Lok Sabha Question No. 1137 (UNSTARRED), answered on 2017-02-08
Subject: New Real Estate Rules
Ministry: HOUSING AND URBAN  POVERTY ALLEVIATION
Asked by: SHIVAJI ADHALRAO PATIL, SHRIKANT EKNATH SHINDE, VINAYAK BHAURAO RAUT, ANANDRAO  ADSUL, Shrirang Appa Barne, MUTHAMSETTI SRINIVASA RAO (AVNTHI)

## GOVERNMENT OF INDIA

## MINISTRY OF HOUSING AND URBAN POVERTY ALLEVIATION LOK SABHA

UNSTARRED QUESTION NO. 1137

TO BE ANSWERED ON FEBRUARY 08, 2017

## NEW REAL ESTATE RULES

No. 1137

SHRI ADHALRAO PATIL SHIVAJIRAO:

DR. SHRIKANT EKNATH SHINDE:

SHRI VINAYAK BHAURAO RAUT:

SHRI ANANDRAO ADSUL:

SHRI SHRIRANG APPA BARNE:

SHRI MUTHAMSETTI SRINIVASA RAO (AVANTHI):

Will the Minister of HOUSING AND URBAN POVERTY ALLEVIATION be pleased to state:

- (a)  whether  the  real  estate  rules  makes  it  mandatory  for  all builders developing a project where the land exceeds 500 square  metres  to  register  themselves  with  the  regulatory authority before launching or even advertising their project and if so, the details thereof;
- (b) whether failure to do so will invite a penalty of up to 10 per cent  of  the  project  cost  and  for  subsequent  violation  jail term for three years for developers has been included in the rules;
- (c) if so, the number of builders penalized for violation of law, State-wise;
- (d)  whether  the  Union  Government  has  received  complaints from consumer groups that several States have reportedly diluted  key  provisions  of  the  new  real  estate  rules  that Parliament cleared last year related to ongoing projects in their  State  law  to  favour  builders  and  if  so,  the  details thereof and the action taken against those States; and

- (e)  the  steps  taken  by  the  Government  for  implementation of new real estate rules without diluted key provisions?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF HOUSING & URBAN POVERTY ALLEVIATION

## (RAO INDERJIT SINGH)

- (a) & (b): Section 3(1) of the Real Estate (Regulation and Development)  Act,  2016  provides  'No  promoter  shall advertise,  market,  book,  sell  or  offer  for  sale,  or  invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real  estate  project  with  the  Real  Estate  Regulatory Authority established under this Act'.

Section 3(2) provides 'Notwithstanding anything contained  in  sub-section  (1),  no  registration  of  the  real estate  project  shall  be  required-  (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'.

As per Section 59 (1) of the Real Estate Act, 2016 'if any promoter  contravenes  the  provisions  of  section  3,  he shall be liable to a penalty which may extend up to ten percent of the estimated cost of the real estate project as determined by the Authority'. Further, as per Section 59 (2) 'If any promoter does not comply with the orders, decisions  or  directions  issued  under  sub-section  (1)  or continues to violate the provisions of section 3, he shall be  punishable  with  imprisonment  for  a  term  which  may extend up to three years or with fine which may extend up to a further ten percent of the estimated cost of the real estate project, or with both'.

- (c): Section 3 of the Real Estate Act, 2016 has not yet been notified for commencement.
- (d) & (e): Yes,  the  Ministry  has  received  representations  from consumer groups that in the Rules formulated under the Real  Estate  (Regulation  and  Development)  Act,  2016, some States have reportedly diluted key provisions of the Act to favour builders.

The  Rules  that  have  been  notified  by  the  States,  have been forwarded to the Committee on Subordinate Legislation  of  the  Rajya  Sabha  and  the  Lok  Sabha  for examination.

The Ministry had convened a meeting of State and Union Territory officials on 17th January, 2017 to apprise them about the provisions of the Act. During this meeting they were also informed that the Rules cannot be ultra-vires the Act. The Ministry also apprised the participants about the Rules made by the Ministry for the Union Territories without  Legislature, for which  it is the 'appropriate Government'.  In  addition,  a  set  of  Frequently  Asked Questions (FAQs) on the Act was circulated to the said officials.

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