2010

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Real Estate (Development and Management) Act, 2010

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The Real Estate (Development and Management) Act, 2010 (Act No. XX of 2010) regulates the business of real estate development and apartment ownership in Bangladesh. It applies to real estate developers and apartment buyers within the territory, covering land development, construction of multi-storied buildings, and the sale of flats, apartments and plots. The Act designates existing city development authorities (RAJUK, CDA, KDA, RDA), municipalities, cantonment boards, and the National Housing Authority as the regulatory "Authority" for different areas (section 4). Developers must register with the relevant Authority before commencing business (section 5). Key mechanisms include registration requirements, project approval, written agreements between developers and land owners (section 10) and between developers and buyers, regulation of payment instalments (section 12), and obligations to deliver possession within the agreed timeframe with 15% compensation for delays (section 15). Notable provisions include the prohibition on advertisement or sale without registration (section 20), criminal penalties including up to 3 years imprisonment for fraudulent practices (section 27), dispute resolution through arbitration (section 36), and the requirement for developers to provide utility connections before handover (section 13). The Act remains in force and applies retrospectively to existing projects (section 37).

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§ 1Short Title and Commencement

(1)This Act shall be called the Real Estate Development and Management Act, 2010.

(2)Of this Act,-
(a) sections 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31 and 32 shall come into force immediately;
(b) the other sections, except those mentioned in clause (a), shall be deemed to have come into force from 7th December, 2008.

§ 2Definitions

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

(1)"Approved plan" means a plan approved by the competent authority in accordance with the applicable building construction, land development and Bangladesh National Building Code and other relevant rules and regulations;

(2)"Common space" means the ancillary space of a real estate, such as lift lobby, staircase, lift machine room, generator sub-station, caretaker room, guard room, space used for common facilities;

(3)"Authority" means the authority declared or, as the case may be, mentioned under section 4;

(4)"Buyer" means a person who has entered into an agreement with a real estate developer for purchasing a real estate;

(5)"Urban development authority" means the Capital Development Authority established under the Town Improvement Act, 1953, Chittagong Development Authority established under the Chittagong Development Authority Ordinance, 1959, Khulna Development Authority established under the Khulna Development Authority Ordinance, 1961, and Rajshahi Town Development Authority established under the Rajshahi Town Development Authority Ordinance, 1976;

(6)"Registration certificate" means the registration certificate issued under section 5;

(7)"Prescribed" means prescribed by rules made under this Act;

(8)"Plot" means a piece of residential land on which one or more residential, institutional or commercial flats can be constructed;

(9)"Floor space" means the area of a usable floor of a building including the horizontal area of walls and other load-bearing structures;

(10)"Person" shall include a company, association or body of persons, whether incorporated or not;

(11)"Building services" means air circulation, electrical connection, air conditioning, heating, acoustic control, lift, garage, escalator and moving walk installation, water supply, fire fighting, sewerage and drainage, gas supply and telephone connection and related services.

§ 3Applicability

(1)The provisions of this Act shall not apply to real estate development and management activities carried out entirely under Government management.

(2)Where any ministry or division of the Government or any office, institution or authority subordinate to or connected with it, or any statutory authority or autonomous institution jointly carries out real estate development and management activities with a developer, it shall be deemed as real estate development and management in a public-private joint venture, and in such case this Act and the rules made thereunder shall apply.

§ 4Establishment of Authority

(1)The Government may, for the purpose of this Act, establish one or more authorities and for this purpose, by notification in the official Gazette, declare any Government, statutory or autonomous institution as the authority for the area mentioned in the notification.

(2)Without prejudice to the generality of sub-section (1),- (a) the concerned urban development authority and, in the absence of the urban development authority, the concerned city corporation, for its local jurisdiction; (b) the concerned municipality, for its local jurisdiction; (c) the concerned cantonment board, for its local jurisdiction; and (d) the National Housing Authority, for areas outside the urban development authority, municipality and cantonment board,- shall be deemed to be the authority under this Act.

§ 5Registration of Real Estate Developers

(1)Every real estate developer shall, for the purpose of conducting real estate business in any particular area under this Act, obtain registration from the concerned authority.

(2)Notwithstanding anything in sub-section (1), where real estate business is to be conducted throughout Bangladesh, the real estate developer shall obtain registration from the Government.

(3)Every real estate developer shall apply to the Government or, as the case may be, the authority in the prescribed form with copies of the following documents, namely:- (a) trade license; (b) Tax Identification Number (TIN) certificate; (c) Value Added Tax (VAT) registration number; (d)(i) experience in project planning and implementation, if any; (ii) evidence of technical qualifications of technical persons (certificates of educational qualifications of architects, engineers and planners and certificates of membership of relevant professional bodies); (e) in case of a company, certificate of incorporation with memorandum of association and articles of association; (f) copy of registration of membership with REHAB or Land Developers Association, if any.

(4)After receiving application under sub-section (3), the Government or, as the case may be, the authority shall, within 60 (sixty) days, verify the information and if satisfied that- (a) the applicant is capable of fulfilling the conditions for implementation of real estate development project, shall approve the application within the said time and inform the applicant in writing; or (b) the applicant is unable to fulfill the conditions, shall reject the application with reasons and inform the applicant in writing.

(5)After approval of the application under sub-clause (a) of sub-section (4), the Government or, as the case may be, the authority shall, within 30 (thirty) days from the date of informing the applicant of the approval, subject to payment of applicable fees, issue a registration certificate in favour of the applicant for a period of 5 (five) years.

§ 6Conditions for Real Estate Development

(1)All developers under this Act shall, in the prospectus prepared by them, mention the registration number of the real estate, its name, address and reference number and date of approval of the plan by the competent authority.

(2)No developer shall, before obtaining approval of the real estate development project from the authority and before obtaining power or right to execute transfer documents by the developer, publish advertisement in mass media for sale of real estate.

(3)Before project approval, no developer shall sell or enter into agreement for sale of any real estate to a buyer.

(4)Every developer shall show the buyer the approval of the authority and documents relating to ownership of the concerned land.

(5)All other ancillary architectural plans, structural designs and other building services designs and documents shall be countersigned by the developer.

(6)In the case of residential plot projects under private or public-private joint ventures, ownership rights of land and rehabilitation of displaced persons shall follow the Private Residential Project Land Development Rules, 2004, with necessary modifications.

(7)Every developer shall obtain approval of real estate plans from the competent authority in accordance with the Private Residential Project Land Development Rules, 2004, with necessary modifications, and applicable building construction rules.

(8)Layout plans of real estate development projects constructed in private or public-private joint ventures shall be approved by the competent authority in the prescribed manner.

(9)Civic amenities shall be ensured as far as possible in real estate development projects in accordance with the Private Residential Project Land Development Rules, 2004.

(10)Every developer shall implement the real estate development project in such manner that the project ensures all types of infrastructure, plot, flat, road, electrical connection, water supply, sewerage and other civic amenities in accordance with the relevant laws and rules.

§ 7Real Estate Construction by Land Owners

(1)If a developer purchases land and becomes the owner thereof and constructs real estate on such land for sale, all the provisions of this Act shall also apply to him.

(2)If any person, singly or jointly, constructs real estate on his or their own land for purchase and sale, even if not being a real estate developer or commercial institution, the provisions of this Act shall also apply to him or them, to the extent applicable.

§ 8Terms and Conditions of Real Estate Sale

(1)The prospectus or allocation letter shall contain adequate description or analysis of the division of saleable area of the real estate.

(2)Detailed terms relating to real estate development and sale and purchase shall be mentioned in the agreement executed between the parties.

(3)A developer may, with the consent of the buyer, change the specific plot or flat allocated.

(4)No developer shall receive any excess money from the buyer beyond the terms mentioned in the agreement:

Provided thatif any party subsequently proposes addition of any improved equipment and they mutually agree and execute a supplementary agreement to that effect, this provision shall not be effective.

§ 9Execution of Transfer Document and Registration

(1)After full payment of the total value of the real estate, the developer shall, within 3 (three) months, complete the work of handing over possession, executing documents and registration in favour of the buyer.

(2)If, at the time of handing over possession of the real estate, its area is less or more, its value shall be adjusted within 3 (three) months at the purchased rate.

(3)Where a developer obtains land under a general power of attorney deed from a land owner and proposes to sell the real estate constructed thereon and the portion thereof obtained to buyers, the land owner or the party executing the general power of attorney deed shall, subject to the provisions of sub-section (4), empower the developer to execute documents and sell or otherwise transfer the real estate obtained as his portion.

(4)Where the land owner or the party does not execute documents in favour of the developer as mentioned in sub-section (3), then within 15 (fifteen) days of the developer serving written notice after the constructed real estate becomes saleable or transferable, the land owner or the party shall execute documents in favour of the buyer.

(5)Notwithstanding anything to the contrary in any other law in force, where the land owner or the party fails to execute documents within the prescribed time after the developer serves notice under sub-section (4), the developer may, by virtue of the powers under this section, himself execute documents in favour of the buyer as if the developer himself is the owner of the said land and real estate.

§ 10Agreement Between Land Owner and Developer

(1)The land owner shall execute a written bilateral agreement (Joint Venture Agreement) with the developer for the purpose of real estate development.

(2)The agreement mentioned in sub-section (1) shall contain the amount of the developer's share obtained in lieu of real estate development, condition for executing a general power of attorney deed in favour of the developer for the purpose of executing and registering documents in favour of the developer's nominated buyer, and mention of time for starting and completing land development or construction work.

(3)Land development or construction work shall be started and completed in accordance with the terms of the agreement mentioned in sub-section (1).

§ 11Amenities of Real Estate

(1)In the case of real estate development projects, civic amenities shall be ensured as far as possible in accordance with the Private Residential Project Land Development Rules, 2004.

(2)All types of real estate constructed by a developer- (a) shall be suitable for air and light circulation; (b) before transfer, shall have all types of utility services such as water, electricity, gas and sewerage, waste management, fire prevention system, etc. connected (where applicable); and (c) if, after transfer, repairs are needed due to construction defects, the developer shall complete such repairs at his own expense for a period of not less than 2 (two) years from the date of transfer.

(3)In accordance with the terms of the agreement executed between the parties, every developer shall maintain the real estate for at least 1 (one) year after transfer.

(4)No deviation from the approved plan of the real estate shall reduce any amenities or change the common space.

(5)Every developer shall provide to the buyer, at the time of allocation of real estate, a document containing information about the civic amenities marked in the architectural plan and layout of the project.

§ 12Payment Rules for Real Estate

(1)The buyer shall pay the value of the real estate through a bank in accordance with the rules mentioned in the prospectus or allocation letter.

(2)No interest shall be charged on installment money until the real estate sold or allocated with infrastructure development and supply of electricity, water, gas etc. becomes suitable for handing over possession.

§ 13Ensuring Utility Services

(1)In the case of providing utility services such as water, electricity, gas etc. (where applicable) mentioned in the prospectus or allocation letter, the developer shall take effective measures before handing over possession of the real estate.

(2)Notwithstanding the action taken under sub-section (1), if it is not possible to provide connections in time due to limitations of the service providing agencies, and the developer continues to take measures after filing application for obtaining service with the concerned agencies, the developer shall not be liable for failure.

§ 14Buyer's Failure to Pay Lump Sum or Installments

(1)The prospectus or allocation letter shall contain detailed information about the consequences of the buyer's failure to pay the lump sum value or installment value of the real estate within the stipulated time.

(2)Notwithstanding anything to the contrary in the agreement or allocation letter, if the real estate buyer fails to pay the lump sum value or installment money for any reason, the buyer's allocation shall not be cancelled without giving at least 60 (sixty) days' prior notice by registered post.

(3)In case of cancellation of allocation as mentioned in sub-section (2), the deposited money of the buyer shall be refunded collectively within 3 (three) months after the order of cancellation by account payee cheque.

(4)If any buyer wishes to pay installment money with delay in accordance with the provisions of sub-section (2), he may pay the installment with interest at the rate of 10% on the installment money for the delayed period on the outstanding installments.

(5)If the buyer delays payment of installments a total of 3 (three) times in accordance with the provisions of sub-section (4), the developer may cancel the allocation of the concerned buyer.

§ 15Developer's Failure to Transfer Real Estate

(1)If the developer fails to transfer the real estate within the time stipulated in the agreement, he shall refund the total money paid for the real estate value together with the compensation amount stipulated in the agreement within 6 (six) months by account payee cheque:

Provided thatif the buyer and developer mutually agree to extend the time limit for transfer of real estate through supplementary agreement, compensation shall be paid to the buyer in accordance with the provisions of sub-section (2).

(2)If the amount or rate of compensation mentioned in sub-section (1) is not mentioned in the agreement executed between the parties, compensation shall be determined at the rate of 15% on the total money paid, and the developer shall pay the total money including compensation within 6 (six) months in not more than 3 (three) installments.

(3)For the purpose of calculating the time of compensation mentioned in sub-sections (1) and (2), the time of compensation shall be calculated up to the date of payment of the total money.

§ 16Mortgage of Real Estate etc.

(1)No real estate mortgaged by the developer shall be sold to the buyer:

Provided that, with the consent of the buyer, any allocated real estate may be mortgaged by the developer to any person, bank or other financial institution.

(2)The real estate under construction or constructed by the developer may be mortgaged in its entirety or in part to any person, bank or other financial institution by the developer with the consent of the land owner:

Provided that, before executing the transfer document, the developer shall release the concerned real estate from mortgage.

§ 17Refund Rules for Buyer

If the buyer, for any reason, wishes to receive refund of the money paid after cancelling the allocation in his favour through written application, the developer shall refund the remaining money after deducting 10% of the money paid as incidental expenses to the buyer within 3 (three) months by a single cheque or pay order.

§ 18Architectural Plan or Possession Transfer Document

(1)The agreement or allocation letter for purchase or sale of apartment, flat or floor space shall clearly specify the fittings, fixtures etc. to be used in the proposed building.

(2)While preparing the architectural and structural plans, arrangements shall be made for preparation and supervision of plans by qualified architects, engineers and relevant technical persons as mentioned in the Building Construction Act, 1952.

(3)The applicable building construction rules and Bangladesh National Building Code shall be followed in preparation of architectural and structural designs.

(4)Besides the field mentioned in sub-section (3), for any other technical matter, international standard codes may be followed under the joint management of the developer, engineers or architects.

(5)No change shall be made to the approved plan without the approval of the competent authority.

(6)A copy of the architectural plan of the apartment, flat or floor space approved by the competent authority and the structural design and building services (electrical, mechanical, plumbing etc.) plans prepared by the approved technical persons, as well as the possession transfer letter countersigned by the developer shall be provided to the buyer.

§ 19Penalty for Operating Without Registration

Any person who conducts any real estate business without obtaining registration under section 5 shall be deemed to have committed an offence, and shall be punished for the said offence with imprisonment for a term not exceeding 2 (two) years, or with fine not exceeding 10 (ten) lakh taka, or with both.

§ 20Penalty for Starting Work Without Approval

Any developer who starts work on any real estate development project without obtaining approval of the competent authority, or advertises or sells an unapproved real estate project shall be punished with imprisonment for a term not exceeding 2 (two) years, or with fine not exceeding 10 (ten) lakh taka, or with both.

§ 21Penalty for Non-provision of Utility Services

For contravention of the provisions mentioned in section 13, the developer shall be punished with fine not exceeding 5 (five) lakh taka, and in default of payment, with imprisonment for a term not exceeding 1 (one) year without labour.

§ 22Penalty for Cancelling Allocation Without Notice

Any developer who, in contravention of the provisions of section 14, cancels the allocation of real estate shall be punished with imprisonment for a term not exceeding 1 (one) year, or with fine not exceeding 5 (five) lakh taka, or with both.

§ 23Penalty for Mortgaging Real Estate

Any developer who, in contravention of the provisions mentioned in section 16, mortgages real estate shall be punished with imprisonment for a term of 1 (one) year, or with fine not exceeding 5 (five) lakh taka, or with both.

§ 24Penalty for Selling Committed Real Estate Elsewhere

Any developer who, instead of selling the real estate committed in the agreement to the buyer, sells it elsewhere without the knowledge of the buyer for the purpose of illegal gain shall be punished with imprisonment for a term not exceeding 3 (three) years, or with fine not exceeding 20 (twenty) lakh taka, or with both.

§ 25Penalty for Using Substandard Materials

Any developer who, instead of using the construction materials committed in the agreement with the buyer, uses substandard materials for the purpose of illegal gain, or does not use adequate construction materials shall be punished with imprisonment for a term not exceeding 3 (three) years, or with fine not exceeding 20 (twenty) lakh taka, or with both.

§ 26Penalty for Construction Beyond Approved Plan

Any developer who constructs real estate beyond the approved plan shall be punished with imprisonment for a term not exceeding 3 (three) years, or with fine not exceeding 20 (twenty) lakh taka, or with both.

§ 27Penalty for Fraudulent Offence by Developer

If any developer, after executing an agreement with a land owner regarding real estate development or an allocation letter with a buyer, fails to take any action accordingly or takes partial action and leaves the remaining work undone without cause and does not provide any financial benefit to the land owner or, as the case may be, the buyer, it shall be deemed a fraudulent offence under this Act, and the developer shall be punished for the said offence with imprisonment for a term not exceeding 2 (two) years, or with fine not exceeding 20 (twenty) lakh taka, or with both.

§ 28Penalty for Land Owner Not Transferring Possession

If, after entering into an agreement with a developer for real estate development and management, the land owner fails to transfer possession of the concerned land in favour of the developer within the time mentioned in the agreement, the land owner shall be punished with imprisonment for a term not exceeding 2 (two) years, or with fine not exceeding 10 (ten) lakh taka, or with both.

§ 29Penalty for Land Owner Cancelling Power of Attorney

If a land owner, after entering into an agreement with a developer for real estate development and management, cancels the registered general power of attorney executed in favour of the developer under the terms of the agreement without giving at least 30 (thirty) days' prior notice, the land owner shall be punished with imprisonment for a term not exceeding 2 (two) years, or with fine not exceeding 10 (ten) lakh taka, or with both.

§ 30Penalty for Developer Not Handing Over Land Owner's Share

If a developer, after entering into an agreement with a land owner for real estate development and management, fails to complete the real estate development properly and transfer the land owner's share in favour of the land owner within the stipulated time, or, as the case may be, fails to hand over possession, the developer shall be punished with imprisonment for a term not exceeding 2 (two) years, or with fine of 20 (twenty) lakh taka, or with both.

§ 31Offence by Company

Where a developer under this Act is an incorporated company, the owner, director or any officer of the company who is knowingly a party to the commission of any offence under this Act shall be personally liable for the said offence.

§ 32Cognizance of Offence etc.

Notwithstanding anything to the contrary in any other law, offences punishable under this Act shall be compoundable, bailable and non-cognizable.

§ 33Trial

(1)Notwithstanding anything to the contrary in the Code of Criminal Procedure, offences under this Act shall be triable by a First Class Magistrate or Metropolitan Magistrate.

(2)Unless there is anything to the contrary in this Act, trial of offences committed under this Act shall be conducted in a summary manner, and for this purpose, the procedure mentioned in Chapter XXII of the Code of Criminal Procedure shall apply, as far as practicable.

§ 34Special Power of Magistrate to Impose Fine

Notwithstanding anything to the contrary in the Code of Criminal Procedure, a First Class Magistrate or Metropolitan Magistrate under this Act may impose any penalty authorized under this Act on a person convicted for the concerned offence.

§ 35Distribution of Collected Money

(1)Where any money is realized from a developer convicted and punished under this chapter as fine, the court may order that not more than 50% of the realized money be paid in favour of the aggrieved land owner or, as the case may be, the buyer, and the remaining portion in favour of the State.

(2)If the court does not pass any order regarding distribution under sub-section (1), the entire money shall be deposited in favour of the State.

§ 36Dispute Resolution

(1)At any stage of implementation of the real estate project, if any dispute arises between the project-related buyer, developer or land owner for offences mentioned in sections 21, 22, 23, 24, 25, 27, 28, 29 and 30 of this Act or for breach of any provision of the agreement executed between them, the parties shall first try to settle the dispute by mutual agreement.

(2)If, after taking steps for settlement as per sub-section (1), it fails due to non-cooperation of any party, the other party shall give notice to the other party expressing his intention to go to the arbitration tribunal under the Arbitration Act, 2001 for settlement of the disputed matter.

(3)The recipient of notice under sub-section (2) shall jointly constitute an arbitration tribunal with the sender of the notice within 30 (thirty) days of receipt of the said notice.

(4)Notwithstanding anything in the Arbitration Act, 2001, the award of the arbitration tribunal constituted by the parties shall be binding on the parties and any person claiming through or under them, and no party shall have the right to raise objection in any court against the same.

(5)If the parties fail to constitute an arbitration tribunal as per sub-section (3), any party may file a suit in the competent court under this Act for trial of the disputed matter.

§ 37Application of this Act to Ongoing Projects

Without prejudice to the provisions of the respective agreements executed between the land owner, developer and buyer, the provisions of this Act shall apply, as far as practicable, to ongoing projects immediately before this Act comes into force.

§ 38Power to Frame Rules

(1)The Government may, by notification in the official Gazette, frame rules for the purpose of this Act.

(2)Without prejudice to the generality of sub-section (1), the Government may frame rules on any of the following matters, namely:- (a) method and conditions for granting, renewing, cancelling and amending registration; (b) method and conditions for approval, amendment and renewal of real estate development projects; (c) method of maintaining and publishing the list of registered developers; and (d) method and conditions for preparation of layout plans of real estate development projects.

§ 39Special Provision Regarding Savings

(1)Any action taken or measure adopted under the Real Estate Development and Management Ordinance, 2008 (Ordinance No. 56 of 2008), hereinafter referred to as the said Ordinance, shall be deemed to have been taken or adopted under this Act.

(2)Notwithstanding the cessation of the operation of the said Ordinance in accordance with clause (2) of paragraph 93 of the Constitution of the People's Republic of Bangladesh, any action taken or measure adopted in its continuity or deemed continuity after such cessation shall also be deemed to have been taken or adopted under this Act.