SHELTER FOR THE REAL ESTATE BUYER: A BRIEF ANALYSIS OF THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 – Adv Sherry Samuel Oommen

.Offences & Liabilities:Chapter VIII of the Act deals with offences and penalties. Promoter’s non-compliance with the registration requirement under Section 3 is punishable levy of penalty up to 10% of the estimated cost of the project. Contravention with orders, decisions or directions of the Authority/appellate tribunal is punishable with imprisonment up to three years. Further, failure to provide correct information may be penalized with a sum of about 5% of the estimated cost of the project. Penalties may also be imposed on the agent under other provisions of Chapter VIII.

1. Impact on the Buyer:

The main thrust of the Act being to secure the protection of the end-customer, there are several pertinent features which are of considerable interest to consumers, including:

• Return of Received Amount & Interest: Under Section 18,if there is delay in completion, the promoter shall be liable on demand to return the received amount to the buyer with interest, if the buyer chooses to withdraw, or pay monthly interest to the buyer- if the buyer chooses not to withdraw.
• Compensation for Defective Title: under Section 18, the Buyer is also entitled for compensation from the promoter for defective title of land, in case of any loss caused to him.
• Right to Information: Under Section 19, among other rights, the Buyer is entitled to know stage-wise time schedule of completion of the project, including the provisions for water, sanitation, electricity and other amenities.
• Public Database for Defaulting Promoters: Under Section 34, The Authority is required to maintain a database providing the detailing defaulting promoters. This database would be available for public viewing;

1. Conclusion

The posturing of the Act is towards greater regulation of real estate promoters and agent, and the enhanced protection of real estate end-customers. Certain registration requirements may be considered onerous, but regulation shall prove helpful for the overall health of the sector. The full impact of the enactment will be keenly felt after the foundations and the firmament has been laid down for the Authority and the appellate tribunal to operate.

[1]This article is written by Adv Sherry Samuel Oommen with assistance from Adv Kiran J Prakash of Messrs Nash Capital Partners

Adv Sherry Samuel Oommen

Adv Sherry Samuel Oommen is a practising Lawyer At High Court of Kerala who specialises in tax and Corporate Laws. Presently he heads the tax practise of Nash Capital Partners. Prior to Nash , he single-handedly led the entire Tax vertical of KPMG in Kerala. Apart from being a qualified lawyer, he is also a chartered accountant and a company secretary. He is available at sherryoommen@nashcp.com

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