Standard Real Estate Laws & Regulations In India

Posted on: 2022-09-19
Standard  Real Estate Laws & Regulations In India Standard Real Estate Laws & Regulations In India

Real estate in India is governed by a combination of the federal government (Central) and the state government's law. This is because, according to Article 246 of the Constitution of India, the regulation of "Land" falls under the State List (List-II) of subjects that only states can legislate upon.

However, matters like the transfer of property for agricultural land, documents, registration of deeds, and contracts (except for agricultural lands) are covered under the Concurrent List (List-III), which means both the central and state legislatures can make laws related to these subjects.

Over the years, the top judiciary in India has made important decisions regarding real estate laws. These decisions are known as judicial precedents and guide the interpretation of the relevant laws.

Here are some of the main laws that govern real estate in India:

1. Transfer of Property Act, 1882

The Transfer of Property Act 1882 is a significant legislation in India that governs the transfer of property rights. Enacted during British colonial rule, the Act remains an essential framework for property transactions in the country.

The Act outlines various provisions and procedures related to property transfer, including sale, lease, mortgage, gift, and exchange. It defines the rights and obligations of both the transferor and the transferee, ensuring transparency and legal protection for all parties involved.

Under the Act, certain conditions, such as free consent, lawful consideration, and proper documentation, must be met for a valid property transfer. It also covers matters related to immovable and movable property transfer, providing guidelines for their respective procedures.

2. Indian Easement Act, 1882

The Indian Easement Act of 1882 is a vital legislation in India that deals with the legal concept of easements. An easement is a right enjoyed by one person over the immovable property of another person, which enables the former to use the property in a particular manner or to restrict the latter's use of their property.

The Act provides a comprehensive framework for creating, acquiring, and terminating easements. It defines the various types of easements, such as rights of way, rights of light, rights of air, and rights of water, among others. It also specifies how an easement can be legally acquired or extinguished.

3. Registration Act, 1908 and Indian Stamp Act, 1899

The Registration Act 1908 and the Indian Stamp Act 1899 are important legislations governing property transactions and stamp duty payment in India. The Registration Act mandates the registration of documents like sale deeds, leases, mortgages, and gift deeds to establish their legal validity and evidentiary value.

The Act specifies the documents requiring stamping, applicable rates, and consequences of non-compliance. These acts work together to facilitate transparent and lawful property transactions in India, ensuring proper documentation, tax compliance, and legal protection for all parties involved.

4. Indian Contract Act, 1872

The Indian Contract Act governs laws related to contracts in India, including the capacity to enter into a contract, execution and implementation thereof, breach, and the remedies available to the parties involved.

5. Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013

The Act regulates how the government or a company can acquire private lands for specific public purposes. It also outlines the compensation or rehabilitation measures that the government must undertake in such cases.

6. Land Revenue Codes

States in India have their land revenue codes that govern laws related to agricultural land, land revenue, types of tenancy, and associated matters. These codes cover the division and classification of immovable property, restrictions on property transfer, the authority and responsibilities of revenue officers, and the rules, regulations, and penalties for violating these codes. These state-specific land revenue codes aim to ensure effective land resource management, protect landowners and tenants' rights, and maintain order in the land administration systems of each state.

6. Foreign Exchange Management Act, 1999 (FEMA) and Foreign Direct Investment Policy (FDI Policy)

The purchase or sale of immovable property in India by foreign entities and non-resident individuals is regulated by the Foreign Exchange Management Act (FEMA) and its associated regulations. The consolidated Foreign Direct Investment (FDI) Policy outlines the rules regarding foreign investment in the real estate sector in India, including compliance requirements and procedures for investors' exit.

The Department of Industrial Policy and Promotion (DIPP) and the Reserve Bank of India (RBI) oversee and regulate foreign investment in coordination with the relevant ministries of the Government of India. These measures ensure that foreign investment in Indian real estate adheres to specified guidelines and maintains compliance with applicable regulations.

Before purchasing a home, review the following documents:
  • Although not needed by law, the buyer's alertness is critical to becoming a legitimate customer. Due diligence is essential when purchasing a house. Here is a detailed guide on buying flats in India.
  • Certificate of Completion/Occupancy: When a project is completed, local authorities give a Certificate of Completion (CC). This document is required for applying for water and power connections, as well as bank loans.
  • Once a project is completed and deemed suitable for habitation, a local government agency will issue an occupancy certificate (OC), indicating that it was built in accordance with the necessary regulations. This document is required for applying for water and power connections, as well as bank loans.
  • A building or site plan is a project layout that indicates how the living quarters and utilities will be laid out. The buyer must do due diligence to ensure that the idea has received complete permission from the local municipal administration.
  • Encumbrance Certificate: An encumbrance certificate may be obtained from the sub-office registrar where the property is registered. It says that there are no outstanding obligations, both financial and legal, on the property. It is important to verify that the seller is the legal owner of the property, and they have your authorisation to sell the property to you, and that the property has no outstanding debts (such as property or other taxes, energy or water bills).

Even though it is not legally required, a no objection certificate issued by society may be acquired.


Buying real estate and registering it with the proper authorities might seem to be a difficult undertaking. You'll realise that, despite its complexity, Indian real estate law is doable if you have a basic grasp of the process. When buying properties and homes, it is always advised to take professional and expert guidance and suggestions.