Introduction
The real estate law in India is an ever-changing subject, which is an implication of India’s growing economy, increasing urbanization as well as the dynamic legal framework. While currently interning at an Indian law firm I have quickly learned that real estate law is a critical area of practice that one must be able to provide relevant information and advisement about to clients. Thus, the purpose of this article is to discuss the major Indian regulations as concerns real estate legislation, the existing challenges, and newer trends influencing this sector.
Historical Context
Real estate laws in India have developed over the years, the new acts largely controlling the sector. In the past, the legal systems for the management of land and other forms of properties were characterized by regional practices, colonial legislations, as well as changes that have occurred after the independence of some African countries. Some of the laws formulated by the British colonial regime include Transfer of Property Act 1882 and Indian Registration Act 1908 which are still used to regulate property rights to this day.
Key Legislations Governing Real Estate in India
1. Transfer of Property Act, 1882: This act is the basis of property transactions in India and enunciates the legal concepts governing the transfers of an ‘estate’ in property. Questions like sale, mortgage, lease, and gift that relate to the subject are well captured by this type of deed.
2. Indian Registration Act 1908: This empowers the registration of documents that in one way or the other are inclined with immovable property transactions to enhance legal acknowledgment and avoid chances of con jobs.
3. Land Acquisition Act 2013: This the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 that was enacted to ensure that land owners are paid fair compensation for the land acquired as well as ensure that the process of land acquisition is done in a transparent manner.
4. Real Estate (Regulation and Development) Act, 2016 (RERA): To address certain issues related with the real estate, RERA is a path breaking legislation that seek to establish the standards of practicing bonafede and to protect the consumer’s interest in this business. It requires the need to have a register of real estate projects and of individuals acting as agents, promulgates the setting of state levels of authorities and entails the provisions of rights and responsibilities of the buyer and the developer.
5. Benami Transactions (Prohibition) Act, 1988: It is an act which prohibits benami transactions i.e. transactions which are entered into where the property is transferred with the intention that it shall be benefited by one person but it is transferred to the name of another person and financed by another person to check black money and bring transparency in transaction of properties.
6. Stamp Duty and Registration Fees: Stamp duties required on property and registration of the property are also different in every state. These charges are compulsory to have legal backing to your property documents.
Key Challenges in Real Estate Law
1. Complexity of Land Records: The records related to land holding have not only been uncoordinated but also are very archaic and therefore cause a lot of problems when people go for transactions. Such problems relate to inefficiencies in the current system for managing land records, which are currently being tackled through the digitization and modernization of records.
2. Regulatory Hurdles: Government authorities have made it a factor that any real estate project goes through a procession of approvals and clearances hence costing some time and more money. The other area that has direct impact on project efficiency is the approval process so that there is integration of these agencies.
3. Land Acquisition Issues: This is mainly due to the following reasons: The acquisition of land for large-scale projects invokes major legal issues with the land owners and communities hence there delayed project. One of the major issues is the conflict of interest between the developmental requirements of the employees and their proper remuneration and rehabilitation.
4. Title Disputes: Dispute of property is another factor that goes hand in hand with lack of clear property deeds. Risk management involves undertaking proper searches because it is crucial to do an efficient due diligence, search for the title of the property before investing in real estate, and get the verification of the title from an independent legal advisor.
5. Regulatory Compliance: Since the construction projects have to follow several state norms, Environmental clearance and building byelaws, there is a lot of planning and compliance work involved with the developers.
Recent Developments in Real Estate Law
1. Digitization of Land Records: To improve land registration and reduce failure the government has started many programs to digitize record and increase transparency. The Digital India Land Records Modernization Programme (DILRMP) that is in the making shall pull off the creation of a modern and updated database of the land records.
2. Implementation of RERA: Since the formation of RERA, there have been emerging new states’ authorities in the real estate sector that have enhanced timely completion strategies of projects that have been developed for buyers. The act requires registration of projects, publication of the details of the project, and conformity to laid down time lines.
3. Affordable Housing Initiatives: Some of the schemes include: The government has come up with different programs that may help those persons who want to build houses that are cheap and affordable, for instance; Pradhan Mantri Awas Yojana (PMAY). These prospects market aimed at delivering homes for all and the augmentation of real estate business.
4. Amendments to Benami Transactions Act: New changes in the Benami Transactions Act has whipped up various strong provisions against benami transactions and enhanced penalties along with the right of the jurisdictions to seize the benami properties.
5. Insolvency and Bankruptcy Code (IBC): Through the IBC, the real estate projects have been classified thereby extending a solution for insolvency problems in the sector. The homebuyers are accepted as new category of financial creditors where they are now allowed to file insolvency cases against defaulting promoters/developers.
Role of Legal Professionals in Real Estate Transactions
1. Due Diligence: It is vital to be extremely wary on this and this is why legal research is vital in the business of real estate. It’s lame to note that legal persons or legal practitioners exercise unique functions in acknowledging property rights, analyzing records relating to land or property, and discovering legal issues.
2. Drafting and Reviewing Agreements: Legal practitioners prepare and peruse sale deeds agreements, lease agreements, joint venture agreements and construction contracts among others with a view of making them legal and resource for the clients.
3. Regulatory Compliance: It involves skills in interpreting and meeting the state legal requirement, construction codes, environmental laws and tax laws amongst others.
4. Dispute Resolution: The legal professionals help in resolving the commercial lawsuit arising out of sale of property, title disputes, acquisition and construction contracts through negotiations, mediations, arbitrations or through courts.
5. Advisory Services: Being some of the main consultants to developers, investors, and buyers, lawyers offer clues on wide and diverse legal elements of the policy, finance, and more so legal structures for development and buying.
Conclusion
The development of real estate law In India is vast and involves many branches of law, for legal practitioners to be able to work in this sector, one has to be conversant with the legal issues facing the country and recent reforms. The knowledge of primary legislations, issues, and the present trends in the field of real estate law are crucial to performing an intern’s responsibilities at an Indian law firm and being able to support clients with accurate legal advice and information. From conducting research and being acquainted with the legal requirements and doing legal work and managing contentious duties, legal workers are therefore instrumental in the proper process of the sale of such property in the real estate market.
The assessment of the government continuous endeavours toward digitizing land records, the process of formulating and enforcing RERA, providing boost to affordable housing are some of the steps toward bringing about definite enhancements in the real estate sector. Though, solving the problem of land acquisition, the issue of titles and permits, as well as the need to deal with bureaucracies ones again involve the active participation of the government, attorneys, and organizations in the sphere of real estate. Thus, the legal professionals should be concerned and responsive towards real estate possibly become significant factors that will constructive to the development of real estate in India.
By-Raj Kumar(Intern)
O.P JINDAL GLOBAL UNIVERSITY