This presentation gives complete detail about the various legislations governing the housing sector in India.

1. LEGISLATIONS GOVERNING THE HOUSING
INDUSTRY IN INDIA
Submitted By:
Ankit Mittal
Shiv Dayal Singh
Rajat Nainwal
( M. Arch. – I Sem )

2. INTRODUCTION
The housing industry of India is one of the fastest growing sectors. A large population
base, rising income level and rapid urbanization leads to growth in this sector.
In the Federal structure of the Indian polity, the matters pertaining to the housing and urban
development have been assigned by the Constitution of India to the State Governments.
Although the Parliament does not have powers to legislate on the urban issues, the Ministry
of Urban Development (MoUD), Government of India, has taken initiative for legal and
regulatory reforms in the housing and urban development sector. Such initiatives are of two
types :-
• Advising State Governments with Modal Legislations.
• Advising other Ministries of Government of India for legal reform in areas which have
bearings on the urban sector.

3. The following model legislation have been prepared and circulated to all the State
Government to help them formulate their respective legislation to bring about uniformity in
various state laws and also to simplify the regulations.
• Model Rent Control Legislation.
• Model Apartment Ownership Legislation.
• Model Property Regulation Legislation.
• Model Urban and Regional Planning and Development Legislation.
• Model Legislation regarding Housing Cooperatives.
• Model Chapter on Property tax for inclusion in the State Municipal Laws.
MODEL LEGISLATIONS

4. • REAL ESTATE REGULATION AND DEVELOPMENT ACT, 2016.
• URBAN LAND (CEILING AND REGULATION) ACT (ULCRA), 1976.
• REGISTRATION ACT, 1908.
• TRANSFER OF PROPERTY ACT, 1882.
• INDIAN CONTRACT ACT, 1872.
• LAND ACQUISITION ACT, 1894.
• 73RD AND 74TH AMENDMENT OF THE CONSTITUTION OF INDIA, 1992.
• THE SLUM AREAS (IMPROVEMENT AND CLEARANCE) ACT, 1956.
LAWS RELATED TO OWNERSHIP OF LAND FOR DEVELOPMENT

5. To regulate the real estate sector, the government has come up with the idea of Real Estate
Regulatory Authority (RERA) Bill which is expected to help buyers. RERA is supposed to
protect the interest of the homebuyer and ensure timely delivery of projects. Real Estate
Regulatory Authority (RERA) Bill was introduced in 2013 and finally the bill got approved
in March, 2016.
1. REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016
According to latest order issued by the Real Estate Regulatory Authority (RERA),
developers can’t delete documents once uploaded on the website. Developers now will have
to be extra careful while uploading any documents for registration, as the new orders from
the RERA says that documents once uploaded by the promoter during registration or project
update cannot be deleted. The real estate lobby is not happy with the new orders. RERA as
also said that, if the developer fails to update the progress in the project, then action will be
taken too.

6. • Under RERA, each state will have to setup regulatory bodies as appellate tribunals to
solve the disputes between buyer and builder within 120 days.
• Developer will have to put 70% of the money collected from a buyer in a separate account
to meet the construction cost of the project.
• RERA will make it mandatory for all commercial and residential real estate projects where
the land is over 500 sq. mt. or eight apartments will have to register with the regulator
before launching a project.
• RERA also seeks to impose strict regulations on the promoter and ensure that construction
is completed on time.
• Carpet area has been clearly defined in the bill to include usable spaces like kitchen and
toilets imparting clarity which was not the case earlier.
• A developer’s liability to repair structural defects has been increased to 5 years from the
earlier 2 years.
KEY FEATURES -

7. • The buyer will pay only for the carpet area (area within walls). The builder can’t charge for
the super built-up area, as is the practice at present.
• Developers will be able to sell projects only after the necessary clearances. Under RERA,
builders and agents will have to register themselves with the regulator and get all projects
with more than eight apartments registered before launch.
• To enable informed decisions by buyers, RERA will ensure publication on their websites
information relating to profile and track record of promoters, details of litigations,
advertisement and prospectus issued about the project, details of apartments, plots and
garages, registered agents and consultants, development plan, financial details of the
promoters, status of approvals and projects etc.
• Land of slum dwellers, that are eligible under the criteria of Slum Rehabilitation Authority
(SRA), is given to a developer who builds a permanent structure for slum residents. The
developer in return gets additional Floor Space Index who can then build a sale component
and make profit.

8. • According to a report, residential project launches have fallen by 8% since the Real Estate
(Regulation and Development) Act 2016 was announced.
• The fall in new unit launches is most noticeable in the NCR. Launches in the residential
sector are expected to remain restricted over the next 2 to 3 quarters as developers will be
making changes to their business structure, operations and marketing strategies to comply
with RERA norms.
• The share of affordable segment in total launches has improved. While sales have been
weak across segments, it has been prominent in the high-end and luxury segments over the
last quarters owing to demand-supply mismatches.
• Under RERA, all property brokers will have to register with real estate regulators in their
states, thus sieving out the small-time players and consolidating major ones.
• In a major relief to citizens, the Real Estate Regulatory Authority has decided to accept
complaints about unregistered projects for free of cost from informants until the 90-day
period granted to builders to register their projects ends. The law though states that a
mandatory fee of Rs 5,000 is required for filing of the complaint.
IMPACTS -

9. • The ULCRA came into force in 1976 in 64 urban agglomerations spread over 17 states
and three union territories (UTs) and covered towns with a population of more than two
lakh as per the 1971 Census.
• Land ceiling act implies settling maximum size of land holding that an individual /
family can own. Land over and above the ceiling limit, called surplus land.
• On the off chance that, if the individual / family possesses more land than the ceiling
limit, the surplus area is taken away (with or without paying remuneration to original
owner). This surplus land is distributed among small farmers, tenants, landless
labourers or handed over to village panchayat or given to cooperative farming societies.
• This act has a large impact on development of the urban area. It barred the development
on large belts of accessible land.
• This limit of ceiling ranges from 500-2000 sq m. (square meters).
2. URBAN LAND (CEILING AND REGULATION) ACT, 1976

10. The above legislation was retracted in 1999.
• At the beginning the repealed act was applied to Punjab, Haryana and all union territories. Later it was
adopted by the state government of Uttar Pradesh also.
• This act was repealed in November 2007 in the state of Maharashtra.
• Bombay HC empowers state to recover excess land for public housing from private landowner.
The implementation of the ULCRA in the states and UTs was, however, dismal mainly due to:
• Absence of clarity and too much discretionary powers given to the state governments for granting
exemptions.
• Compensation provided for the acquired land was very little, which often led to lengthy litigation disputes.
The maximum compensation was Rs.10 per sq. meter and the total compensation could not exceed Rs.2
lakhs per owner. This made landowners reluctant to declare their vacant land as surplus.
• Absence of a mechanism to encourage the entry of the vacant urban land into the land market through
appropriate fiscal measures. Land prices in cities reached astronomical heights due to artificial scarcity of
land created by ULCRA.
• Since the ULCRA has not met its intended objectives, the Government of India decided to repeal the Act
with the passing of the Urban Land (Ceiling and Regulation) Repeal Act, 1999. Various states
subsequently repealed the Act. The only states yet to repeal ULCRA are Andhra Pradesh, Assam, Bihar and
West Bengal.

11. • This act deals with registration of the documents in India. The aim of the act is to conserve the
evidence, title, assurances, publishing of documents and prohibition of frauds. It lays down
the provisions and formalities which are prerequisite to registration of an instrument.
The instruments which are compulsory to register are:
• Documents of gift of an immovable property.
• Instruments which are non-testamentary and which operate to declare, create, limit, assign or
extinguish, whether it is in the present or in future, any title or share, any right, whether
contingent or conferred to or in an immobile property.
• Lease of any fixed or immovable property from one year to another, or for any period
exceeding a year, or reserving an annual rent.
• Mortgage (except the one by way of deposit of title deeds), sale and mere exchange of a fixed
estate are required to be registered on account of the Transfer of Property Act.
Apparently, thus, all the above- mentioned instruments shall be in written form.
3. REGISTRATION ACT, 1908

12. • Section 17 of the registration act advances optional registration.
• A document which is not registered will not impact the property included in it, nor can be
presented as an evidence for any transaction related to the property.
• There is an exception that in the case of a contract or a suit for specific performance or as
a proof of part-performance of a contract under the Transfer of property act, the
unregistered document can be presented as evidence.
• Henceforth, the doctrine of part-performance under section 53A of the transfer of property
act and section 49 of the registration both protects the purchaser in case of possession of a
sale deed which is not yet registered.
• As per section 49 of the act, any unregistered document cannot be presented as evidence
before any court of law except as secondary evidence under the Indian evidence act.
• So an overall effect has been that big amount of property transactions have been attained
without complete registration.
• Moreover, other instruments such as power of the attorney, an agreement to sell a will
have been uncritically are used to impact the change of ownership.

13. • It is an Indian legislation which regulates the transfer of property in India. It contains
specific provisions regarding what constitutes transfer and the conditions attached to it. It
came into force on 1 July 1882.
• Any transfer of property in India is regulated by the transfer of property act. This act lays
down the general laws to abide by while dealing with a property through sale, mortgage,
lease, gift or lien.
• It includes provisions even for the part-performance of the contract to transfer.
• Under this act, any person who acquires a fixed (immovable) property or any other interest
is assumed to have a notice of the previous owner or possessor of the property.
• The act of transfer may be done in the present or for the future.
• The person may include an individual, company or association or body of individuals, and
any kind of property may be transferred, including the transfer of immovable property.
4. TRANSFER OF PROPERTY ACT, 1882

14. • The Indian Contract Act, 1872 prescribes the law relating to contracts in India.
• The Act was passed by British India and is based on the principles of English Common Law.
• It is applicable to all the states of India except the state of Jammu and Kashmir .
• It determines the circumstances in which promises made by the parties to a contract shall be legally
binding and the enforcement of these rights and duties.
• A contract applicable to reality can be entered into by an individual, a company, a trust, a sole
proprietorship, by a partner of a firm, manager of a Hindu Undivided Family (HUF) and a
foreigner.
Following are the prerequisites to a valid contract:
• A valid agreement.
• A lawful Consideration.
• A lawful object.
• An intention to enter the contract.
• Along with the above requirements, the validity under the law of the land shall be fulfilled.
5. INDIAN CONTRACT ACT, 1872

15. • This act lays down guidelines about how the government acquires land from individual
landowners.
• This act allows the government to obtain land from individual landowners for some public
work, by paying compensation which is determined by the government.
• The public purpose includes provisions for rural or town planning, land development, housing
for poor and homeless or any other housing, education and health project for public welfare.
• At present, the act obstructs rapid accession of the land at affordable prices, which results in
cost overruns.
What is Land Acquisition?
• Land acquisition is the process by which the government acquires private property for public
purpose.
• Till 2013, land acquisition in India was governed by Land Acquisition Act of 1894 .
• In 2013, An updated Land Acquisition, Rehabilitation and Resettlement Bill was passed.
6. LAND ACQUISITION ACT, 1894

16. • Under the 1894 Act, the government could acquire any land as it wishes to, in the name of “public
purpose”. The term “public purpose” was ambiguous and open to executive-discretion. So, poor
peoples’ land was acquired at throwaway prices in pretext of development projects.
• Sometimes such projects never started, and the same cheap land was resold at higher price to real
estate developers, without building anything for “public purpose”.
• No safeguards: There is no real appeal mechanism to stop the process of the acquisition.
• Silent on resettlement and rehabilitation of those displaced: There are absolutely no provisions
in the 1894 law, relating to the resettlement and rehabilitation of those displaced by the acquisition.
• Urgency clause: This is the most criticised section of the Law. The clause never truly defines what
constitutes an urgent need and leaves it to the discretion of the acquiring authority.
• Low rates of compensation: The rates paid for the land acquired are the prevailing circle rates in
the area which are notorious for being outdated and hence not even remotely indicative of the actual
rates prevailing in the area.
• Litigation: Even where acquisition has been carried out the same has been challenged in litigations
on the grounds mentioned above. This results in the stalling of legitimate infrastructure projects.
KEY PROBLEMS WITH THE LAND ACQUISITION ACT, 1894

17. • Compensation: Given the inaccurate nature of circle rates, the Bill proposes the payment of
compensations that are up to four times the market value in rural areas and twice the market
value in urban areas.
• Rehabilitation and Resettlement: This is the very first law that links land acquisition and the
accompanying obligations for resettlement and rehabilitation. The Second Schedule in particular
outlines the benefits (such as land for land, housing, employment and annuities) that shall accrue
in addition to the one-time cash payments.
• Retrospective operation: To address historical injustice the Bill applies retrospectively to cases
where no land acquisition award has been made. Also in cases where the land was acquired five
years ago but no compensation has been paid or no possession has taken place then the land
acquisition process will be started afresh in accordance with the provisions of this act.
• Multiple checks and balances: A ‘comprehensive, participative and meaningful’ process
(involving the participation of local Panchayati Raj institutions) has been put in place prior to the
start of any acquisition proceeding. Monitoring committees at the national and state levels to
ensure that Rehabilitation and Resettlement obligations are met have also been established.
HIGHLIGHTS OF LAND ACQUISITION, REHABILITATION AND RESETTLEMENT
ACT, 2013

18. • Compensation for livelihood losers: In addition to those losing land, the Bill provides
compensation to those who are dependent on the land being acquired for their livelihood.
• Consent: In cases where PPP projects are involved or acquisition is taking place for private
companies, the Bill requires the consent of no less than 70% and 80% respectively (in both cases)
of those whose land is sought to be acquired. This ensures that no forcible acquisition can take
place.
• Caps on acquisition of multi-crop and agricultural land: To safeguard food security and to
prevent arbitrary acquisition, the Bill directs states to impose limits on the area under agricultural
cultivation that can be acquired.
• Return of unutilized land: In case land remains unutilized after acquisition, the new Bill
empowers states to return the land either to the owner or to the State Land Bank.
• Exemption from income tax and stamp duty: No income tax shall be levied and no stamp duty
shall be charged on any amount that accrues to an individual as a result of the provisions of the
new law.
• Share in appreciated land value: Where the acquired land is sold to a third party for a higher
price, 40% of the appreciated land value (or profit) will be shared with the original owners.

19. • The existing Act kept 13 most frequently used acts for Land Acquisition for Central Government
Projects out of the purview. These acts are applicable for national highways, metro rail, atomic
energy projects, electricity related projects, etc. The present amendments bring all those exempted
from the 13 acts under the purview of this Act for the purpose of compensation, rehabilitation and
resettlement. Therefore, the amendment benefits farmers and affected families.
• The proposed changes in the Land Acquisition Act would allow a fast track process for defence
and defence production, rural infrastructure including electrification, affordable housing, industrial
corridors and infrastructure projects including projects taken up under Public Private Partnership
mode where ownership of the land continues to be vested with the government.
• As per the changes brought in the act, multi-crop irrigated land can also be acquired for purposes
like national security, defence, rural infrastructure including electrification, industrial corridors and
building social infrastructure.
ADVANTAGES OF ‘LARR ACT, 2013’

20. • The original Land Acquisition Act, 2013 had a consent clause for acquiring land – industrial
corridors, Public Private Partnership projects, rural infrastructure, affordable housing and defence.
But after the central government changed, it exempted these five categories from the rule of
acquitting land in the bill.
• Social assessment which was mandatory before acquitting land has also been exempted in the bill.
• As per the existing law, land will be given back to the farmer if it remains unused for five years.
The proposed amendment says the land will be returned only if the specified project on the land
fails to complete the deadline.
• Also, whether the land is fertile or not will also not be taken into consideration while acquiring it.
• Bureaucrats will be punished if found guilty of violating any clause of the existing land act.
• However, the new clause makes government sanction necessary to prosecute civil servants.
DISADVANTAGES OF ‘LARR ACT, 2013’

21. • The 73rd amendment act of 1992 is related to the “Panchayats”. The act gave
constitutional status to the Panchayati Raj Institutions. It has brought them under the
justiciable part of the constitution. The act is significant landmark in the evolution of grass
root democratic institutions in the country.
• The 74th amendment act of 1992 is related to the “Municipalities”. The act gave
constitutional status to the municipalities. The act aims at revitalizing and strengthening
the urban governments so that they function effectively as units of local government.
7. 73RD AND 74TH AMENDMENT OF CONSTITUTION OF INDIA, 1992

22. 8. THE SLUM AREAS (IMPROVEMENT AND CLEARANCE) ACT, 1956
• An Act to provide for the improvement and clearance of slum areas in certain Union Territories and for the
protection of tenants in such areas from eviction.
Be enacted by Parliament in the Seventh Year of the Republic of India as follows:
• It extends to all Union territories except the Union territories of the Andaman and Nicobar Islands and the
Laccadive, Minicoy and Amindivi Islands.
• It shall come into force in a Union territory on such date as the Central Government may, by notification in
the Official Gazette, appoint and different dates may be appointed for different Union territories.
SALIENT FEATURES:
• To facilitate inclusive growth and slum-free cities.
• To provide assured security of tenure, basic amenities and affordable housing for slum dwellers.
• To assign a “legal document of entitlement” to every landless person in a slum area entitled to a dwelling
space.
• To give mortgageable rights to allottees of dwelling space. However, tradability of dwelling space limited to
the Government or the slum collectives.
• To provide compensation for acquisition of land, wherever necessary, in the form of concessional
building.

23. STATE LEVELACTS AND REGULATIONS
1. RENT CONTROL ACT, 1947
• Rent Control Act was an attempt by the Government of India to eliminate the exploitation of tenants by landlords.
• Rent legislation tends to providing payment of fair rent to landlords and protection of tenants against eviction. But
the allowances have been very generous and hence tenants residing in rental properties in India since 1947
continue to pay rents fixed then, irrespective of inflation and the realty boom.
• In 1992, the Central Government proposed a Model Rent Control Legislation, which was meant for and
circulated to all states. The model Act proposed modification of some of the existing provisions on inheritance of
tenancy and also prescribed a rent level beyond which rent control could not apply.
• The new Maharashtra Rent Control Act, Delhi Rent Control Act, Tamil Nadu Rent Control Act, Karnataka
Rent Control Act all has provisions for the dispute among the landlords and tenants. Each of the State Rent Act
provides for fixation of Standard Rent as well decree for possession and provisions that lay down the satisfaction
of the Court.
• Under the Act of 1947, the standard rent once fixed could not be increased or decreased. Now under the
new act, increase in standard rent is permitted annually at the rate of 4%.
• Rental Agreement is an integral part of rental law. Rent or lease of a residential or commercial property in India is
subject to strict Indian laws. A mutual agreement on the terms and conditions of the rented property by the
landlord and the tenant is required. In the present times, leasing a commercial space in India as opposed to owning
commercial real estate is turning out to be a brilliant move.

24. • Statutory process of master plan formulation in India was inspired by the erstwhile comprehensive
planning system envisaged under the Town and Country Planning Act, 1947 of United Kingdom.
• As most of the Town Improvement Trust Acts then in force in various states did not contain
provisions for preparation of Master Plans, a need was felt to have a Comprehensive Town and
Country Planning Act on the lines of U.K.
• Accordingly, Central Town and Country Planning Organization or TCPO drafted the Model Town
and Regional Planning and Development Law in 1962, which formed the basis for various States to
enact Town and Country Planning Acts, with modifications to suit local conditions.
• This model Act was revised by TCPO in year 1985 as “Model Regional and Town Planning and
Development Law” to enact a comprehensive urban and regional planning legislation in all the
States and UT’s.
2. TOWN AND COUNTRY PLANNING ACT, 1962

25. • The Karnataka Highways Act, 1964.
• The Karnataka Apartment Ownership Act, 1972.
• The Karnataka Urban Development Authorities Act, 1987.
• U.P. Road Side Land Control Act, 1945.
• U.P. (Regulations of Building Operations) Act, 1958.
• U.P. Public Premises (Eviction of Unauthorised Occupants) Acts, 1972.
• U.P. Ownership of Flats Act, 1975.
SOME OTHER STATE LEVELACTS AND REGULATIONS

26. • Coastal Regulation Zone Notifications.
• The Environment Protection Act, 1986.
LAWS RELATED TO THE NATURE OF DEVELOPMENT
LAWS RELATED TO OPERATIONS OF DEVELOPERS
• Contract Labour Act, 1970.
• Building and Construction Workers Act, 1996.
• Minimum Wages Act, 1948.
• Payment of Wages Act, 1936.

27. 1. PROPERTY TAX
• Levied by the municipal authorities.
• In India owner is liable to pay.
• Basically calculated on reasonable rent.
2. INCOME TAX
• Paid to Central Govt.
3. CAPITAL GAINS TAX
• Classified as short term and long term.
• Short term – 3 years from date of acquisition and treated at par with regular income.
• Long term – Taxed at 20% , also if the amount is invested in house property it is exempted.
• Alternatively, if capital gain invested in securities such as NABARD etc. can avail tax exemption under
54EC.
LAWS RELATED TO EARNINGS AND PROFITS OF DEVELOPERS