India: Real Estate 2016

Last Updated: 13 October 2016
Article by Shailesh Vaidya and Kunal Vaidya

1 Real Estate Law

1.1 Please briefly describe the main laws that govern real estate in your jurisdiction.  Laws relating to leases of business premises should be listed in response to question 10.1.  Those relating to zoning and environmental should be listed in response to question 11.1.

India is a quasi-federal state and all legislative, administrative and executive powers are divided between the government at the centre and each state government, respectively.  The main central laws that govern real estate in India are as follows:

(a) The Indian Contract Act, 1872 [Act No. IX of 1872]: The Indian Contract Act, 1882 inter alia specifies the laws governing contracts between parties.

(b) Transfer of Property Act, 1882 [Act No. IV of 1882]: The Transfer of Property Act, 1882 inter alia specifies the laws governing the sale, lease, mortgage, etc. of immovable property, by act of parties.

(c) The Indian Succession Act, 1925 [Act No. XXXIX of 1925]: The Indian Succession Act, 1925 specifies the laws relating to testamentary succession to the assets of individuals.  Intestate succession in India depends upon the religion of the deceased.  The Hindu Succession Act, 1925 [Act No. 30 of Year 1956], has codified the laws relating to intestate succession amongst Hindus.  Mohamedan law on this subject, however, is un-codified.

(d) The Registration Act, 1908 [Act No. XVI of 1908]: The Registration Act, 1908 specifies the laws relating to registration of non-testamentary documents purporting to create, declare, assign, limit or extinguish any right title or interest in immovable property, with the relevant authorities.

The aforesaid are the main central laws relating to real estate in India.  In addition to the above, the legislature of every state in India enacts separate laws which operate only in such state and are to be read with and in addition to the basic central laws specified above.  For instance, in the State of Maharashtra, the additional laws that govern real estate are as follows:

(i) The Maharashtra Ownership of Flats (Regulation of the Promotion, Construction, Sale, Management and Transfer) Act, 1963 [Maharashtra Act No. XLV of 1963] ("MOFA Act"):  The MOFA Act governs the construction, sale and transfer of flats in buildings constructed by real estate developers.  It has been made to protect flat purchasers from the malpractices committed by the real estate developers. The MOFA Act is to be read along with the The Maharashtra Co-operative Societies Act, 1960 [Maharashtra Act No. XXIV of 1961] which inter alia sets out the laws pertaining to the formation and management of co-operative housing societies formed by occupants of ownership premises in buildings.

(ii) The Maharashtra Rent Control Act, 1999 [Maharashtra Act No. XVIII OF 2000]: The Maharashtra Rent Control Act, 1999 inter alia relates to control of rent in respect of tenanted premises. The Act also deals with the process for eviction of tenants and diverse matters connected with tenancy rights.

(iii) The Maharashtra Stamp Act, 1958 [Maharashtra Act No. LX of 1958]: The Maharashtra Stamp Act, 1958 inter alia specifies the laws relating to stamping of instruments relating to the transfer of immovable property.  The said Act also specifies the rates of stamp duty payable on such documents.

1.2 What is the impact (if any) on real estate of local common law in your jurisdiction?

As is evident from our response to question 1.1 above, most of the Acts pertaining to real estate in India are old and outdated.  Although the legislature does amend the said Acts from time to time, the same is not sufficient to keep up with new challenges plaguing the real estate sector.  Therefore, common law also plays an important role in regulating the real estate sector in India.

Though most real estate laws are codified there are some aspects which are still governed by common law.  It is common practice in India for courts to rely on precedents when the codified law is not clear and conclusive on a subject.  This is the case for all sectors, including real estate.  

1.3 Are international laws relevant to real estate in your jurisdiction?  Please ignore EU legislation enacted locally in EU countries.

There are no international laws that specifically apply to real estate in India.

Download >> Indian - Real Estate 2016

Originally published in ICLG

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