New rules drafted regarding real estate projects

  • New rules regarding property matters are soon to be drafted by the government. The housing ministry has come out with proposed norms that will form the basis of buyer-seller agreement in real estate projects.

    As per the draft norms, such agreements should explicitly mention the timeline for completion of the project and any delay would be admissible only if it's due to "force majure" — events like natural disaster or war.

    It also proposes the buyer can stop making payment if the project does not achieve the construction milestones because of promoter's fault. In such a case, the builder shall take corrective measures and only after completing the milestones, the allottee would be required to make payment without any "penal interest".

    The draft norms say the total price shall be escalation-free, except in situations where allottees agree to pay more due to increase in development charge by local authority. The conditions in the buyer-seller agreement becomes the basis for making claims and in case the matter reaches court or any tribunal.
    The ministry has come out with the "Draft Agreement for Sale Rules, 2016" under the Real Estate Act for six Union Territories, including Chandigarh and Lakshadweep, that have no legislature. In case of Delhi, the urban development ministry will notify the rules. "Once these rules are notified in these Union Territories, there will be pressure on other states and UTs to follow suit. This can work as model rules for them," a ministry official said.
    Specifying that time is the essence of such agreement, the draft rules mention, "The promoter agrees and understands that timely delivery of possession of the (apartment/plot) to the allottee and common areas to the association of allottees after receiving the occupancy certificate."
    It specifies in case the allottee agrees that the project cannot be completed because of "force majure" conditions, then the allotment can be terminated and the buyer will be entitled to get back the entire amount within 45 days.
    The draft rules also specifies that the builder shall compensate the allottees in case any loss is caused due to defective land title. It proposes that the buyer-seller agreement shall mention that the promoter shall rectify any structural or any other defect within five years after handing over possession without any charge in 30 days.


    The time has come for the government to draft new rules and regulations regarding these property matters. For long, the matters between developers and the home buyers have always been ending in disputes. This has to stop. The rules should be pushed forward and implemented as soon as possible. With certain tweaks, the rules are sure to make the property buying sector a more responsible and disciplined one.

    Visit the Indian Kanoon section of LawRato to learn more on Indian Laws.

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