INTERNATIONAL JOURNAL FOR LEGAL RESEARCH & ANALYSIS (ISSN 2582 - 6433) - VOLUME 2 ISSUE I (April 2021) - INTERNATIONAL ...
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INTERNATIONAL
JOURNAL FOR LEGAL
RESEARCH & ANALYSIS
(ISSN 2582 – 6433)
VOLUME 2 ISSUE I
(April 2021)
Email –
editor@ijlra.com
Website – www.ijlra.com
5656565656565
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Volume I Issue X| February 2021 ISSN: 2582-6433
DISCLAIMER
No part of this publication may be reproduced or copied in any form by any means
without prior written permission of Managing Editor of IJLRA. The views
expressed in this publication are purely personal opinions of the authors and do not
reflect the views of the Editorial Team of IJLRA.
Though every effort has been made to ensure that the information in Volume I
Issue X is accurate and appropriately cited/referenced, neither the Editorial Board
nor IJLRA shall be held liable or responsible in any manner whatsever for any
consequences for any action taken by anyone on the basis of information in the
Journal.
Copyright © International Journal for Legal Research & Analysis
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Volume I Issue X| February 2021 ISSN: 2582-6433
EDITORIAL TEAM
EDITORS
Ms. Ezhiloviya S.P.
Nalsar Passout
Ms. Priya Singh
West Bengal National University of Juridical Science
Mr. Ritesh Kumar
Nalsar Passout
Mrs. Pooja Kothari
Practicing Advocate
Dr. Shweta Dhand
Assistant Professor
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Volume I Issue X| February 2021 ISSN: 2582-6433
ABOUT US
INTERNATIONAL JOURNAL FOR LEGAL RESEARCH & ANLAYSIS
ISSN
2582-6433 is an Online Journal is Quarterly, Peer Review, Academic Journal,
Published online, that seeks to provide an interactive platform for the
publication of Short Articles, Long Articles, Book Review, Case Comments,
Research Papers, Essay in the field of Law & Multidisciplinary issue. Our aim
is to upgrade the level of interaction and discourse about contemporary issues
of law. We are eager to become a highly cited academic publication, through
quality contributions from students, academics, professionals from the
industry, the bar and the bench. INTERNATIONAL JOURNAL FOR
LEGAL RESEARCH & ANALYSIS ISSN
2582-6433 welcomes contributions from all legal branches, as long as the
work is original, unpublished and is in consonance with the submission
guidelines.
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Volume I Issue X| February 2021 ISSN: 2582-6433
ECONOMIC FLUCTUATION AND ITS IMPACT ON REAL
ESTATE
By: VARADHARAJU.B
Abstract :
Real estate in India is governed and impacted by a combination of federal and state specific laws.
This is largely because, in accordance with article 246 of the constitution of India, ‘land’ is the
subject matter of state list or list 2 of seventh schedule to the constitution of India, which covers
subjects for which only states can legislate, while ‘transfer of property other than agricultural
land, registration of deeds and documents and contracts other than for agricultural lands, fall
under the concurrent list or list 3 of the seventh schedule to the constitution of India. 1 It's an
axiom in real estate that housing markets are affected by the broader economy. When
economic times are good, certain parts of the housing market usually see healthy growth.
When economic times aren't so good, those same parts don't tend to do too well. The economy
affects the overall housing market and impacts two of its major segments in an especially
noticeable manner. Home sales usually are directly tied to an economy's health and rise and fall
with economic activity. As economies slow, the supply of money tends to become more
restrictive. As money becomes harder to borrow, fewer home buyers enter the housing
market2.The position of real estate market phase in cycle is determined by variety of indicators
that have a great significance for business planning. The purpose of the research is to identify
how fluctuations of key macroeconomic and real estate market indicators influence construction
and real estate business representatives and to define implementation of this knowledge in
business management The results of the research can be applied by real estate entrepreneurs,
construction companies, developers, real estate investors and other market participants and for
branch regulation improvements.
Keywords : real estate, economy, business cycle, real estate cycle, national economy,
entrepreneurship, real estate market, economic cycle, real estate investments, economic
fluctuations, real estate.
PREFERRED CITATION
10th semester student of BALLB, school of legal studies, Reva university, Bengaluru
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Volume I Issue X| February 2021 ISSN: 2582-6433
a critical study on economic fluctuation and its impact on real estate,
https://homeguides.sfgate.com/economy-affect-housing-market-50583.html ,
(www.ICLG.com) (https://iclg.com/practice-areas/real-estate-laws-and-regulations/india)
INTRODUCTION :
Before 1926, land(with all houses etc., built thereon) including all estates and interests in lands
which are held for life(not for years, however many) or for some greater estate and whether such
lands be of freehold or copyhold tenure. This is the usual meaning of real estate, but for the
purposes of devolution upon deaths after 1925 the definition of real estate by section 3 of the
administration of estates act, 1925 is real estate includes chattels real and land in possession.
The real estate sector plays a catalytic role in fulfilling the need and demand for housing and
infrastructure in the country. While this sector has grown significantly in recent years, it has been
largely unregulated, with absence of professionalism and standardisation and a lack of adequate
consumer protection. Consumer protection act, 1986 is available as a forum to the buyers in the
real estate market, the recourse is only curative and is not adequate to address all concerns of
buyers and promoters in that sector. The lack of standardisation has been a constraint to the
healthy an orderly growth of industry. Hence the need for regulating the sector has been
emphasised in various forms. 3
ECONOMY IN REAL ESTATE :
The real estate and economic cycles may have different reasons and different consequences, it is
necessary to analyse this questions from different point of views, with an aim to develop tools
how market participants can apply this knowledge. cycles may have different effects – positive
and negative – depending on phase of economic cycle, behaviour and decision-making of market
participants. The relevance of the research is being determined by the factor, that of investments
in real estate operations and real estate development in many cases have long period of
implementation, during which significant changes in real estate market and national economy
can be observed4
provisions relating to real estate sector
There are many legal provisions in various enactments for the real estate sector for safeguard of
builders, investors and buyers such as
1) RERA ACT ( real estate regulatory authority act 2016)
3
Lawmann’s real estate (regulation and development) act, 2016 (act no.16 of 2016 pg.no 02
4
www.ieomsociety.org/ieom_2016/pdfs/227.pdf
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2) Indian easement act 1882
3) Residential tenancies act 2010 (NSW)
4) Real property act 1900(NSW)
5) Real property regulation 2019(NSW)
Functions of real estate agents in real estate :
Every real estate agent registered under section 9 shall
a) Not facilitate the sale or purchase of any plot, apartment or building, as the case maybe,
in a real estate project or part of it, being sold by the promoter in any planning area,
which is not registered with the authority;
b) Maintain and preserve such books of account, records and documents as may prescribed.
c) Not involve himself in any unfair trade practices, namely 1) the practice of making any
statement, whether orally or in writing or by visible representation which 2) falsely
represents that the services are of a particular standard or grade; 3) represents that the
promoter or himself has approval or affiliation which such promoter or himself does not
have;
4) makes a false or misleading representation concerning the services;
5) permitting the publication of any advertisement whether in any newspaper or otherwise of
services that are not intended to be offered;
d) facilitate the possession of all information and documents, as the allottee, is entitled to, at the
time of booking of any plot, apartment or building, as the case maybe;
e) discharge such other functions as may be prescribed.
Government Legislative framework and policies in real estate :
The Real Estate industry is one of the prime drivers of growth of our economy and a key
contributor to its GDP growth. Besides, it is second only to the agricultural sector in employment
generation. However, despite the tremendous growth in Real estate sector, it is still quite
unorganised without proper regulations being implemented to safeguard the interests of
stakeholders and an industry status still eluding it.
REAL ESTATE REGULATION BILL, 2013
In order to bring about systematic changes in the Real estate sector and make it more organised
and regulated, the government decided to implement a regulatory framework along with well-
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defined policies. This move was also meant to substantiate the government’s agenda to bring
about economic reforms through poverty alleviation and by providing affordable housing to
economically weaker sections of society. Eventually after considerable debate and deliberations
on the issue the Real Estate (Regulation and Development) Bill, 2013 was approved by the
Union Cabinet in June, 2013. Subsequently, it was introduced in the Rajya Sabha in August,
2013.
IMPORTANCE OF REGULATIONS IN THE SECTOR
The real estate sector at present is associated with many vices, which hopefully can be cleansed
by bringing about stringent regulations and effective policies. One of the pressing needs is to rid
it from the influence of black money supply. Currently, the sector contributes to about 70 per
cent of the black money generated in our country. Considering the impact the sector has created
in the form of contribution to the total GDP of our country as well as in employment generation,
both skilled and unskilled, it is high time that the government accords the industry status to the
sector. Such a move assumes more significance especially in the backdrop of the government
opening up the sector to FDI, thereby benefiting developers in a large way. 5
REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016
An act to establish the real estate regulatory authority for regulation and promotion of the real
estate sector and to ensure sale of plot, apartment or building, as the case may be, or sale of real
estate project, In an efficient and transparent manner and to protect the interest of consumers in
the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal and
also to establish the appellate tribunal to hear appeals from the decisions, directions or orders of
the real estate regulatory authority and the adjudicating officer and for matters connected
therewith or incidental thereto.
1) Subclause (1) of clause 18 of the bill provides for the establishment of the real estate
regulatory authority to exercise the powers conferred on it and to perform the functions
assigned to it under the proposed legislation
a) Sub clause (1) of clause 22 of the bill provides for the salary and allowances payable
to the chairperson and the members of the authority.
2) Subclause (1) of clause 35 of the bill provides for the establishment of the central
advisory council to perform the functions assigned to it under the proposed legislation
5
https://www.commonfloor.com/guide/importance-of-regulatory-framework-and-policies-in-real-estate-40465
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3) Clause 63 of the bill provides for grants and loans by the central government
to the authority of such sums of money as considered necessary
4) Clause 64 of bill provides for grants and loans by the state government to the authority, of
such sums of money as considered necessary for the purposes of the proposed legislation.
The establishment of the real estate regulatory authorities and real estate appellate tribunal for the
union territories without legislatures
Andaman and Nico bar islands, Lakshadweep, Dadar and nagar haveli, daman and diu and
Chandigarh, no expenses are likely to be incurred.
The establishment of the real estate regulatory authorities and the real estate appellate tribunal for
the union territory of Delhi is to be carried out by the ministry of urban development, which Is
the appropriate government in relation to the union territory of Delhi, for which some expenses
are likely, to be home.6
CASE LAW
1) Neel Kamal realtors suburban private limited and another vs union of India and others,
2017 SCC it can be said that the provisions of the act, as far as they relate to delay in
delivery of possession of apartment and determination of compensation or interest as the
case maybe, are applicable even to all the ongoing projects,
in similar case K.veerappa and another vs real estate regulatory authority, Bengaluru
Karnataka and another, 2019(3) kar.L.J.
Application for settlement of disputes and appeals to appellate tribunal-
The appropriate government may, if it deems necessary, establish one or more benches of the
appellate tribunal, for various jurisdictions, in the state or union territory.
CASE LAW : 1) smt. M.V. Jayanthi, IAS, chairperson and Abhay Dhanapala chou gala,
Rule 4 specifically states the meaning of “ongoing project”, as per the explanation to rule 4,
the project where development work is going on and where completion certificate has not
been issued, then only those projects can be treated as ongoing projects requiring registration
within three months from the date of the commencement of the act.
Section 3 of the act and rule 4 of the rules, are interconnected with each other. Under sub-
section(2) of section 3, it is stated when registration of the project is not required and whereas
under rule 4,7 when registration of ongoing project are required to be registered. Harmonious
reading of these provisions makes it clear that registration of a project whether the project
6
Lawmann’s real estate (regulation and development) act, 2016 pg. no. 2 and 3
7
Sathpul puliani’s (the real estate regulation and development act, 2016) (central act no.16 of 2016) pgno 37/40
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Volume I Issue X| February 2021 ISSN: 2582-6433
was commenced before or after the commencement of the act, depends upon the
commencement of activities as stated under section(1) of section 3 or in case of ongoing
project, if development work is going on.
2) Karnataka real estate (regulation and development) rules, 2017, rule 16 – delay in
execution and delivery of possession of flat by respondent 2 to appellant- purchaser –
impugned order dated 4/7/2018 passed by respondent 1-adjudicating officer directing
respondent 2 to pay rs.10 per sq. Ft. per month from 1/10/2014 till delivery of possession
of flat to appellant as delayed compensation.
In case of smt.m.v.jayanthi, IAS, chairperson and Abhay Dhanapala chou gala
After service of notice, the 1st respondent- authority appeared through its counsel (panel
advocate). The 2nd respondent even after service of notice remained absent. The records of the
respondent- authority have been secured. We have heard the 1st appellant (party-in-person), who
also filed his written arguments. We have also heard the learned counsel appearing for 1st
respondent and perused the material available on record.
CONCLUSION
After the study of this it can be said that Real Estate Market is one of the ever-growing markets
in every country has now slowed down a bit. With changing taxes and demonetization over the
past few years, this market has seen major ups and downs but has significantly recovered and
restrengthened itself a lot.
Moreover due to pandemic in recent times and from demonetization in the past have arised many
problems in and around real estate sector, unemployment and various other issues.
Many provisions under real estate such as RERA ACT, easement act, transfer of property act of
1882 etc, controls such issues and must be given more scope under any circumstances.
Some of the acts here are is clearly long delayed to address the violation and issues in real estate
sector in Karnataka. Through following provisions of the act and speedy trail by the court,
tribunal or state can prohibit and stop the problems arising in real estate sector In Karnataka.
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