property between living person as well as artificial person in the way of sale, gift, lease, exchange, mortgage and actionable claim. It concentrate upon transfer of immoveable property from British period. As of before, the real estate industry was regularised through this Act.

3. LARR Act, 2013

The Act has the objective to acquire a lands of private people for public interest by the government. It also applies to residential home, if the person owns/stays there. At the same time, the proper welfare measure of rehabilitation, fair compensation and resettlement to be allotted. If not, the possession will be relieved from government, handed over to the previous owner by court.⁴

4. SEBI (Real Estate Investment Trusts) Regulation, 2014

The regulation make the way to attract the investor for real estate business by providing the finance. It enable the promoter to manage and to ensure their stable income. A trust-based system has structured with pre-standards to protect the investor interest and to ensure the upliftment of real estate business.

5. Registration Act, 1908

The Act prescribes the list of document that need for the registration of sale of residential home. It made the property as evidence to title deed in court of law. The immoveable property has to be registered with competent authority.
 

COMPARATIVE SCOPE

UK:

Unlike India, there is no specific statute dealt with transaction of real estate. The Act such as,

1. Registration Act, 2002

2. Law of Property, 1925

Can handle this field, by prescribing the authority to regulate all land related activities.

US:

The Real Estate Settlement Procedure Act is implemented to ensure the homebuyers and promoters with complete settlement cost disclosures. It helps to eliminate an abuse practices in the sector. RESPA has federal status, regularised by Consumer Financial Protection Bureau (CFPB).⁵
 

JUDICIAL SCOPE

The Apex Court has delivered a landmark decision in Imperial Structures V. Anil Patni, as the buyers who are affected in real estate can take their case to either National Consumer redressal commission (NCDRC) or State’s real estate regulatory authority in the view of concurrent jurisdiction. And in Bikramjit Singh V. M/s HP Singh, the Punjab RERA Authority ruled that the projects has not been registered under the Act, not been allowed to decide by such authority. It also pointed out the three conditions to entertain such complaint,

1. The violation must be commenced before enactment of Act and still continues.

2. It must be in non-compliance of RERA Act or Rules.

3. The pending case will not be allowed in this forum.⁶
    

CONCLUSION

India is the most populous country, the citizen have the right to shelter as their constitutional right. The state has the duty to assure his right. As the urbanisation come, the real estate business evolves. The government made a step to introduce the RERA Act and RERA authority to regulate the sector in order to fill-up vacuum as there in existed laws. We are growing in this sector, with the growth of economy.

“RERA = RIGHT OF SHELTER”

About The Author

REFERENCE

1. https://www.icsi.edu (last visited 27 June, 2025).

2. https://www.cyrilshroff.com (last visited 28 June, 2025).

3. Shubhanshu Aggarwal, RERA Act, 2016, 13-20 (Acclaims, Vol 14, Jan 2021).

4. https://www.mea.gov.in (last visited 29 June, 2025).

5. James Chen, Real Estate Settlement Procedure Act (RESPA), 35-50 (Investopedia, Jul 28, 2020).

6. https://manupatra.in (last visited 29 June, 2025).