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Real Estate & Construction: statutory compliance in India

RERA registration and quarterly updates, title diligence, joint development, redevelopment, stamp duty and delayed-possession litigation.

What this covers

8 regulators, 10 key statutes and 14 compliance obligations, plus 10 common dispute types and 22 due-diligence checks. 10 entries are marked for verification because the rule is state-specific, recently amended, or commenced in stages — those say what to check rather than stating a date we cannot stand behind.

Who regulates this sector

RegulatorWhat it decides
State Real Estate Regulatory Authority (RERA)Project and agent registration, quarterly project disclosures, buyer complaints, penalties on promoters.
Real Estate Appellate Tribunal (REAT)First appeal from orders of the Authority and the adjudicating officer under section 44.
Department of Registration and Stamps (state)Stamp duty valuation, registration of instruments, market-value (ready reckoner) rates.
Town and Country Planning Department / Development AuthorityLayout and building plan sanction, land use, FSI/FAR, occupancy and completion certificates.
Municipal Corporation / Local AuthorityBuilding permission, property tax, water and drainage connections, fire and structural NOCs.
Ministry of Environment, Forest and Climate Change / SEIAA (MoEFCC)Environmental clearance for large built-up projects and any CRZ component.
National Company Law Tribunal (NCLT)Insolvency of promoters, where allottees are financial creditors.
Competition Commission of India (CCI)Abuse of dominance in one-sided builder-buyer agreements; combinations in land and asset deals.

Key statutes

StatuteYearWhy it matters
Real Estate (Regulation and Development) Act2016No advertisement, marketing, booking or sale of a unit in a registrable project before registration (section 3); 70% of realisations must sit in a separate account (section 4(2)(l)(D)); allottees get interest and refund rights for delay (section 18).
Transfer of Property Act1882Governs sale, mortgage, lease, exchange and gift of immovable property; sections 53A (part performance) and 54 (sale of tangible immovable property of Rs 100 and upwards only by registered instrument) decide whether an agreement gives any right at all.
Registration Act1908Section 17 lists compulsorily registrable instruments; section 49 makes an unregistered one inadmissible to affect immovable property. An unregistered agreement to sell is the single most common defect found in title diligence.
Indian Stamp Act1899Stamp duty is a state subject with heavy state amendments; an under-stamped instrument is impounded under section 33 and inadmissible under section 35 until duty and penalty are paid. — verify: Rates, article numbers and the impounding procedure are set by state amendments and state Stamp Acts. Check the state schedule, not the central Act.
Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act2013Compensation multiplier, social impact assessment, consent requirements for PPP and private acquisition, and section 24 lapse of old proceedings.
Insolvency and Bankruptcy Code2016Allottees are financial creditors, so a stalled project can be pulled into CIRP; section 7 applications by allottees need at least 100 allottees or 10% of the total, whichever is less.
Consumer Protection Act2019Runs parallel to RERA — an allottee may choose the consumer commissions, and the Supreme Court has held RERA does not oust that remedy.
Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act1996Registration of the establishment, welfare board registration of workers, and the 1% cess under the companion BOCW Welfare Cess Act, 1996 on the cost of construction.
Prohibition of Benami Property Transactions Act1988As amended in 2016, confiscation and prosecution for property held in another's name — the risk in the cash-and-nominee land aggregation that still precedes many projects.
Environment (Protection) Act1986Environmental clearance for large built-up projects flows from the EIA Notification, 2006 made under this Act; conditions carry six-monthly compliance reporting. — verify: The threshold and the process for building and construction projects have been repeatedly re-notified and litigated. Confirm the notification in force and the SEIAA position in your state.

Compliance obligations

ObligationFormWhenIf missedAuthority
Register the project with RERA before any marketingForm A (application) / Form C (certificate)On the trigger event. Before advertising, marketing, booking, selling or offering for sale any plot, apartment or building in a registrable project.Penalty up to 10% of the estimated project cost under section 59, and up to three years' imprisonment or a further 10% on continued default.RERA, 2016 sections 3 and 59
Quarterly project progress update on the RERA portal (verify: The window after quarter end is set by state rules and is commonly 7 to 15 days. The date modelled here is indicative only — confirm your state's rule and the form number.)Quarterly Progress Report (QPR) / Form 5-series, state-specificQuarterly. Update the project page with construction status, approvals, bookings and inventory after the end of every quarter.Penalty up to 5% of project cost under section 61; several authorities suspend the project page, which stops sales.RERA, 2016 section 11(1) read with state RERA Rules
Chartered accountant's certificate on use of the 70% designated account (verify: The statutory rule is 'within six months of the end of the financial year'. The form number and any extension are state-specific; several authorities have extended the date in individual years.)Form 5 (Maharashtra) / state equivalentAnnual. Get the project accounts audited within six months of the end of every financial year and certify that withdrawals were in proportion to the percentage of completion.Penalty under section 61 and, in practice, a bar on further withdrawals from the designated account.RERA, 2016 proviso to section 4(2)(l)(D)
Apply to extend the project registration before it expires (verify: Most state rules require the application a stated period before expiry (commonly three months). Check the state rule.)Form EOn the trigger event. Apply before the registered completion date, on the grounds permitted by the state rules (force majeure and, in most states, a limited discretionary extension of one year).A lapsed registration means the project cannot lawfully be marketed or sold and the Authority may take over under section 8.RERA, 2016 sections 6, 7 and 8
TDS on purchase of immovable propertyForm 26QB (challan-cum-statement); Form 16B to the sellerOn the trigger event. Deduct 1% where consideration or stamp duty value is Rs 50 lakh or more, and deposit within 30 days from the end of the month in which the deduction was made.Interest under section 201(1A), late-filing fee of Rs 200 per day under section 234E, and the buyer is treated as an assessee in default.Income-tax Act, 1961 section 194-IA; Rule 30(2A)
Present the executed instrument for registrationRegistration under section 17On the trigger event. Within four months of execution; a further four months is condonable by the Registrar on payment of a fine up to ten times the registration fee.Beyond the condonable window the document cannot be registered at all, and an unregistered instrument does not affect immovable property under section 49.Registration Act, 1908 sections 23, 25 and 34
Building and other construction workers welfare cess (verify: Collection mechanics differ by state — some deduct at plan approval, some assess on completion. Confirm the state's cess rules and the assessing authority.)Cess return under the Cess Rules, 1998On the trigger event. 1% of the cost of construction, collected at source by the local authority approving the plan or paid on assessment.Interest and penalty under the Cess Act; local authorities routinely withhold the occupancy certificate until cess is cleared.Building and Other Construction Workers' Welfare Cess Act, 1996
Register the construction establishment and the workers (verify: Threshold, form numbers and the filing window are set by state BOCW Rules.)Form 1 (establishment) / Form 27-28 (worker registration), state rulesOn the trigger event. Register the establishment with the registering officer within the period prescribed by the state rules after commencement of construction employing 10 or more workers.Prosecution under section 47; and unregistered workers cannot draw welfare board benefits, which surfaces after an accident.BOCW Act, 1996 sections 7 and 12
Provident fund and ESI contributions for site staff and contract labourECR (EPFO); ESI contribution challanMonthly. Deposit by the 15th of the month following the wage month.Damages up to 100% of arrears under section 14B and interest under section 7Q of the EPF Act; the principal employer is liable for the contractor's default.EPF & MP Act, 1952; ESI Act, 1948
Municipal property tax on unsold inventory and completed stock (verify: Every corporation sets its own dates, instalments and rebate windows. The date here is a placeholder — replace it with the corporation's calendar.)Annual. As fixed by the municipal corporation, commonly half-yearly or annual with an early-payment rebate.Interest and penalty; in several states, attachment and auction of the property for arrears.State municipal legislation
Fire safety NOC / renewal for the completed building (verify: Validity period and renewal date are state-specific; some states issue for one year, others for three.)Annual. Renew the fire safety certificate under the state fire services legislation before expiry.Prosecution, sealing of the premises, and — the commercially serious one — a defence of contributory negligence collapsing after a fire.State Fire Prevention and Life Safety Measures Acts
GST returns on construction receipts (verify: Quarterly (QRMP) filers and taxpayers in certain states have staggered 22nd/24th dates for GSTR-3B. Confirm the client's filing frequency.)GSTR-1 and GSTR-3BMonthly. GSTR-1 by the 11th and GSTR-3B by the 20th of the following month for monthly filers.Late fee and interest; blocking of e-way bills and of the recipient's input tax credit.CGST Act, 2017 sections 37 and 39
Obtain and hand over the occupancy / completion certificateOC / CC from the local authorityOn the trigger event. Before offering possession; RERA requires possession to be offered with the OC and the promoter to form the association and convey title.Possession without an OC is a deficiency in service and does not stop the running of delay interest under section 18.RERA, 2016 sections 11(4), 17 and 19(10)
Annual filings for the promoter companyAOC-4 and MGT-7 / MGT-7AOn the trigger event. AOC-4 within 30 days of the AGM; MGT-7 within 60 days of the AGM.Additional fee of Rs 100 per day per form with no cap, and director disqualification on three consecutive defaults under section 164(2).Companies Act, 2013 sections 137 and 92

Where disputes in this sector are heard

DisputeForumNote
Delayed possession — interest or refundRERA Authority / adjudicating officer, then the Real Estate Appellate Tribunal, then the High Court under section 58Section 18 gives the allottee a choice between withdrawing with interest and staying on with delay interest; the choice is the allottee's, not the promoter's.
Deficiency in service and unfair contract termsDistrict, State or National Consumer Disputes Redressal CommissionRuns in parallel to RERA; one-sided clauses have been read down repeatedly.
Specific performance of an agreement to sellCivil court of ordinary original jurisdiction / commercial court where the specified value is metAfter the 2018 amendment to the Specific Relief Act, specific performance is the rule rather than a discretionary remedy.
Title, partition and declaration suitsCivil courtUsually the real fight behind a 'clean title' opinion that turned out not to be.
Construction contract claims and delay analysisArbitration under the Arbitration and Conciliation Act, 1996Extension of time, prolongation cost and liquidated damages; the Section 34 challenge window is three months plus 30 condonable days.
Insolvency of the promoterNCLT, appeal to NCLATAllottees are financial creditors in a class, voting through an authorised representative.
Challenges to planning and municipal actionHigh Court, writ jurisdictionRefusal of OC, demolition notices, and change of land use decisions.
Land acquisition compensation referencesReference court, then High CourtEnhancement claims and, where the old Act applied, section 24 lapse arguments.
Cheque dishonour on instalments and refundsMagistrate's court under section 138 of the Negotiable Instruments Act, 1881Strict timelines: notice within 30 days of the dishonour memo, complaint within one month of the 15-day cure period expiring.
Redevelopment and society disputesCo-operative Court / Registrar of Co-operative Societies, and increasingly RERAChallenges to the developer's appointment, to the general body resolution, and to non-payment of transit rent.

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