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In a developing and dynamic economy such as India, real estate has emerged as an important sector for both investment and development. Given its role in the overall economic growth of the country, a robust legal framework is necessary to govern it. The expert team at SimranLaw, a leading law firm based in Chandigarh, India, delves into the crucial legal provisions related to the real estate sector in India.
1. Real Estate Regulation and Development Act (RERA), 2016
Arguably the most significant legal provision affecting real estate in India, RERA primarily seeks to protect the interests of homebuyers and enhance transparency in the sector. The Act mandates the registration of all ongoing and upcoming projects exceeding a certain size with a state-level RERA Authority.
A landmark case that testifies to this law’s effectiveness is ‘Manju Gita Mishra Vs. Harsha Associates Pvt.’ (2017). Here, the Maharashtra RERA Authority ordered the developer to refund the amount paid by the homebuyer with interest, for failure to complete the project within the stipulated time. The judgment significantly established the RERA’s goal of consumer protection.
2. Registration under the Registration Act,1908
This Act mandates that all transactions involving the sale of immovable property worth more than INR 100 must be registered. The purpose of registration is to record and provide proof of titles and facilitate the resolution of disputes, if any.
In the case of ‘Suraj Lamp & Industries Pvt. Ltd. Vs State of Haryana and Anr’ (2012), the Supreme Court held that failure to register a sale agreement might not necessarily render it invalid or unenforceable. However, it certainly is a risky proposition and can lead to complications.
3. Transfer of Property Act, 1882
This Act defines the general principles related to the transfer of tangible and intangible properties. The law pertains to the procedures and conditions under which such transactions can occur.
A crucial case in this regard is ‘Rambhau Namdeo Gajre vs Narayan Bapuji Dhotra’ (2004), where the Supreme Court reiterated that a sale agreement does not ipso facto create any interest in or charge on such property.
4. Indian Contract Act, 1872
This law outlines how contracts are made, executed, and effected in India. It governs the relationship between parties entering into a contractual relationship relating to property.
In ‘Mohori Bibee vs Dharmodas Ghose’ (1903), the Privy Council held that a minor’s contract is void, thereby setting a critical precedent for contracts related to real estate transactions.
5. Stamp Duty Legislations
Stamp duty laws involve payment of a certain percentage of the transaction value to the state government and forms an integral part of property transactions in India.
In the landmark judgment of ‘Hindustan Steel Ltd. Vs State of Orissa’ (1970), the Supreme Court held that when a statute requires payment of stamp duty and registration of an instrument/document, it cannot be deemed valid unless these legal provisions are complied with.
These legal provisions craft a robust framework within which real estate transactions must occur in India. Understanding their complexities and implications necessitates expert legal guidance, such as that offered by the seasoned team at SimranLaw. Compliant transactions not only ensure legal security but also contribute to the orderly growth and development of India’s real estate sector.