
Jurisdiction and Applicability
The Indian Constitution divides legislative powers between the Central (Union) government and the State governments. Real estate is a subject that falls under the Concurrent List, meaning both the Central and State governments have the power to legislate on it.Central real estate laws, such as the Transfer of Property Act, 1882 and the Real Estate (Regulation and Development) Act, 2016 (RERA), apply across India. However, States can also enact their own real estate laws, which may differ from the Central laws. For example, many States have their own RERA regulations to implement the central RERA Act at the local level.
Rent Control Laws
Rent control is a prime example of the differences between Central and State real estate laws. While the Central government has not enacted a comprehensive rent control law, most States have their own Rent Control Acts that govern the landlord-tenant relationship, rent fixation, and eviction procedures. These State-level rent laws can vary significantly in their provisions and impact on the real estate market.
Land Acquisition Laws
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is a Central law that governs land acquisition by the government. However, States can enact their own land acquisition laws, as long as they are not inconsistent with the Central Act. Some States have indeed passed their own land acquisition laws, leading to differences in the compensation, rehabilitation, and resettlement norms across the country.
Registration and Stamp Duty
The Registration Act, 1908 is a Central law that prescribes the requirements for registering various real estate documents. However, the stamp duty payable on these documents is determined by the respective State governments. As a result, the stamp duty rates can vary significantly across States, impacting the overall cost of real estate transactions.
Building Bye-laws and Development Control Regulations
Building construction, layout, and development norms are primarily governed by State and local laws, such as the municipal building bye-laws and development control regulations. These can differ across States and even within a State, depending on the local planning and development authorities.
Customary Laws
In addition to statutory laws, customary laws and practices also play a role in real estate transactions, especially in matters of inheritance and succession. These customary laws can vary based on the religious, ethnic, and regional affiliations of the parties involved, leading to further diversity in real estate practices across India.
In summary, while the Central government has enacted several key real estate laws, the diversity of State-level legislations, customary practices, and local regulations results in a complex and heterogeneous legal landscape for the real estate sector in India. Investors and stakeholders must carefully navigate this multi-layered regulatory framework to ensure compliance and mitigate risks.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions. The content of the above article is based on references, learnings and interpretations. Invest Corners does not guarantee the accuracy of the information provided.
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