Real Estate Laws in India

By Team Legal Helpline India, December 25, 2014

IMPORTANT: We have inhouse experts for Real Estate Laws in India. For urgent requirements of the legal services related to check and compliance of the real estate projects, advice related to sale and purchase of properties, call our board No. 9-11-2335 5388 or mail us through contact us page of our website.

OUR SERVICES UNDER THE REAL ESTATE LAWS IN INDIA:

  • Providing all legal consultancy under the real estate laws in India for real estate projects, housing projects, townships, colonies.
  • Providing legal audit and compliance check of all real estate projects in accordance with real estate laws in India.
  • Providing online and on call legal advice on all matters related to sale and purchase of properties in accordance with the real estate laws in India.
  • Providing all litigation services under the real estate laws in India.
  • Due diligence services related to verification of titles, verification of compliances as per the requirements of the real estate laws in India.

IMPORTANT TIPS FOR PURCHASE OF A RESIDENTIAL BUILT-UP PROPERTY UNDER THE REAL ESTATE LAWS IN INDIA:

  • First and foremost important requirements of the real estate laws in India is to check the title of the property, whether the seller really owns the title of the property, whether he has acquired the property legally as per the real estate laws in India. This can be done by checking the entire series of the title deeds through which the seller has acquired the title of the property. It is always better to take the reverse route of verification by preparing a chart starting from the present seller and going back to the original owner.
  • The title verification can also be done by checking the property tax returns, mutation details, electric connection, water connection, telephone connection details showing the names of the erstwhile owners under the real estate laws in India.
  • The next important aspect is checking the legal sanction of the construction of the property in accordance with the sanctioned building plan of the property. For this purpose the building plan with the stamping of the local building department from the corporation or the land owing agency or the urban development agency should be verified. Entire details of the floors to be constructed, the sanction of the built up area etc is given in the sanction plan which should be verified under the real estate laws in India.
  • The documents regarding the completion, occupancy certificate etc for the building may also be verified from the building department of the local municipal office.
  • For the properties allotted by any government agency , it is essential to verify the terms of the lease deed whether any condition has been imposed on restriction of the sale of the property without permission or not and whether all other terms and conditions of allotment have been complied with or not under the real estate laws in India .
  • For properties situated in any house building society, it is essential to check the name of the owners of the property is entered in the records of the society or not. The share certificate of the seller member, his voting rights, maintenance bills etc may be verified from the office of the society to determine the real status of the owner under the real estate laws in India.
  • List of the fittings and fixtures, facilities with a site plan showing the real status of the property should be prepared and got signed by the parties. The specific details about the parking facilities, roof rights, terrace rights, common area rights etc be checked through the records of the allotment under the real estate laws in India.
  • Complete and comprehensive details of the entire dues of maintenance, house tax, electric consumption etc can be drawn to determine the existing liabilities on the said property under the real estate laws in India.
  • A check on the notices etc issued by the local bodies against unauthorized and illegal construction may be checked under the real estate laws in India.

IMPORTANT TIPS FOR PURCHASE OF A COMMERCIAL BUILT-UP PROPERTY IN URBAN AREAS:

  • First and foremost important is to check the title of the property, whether the seller really owns the title of the property and whether he has acquired the same legally. This can be done by checking the entire series of the title deeds through which the seller has acquired the title of the property. It is always better to take the reverse route of verification by preparing a chart starting from the present seller and back wards under the real estate laws in India.
  • The title verification can also be done by checking the property tax returns, mutation details, electric connection, water connection, telephone connection details showing the names of the erstwhile owner under the real estate laws in India.
  • The most important aspect while purchasing a commercial property in urban areas to check the nature of land use and the permitted uses of the said property at the time of allotment by the government or by the prevalent bye laws governing the property. It is very essential to distinguish the residential property and commercial property user under the real estate laws in India.
  • The next important aspect is checking the legal sanction of the construction of the property in accordance with the sanctioned building plan of the property under the real estate laws in India. For this purpose the building plan with the stamping of the local building department from the corporation or the land owing agency or the urban development agency should be verified. Entire details of the floors to be constructed, the sanction of the built up area etc is given in the sanction plan.
  • The documents regarding the completion, occupancy certificate etc issued under the real estate laws in India for the building may also be verified.
  • For the properties allotted by any government agency, it is essential to verify the terms of the lease deed whether any condition has been imposed on restriction of the sale of the property without permission or not under the real estate laws in India.
  • List of the fittings and fixtures, facilities with a site plan showing the real status of the property should be prepared and got signed by the parties. The specific details about the parking facilities, roof rights, terrace rights, common area rights etc be checked through the records of the allotment.

FOR PROPERTY WHICH IS STILL AT THE CONSTRUCTION STAGE:

  • The most important aspect is to verify the sanction of the project by the concerned government agency. The details of the sanction plan; sanction letter etc may be verified before entering into any kind of deal under the real estate laws in India.
  • The comparison of the construction with the sanction should also be done as in most of the cases the sanction is for two floors whereas the builders add three or more floors and sell them to unsuspecting buyers.
  • Get a details of all the facilities being given alongwith the property and the costs of the said facilities like parking, power back up, utilization and rights on the common area under the real estate laws in India.
  • Get a detailed inventory of the facilities being constructed and provided with details of their qualities viz the flooring, wood work, electrical fittings etc under the real estate laws in India.
  • Check about the maintenance costs and other escalations of the proposed scheme in details to ascertain the real cost to be paid for the property and the said services under the real estate laws in India.
  • Take a clear written document about the carpet area to be sold, it is most important to compare the proposed carpet area and the sanction plan of the unit. Please do not get swayed away with super area or built up area details because you can use the carpet area only.
  • If the builder is charging on square foot criterion then check the figure with that of the carpet area and not the super area cost which will give you the real picture of the area which you will get after paying the amount.
  • Take a written assurance about the date of handing over of the possession and the consequences for not fulfilling the said date.

A BRIEF DESCRIPTION OF THE REAL ESTATE LAWS IN INDIA:

Real estate laws in India thus create a very complex and unclear picture of the set of laws governing the Real estate laws in India. Real Estate laws in Indian or the property law as we commonly call it has assumed an important role in now a days due to massive urbanization and growth in the city area both horizontally as well as vertically.

The value attached to the property in urban areas has drawn the attention of large scale investors both from organized as well as unorganized sectors. The urbanization phenomenon is a recent development in the Indian system hence the proper regulatory measures have not been created thereby creating a mess of the matters.

In case of any legal dispute the set of law applicable on the said property varies from area to area, locality to locality and even premises to premises. This is more spectacular in the highly densely populated urban areas which are by and large commercial areas with high value of the property but less prospects of any extension. Real estate laws in India need very urgent amendments to accommodate the changing scenario of the real estate in India.

Any area is categorized as urban or rural on the basis of the enlistment in the census of India under the Real Estate Laws in India which adopts the parameters for classification of an area as urban or rural.

With the inclusion in the urban area, the classification of towns, cities, metropolitan cities etc begins which is mainly based on the size of the population. With the growth of the size of a city the value of the land vis-a -vis property increases as land becomes a scarce commodity in the city areas and more specifically in the city business areas which we often refer as Central Business District or CBD areas under the Real Estate Laws in India.

The first and foremost important aspect with urbanization of an area under the Real Estate Laws in India is the change of land use of the area , it becomes non agricultural, residential or commercial from agricultural thereby attracting different set of laws on the same land after urbanization. Town and Country Planning Organization or the TCPO and the states urban development authority draw the basic plans for inclusion of any area from rural to urban areas which are of course carved out from the adjoining or existing rural areas.

With the demarcation of TCPO, the state government formally issues a CDP or the comprehensive development plan for the said area based on the requirements of the region and as per the Real Estate Laws in India. The area can be developed as a city with residential areas or the Residential Zone (R Zone) or a Commercial Zone, Industrial Zone, Export Zone and so on so forth. Based on the plan document issued by the concerned state government the land use of the area is determined under the Real Estate Laws in India. In most of the cases the state government issues a master plan keeping in view the perspective planning of the area which determines the plans for development of the area in future.

The master plan is a planning document which contains zonal plans for different zone of the area which are dully planned and the land use, development pattern etc is determined in advance by the state government based on the guidelines issued by the TCPO under the Real Estate Laws in India.

With the formulation of the master plan the land use of the particular area is decided and the state government through the local bodies starts the development process of the area during that process the land is mostly acquired and developed as per the planning document and then allotted, sold or leased out to the people as per the planning.

If the planning is for R Zone then the entire land is developed as per the requirements of the residential area with parks, roads, markets, schools, hospitals and other facilities which are strictly controlled by the government and the Real Estate Laws in India .

The residential areas are either sold as plots or granted to some organization for development as residences which can be plots, houses, flats, multistoried apartments etc. Initially this was all done by the government bodies but with time private parties including the land developers, colonizers, builders, housing societies etc have been assigned this work in an attempt to offload the liabilities of the government organization.

With the induction of the private players, the investors role sets in which is often derived by profit and in most of the cases quick profits by ignoring or violating the law of the land and the guidelines. Since the enforcement and implementation of the provisions related to development, construction etc is very low, the private players often violate the laws to earn more and more profits which ultimately creates a mess in the entire development process.

The development process for any area is mainly guided by the master plan of the area or the stipulation of the local bodies like municipalities, corporation, housing boards etc. The zones earmarked for development are to be strictly developed in accordance with the planning documents and the real estate laws in India.

The buildings in the area are to be constructed strictly in accordance with building plans approved which are in accordance with the Unified Building Bye Laws or the BBL as we call it. The extent of construction, the height, etc are determined and the builder is allowed to construct the building as per the said plan which is often referred to as the Sanctioned Plan or the Building Plan.

The entire set up of regulatory bodies and laws are very complex and unclear on various issues thereby creating confusions. The issue regarding applicability of various types of laws on various types of lands is basically area specific.

Real estate laws in India has such regional variations that the compliance levels of the laws vary from state to state making very complex for the investors to take up the projects. The number of bodies involved in regulating and sanctioning under the real estate laws in India are involved which makes the entire scenario so complex that even the legally trained brains are twisted in dealing with such issues.

Some of the broad compliances required for a residential townhouse, colony, society, building, and project for residential apartments are enumerated hereunder:

    • Approval of the residential township or colony from the state urban development authority.

       

    • Getting the layout plan of the area sanctioned or approved by the local authority under the real estate laws in India.

       

    • NOC from the landowning agency under the real estate laws in India.

       

    • No Objection Certificate from the Airport Authority, Military Authority, Naval Authority for the project in terms of height clearance, location etc of the project.

       

    • Permission from the forest department or any regional authority which controls the developmental activities of the area.

       

    • NOC from the pollution control board of the authority based on the size of the project which is often called the consent to establish.

       

    • Fire NOC from the fire department regarding the fire safety measures proposed to be taken in the project.

       

    • Getting the building plan sanctioned which includes the floor plans of the building in accordance with the allowed Floor Area Ratio or the FAR as we call it.

       

    • Connections for services of sewer, water connections sanctioned and installed as per the norms.

       

    • Erection Permission for Lift and getting the lift license after the completion of the erection of the lift.

       

    • NOC for the electrical substation HT/LT as the case may be.

       

    • Getting the completion/occupation certificate (CC or OC) from the local building authority which certifies the building safe for human habitation.

       

    • Permission for sale/lease of the property from the landowning agency if applicable.

This entire set up further complicated with the difference in the applicability of different set of laws which are area specific and call for the interpretation in accordance with the local legislation. In different state we have different tenancy laws for the agricultural areas as well as for the residential area.

The applicability of tenancy laws in urban areas and more specifically the metropolitan areas creates a very complex scenario regarding the tenancy and ownership rights of the properties. In cities like Mumbai, Delhi and Calcutta we find different set of residential tenancy laws which govern the areas. Real estate laws in India thus need a complete overhaul keeping in mind the changing scenario of the real estate in India.

REAL ESTATE LAWS IN CITIES AND METROPOLITAN CITIES:

The applicability and operation of the real estate laws in India and more specifically in urban areas and more particularly in the metropolitan areas of the countries becomes very important from the point of view of the soaring prices of the real estate in most of the metropolitan areas and class A cities of the country including some of the state capitals like Patna, Jaipur, Gandhinagar etc.

The entire setup of real estate laws in India assumes a very important role from the point of view of the availability of the land and its transaction. The major areas of concern and importance in the Real estate laws in India can be described as under:

i) LAND OWNING AGENCY: The rules, regulations governing the terms and conditions of the subject land, the nature of title given by the land owning agency, the rights of the purchaser etc are of vital importance.

In most of the urban areas the ownership rights of developed properties is often vested with the land owning agency, in some cases with the developer and in some cases with all. This makes the legal aspects of the title very confusing and unclear due to which project financing, mortgaging, transfer etc becomes legally impermissible thereby creating a serious embargo on the development of the properties of the said area.

The said property in true sense can not become a real estate as the owner can not mortgage it or put to some other uses. The end result is the manipulations, misrepresentations and overlooking of the existing laws. This uncertainty pushes the real players out from the market and those who can manipulate the system thrive to earn huge profits.

ii)LAND USE: The land use assumes importance from the point of view of enforcement of the real estate laws as the nature of the use of the land directly determines the price and the availability of the property.

In most of the metropolitan cities in Indian the enforcement of the land use was initially ignored as a result of the same big commercial establishments were constructed on agricultural land without any sanction and without any approval, the said properties were sold to unsuspecting buyers and the developers took the lion share out of the premium.

Now with the growing thrust on the land use , the cost of the property is determined by the various aspects of land use attached to it.

iii) BUILDING PLAN REGULATIONS: The regulations of the building plans in the metropolitan cities has created such a scenario that even the trained architects, legal minds are unclear about the extent of the construction, the use of the basement, common areas etc.

The recent judgment by Supreme Court about the misuse of the basement areas, common areas, residential areas etc has further complicated the already mixed up things.

In urban areas one has to take NOC from several bodies like the army, air force, navy as the case may be, airport authority, urban art commission, local building law sanctioning authority, pollution control board etc before commencing any kind of construction.

iv) TENANCY LAWS: The applicability of the tenancy laws in the metropolitan cities is a major issue determining the extent and nature of real estate trading in the said area. In cities like Mumbai, Delhi, Calcutta we find stringent tenancy laws restricting the rights of the property owners in taking back their properties from the tenants or fetching rents in accordance with the prevalent market rates.

The Apartment Acts, Cooperative House Building Societies Acts, Slum Area Development and Clearance Acts are some of the Legislation which operate in various metropolitan cities with their peculiarities and shape the Real Estate Laws of the particular city.

In such confusing and chaotic situation coupled with the temptation of very good returns one has to look into various aspects of the matter before investing or buying any real estate in the urban areas. We are giving some brief tips in this regards which may form very handy and useful for the unsuspecting investor who is often out in the market to buy a dream house.

IMPORTANT NOTE:
As a Law Firm Delhi, we provide all services related to legal advice in real estate laws in India. Call our board No. 9-11-2335 5388 for urgent requirements or mail us through contact us page of our website.

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