Chanderprabhu Jain College of Higher Studies

&
School of Law
An ISO 9001:2015 Certified Quality Institute
(Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi & Approved by Bar Council of India & AICTE)

E-Notes

Class : B.A.LL.B & BBA LL.B VII SEM

Paper Code : LL.B 505

Subject : Land and Real Estate Laws

Faculty Name : Ms. Anjali Gaur

Unit –III
Unit-III: Real Estate Development and Apartment ownership
Real Estate (Development and Regulation) Bill, 2013
The Real Estate (Development and Regulation) Bill, 2013 (commonly referred to as the
RERA Bill) was introduced to regulate the real estate sector in India, with a focus on
promoting transparency, accountability, and efficiency in real estate transactions. The Bill
was eventually passed as the Real Estate (Regulation and Development) Act, 2016 (RERA).

Objective of the Bill:

The primary aim of the Bill was to:

 Protect homebuyers and ensure timely delivery of projects.

 Bring accountability to real estate developers.
 Standardize practices and ensure transparency in real estate transactions.
Regulate the real estate sector by establishing an authority (Real Estate Regulatory Authority,
or RERA) to monitor transactions and resolve disputes.

Key Provisions of the Bill

1. Establishment of Regulatory Authority (RERA)

The Bill mandates the establishment of Real Estate Regulatory Authorities (RERAs) at both
the state and union territory levels to regulate the real estate sector.

The Authority is responsible for the registration of real estate projects and agents, maintaining
a database of registered projects, and resolving disputes between buyers and developers.
2. Registration of Real Estate Projects

Developers must register their projects with the respective RERA before advertising,
marketing, or selling.

Only projects with a land area exceeding 500 square meters or more than 8 apartments are
required to be registered.

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An ISO 9001:2015 Certified Quality Institute
(Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi & Approved by Bar Council of India & AICTE)

Developers must provide detailed information regarding the project, such as:
Layout plans.
Number of floors.
Carpet area.
Status of approvals and timelines.
3. Escrow Mechanism

The Bill mandates that 70% of the funds collected from buyers for a particular project must
be deposited into an escrow account. This money is to be used only for the construction of
that specific project and cannot be diverted elsewhere.

This provision ensures that developers do not misappropriate funds for other projects,
protecting buyers' interests.
4. Rights and Duties of Allottees
Homebuyers have the right to:

 Obtain clear and accurate information regarding the project's progress.

 Seek a refund of their investment if the developer fails to complete the project on
time.
 File complaints with the Regulatory Authority for delays, fraud, or other grievances.

5. Penalties and Compensation

The Bill provides for heavy penalties for developers who delay projects or provide false
information. Buyers are entitled to compensation in cases of delays, with interest rates set by
the respective RERA.
6. Fast Track Dispute Resolution

The Bill establishes Real Estate Appellate Tribunals to deal with disputes between buyers,
developers, and agents. These tribunals are required to resolve complaints within 60 days.
7. Liability for Structural Defects

Developers are held accountable for any structural defects or poor quality in the construction
of a project for up to five years after possession is handed over to buyers. Any such defects
must be rectified by the developer at no extra cost to the buyer.

Case Laws Related to the Real Estate (Development and Regulation) Bill, 2013
1. Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India (2017)

Facts: The constitutional validity of certain provisions of the RERA Act, 2016, was
challenged by real estate developers. They argued that some provisions, particularly those
related to ongoing projects, were retrospective and violated their rights.

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 Chanderprabhu Jain College of Higher Studies
&
School of Law
An ISO 9001:2015 Certified Quality Institute
(Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi & Approved by Bar Council of India & AICTE)

Judgment: The Bombay High Court upheld the constitutional validity of the Act and ruled
that the Act is prospective in nature and would apply to ongoing projects only to the extent
that future actions related to those projects were concerned. The court emphasized that the
legislation was necessary to protect consumer rights and promote transparency in real estate
transactions.

Significance: This case reinforced the consumer-centric nature of RERA, emphasizing that
the Act was introduced to bring transparency, accountability, and protect the interests of
homebuyers.

2. Imperial Structures Ltd. v. A.N. Gupta &Ors. (2019)

Facts: The homebuyers filed a complaint against the developer for delay in handing over
possession and sought refund of the amount paid.

Judgment: The RERA Authority directed the developer to refund the money along with
interest, as the project was delayed beyond the promised timeline.

Significance: The case highlighted the ability of RERA authorities to take swift action and
ensure justice for buyers, especially in cases of project delays.

3. DLF Home Developers Ltd. v. Capital Greens Flat Buyers Association (2020)

Facts: A group of homebuyers in the Capital Greens project sought compensation from DLF
Home Developers for delayed possession and non-adherence to the promised layout plans.

Judgment: The Real Estate Appellate Tribunal ruled in favor of the buyers, holding that the
developer was liable for compensation for delays. The tribunal also directed the developer to
rectify deviations from the approved plans.

Significance: This case reinforced that RERA is committed to protecting buyers against
misrepresentation and deviations in project plans by developers.

4. Kumar Urban Development Pvt. Ltd. v. RERA Authority (2020)

Facts: In this case, the developer had delayed the completion of a project. The buyers
approached the RERA authority for a refund and compensation.

Judgment: The Maharashtra RERA ruled in favor of the buyers and imposed a hefty penalty
on the developer for causing unreasonable delays in project completion.

Significance: This case shows how RERA not only ensures project completion but also holds
developers accountable through monetary penalties.

Key Implications of the Bill (RERA Act, 2016)

Consumer Protection: The Bill puts consumers at the forefront by providing legal recourse
to homebuyers and ensuring that developers are accountable for timely delivery and
transparency in real estate transactions.

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 Chanderprabhu Jain College of Higher Studies
&
School of Law
An ISO 9001:2015 Certified Quality Institute
(Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi & Approved by Bar Council of India & AICTE)

Accountability for Developers:

The requirement for developers to register projects, maintain an escrow account, and provide
regular updates creates a system of accountability that previously did not exist in the real
estate sector.

Project Transparency:
RERA brings transparency by requiring developers to publish project details, such as
approvals, project timelines, and layout plans, on the RERA website, allowing buyers to make
informed decisions.

Timely Resolution of Disputes:

With the establishment of Real Estate Appellate Tribunals, disputes between developers and
buyers are resolved in a time-bound manner (within 60 days), providing relief to buyers who
have often been left in limbo in the past.

Reduced Fraud:
By mandating project registration and penalties for false advertising, the Bill has significantly
reduced fraudulent practices in the real estate market, thereby instilling confidence in
homebuyers.

Conclusion
The Real Estate (Development and Regulation) Bill, 2013, and its transformation into the
RERA Act, 2016, is a landmark piece of legislation that has transformed the real estate sector
in India. By ensuring transparency, accountability, and protection of consumers' interests, the
law has helped bridge the gap between buyers and developers, ensuring fair and timely
completion of projects. The case laws discussed above further demonstrate the practical
implications of the law and its effectiveness in protecting homebuyers' rights.
For law students, understanding the nuances of this legislation is crucial, especially given its
wide-reaching impact on property law, consumer protection, and regulatory oversight in the
real estate sector.

UNIT III (B)

Delhi Apartment Ownership Act, 2009
The Delhi Apartment Ownership Act, 2009 was enacted to provide a legal framework for the
ownership of apartments in multi-storey buildings in Delhi, ensuring the protection of
apartment owners' rights. The Act aims to regulate the relationships between apartment
owners, promote transparency in apartment-related transactions, and ensure fair management
of common areas in apartment complexes.

Objective of the Act

The primary objectives of the Delhi Apartment Ownership Act, 2009 are:

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 Chanderprabhu Jain College of Higher Studies
&
School of Law
An ISO 9001:2015 Certified Quality Institute
(Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi & Approved by Bar Council of India & AICTE)

 To enable individual apartment owners to have clear legal ownership of their

apartments, while also defining their rights and obligations concerning the common
areas.
 To facilitate the smooth management and governance of apartment buildings by
creating associations of apartment owners.
 To ensure that apartment owners have undivided interest in common areas and
amenities, with specific provisions for the management of such areas.
 To provide a framework for the registration of apartment ownership, ensuring legal
clarity on the rights and liabilities of owners.

Key Provisions of the Act

1. Definition of Key Terms
The Act defines several important terms for clarity:

 Apartment: A part of a property intended for any type of independent use, including
residential or commercial purposes.
 Common Areas and Facilities: These include the land on which the building stands,
the foundations, corridors, lobbies, elevators, and amenities like parks, gardens, etc.
 Apartment Owner: A person who has acquired ownership of an apartment, including
the undivided interest in common areas.
 Association of Apartment Owners: A group of apartment owners organized to manage
and maintain the common areas and facilities.

2. Ownership of Apartments
Each apartment, along with an undivided interest in the common areas and facilities, is
treated as an independent unit that can be bought, sold, and inherited. This provides clarity on
ownership and helps to prevent disputes regarding apartment transactions.

3. Undivided Interest in Common Areas

Each apartment owner automatically has an undivided interest in the common areas. This
interest cannot be sold separately from the apartment, ensuring that ownership of the
apartment and the common areas remains unified.

4. Declaration of Apartment Ownership

Developers or builders must file a declaration with the competent authority, stating the
ownership details of each apartment and the proportionate interest of each apartment owner in
the common areas.

The declaration also includes a description of the building, its amenities, and the bylaws for
the management of the property.

5. Transfer of Apartments
The Act provides for the free transferability of apartments. However, the undivided interest in
the common areas is automatically transferred along with the apartment itself.
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An ISO 9001:2015 Certified Quality Institute
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6. Formation of Apartment Owners’ Association

Apartment owners must form an Association of Apartment Owners to manage and maintain
common areas and facilities.

The association is responsible for creating and enforcing bylaws, conducting regular
meetings, and ensuring the smooth operation and maintenance of the property.
7. Liability for Common Expenses

All apartment owners are required to contribute to the common expenses for the maintenance
and upkeep of common areas and facilities. This amount is usually proportional to the size of
the apartment.
8. Bylaws for Apartment Management

The Act prescribes that each apartment owners' association must adopt bylaws to govern their
activities. These bylaws cover the election of office bearers, the powers and duties of the
association, the allocation of expenses, and the management of common areas.
9. Dispute Resolution

In case of disputes between apartment owners or between the owners and the association, the
Act provides mechanisms for the resolution of disputes through the courts.

Relevant Case Laws

1. Sudha Mishra v. Jai Krishna & Ors. (2013)

Facts: In this case, the apartment owner had disputes regarding the contribution to common
expenses for the maintenance of common areas and services in an apartment building.

Judgment: The Delhi High Court ruled that all apartment owners must contribute
proportionally to the maintenance costs of the common areas, as per the Delhi Apartment
Ownership Act, 2009. The court upheld that owners cannot be exempted from their duty to
pay common charges simply because they are not using certain facilities.

Significance: This case reinforces the importance of the proportionate contribution of

apartment owners towards the maintenance of common areas and facilities.
2. Nand Kishore Gupta v. Saraswati Devi (2015)

Facts: The dispute arose over the ownership of common areas between the builder and the
apartment owners after the apartments had been sold.

Judgment: The Delhi High Court held that once the ownership of an apartment is transferred
to a buyer, the undivided interest in the common areas also transfers, and the builder cannot
retain ownership of the common areas. This was in line with the provisions of the Delhi
Apartment Ownership Act.

Significance: The ruling emphasizes that builders cannot retain control over common areas
after selling apartments and must transfer such rights to the apartment owners.

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 Chanderprabhu Jain College of Higher Studies
&
School of Law
An ISO 9001:2015 Certified Quality Institute
(Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi & Approved by Bar Council of India & AICTE)

3. Ajay Verma & Ors. v. Association of Apartment Owners (2016)

Facts: The case dealt with the rights of apartment owners to form an association to manage
the common areas, despite opposition from some members of the complex.

Judgment: The Delhi High Court upheld the right of apartment owners to form an Association
of Apartment Owners under the provisions of the Delhi Apartment Ownership Act, 2009,
even if some members oppose it.

Significance: This case affirmed the legal right of apartment owners to form associations for
managing their properties and highlighted the collective nature of apartment ownership.
4. Gulshan Kumar v. Association of Apartment Owners (2017)

Facts: In this case, an apartment owner challenged the bylaws created by the apartment
owners’ association, particularly regarding the allocation of common expenses.

Judgment: The Delhi High Court ruled that the bylaws of the association, once adopted by a
majority of apartment owners, are binding on all owners, including those who did not
participate in the decision-making process.

Significance: This judgment reinforces the binding nature of association bylaws and the
importance of active participation in decision-making processes by all apartment owners.
5. M/s Vikas Builders Pvt. Ltd. v. Rakesh Kumar (2019)

Facts: This case involved a dispute over the handover of common areas from the builder to
the association after the completion of the apartment project.
Judgment: The court ruled that the builder must transfer the common areas and facilities to
the association of apartment owners once the project is completed, in accordance with the
Delhi Apartment Ownership Act, 2009.

Significance: This case further established the obligation of builders to transfer control over
common areas to apartment owners’ associations and clarified the process for such transfers.

Key Implications of the Act

1. Clarity of Ownership

The Act provides clarity regarding the ownership of both the individual apartments and the
common areas of a building, reducing disputes between owners, builders, and authorities. The
concept of undivided interest in common areas ensures that all owners have shared rights to
common facilities.
2. Protection of Apartment Buyers

The Act offers significant protection to apartment buyers by ensuring transparency in

transactions, requiring builders to register ownership, and mandating the transfer of common
areas to the apartment owners' association.

Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040

Ph: 011-35044787 Website: www.cpj.edu.in. E-mail: [email protected]
 Chanderprabhu Jain College of Higher Studies
&
School of Law
An ISO 9001:2015 Certified Quality Institute
(Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi & Approved by Bar Council of India & AICTE)

3. Collective Management

By encouraging the formation of apartment owners' associations, the Act provides a

structured system for the management and maintenance of common areas and services,
ensuring that all owners contribute equally and benefit from the shared resources.
4. Dispute Resolution Mechanism
The Act establishes clear guidelines for the resolution of disputes, including those related to
common expenses, association bylaws, and maintenance of common areas, thereby reducing
the likelihood of prolonged conflicts between apartment owners.

Conclusion
The Delhi Apartment Ownership Act, 2009 is a significant piece of legislation that governs
the ownership and management of apartments and common areas in Delhi. It provides a legal
framework for apartment owners, ensuring transparency in transactions, protecting their
rights, and establishing a system for managing shared facilities. Through the formation of
associations and the regulation of common expenses, the Act addresses many of the concerns
that arise in multi-storey residential and commercial complexes. The case laws discussed
further illustrate the practical application of the Act in resolving disputes and clarifying
ownership rights, making it essential for law students to understand the Act's provisions and
judicial interpretations.

Sd/-
Ms. Anjali Gaur

Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040

Ph: 011-35044787 Website: www.cpj.edu.in. E-mail: [email protected]