The Real Estate Development & Management Act, 2010

 

WHEREAS it is expedient and necessary to make provisions in connection with real estate development and its management;

It is hereby enacted as follows:-

                             CHAPTER ONE: PRELIMINARY

(1) Short Title & Introduction:

 

1. This Act shall be called The Real Estate Development & Management Act, 2010.
2. Under this Act---

a.       Section 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31 and 32 shall be effective immediately;

b.      Except for the clauses referred to in clause (a), the other clauses shall be deemed to have come into effect from 7 December, 2008.

 

(2) Definitions:

 

In this Act, unless there is anything repugnant in the subject or context---

1. Approved Design: Approved design means the design approved by the appropriate authority in accordance with The Bangladesh National Building Code and other rules relating to the building construction and land development.
2. Common Space: Common space means the part of the site or plot not occupied by buildings; the stair cases, lifts, staircase and lift lobbies, fire escapes and common entrances exits of buildings; the common basements, parks, play areas, parking areas and common storage spaces; all other portion of the property necessary or convenient for its maintenance, safety, etc., and in common use.
3. Authority: Authority means the authority declared under section 4 or, as the case may be, the authority mentioned.
4. Buyer: Buyer means any person contracted with the real estate developer for the purpose of purchasing real estate;
5. Urban Development Authority: Urban Development Authority means the Chittagong Development Authority established under the Chittagong Development Authority Ordinance, 1959 (Ordinance No. LI of 1959), the Capital Development Authority established under the Town Improvement Act, 1953 (Act No. XIII of 1953). Khulna Development Authority established under the Khulna Development Authority Ordinance, 1961 (Ordinance No. II of 1961) and the Rajshahi Development Authority established under the Rajshahi Town Development Authority Ordinance, 1976 (Ordinance No. LXXVIII of 1976);
6. Registration Certificate: Registration certificate means the registration certificate issued under section 5.
7. Prescribed: Prescribed means prescribed by rules made under this Act.
8. Plot: Plot means a parcel of land on which one or more residential, industrial or commercial flat or flats may be erected.
9. Floor space: Floor space means the total space of a floor.
10. Person: Person "means companies, associations or groups of individuals, whether statutory or not;
11. Building services: Building Services "means ventilation, electrical connection, air conditioning, heating, internal acoustics control, elevator, garage, escalator and moving walk, water supply, firefighting, sewerage and drainage, gas supply and Insertion of telephone connection and other related facilities;
12. Real estate: Real estate means residential, industrial, commercial or mixed plot or flat or apartment and other land property for the purpose of development and buying and selling.
13. Real estate development & management:  Real estate development & management means the development, regulation, construction and management of residential, industrial, commercial or mixed plot or flat or apartment by the private entrepreneurs or by public-private partnership or by the foreign and including carrying out development of immovable property, engineering or other operations in, on, over or under the land or the making of any material change in any immovable property or land.
14. Real estate project: Real estate project means the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments or any real estate project for development.

15.  Real estate developer: Real estate developer means the person registered under section 5 of this Act for real estate business.

 

(3) Applicability of the law:

 

1.      This Act shall not be applicable in case of the fully government project.

2. The provisions of this Act and the rules hereunder shall be applicable in case where the government or its any organ or any statutory authority develops any project in partnership with any developer.

 

CHAPTER TWO: ESTABLISHMENT OF AUTHORITY, REGISTRATION OF THE REAL ESTATE DEVELOPERS, DUTIES, ETC.

 

(4) Establishment of authority:

 

1. For the purpose of this Act, the government shall, by notification in the official gazette, establish an Authority to exercise the powers conferred on it and to perform the functions assigned to it under this Act; and for such purpose declare by notification in the official gazette any government or Statutory Authority to do all acts as conferred on the Authority within a specified area.

 

2. Without generality of the forgoing provisions, the following Authorities shall be treated as Authority in the respective area as-

a.       Respective development Authority such as RAJUK, CDA, KDA, etc. and in their absence the concerned City Corporation;

b.      Concerned Municipal Authority within its local jurisdiction;

c.       Concerned Cantonment Board within its local jurisdiction;

d.      The national Housing Authority for other areas.

 

(5) Registration of the Real Estate Developers:

 

1.      Every developer shall obtain registration from the concerned Authority for conducting real estate business.

2. Notwithstanding anything contained in sub-section (1), for the purpose of conducting the real estate business throughout the country, a developer shall obtain registration from the government.
3. Every developer shall apply for registration to the concerned Authority or the government, as the case maybe, with the copy of the following documents-

a)      Trade license;

b)      TIN certificate;

c)      VAT registration number;

d)     Experience of conducting any project (if any);

e)      The certificate of the technical personalities (the educational qualification, certificate of the architect, engineer and the planners and the membership certificate of the concerned professional organization);

f)       If it is company, Memorandum and Articles of Association with the certificate of incorporation;

g)      Membership certificate of REHAB or Land Developers Association (LDA), if any.

4.      After receiving the application under aforesaid sub-section (3), the concerned Authority or the government may, within 60 days and if after examining the documents, satisfy itself that-

a)      The applicant is competent to fulfil the conditions for implementation of the real estate project, grant the application and inform the applicant within said period; or

b)      If the applicant is not competent to fulfil the conditions for implementation of the real estate project, reject the application and inform the applicant within said period.

5.      If the application is granted under sub-section 4(a), the applicant shall be issued a registration certificate after giving prescribed fee within 30 days, for a period of 5 years and such certificate shall be renewed every after 5 years;

6.      The Authority shall maintain and publish a list of the registered developers;

7.      The registration may be renewed, annulled and amended as prescribed.

 

(6) Duties of the Developers:

 

1.      Every developer shall mention the reg. no, address, the design approval no. and date in its prospectus;

2.      No developer shall advertise for sale of any real estate before obtaining the approval of the project by the authority and before obtaining the power to execute the deeds;

3.      No developer shall sell or agree to sell any real estate before obtaining the approval of the project by the Authority;

4.      Every developer shall exhibit buyers the approval of the project and the deeds of the land;

5.      Except the approved design, all other services designs, structural designs and deeds shall be counter-signed by the developers;

6.      In case of rehabilitation of the land migrants in any project, the rules contained in the Private Housing Estate Development Rules, 2004 shall, mutatis mutandis, apply;

7.      Every developer shall comply with the rules contained in the Private Housing Estate Development Rules, 2004 and other rules relating to the Building Construction in respect of design, development, renewal & maintenance.

8.      The lay-out plan of the private housing project or project based on Public Private Partnership shall be approved by the Appropriate Authority;

9.      All the facilities and the services shall be provided in the project as per the rules contained in the Private Housing Estate Development Rules,2004;

10.  Every developer shall ensure that the project is implemented in such a way that the surrounding plot, flat, roads, or other public services are not damaged in any way;

 

(7) Real Estate Development by the Land-Owners:

 

1.      If any developer buys any land and constructs the real estate thereon for sale, all the provisions of this Act shall apply to his case.

2.      If one or more persons who are not real estate developers, either individually or jointly construct any real estate on their own land for business purpose, the provisions of this Act shall apply.

 

CHAPTER THREE: BUYING & SELLING OF REAL ESTATE, EXECUTION & REGISTRATION OF DEEDS ETC.

 

(8) Conditions for Buying and Selling of Real Estate:

 

1.      The details of the real estate shall be mentioned in the prospectus;

2.      The details of the development and conditions relating to buying and selling of real estate shall be mentioned in the contract between the parties;

3.      The developer may change  the allotted plot or flat subject to the consent of the buyer;

4.      No developer shall receive more money than that as mentioned in the contract between the parties; provided that if the parties thereafter agree to provide modern fittings, the aforesaid provisions shall not apply.

(9) Execution and Registration of Deeds:

 

1.      The developer shall, within 3 months of paying the full consideration money of the real estate by the buyer, handover the possession of real estate, execute and register the real estate deeds;

2.      If the size of the real estate is more or less during the handover of possession, both the parties shall reconcile the rate within 3 months;

3.      If any developer gets any land from the land owner by power of attorney empowering the developer to construct real estate and to sell the flats to the buyers, the land owner subject to the provisions of sub-section 4 , shall empower the developer in the power of attorney to execute the sell deed or otherwise handover the possession;

4.      If the power of attorney is not as per sub-section 3, the land owner shall within 15 days of completing the real estate, execute the sale deed in favor of the buyer;

5.      Notwithstanding anything contained in any other law for the time being in force, if any land owner refuses to execute the deeds as provided in sub-section 4, the developer may execute the real estate in favor of the buyer as if the developer id the owner of the land and real estate.

  

CHAPTER FOUR: CONTRACT, ETC.

 

(10)        Contract between the Developer and Land Owner:

 

1.      For the development of real estate, land owner and real estate developer will make a joint venture agreement;

2.      The contract shall contain the portion of the developer, power to execute such portion in favor of the buyers, date of beginning and date of completing the construction, according to the agreement as mentioned in sub-section 1.

3.      According to the condition as mentioned in sub-section 1, the construction of the real estate shall have to be started and completed within the dates as mentioned in the contract.

 

(11)        Facilities of Real Estate:

 

1.      All the facilities and the services shall, as far as possible, be provided in the project as per the rules contained in the Private Housing Estate Development Rules,2004;

2.      Following facilities shall be provided in real estate-

a)      Sufficient air circulation;

b)      All types of utility services such as water, electricity, gas etc. must be installed before handing over possession;

c)      If any construction fault is detected in real estate, the cost of repair shall be borne by the developer for 2 years;

3.      After handing over the real estate, at least one year maintenance facility shall be provided by the developer;

4.      No deviation from the approved design so as to reduce the common space shall be permitted;

5.      Every developer shall provide the buyer detail information relating to design and facilities of the real estate;

 

CHAPTER FIVE: PAYMENT, HAND-OVER POSSESSION, ETC.

 

(12)        Rules Relating to Payment:

 

1.      Buyer shall make the payment of the consideration of the real estate as per the contract through Bank Transfer;

2.      Before making the real estate suitable (infrastructural development, electricity, water, gas) for handing over possession, no interest can be taken except the instalment;

 

(13)        Utility Services of Real Estate:

 

1.      The developer has to take proper steps for utility services such as water, electricity, gas etc. before handing over possession.

2.      If proper steps are taken and delay has been made due to the limitations of utility services Authority, the developer shall not be liable for such delay.

 

(14)        Failure of the Buyer to make Payment:

 

1.      The consequence resulting from the failure of the buyer to make the whole payment or the installment shall be mentioned in the contract.

2.      Notwithstanding anything contained in the contract, no allotment of any real estate in favor of the buyer shall be cancelled unless he has been given a 60 days’ notice by registered post giving him an opportunity to explain the failure to make the whole payment or the installment.

3.      In case of cancellation of allotment as mentioned in sub-section 2, full consideration money as received by the developer shall be returned through account payee cheque within 3 months of cancellation.

4.      In case of failure to pay the installment as mentioned in sub-section 2, if the buyer wish to pay the same, 10% interest on the installment shall be given together with the installment.

5.      It lastly prescribes that if any buyer makes default for three times in making the installment as per sub-section 4, the developer may cancel the allotment.

 

(15)        Failure to Hand-Over the Possession:

 

1.      In case of failure to handover the possession within the time prescribed in contract, the developer shall pay back the whole consideration money and the damages as mentioned in the contract to the buyer within 6 months through account payee cheque. Provided that, the parties may by mutual consent increase the time and in that case the developer has to pay compensation to the buyer.

2.      The amount of compensation as mentioned in sub-section 1, if not mentioned in the contract shall be 15% of the entire amount paid and the developer shall within 6 months and maximum 3 installments pay the same.

3.      In computing the period of compensation as mentioned in sub-section 1 and 2, the period, up to which the full compensation money is paid, shall be taken.

 

(16)        Mortgage of Real Estate:

 

1.      No real estate which is mortgaged by the developer shall be sold in favor of the buyer; Provided that, with the consent of the buyer, the real estate may be mortgaged to any person, bank or financial institution.

2.      The real estate may be mortgaged by the developer to any person, bank or financial institution with the consent of the land owner; Provided that the real estate must be foreclosed from mortgage before execution of the sale deed.

 

(17)        Cancellation of Allotment by the buyer:

 

If for any reason the buyer applies in writing to cancel the allotment in his favor and to return the money as paid, the developer after deducting 10% of the amount as incidental cost, shall return the money through cheque or bank draft.

 

 

(18)        Design of the Building and Contract Details:

 

1.      Every contract for sale of allotment paper of any plot, flat or floor space shall contain the details of fittings, fixtures etc. to be used in such project;

2.      The architecture and structural design of the project shall be made and maintained by the architect, engineer and persons having the qualification as per the provisions of the Building Construction Act, 1952 (Act No. II of 1953).

3.      In making the architecture  and structural design of the project, the provisions of the Building Construction Rules and Bangladesh National Building Code shall be compiled with;

4.      Except in the matters mentioned in sub-section 3, the developer may follow the International Standard Code in other matters relating to the technical aspect of the project;

5.      Approved design of the project shall not be changed in anyway except with the permission of the appropriate authority;

6.      Approved design, the architecture, structural design and other planning of the project together with the possession handing over certificate shall be provided to the buyer with a counter signature of the developer.

 

 

CHAPTER SIX: CRIME, JUSTICE & PUNISHMENT

 

(19)        Punishment for Real Estate Development without Registration:

 

A person who conducts a real estate business without registration under section 5 shall be deemed to have committed a crime and shall be liable to imprisonment for a period  not exceeding two years or to a fine not exceeding ten lakh taka or with both.

 

(20)        Penalty for Starting Work on a Real Estate Development Project without      Approval:

 

A developer who starts work on a real estate development project without the approval of the appropriate authority or advertises or sells an unauthorized real estate project shall be punished with imprisonment for a term not exceeding two years or a fine not exceeding ten lakhs or with both.

 

(21)        Punishment for not Ensuring Utility Services:

 

For violation of the provisions mentioned in section 13, the developer shall be   punished for fine not exceeding five lakh taka, non-payment will be punishable by imprisonment for not exceeding one year.

 

(22)        Penalty for Cancellation or Suspension of Allotment without Notice:

 

Any developer who cancels the allotment of real estate in violation of the provisions of section 14, shall be punished to imprisonment for a term not exceeding one year or to a fine not exceeding five lakhs or with both.

 

(23)        Penalties for Mortgaging Real Estate:

 

Any developer who mortgages real estate in violation of the provisions of section 16, shall be liable to imprisonment for one year or to a fine not exceeding five lakh taka or with both.

 

(24)        Penalty for Changing Contracted Real Estate:

 

Any developer who sells real estate as promised in the contract without selling it to the buyer, without the knowledge of the buyer, for illegal profit, shall be punished with imprisonment for a term not exceeding three years or to a  fine not exceeding taka twenty lakhs or with both.

 

(25)        Penalty for not Using Promised Construction Materials:

 

If a developer uses substandard materials or does not use the appropriate amount of construction materials for the purpose of illegally profiting, instead of the construction materials promised under the contract executed with the buyer, he shall be punished with imprisonment for a term not exceeding three years or to a fine not exceeding taka twenty lakhs or with both.

 

(26)        Penalty for construction outside the approved design:

 

If a developer builds real estate outside the approved design, he will be liable to imprisonment for a term not exceeding three years or to a fine not exceeding twenty lakhs or with both.

 

(27)        Penalty for fraudulent offenses by the developer:

 

If a developer enters into a real estate development agreement with a landowner or executes a real estate allotment with the buyer without taking any action accordingly or taking partial action without any reason leaving the remaining work unedited and accordingly the landlord or, Failure to provide any financial benefits would be considered a fraudulent offense under this Act and the developer shall be liable to imprisonment for a term not exceeding two years or to a fine not exceeding twenty lakhs or with both.

 

(28)        Penalty for failure to hand over the possession of the land by the land owner:

 

Failure to transfer the possession of the land in favor of the developer within the period specified in the contract after signing a contract with a developer for real estate development and management is punishable with imprisonment for a term not exceeding two years or a fine not exceeding ten lakhs or with both.

 

 

(29)        Penalty for cancellation of power of attorney executed by land owner:

If a land owner contracts with a developer for real estate development and management and cancels a registered power of attorney executed in favor of the developer in accordance with the terms of the contract without giving notice at least thirty days in advance, he shall be punished with an imprisonment for a term not exceeding two years or to a fine not exceeding taka ten lakhs or with both.

 

(30)         Penalty for not hand over the  share of the land owner  in time:

 

Unless a developer enters into a real estate development and management agreement with a landowner and completes the real estate development in accordance with the terms of the agreement, does not transfer the landowner's share to the landowner within the stipulated time or, as the case may be, does not handover the possession to the buyer, the developer, he shall be punished with an imprisonment for a term not exceeding two years or to a fine not exceeding taka ten lakhs or with both.

 

(31)        Crime committed by the company:

 

If a developer is an incorporated company under this Act, the owner, director or any officer of that company in whose knowledge and participation any offense under this Act will be committed shall be personally liable for such offense.

 

(32)        Acceptance of criminal proceedings:

Notwithstanding anything contained in any other law, offenses punishable under this Act shall be compoundable, bailable and non-cognizable.

 

(33)        Judgement:

 

1.      Notwithstanding anything contained in the Code of Criminal Procedure, offenses under this Act shall be adjudicated by a Magistrate of the First Class or a Metropolitan Magistrate.

2.      Unless otherwise provided in this Act, the trial of offenses committed under this Act shall be conducted in a concise manner and the procedure described in Chapter XXII of the Criminal Procedure Code shall, as far as possible, apply for this purpose.

 

(34)        Special powers of the Magistrate in imposing fines:

 

Notwithstanding anything contained in the Code of Criminal Procedure, any first class magistrate or metropolitan magistrate under this Act may impose on the convicted person any penalty sanctioned under this Act for the offense concerned.

 

(35)        Distribution of collected money:

 

1. If any money is recovered from the convicted and convicted developer under this chapter, the court may order the landowner or, as the case may be, to pay up to 50% of the money collected in favor of the buyer and the rest in favor of the state.
2. If the court does not issue any order relating to the distribution under sub-section (1), the entire amount shall be deposited in favor of the State.

 

CHAPTER SEVEN: MISCELLANEOUS

(36)        Dispute Resolution:

 

1. If any dispute arises between the developer, land owner or buyer under sections 21, 22, 23, 24, 25, 27, 28, 29 and 30, the parties shall try to resolve it amicably by themselves.
2. If the conciliation cannot be reached due to the unwillingness of one party, the other party may refer the dispute to the Arbitration Tribunal for arbitration under the Arbitration Act, 2001 and give notice to this effect.
3. Within 30 days of receiving the notice, both the parties shall mutually constitute an arbitration tribunal.
4. Notwithstanding anything contained in the Arbitration Act, 2001, the award of the tribunal shall be binding upon the parties and their representative in interest and no question shall be raised in any court against the award.
5. If the parties fail to constitute the tribunal under sub-section 3, any party may refer the dispute to the court for trial.

 

(37)        Application of this law to ongoing projects:

 

Without prejudice to the existing contracts between the land owner, developer and the buyers, the provisions of this Act shall, mutatis mutandis, apply to the existing projects as well.

 

(38)         Ability to make rules:

 

1. The Government may, by notification in the Official Gazette, make rules for carrying out the purposes of this Act.
2. In particular, and without compromising the totality of sub-section (1), the Government may make rules for any of the following matters, for example:-

a)      Procedures and conditions for registration, renewal, cancellation and amendment;

b)      Procedures and conditions for approval, revision and renewal of real estate development projects;

c)      Procedures for storing and publishing lists of registered developers; And

d)     Procedures and conditions for formulation of layout plan of real estate development project.

 

(39)        Special provisions regarding custody:

 

1. The Real Estate Development and Management Ordinance, 2008 (Ordinance No. 57 of 2008), hereinafter referred to as the Ordinance, Actions taken or measures taken under this Act shall be deemed to have been taken or taken under this Act.
2. Pursuant to the provisions of Article 93 (2) of the Constitution of the People's Republic of Bangladesh, if any action has been taken or action has been taken or taken in its continuation or considered in continuation after the repeal of such Ordinance, it shall be deemed to have been done or adopted under this Act.

 Download Link: The Real Estate Development & Management Act, 2010