Real Estate (Regulation and Development) Bill, 2016

The Real Estate (Regulation and Development) Bill, 2016 passed by the Parliament of India, aims not only to protect home-buyers but also boost investments in the real estate industry. This article discusses the salient features of the Amendment Bill of 2016, including the penalties for violation.

Tue Aug 16 2022 | Real Estate, Wills, Probate and Trust | Comments (0)



The Real Estate (Regulation and Development) Bill, 2016 passed by the  Parliament of India, aims not only to protect home-buyers but also boost investments in the real estate industry. The main objective of the Real Estate Bill is to protect the interest of the purchasers or buyers by promoting transparency, accountability and efficiency in the execution of real estate projects by the builder

Salient features of the Real Estate Bill

  • Mandatory registration of all projects/ongoing projects with regulatory authorities. Builders/Developers would be required to disclose project related information i.e. particulars  of the builder and the project, layout plan, land status, status of approvals and agreements along with details of real estate agents, contractors, architects and structural engineers.
  • Builders will have to deposit a minimum of 70% of the project amount collected from the buyer in a bank account to cover the ongoing cost of the project, so as to avoid any delay in the completion
  • No pre-launch of the project would be allowed, unless all the necessary approvals from the local authorities and  registration from the regulator are taken. 
  • The bill covers every project that is more than 500 square meters or has a project plan for more than eight apartments to be constructed.
  • No discrimination of any kind on the basis of religion, region, caste, creed or sex and gender. 
  • The bill states the builder has to return the payment with interest to buyers who are affected by misleading advertisements pertaining to the model apartment, plot or building as the case may be.  It provides for imprisonment of up to three years for builders and up to one year for real estate agents and buyers and/or monetary penalties if they violate orders of appellate tribunals.

Responsibilities of a Builder 

  • Disclosure of all relevant information of project;
  • Adherence to approved plans and project specifications
  • Obligations regarding veracity of the advertisement for sale or prospectus;
  • Rectify structural defects
  • Refund money in cases of default

Rights & Duties of Allottees

 The property buyer has the right to obtain stage-wise time schedule of the real estate project and claim possession as per the declaration / agreement. If the builder defaults, the buyer can claim refund (with interest) and compensation). The allottees have to make all the payments on time as per the signed agreement.

Course of Action at the Time of Default by the Builder

In any case of default by the builder, the aggrieved customers can now approach any consumer court at the district level, instead of the regulatory body given in the Real Estate Bill of 2016. This Bill also establishes a fast track dispute resolution mechanism which would solve the disputes within the time period of sixty days through the Appellant Tribunal as against the ninety days time period as proposed earlier.


The Bill provides penalties in case there is a default by the builder on the following counts
  • If builder does not register its project with the Regulatory Authority then the penalty may be up to 10% of the estimated cost of the project as determined by the Regulatory Authority.
  • If builder does not comply with the order of the Regulatory Authority then  imprisonment of up to three years and a further penalty of up to 10% of the estimated cost or both.
  • In case the builder provides any false information while making an application to the Regulatory Authority or contravenes any other provision of the Act, the penalty may be up to 5% of the estimated cost of the project or construction.
  • Builders have to pay interest if there is any delay or default in the home at the same rate as they charge the homebuyers.
For builders, three years of punishment and for agents one year of punishment has been prescribed for the violation of the orders of the appellate tribunal.
Copyright 2022 – Helpline Law - HLL001


You could get in touch with our team to find a suitable lawyer for assistance.
Helplinelaw has been referring lawyers that fit your needs in terms of seniority and experience since 2001

Other Latest Articles